Buy this year, or next?

[HannaBelle]

Being a newbie to DVC I am curious if one does not take a risk by renting out points either on the rent/trade board or through David.

Yes, there is a risk, but we decided to give it a try. The worst part is having to call and make the ressies for someone else vacation!!!

They can only charge to the room if they give the front desk a credit card when they check-in.

David collects 100% of the cash up front from the renter. The owner (or rentee) gets a 50% payment when proof of the reservation is provided. The other 50% is paid when the renter checks in. I am going to assume that the renters will show since David has all of the cash. (This has been our experience.)

There is a concern about the damages, but I choose to believe that most people are inherently good and that maybe a bit “Pollyanna”, but it was willing to take the risk based on what most owners have said.

 

[lemonsours]

I want to thank all of you for your carefully considered responses. The discussions have illustrated one thing that makes my decision pretty clear to me: our purchase is not about the money, it is about the magic. (I hear you gagging on your koolaid again, JimMIA, you might want to get that checked out. ) As such, the magic will still be there next year, or the year after even, when we can pay cash.

For resale points bought after 3/20/11, you can still use those points for RCI . You cannot use them for DCL or any Disney Resorts. Or Adventures by Disney or the Concierge Collection.

Thank you for verifying that.

I totally understand your decision to buy direct. That said, we decided to wait until next year to buy so that we can do more up-front and (honestly) because things still look 'eh' for the luxury expense aspect of the economy and we sort of want to see how it plays out.

That makes sense, I hate to think about either of us losing our job, but I would hate to be saddled with those payments if something happened.

Also, have you looked into using the Disney Visa card to finance the
purchase? They have 0 APR on DVC for 6 months and you'd get some GREAT dollars for that first trip Just saying -- I'm sure other cards will offer a decent financing rate, but if you have the cash, it might be a way to add to the mix

Yes, we would use our Disney Visa and just pay it off right away! Love doing that!

Even if direct point prices from Disney increase I still think that the price difference will not exceed the interest that you will have to pay.

Just my $0.02.


PS: I would also do some more reading about buying a resale vs. direct, as well as value of using points for anything other than DVC villas (i.e. DCL).

Thanks, I finally came to the same conclusion.

The problem also is that one night using points in an exchange is soemtimes 75 points for a 3 days cruise it is around 120 I think....So even with saving your points for the 3 years allowed isn't going to help you because you will only ever have 300 points---not enough to do much of an exchange anywhere.

I know, we did look at the exchange for DCL and the 300 points barely pays for the first person. That being said, we don't take real vacations every year. Every two or three years max. If we have DVC points, and decide to have our vacation be a cruise, I would rather use what I can toward a cruise than let them go to waste.

quick math using points to get a room at the Poly.

It takes rougly 350 points for a week, plus the $95 fee for 6 nights, 7 days.

Cash reservation at $450 a night = $2700
You could rent 350 (assuming you bought enough points) points to someone for $10 a point = $3500

plus you avoid the fee. Point is. for the 1 or 2 times in your life you'd trade your points out, just rent them, use the cash for reservation. (plus save the $95 fee)
Go Resale!

I actually hadn't considered this. Before I saw this I did my own calculation for a week in the middle of January for the Polynesian, and with the 35% off the rack rate the room came to $2319. I guess I have a lot more thinking to do!

Okay, lots of y'all are being very snarky! OP, everyone has an opinion and they obviously are sharing them freely!


I would encourage you to seriously consider buying the points on the resale market. It is very easy to rent your points with David for the times you want to stay at the Poly or take a cruise. Cash is king and it is much more flexible than points.

Obviously, it is your money and you can buy whatever you want for whatever reason and you do not have to justify it to anyone.

RCI is a permanent perk and I would not let that factor into your decision.


I will also piggy back on what amypetecar said....if you do cash ressies at the Poly, you can get free dining if you travel during those times. DVC members who book on points are not eligible.

How much does David charge for listing/facilitating the transaction?

OP: I would wait until you can pay cash. The last increase at AKV was from $112 to $120 in July '10. I think the odds of a more-than-$10 increase in base price is unlikely between now and a year from now.

The other advantage of waiting is it gives you more time to think about this purchase, what it is for, and how to structure it to your best advantage. Here's why: There are two reasons to buy a timeshare. One is to save money on the vacations you'd take anyway. The other is to use it as a way of taking vacations you wouldn't otherwise take.

The DVC market has evolved to the point that there is essentially no way to save money with a developer purchase, compared to the equivalent resale purchase used for the same vacations. In most cases, for most people's expected vacation habits, the developer purchase will be significantly more expensive.

However, depending on your precise mix of vacations, a developer purchase might turn out to be slightly more convenient. But, the cost has diverged so far that very very few people will find that convenience to be a good value when viewed as the cost of time saved vs. what you could otherwise earn with that time. If you are someone with a very very high hourly earning potential, and are constantly turning away work that you don't have time to take on, then it might be cheaper to just buy developer in the end. Otherwise, for most people, it's a luxury, not a savings. That doesn't mean you can't do it, but you have to accept the fact that it will cost you more in the end for the very same vacations---and in most cases, a lot more. What's more, the "convenience" of internal exchange is a little bit overblown. Go back and look at all the people who find that cruising on points is not possible on some particular cruise, but plenty of cash staterooms remain. Read up on some of the difficulties people have with Reservation Status points when they find they have to change plans.

On the other hand, except for cost and some modest (and debatable) differences in convenience, there are no differences between a developer purchase and one made on the secondary market. In other words, a 100 point AKV contract is the same "commitment to vacation" either way.

Ultimately, of course, it is up to you. If you'd be happier with a developer purchase, it is your money to spend as you will. But, if you take the very same vacations with a resale purchase (and you spend a little bit of time spent renting out your points for cash once in a while) you will have more of that money left at the end of it all to use for other things.

Thank you for your considered (and non-snarky ) answer. I really do have a lot to think about, and you described my options very well.

 

[Deb & Bill]

RCI is a permanent perk and I would not let that factor into your decision.

Unfortunately, RCI is not a permanent perk. It also could go away at any time. The only thing guaranteed is a stay at your home resort.

 

[Brian Noble]

and non-snarky

You might not believe this, but this is not how I am normally described.

 

[JimMIA]

RCI is a permanent perk and I would not let that factor into your decision.[/COLOR][/FONT]

Let's be careful with the "facts" we throw around.

RCI exchanges are NOT a "permanent perk" for either direct purchasers or resale purchasers. DVC could eliminate or change their exchange system for either or both groups. And actually, before we exchanged through RCI, we exchanged through II -- and before that, we exchanged through RCI. NONE of this is permanent -- it can and will change...for either direct, or resale, or both.

In fact, there is no such thing as a "permanent perk."

Perks, by definition, are benefits which are not guaranteed. We should all be very, very careful with the use of the word "guaranteed," because darn few things are guaranteed.

We are guaranteed the use of our points at our home resort ONLY, for the length of our contract...subject to availability.

And as long as our home resort is a member of the "club," we are guaranteed that we can use our points at other resorts -- but DVC could take a resort out of the "club" with the stroke of a pen.

We are also guaranteed at least a one-month home resort booking advantage as long as DVC allows booking at non-home resorts.

If anybody knows of any other guarantees...please jump in.

EVERYTHING ELSE is a changeable perk.

 

[lemonsours]

You might not believe this, but this is not how I am normally described.

Given your tag "His Curmudgeonly Highness," I suppose I must have caught you on a good day!

 

[Brian Noble]

I got that tag from my wife:
http://www.disboards.com/showpost.php?p=41773446&postcount=213

 

[JimMIA]

You might not believe this, but this is not how I am normally described.

I'll vouch for that!

Naw, don't take that seriously dear readers. I'm just busting my buddy's chops!

Brian and others like him have a wealth of experience with this stuff...and no axes to grind.

When I was looking to expand my timeshare portfolio, Brian and Dean and Culli and Littlestar, and a lot of other very knowledgeable people gave me priceless input.

 

[JimMIA]

(I hear you gagging on your koolaid again, JimMIA, you might want to get that checked out. )

Actually, the gag reflex is one of the most important automatic defense mechanisms your body has. When a patient loses the gag reflex, they can't protect their airway...and we intubate them.

Gagging is good. It tells you something you need to know.

 

[amypetecar]

If it was important for you to stay at the grand floridian, and you don't mind waiting a year or two..... should you consider waiting for the Grand Floridian DVC points to go on sale? It gives you the best location at the world, and the consideration about resale would be a moot point as everyone would have to buy direct at first......

does anyone know, or have a good guess, when those points will go on sale?

 

[HannaBelle]

TY for all of those that pointed out my typo!

Let's be careful with the "facts" we throw around.

RCI exchanges are NOT a "permanent perk" for either direct purchasers or resale purchasers. DVC could eliminate or change their exchange system for either or both groups. And actually, before we exchanged through RCI, we exchanged through II -- and before that, we exchanged through RCI. NONE of this is permanent -- it can and will change...for either direct, or resale, or both.

In fact, there is no such thing as a "permanent perk."

I left out the word *NOT* and that was key! I will edit my original post.

The PP is completely correct. Nothing is guaranteed except being able to book at your home resort...

lemonsours, at this time David pay the owner $10 a point and the renter pays David $13 a point.

 

[KAT4DISNEY]

If it was important for you to stay at the grand floridian, and you don't mind waiting a year or two..... should you consider waiting for the Grand Floridian DVC points to go on sale? It gives you the best location at the world, and the consideration about resale would be a moot point as everyone would have to buy direct at first......

does anyone know, or have a good guess, when those points will go on sale?

This also brings up a different point (or maybe it was but I missed it). Historically when DVC is added to an existing hotel that hotel is no longer available for book. If the Villas at GF prove to be true then no more hotel bookings but OP can stay there on their cheaper resale points. And there's been more than one rumor of DVC Poly.

 

[Dean]

On our DW trip at the end of Sept, we did the DVC presentation and decided to buy 100 points at AKL with an October UY. We didn't sign, had the paperwork shipped home. Since being home, we have looked into the discussions on resale/direct and decided for us, buying direct makes sense (so please no discussions on that here. ) The only question now is whether to buy this year or next. I need some double checking of my math below (have I missed something?) But it seems to hinge on what are the chances of an AKL point increase in the next 12 months? From the history sticky, it looks like one is probably due.

So the story is this: If we buy this year, we need to finance, and we got the higher (15%) rate. BUT, we can pay it off entirely next year. Or, we can just buy next year without financing. (Even if we buy this year, though, we will not be able to travel until November 2013, thus forfeiting this year's points unless we were to rent them.)

The incentive we were offered was $600 toward our down payment, so we put in $1200, they take off $1800 total, which makes our Financed amount 12,000-1800=10,200. 10y loan=120 payments
10,200/120=$85 capital/per payment. Total monthly payment=$170
Monthly Interest= 170-85=$85 $85x12=$1020 interest for one year.
So that would mean as long as any hike is less than $10 per point, we would
would be better off buying next year, or if there is a chance it would be more, we should buy now.

Is my logic flawed?

I read through the entire thread and came back to your OP. A lot of good points have been made. Not only is RCI not guaranteed, neither are other Disney options, Concierge, etc. They could change or go away tomorrow. IMO, your choices and assumptions are flawed and you have made up your mind to overpay at just about every turn for the privilege of owning a piece of the magic. Remember that even if you buy new, you are essentially buying a used product out of the box.

Based on your actual question, I would wait. I would never finance and it doesn't sound like you'd use it before then anyway. I'd also spend that time re-evalutating your choices because I think you're making poor ones on several fronts, your choice of course.

 

[sweetdana]

I would buy as many points now as I could pay cash for. I would add when I had the cash to add. There is anything wrong with buying a 25 point now, and then adding on 45 points in 9 months and then maybe finishing when you have the rest of the $$. Buying what you can afford now, and add on later may work out very well.

I think you are misunderstanding that there are garentees of direct. There are none. All trading perks can go away tomm. No one knows what will happen. Buy only enough points to use for you and your family at AKV, and no other reason, or you will be disappointed.

If today you can use a cruise,( which you probably couldn't ever do with 100 point contract), fantastic.. but you may not be able to tommorrow. You could rent out your points at 10$ a point and take that 1K and put it towards any cruise line.

Spending 40$ more per point going direct, for a perk, you may never be able to use is not a financially sound decision. If you cannot find your UY, or a good contract size and are in a rush that is 1 thing, but buying direct for the fear your sales person has put in you.. will cost you thousands of $$. Your sales person did a fantastic job!

EVEN buying direct, buy only when you have enough $$ to buy. Do not be affraid to wait 3 months and only spend tax refund. Then add on more later. Having smaller contracts actually hold resale value more, if you ever needed to sell.. or even just wanted to get rid of some of your points.