Creative Justification: Resale or Disney

[sandiedvc]

So I wasn't looking for an add on.. but none the less the email from DVC about AKV add on caught my eye. I had seen many emails from DVC about adding on and I really hadn't really paid any attention. This time was different, maybe because we only had 23 2008 use year points left (and we haven't even gotten them yet!)

So I got onto the DIS to check the cost per point $104 . The last time I bought points they were $61.50 ! Clearly there must be a cheaper way! Resales here we come. Not much in the 100 point range for our September use year, but the prices looked better.

I started wondering how much better the prices were... am I comparing the price of apples to the price of apples?

The cost for AKV for 100 points with the current promo isn't really $104.
You have to take off the $8 per point "rebate"... so down to $96.

Now take off the $500 Visa gift card-- $5/point... so down to $91.

Wow still high. OK the developer points. We have a vacation scheduled for next year where we can use them, so that's good; but it will cost us about an additional 25 points to stay at SSR in the same room type. So the utility to us is really only 75 points. So how to value those points? I took the quick way out and used $10/point which works out to $7.50 value per point.... SOOO.. down to $83.50.

Still high, but looking better. Now is where the point price deductions came to me over period of time (and are a little more like grasping at straws!), but apples must be compared to apples!

If I buy from Disney, I don't pay MF until May. Resale, I probably wouldn't have to pay MF for the rest of 2008. So the difference is the first 4 months of 2009. Dues at AKV are $471 per 100 points. So savings for the 4 months are $157; $1.57 per point. SOOO.. down to $81.93.

Still can do better resale. BUT resale I can't charge my purchase to the Disney Visa and get 1% back. Soo $9600 charge is 96 cents per point is $80.97. (We have the money to pay it off when the bill comes.)

Almost apples. Just have to consider the cost for closing that you have to pay with resale and not for existing DVC members. Looks like about $400 closing costs which is about $4 per point. Sooo... $76.97


Apples. We decided to go ahead and add on thru Disney. There are probably cheaper resales, but I am not known for my patience! For us, this was not a bad deal.

However, we DID get 2008 September use year points. If we had not, I feel that you would need to take the point price reduction for the developer points out of the equation.

Of course, YMMV. If you don't pay off the add-on or can't use the developer points, the deal swings in the resale side very quickly. We are also not planning on using anything other than developer point from the contract in the 2008 use year. That could change the dynamics of the finances.

I'm sure that there are vast holes in my logic, but I am happy in my little world!

-- Kathy

 

[RobDoc]

In addition to the analysis above - it's highly unlikely that you would be able to find an AKV resale for $76.97. AKV has an expiration date of January 31, 2057 - as does the extended OKW contracts (also unlikely to be found under $80 per point). SSR contracts expire in 2054 and all others (VB, HH, BWV, VWL and BCV) expire on January 31, 2042. You may be able to apply some "value" to those additional years to lower your analysis even more!

Nicely done!

 

[5forDiz]

So glad you posted this Kathy Thought that 2008 UY points were not being given on this add-on promo. Your analysis is very compelling :thumbsup

2008 UY Points & Developer Points & $500 gift card & $8 per pt reduction is making us take a good second look at this !

 

[Laneychris]

Loved the analysis. Makes me want to add on, and we haven't even closed yet.

 

[PEANUT1]

this is almost the exact logic for us.... we haven't added on just yet. I am still waiting to see if I want to add on at BLT first.

 

[ITGirl50]

I like your analysis, but we too are waiting for BLT. We may add-on at VWL. Who knows??

 

[shortypots]

Great analysis! We kinda did the same kind of analysis when we decided to buy. We basically figured that if we rented out our developers points and 2008 points that we would actually be able to reduce our price to $76/pt plus closing costs. We definitely couldn't do any better than that for the additional years on AKV, and it was the only one my DH would consider at the tme because of the animals.

 

[kristenrice]

Is the $500 gift card only available for those doing add-ons? We are looking to buy in at AKV as new members and that $500 would go along ways on our trip this October! I hadn't heard of any incentives for the 100 point INITIAL buy in except for the $8 point discount. Is there anything else I am missing? FWIW, we do have and use the Disney Visa. DH is also on the fence about doing resale or buying direct. The 100 points is the MAX we would want so resale WAS our only option, until now!

 

[kellybus]

When you look at it that way the cost is comparable to resale

 

[sandiedvc]

Is the $500 gift card only available for those doing add-ons? We are looking to buy in at AKV as new members and that $500 would go along ways on our trip this October! I hadn't heard of any incentives for the 100 point INITIAL buy in except for the $8 point discount. Is there anything else I am missing? FWIW, we do have and use the Disney Visa. DH is also on the fence about doing resale or buying direct. The 100 points is the MAX we would want so resale WAS our only option, until now!

I am not sure what the incentive is for new members. I am sure that there is a thread on it out there somewhere!

I am also not sure if Disney picks up closing costs for NEW DVC members. I'm sure that someone who has joined recently can let you know. If they don't, you would be looking closer to $81.93 per point if new members have a similar offer that I referenced above.

I think that I read somewhere that you have to buy 160 points to qualify for the new member promotions, but I have been out of the new member loop for a looong while.

The guide did tell me that September use year was close to the cut-off for 2008 points being available. I am not sure what that really means, but definitely check with your guide to see if they are available. If they are not available, remember to add the $7.50/point reduction back into the cost of the points.

Good luck!

-- Kathy

 

[Robert H]

Kathy,
Our resale fell through so we just bought through Disney on Friday. We are brand-new members. Disney does not pay closing costs for the first contract, but the closing costs are still cheaper than they are through resale. Our closing costs were $320 through Disney vs. around $475 through resale.
We bought 160 points so I can't answer the question as to what incentives are available for 100 point buy-ins for new members.

 

[kapeman]

The above analysis works when buying AKV which is offering incentives, but not the sold-out resorts.

 

[sandiedvc]

The above analysis works when buying AKV which is offering incentives, but not the sold-out resorts.

While the specifics of the analysis are only for AKV purchases by existing members, the analysis method will work for any purchase. You are simply eliminating the variables between contracts.

For example, what is the "cost" of points bought directly from Disney for OKW? Currently I believe that they are selling for $104. There are no incentives, but you do need to take into account that existing DVC members do not pay closing costs. This expense is incurred when buying resale, saving you about $4/point.

Therefore the real "cost" is $100 per point when buying thru Disney.

You could go further and add in the savings of paying with the Disney Visa if you will not be financing, as you cannot charge your purchase with resales. That would bring the cost down 1% or $1 per point on a 100 point contract. So you are down to $99 per point.

Can you buy OKW cheaper on the resale market? Darn tooting!

My amazement was in the bottom line of the original AKV analysis. I thought for sure that resales would always be MUCH cheaper than buying from Disney.

However for OUR particular, peculiar set of circumstances AKV direct from Disney turned out to work for US.

Of course, YMMV!

--Kathy

 

[delmar411]

While the specifics of the analysis are only for AKV purchases by existing members, the analysis method will work for any purchase. You are simply eliminating the variables between contracts.

For example, what is the "cost" of points bought directly from Disney for OKW? Currently I believe that they are selling for $104. There are no incentives, but you do need to take into account that existing DVC members do not pay closing costs. This expense is incurred when buying resale, saving you about $4/point.

Therefore the real "cost" is $100 per point when buying thru Disney.

You could go further and add in the savings of paying with the Disney Visa if you will not be financing, as you cannot charge your purchase with resales. That would bring the cost down 1% or $1 per point on a 100 point contract. So you are down to $99 per point.

Can you buy OKW cheaper on the resale market? Darn tooting!

My amazement was in the bottom line of the original AKV analysis. I thought for sure that resales would always be MUCH cheaper than buying from Disney.

However for OUR particular, peculiar set of circumstances AKV direct from Disney turned out to work for US.

Of course, YMMV!

--Kathy

Just remember that contracts for OKW from Disney are the extended version. If you want to extend a resale you need to add at least $20 pp. OKW is $101 so - $5 PP is $96 which is very close to the high $70's/$80 PP that you get with resale plus an additional $20 pp is putting you at break even. Maybe leaning a bit to the direct sale side if you got an referral bonus.

 

[sandiedvc]

Re: OKW extended contracts. TSS has several extended OKW for sale for $87 to $90, not all stripped either. (Whether they will pass ROFR at that price point ? ) But there is a savings between the $96 from Disney and the $90 resale.

I should have been clearer that those were the prices that I was comparing to Disney direct.

Sorry!

--Kathy

 

[delmar411]

Re: OKW extended contracts. TSS has several extended OKW for sale for $87 to $90, not all stripped either. (Whether they will pass ROFR at that price point ? ) But there is a savings between the $96 from Disney and the $90 resale.

I should have been clearer that those were the prices that I was comparing to Disney direct.

Sorry!

--Kathy

Ah ok. Yeah I saw those and I'm very curious whether they pass ROFR. I've been comparing OKW contracts everytime I see one since we want to add on there but I'm not sure how DVC is handling those resales.

 

[5forDiz]

Re: OKW extended contracts. TSS has several extended OKW for sale for $87 to $90, not all stripped either. (Whether they will pass ROFR at that price point ? ) But there is a savings between the $96 from Disney and the $90 resale.

I should have been clearer that those were the prices that I was comparing to Disney direct.

Sorry!

--Kathy

As of Aug. 17 on Donald is # 1 's passed / not passed ROFR list is 210 OKW Extended Contract passing at $82.50 per point with all 2008 points intact.

Would be interested as well to know at what price extended smaller contracts are passing at.

 

[kapeman]

While the specifics of the analysis are only for AKV purchases by existing members, the analysis method will work for any purchase. ...
, but you do need to take into account that existing DVC members do not pay closing costs. This expense is incurred when buying resale, saving you about $4/point.

Therefore the real "cost" is $100 per point when buying thru Disney.

You could go further and add in the savings of paying with the Disney Visa if you will not be financing, as you cannot charge your purchase with resales. That would bring the cost down 1% or $1 per point on a 100 point contract. So you are down to $99 per point.


--Kathy

Yes, your math makes sense, especially in the 25-75 point range where the closing costs make the per point cost increase, but after that the closing cost per point increase becomes a much smaller factor.

Just remember that contracts for OKW from Disney are the extended version. If you want to extend a resale you need to add at least $20 pp. OKW is $101 so - $5 PP is $96 which is very close to the high $70's/$80 PP that you get with resale plus an additional $20 pp is putting you at break even. Maybe leaning a bit to the direct sale side if you got an referral bonus.

$16 per point is still a pretty big difference, even for the extended contracts. If you compare the 2042 contracts that many people are still interested in, the savings REALLY start to add up.