Direct CCV purchase vs resale

[disneynutz]

Bill, i was able to get the paperwork redone. Thanks. You saved me a lot of money if I ever do resale.

Any thoughts on how you would split 250, 125/125 or 150/100?

Either should be fine. With the units requiring more points now and more in the future these sizes will be great for someone buying CCV resale.

Bill

 

[sky2823]

Thanks to everyone. The current promotion added another $1,500 discount on the next 50. $6,500 in total

I increased my buy from 250 to 300 will go with 3 X 100pt contracts for estate planning purposes and each child will have the benefits and membership down the road

My cost per point is roughly where the resale market is for CCV now (not really robust yet) and thanks to Bill I am much more liquid in case I want to sell down the road.

Thanks again Bill. I appreciate the advice

Probably not the best use of resources, but the intangible of legacy to the kids has some ROI for us

 

[disneynutz]

Thanks to everyone. The current promotion added another $1,500 discount on the next 50. $6,500 in total

I increased my buy from 250 to 300 will go with 3 X 100pt contracts for estate planning purposes and each child will have the benefits and membership down the road

My cost per point is roughly where the resale market is for CCV now (not really robust yet) and thanks to Bill I am much more liquid in case I want to sell down the road.

Thanks again Bill. I appreciate the advice

Probably not the best use of resources, but the intangible of legacy to the kids has some ROI for us

While the legacy idea is a nice one, the reality who knows what DVC will be like down the road, if you will keep the contracts that long and if your children will even want to own a DVC contract by then. We asked our adult children if the are interested in taking over our contracts and we were told, "no thanks".

Bill

 

[KAT4DISNEY]

While the legacy idea is a nice one, the reality who knows what DVC will be like down the road, if you will keep the contracts that long and if your children will even want to own a DVC contract by then. We asked our adult children if the are interested in taking over our contracts and we were told, "no thanks".

Bill

Hope you get your sales commission from DVD Bill. OP increasing their direct purchase by 50 points!

 

[sky2823]

You probably will be right about “legacy” not necessarily being a slam dunk.

However, it helps me rationalize in my brain why I blew all that money House of Mouse timeshare .

Regardless, I am appreciative to the board for the tutelage and will probably be back with more questions

Have a great weekend

B

 

[sky2823]

sorry if I am being dense about it. However after all the dust settles and 3 X 100 pt contracts here is my math


300pts

COST 300 points. $54,600.00 $182.00/pt

Developer Credit. $ 6,500.00 ($ 21.67/pt)

Disney Visa. 2%. $ 962.00 ($ 3.20/pt)

2017/18 prorated dues $3,267.00 ($. 10.89/pt)
(No dues 2017 full points)
(Prorated dues 2018 full points)

6 Months no interest disney visa $1,800 ($. 6.00/pt)
Just a back envelope guesstimate

Total point discount. $12,529 ($ 41.76/pt)


“Effective” Price per point $140.24/pt


My interest calculation is a swag (might be higher), didnt always round as well as some of the calculations
might have a minor adjustments as I didnt model this out.... Some of these aren’t discounts but more added value as I still am paying the total amount minus the developer credit). However in aggregate, all should be within margin of error of a few points

Am I missing something with my math? $140 direct purchase per point is comparable to almost everything on the resale market when you factor in years on contract. Even SSR if you discount the $140 by 20% (8 less years FOR SSR) you are $112 per point which isn’t terrible for SSR for a 100 point contract

Other than intangibles (resort preference, higher dues, people per room etc...) I can’t see any huge discount or advantage from buying any property resale vs direct especially when you consider getting no benefits for the next 50 year

I’m not saying you cant save, but not nearly as much as being presented by these resalers and you have to give up a lot of intangible value

Sorry, the math is bugging me. I realize I am a rookie at this, but i just cant jive the resale market in my brain when I run the numbers. Can someone explain what I am missing?

PS - I’m not just referring to buying copper creek on resale vs direct (apples to apples), I am referring to buying copper creek direct vs buying other resorts via resale


Thanks

 

[Gilbert Loo]

I think your math is correct. After you break down the total costs over the life of the contract, the largest cost to owning DVC will be the annual maintenance dues. CCV has one of the highest. Is your plan to use DVC for 10-20 years and resell it (hopefully recouping your initial investment?). Then your maintenace costs is the majority of what you pay for your DVC vacations. (If that makes sense)

 

[sky2823]

The plan would either be to exit or legacy to kids if they want it in 20. I’d be fine with keeping it

I agree on the dues being higher. In my case, since WL is our favorite resort, I’m okay with the premium.

It seems like only about an extra $300 a year (on 300 points) compared to average resort.

I do agree that the dues are a significant piece for some buyers.

And since the only way to avoid these fees on a new buy (not CCV) would be to pay DVC retail without a lot of the discounts I received for going to copper creek, I can see the rationale to avoid buying directly if you are already a member.

However, for me, to have full benefits is probably worth the $300 extra in dues at copper creek per year. As well as when you buy something like SSR, the 11 month home resort is useless, since SSR is almost always available. Then when you add on the flexibility of picking your use year, contract structure flexibility is easily worth $300 a year premium to me as a buyer.

If you are a new buyer and do not have your heart set on a specific resort like (BLT) then I can’t see the tremendous value in the resale market that is being talked about

Again, I could be completely wrong. It happens to me all the time

 

[Bing Showei]

In my case, since WL is our favorite resort, I’m okay with the premium.

When it comes down to it, this is really all that matters. The other calculations are largely justifications of a means to an end.

For example, the argument could be made that by putting the purchase on your Disney Visa for “only 2%,” you’re effectively paying MORE than you would by putting the purchase on a charge card with a higher rewards return. Additionally, the “savings” on 0% finance rate assumes that one would finance at all. This also assumes Disney has extended one a $5X,0000 credit limit which seems really high.

Again none of this matters if CCV is your resort of choice. I would argue buying Aulani would be the best dollar spent if one loves being in Hawaii and wants to be there any time of year.

But to argue that CCV is more cost effective than buying SSR resale would necessitate a high degree of creative math and assume a worst case scenario (paying 2017 dues) on the resale side.

 

[sky2823]

You are correct on the 2% from the visa. I didnt think that through... but there would still be an incremental benefit as most card would just give you points (which works out to more like 1%), so I do still think you would get at least $450 incremental benefit.

Disney isn’t doing the line of credit, the Disney Credit card is run through Chase and they allow you to combine credit lines so $50K is pretty acheivable.

With regards to the 2017 dues. I agree you would need to pay 2017 dues on a resale, but its unlikely you would get 2017 points on a resale without paying a premium. Adding benefit from not paying 2017 or 2018 dues was a way I quantified getting those points as part of the contract but not having to pay dues on them. This was an “assumption” that may or may not be an accurate way of quantifying those points. However, getting 1 1/2 of points with no dues is definitely a bonus compared to resale’s that will put a premium on contracts that have those extra points. The question is “how would you value an extra 450 points without having to pay dues?” $3,267 (the dues amount) doesn’t seen too unreasonable. But maybe I’m wrong. Dunno

My analysis is this:

If you are an “existing owner” and receiving benefits, buying additional points directly for any other resort doesn’t make a lot of sense and you should do resale. There is an argument to be made that buying points at CCV with all of the discounts can be at least competitive to some of the other resorts with a few exceptions and can reap other benefits (pick use year and reasonably in demand resort at 11 months at CCV vs SSR)

IF you are a new buyer (no membership), unless you dislike CCV or have your heart set on another property, it doesn’t seem like there is enough savings on the resale market to stray from direct sales

My gut is Disney has their Strat Planning guys working off a model to manage/create the market so that this is the case. IF they did not, then they would only be relying on emotion for DCV direct sales, which would not sustain in the long-term. They are fine with the resale market as it creates liquidity and actually adds value to the contracts, but they are not going to let it get to the point where the “resale” value proposition is so great that it hurts new sales.

That’s just my 2 cents. However, I also think the resale market is overblowing savings and the value proposition to “new buyers”.

I also think Disney, if they have not already, will strip every possible “extra” away from resale points and continue to add additional benefits to direct point purchases. It only makes sense as the benefits cost the pennies incrementally vs. the revenue generated by new direct sales.

 

[disneynutz]

You can break your direct purchase into two or more contracts, pay them separate giving your line of credit time to be paid down. I also think that you can partially pay and pay off your line of credit between charges. If I remember correctly the Chase zero interest deal has a purchase limit plus you can not use the card until the zero interest charge is paid off or they apply the interest.

Bill

 

[Bing Showei]

Disney isn’t doing the line of credit, the Disney Credit card is run through Chase and they allow you to combine credit lines so $50K is pretty acheivable.

"Pretty Achievable" feels like a euphemism for "technically possible." If this is what you've managed to do, hats off to you as it suggests you have remarkable credit. This also suggests however that you have the Premiere version of the Disney Visa which carries a $95 annual fee and I would assume there is some limit to the amount you can earn back (I've read $750, but cannot confirm this). Again, your savings here is assuming one can secure a new Disney Premiere Visa with a credit limit high enough to run the numbers you are suggesting.

With regards to the 2017 dues. I agree you would need to pay 2017 dues on a resale, but its unlikely you would get 2017 points on a resale without paying a premium. Adding benefit from not paying 2017 or 2018 dues was a way I quantified getting those points as part of the contract but not having to pay dues on them. This was an “assumption” that may or may not be an accurate way of quantifying those points. However, getting 1 1/2 of points with no dues is definitely a bonus compared to resale’s that will put a premium on contracts that have those extra points. The question is “how would you value an extra 450 points without having to pay dues?” $3,267 (the dues amount) doesn’t seen too unreasonable. But maybe I’m wrong. Dunno

Sure you pay a premium for past UY points. But a premium over significantly lower resale prices... which is still significantly lower than direct. A quick scan of the resale broker sites and I see the following:

350pt SSR with 214 2017, all 2018, all 2019 points asking $109/pt.
320pt SSR with 198 2017, all 2018, all 2018 points asking $105/pt.
250pt SSR with all 2017, all 2018, all 2019 points asking $104/pt.

The point is if you look for unstripped contracts, they're out there and they do carry a premium over other resale contracts, but nowhere in the same league as a direct CCV contract, extra RTU years notwithstanding.

IF you are a new buyer (no membership), unless you dislike CCV or have your heart set on another property, it doesn’t seem like there is enough savings on the resale market to stray from direct sales

My gut is Disney has their Strat Planning guys working off a model to manage/create the market so that this is the case. IF they did not, then they would only be relying on emotion for DCV direct sales, which would not sustain in the long-term. They are fine with the resale market as it creates liquidity and actually adds value to the contracts, but they are not going to let it get to the point where the “resale” value proposition is so great that it hurts new sales.

In terms of DVD relying on emotions to sell direct contracts... Solely? No. But heavily? That would be a resounding "Yes." Emotion is THE biggest component of selling DVC direct. Talk to any guide and they'll massage the message so that you focus much less on Annual Dues, the savings-impacted effect of financing, or the amount of capital you are locking away into a timeshare, and focus much more on the happy memories you'll make, the times you'll spend at the parks and poolsides with your happy family, and they'll sell the feeling of being at WDW and all the magic of taking pictures with plastic headed cartoon characters. There's a reason DVC tries to get people at the park to do a tour. When you're in the middle of a well orchestrated show, you suspend disbelief and just want to enjoy the experience. Enter DVC. You give buyers (direct or resale) a lot of credit if you feel the decision for most buyers to buy into DVC is purely driven by a logical, fiscally sound, emotionally devoid decisions.

If their data analysis shows anything, I would wager it shows that a minimum 75 point buy in is close to the edge of what DVD can push for new/resale buyers to feel like they can justify the expense to be a "member of the club" before losing sales. While there are the MM events, AP discounts, and tote bags, a big part of what the blue/white card system is designed to do is to establish a second-class group of owners. Taking away points being used for ABD and Disney Cruises didn't suffice, so they stripped membership extras. That shame was enough that as soon as the rules changed in 2016, 25-point add-ons were the default step after resale purchase. Today, that number is 75, but the white-carded-stigma is the same.

I would take no issue with a suggestion that CCV Direct is a great place to buy into DVC. Full stop. That's a statement that assigns personal value that no one can argue factually against.

I would take no issue with a suggestion that CCV Direct is a much smarter purchase than CCV resale at this point. This, I feel is absolutely true as well.

What I take issue with is selling the notion to someone just learning about DVC, and who wanders into this thread, that mathematically, buying CCV direct is a more economical purchase than going the resale route at ANY resort. Using financial models that involve saving $900-plus dollars on a Visa purchase that evolves into $450, that evolves into $355 with an annual fee on a credit card that most people would be unable to replicate, or using savings based on interest people may not pay at all is not just misleading, it's faulty evidence for an assertion that is just patently false.

 

[sky2823]

With due respect, Ive read in thread people quantifying the smallest direct sale negative so bringing up minor benefit that can be used to cut the cost is reasonable. This Visa benefit you are referring to is small compared to the other discounts discussed. Removing the 2% points doesn’t materially change the analysis.

I’m not trying to be emotional in my analysis. And maybe the best way to put is that its not as clear cut as people make it. It just opened my eyes as I looked at the numbers

But the dogma of resale, resale resale for new buyers can be just as “patently false” as direct direct direct for new buyers. A new buyer coming on to disboards is way more likely to be skewed against buying direct which I feel is misleading

There seems to be a lot less voices out there giving a heads to people that although you might save a few dollars (or not) on the outset with an SSR contract (less or zero with other properties), it might be not material enough to give up the benefits of a direct buy to a first time buyer for the next 50 years.

I’m sorry, I personally don’t see the “tremendous” value in a new buyer buying an SSR unless they have their heart set on a different resort or hate CCV. If you want something so stripped down as an SSR contract,go buy a Marriot timeshare or something close to the property. You loose contract structure flexibility, the home resort 11 month reservations (for a competitive resort) and full benefits, 8 years off the contract and the unknown of future benefits. Just like you can argue Disney can take those benefits away at any moment, they can also enhance them tremendously which seems like its in their best interest to do as time goes on...

There is as much emotion going on the ROFR thread and making offers and accumulating points just like with buying direct. People are finding entertainment in the bid and ask process (the highs and lows)and the feeling that they are “gaming th system” and that is great. But its still emotion none the less.

Even if you hate my analysis which I have no problem with, I still think it is legitimate to say that Disney is intentionally closing the gap with the value of buying resale value for new buyers vs. direct. In my mind the gap is already non-existent when taken in aggregate (unless you dislike CCV or want a different resort). From a business perspective it makes more sense to enhance future benefits to club members than go the opposite direction. The cost to Disney for those benefits are pennies compared to DVC members cheap money to finance future resorts


But again, its just my opinion.

 

[KAT4DISNEY]

sorry if I am being dense about it. However after all the dust settles and 3 X 100 pt contracts here is my math


300pts

COST 300 points. $54,600.00 $182.00/pt

Developer Credit. $ 6,500.00 ($ 21.67/pt)

Disney Visa. 2%. $ 962.00 ($ 3.20/pt)

2017/18 prorated dues $3,267.00 ($. 10.89/pt)
(No dues 2017 full points)
(Prorated dues 2018 full points)

6 Months no interest disney visa $1,800 ($. 6.00/pt)
Just a back envelope guesstimate

Total point discount. $12,529 ($ 41.76/pt)


“Effective” Price per point $140.24/pt


My interest calculation is a swag (might be higher), didnt always round as well as some of the calculations
might have a minor adjustments as I didnt model this out.... Some of these aren’t discounts but more added value as I still am paying the total amount minus the developer credit). However in aggregate, all should be within margin of error of a few points

Am I missing something with my math? $140 direct purchase per point is comparable to almost everything on the resale market when you factor in years on contract. Even SSR if you discount the $140 by 20% (8 less years FOR SSR) you are $112 per point which isn’t terrible for SSR for a 100 point contract

Other than intangibles (resort preference, higher dues, people per room etc...) I can’t see any huge discount or advantage from buying any property resale vs direct especially when you consider getting no benefits for the next 50 year

I’m not saying you cant save, but not nearly as much as being presented by these resalers and you have to give up a lot of intangible value

Sorry, the math is bugging me. I realize I am a rookie at this, but i just cant jive the resale market in my brain when I run the numbers. Can someone explain what I am missing?

PS - I’m not just referring to buying copper creek on resale vs direct (apples to apples), I am referring to buying copper creek direct vs buying other resorts via resale


Thanks

*Nobody buying resale now would be reimbursing 2017 dues so that's one thing that can be removed from the comparison. And there's not necessarily a premium that is going to be added to the purchase price for a contract with 2017 points. It's also the only way to get 2016 points - so maybe up to 2 years of points "free".

*Very few will be buying at the amount you are discussing so not getting the same discount.

*Annual dues on SSR are $1.40 less per point than CCV. For anyone trading to a different resort at 7 months and using 300 points it will be $420 less paid on the SSR dues. Lets make the math easy and say that it will always be that spread - over 40 years you would pay $15,120 more for the exact same accommodations.

*Up front I'd believe I could get SSR 300 points in the $29K range or less - might take an extra swing thru ROFR but DVC does not take everything back so it also might not. CCV in your price would be $42K or over 31% more (although the numbers are a bit off and would actually be a bit more) The value of the purchase is going to be loaded toward the front end (and I believe most timeshare ownership is in the 10-15 year range). Having that $13K in the bank or stock market when sitting in the same room you booked at 7 months? I'd take that.

*If CCV is where you want to book at 11 months and stay then buy direct.

*There is a component in how you intend to use DVC - ie will you always stay at your home resort? Will you often or always try to stay at another resort?

*DVC doesn't have points available for sale at all resorts. For certain ones you're probably going to have to go resale or sit for awhile on a waitlist with DVC and no guarantee of getting the points anytime soon.

*If you want to have the lowest cost investment into DVC then buy SSR from my analysis.

 

[sky2823]

I have three 100 point contracts with fully loaded 2017 and 2018 points.

I have seen comparable fully loaded 100 pt contracts lists for $110 to $120

(Keep in mind you can even go 75 pt)

Assuming $115 that means SSR cost would be $36K

Then discount your numbers by 20% for 8 less years and the math works out with what I am saying

The time value of money rationale is valid, but based on that argument none of us should buy the timeshare and just invest our money and use the proceeds to fund our vacations in the future

If a family came on this board and based on what they read decided to buy a 300 point contract at SSR as opposed to three 100 point contracts at CCV directly, not being able to pick the use year, not having a competitive home resort for 11 months out and not having any benefits, I think they might be very dissapointed with their decision longer term.

The first time they try and book their week vacation and realize without home resort 11 months out their options are incredibly limited to SSR... and they paid $36K for the package without any of the benefits...

 

[sky2823]

And I would go even further and say if they don’t like CCV, then just wait for a new resort to open that they like as opposed to buying SSR

 

[Bing Showei]

And I would go even further and say if they don’t like CCV, then just wait for a new resort to open that they like as opposed to buying SSR

I'm not sure if you're trolling or if you actually believe this is sound advice. But the fact is, the boards are full of people who own SSR who rarely, and in some cases, have never booked a single point there in their life. They're staying at VGF, PVB, BLT, BWV, BCV, and yes, CCV. And they're doing it far more cost effectively than the rest of us who don't want to risk not staying at our favorite resort.

But that's neither here nor there.

Look, you bought direct at a resort that you love and you're happy there. That should really be the end of it. I'm sorry if you feel your direct purchases needs this much defending/justification. It really doesn't. It's a beautiful resort and is selling really well for a lot of reasons. Among them, it's where people want to stay. If you're happy with that, it's all that matters. End of story.

 

[pineapplepalms]

I'm not sure if you're trolling or if you actually believe this is sound advice. But the fact is, the boards are full of people who own SSR who rarely, and in some cases, have never booked a single point there in their life. They're staying at VGF, PVB, BLT, BWV, BCV, and yes, CCV. And they're doing it far more cost effectively than the rest of us who don't want to risk not staying at our favorite resort.

But that's neither here nor there.

Look, you bought direct at a resort that you love and you're happy there. That should really be the end of it. I'm sorry if you feel your direct purchases needs this much defending/justification. It really doesn't. It's a beautiful resort and is selling really well for a lot of reasons. Among them, it's where people want to stay. If you're happy with that, it's all that matters. End of story.

As someone who bought CCV direct and SSR resale, I agree. We wanted a significant amount of points and while there are times we really care where we stay, we also want to stay at all the resorts over time. We saved significantly by buying SSR resale points for the purpose of staying at all resorts over time in 1BR villas and larger during non-peak DVC periods (we're using some of those points to stay at BWV in a 1BR soon for 10 days and have also used them for weekends at VGC so far). Since we wanted to be able to reliably book CCV for stays during the holidays, buying it direct was a great decision for us, but it doesn't negate the advantages of buying other resorts resale. Ultimately DVC is all about making the most of our Disney-related vacations, and that will look different for every owner.

 

[sky2823]

I’m sorry. My intention was not to troll and I just thought we were having a debate with differing opinions. Am I trolling if I just disagree with you?


I absolutely was monday morning quarterbacking myself with my purchase. I think that is human nature with any major purchase.


But what I found from reading blogs, message boards and resale sites is there that there is so much out there directing people to buy resale.


Then I ran the numbers and to me it told a different story or at least a much murkier view.


I think everyone points to SSR as the best value play out there so in comparing that to what I paid for CCV and the way I was able to structure was eye opening. To me the juice wasn’t worth the squeeze on buying resale. Especially as I just had my first experience trying to book rooms outside of the 11 month window. Then I went online and read other message threads with people talking about the same booking issue.


Even if you strip away every discount (you debated) except the developer credit, make an allowance for 8 less years, the gap is not that great. And SSR is considered the BEST value play which means other resorts have much less a gap or negative gap.


Then everyone talks about that disney can take away the benefits at any moment. Sure they could, but they have absolutely no incentive to ever do that as they would completely cannabilize direct sales. The opposite it true, whenever direct starts to slow which eventually will happen, they will just increase benefits to entice folks. As I said, these benefits are peanuts to them compared to the income stream and cheap money we provide them. If they do increase benefits, then the after market will take a price hit as demand will shift. I would rather take my chances on an increase of benefits than a decrease...


I think 1 direct contract (already being a member) and supplemental resale contracts is a very viable option for some. The last poster mentioned that and I agree


But I personally think any new buyer and especially a family (with kids as they need to travel during busy times because of school) who spends $30K plus on an resale SSR contract will be very disappointed when they could have spent a little more and get the 11 month window and all the benefits. If CCV doesn’t meet your needs then wait for Riviera or the River country to open and buy there with incentives


I apologize with this comes off as trolling to you, honestly I think we can both agree to disagree. I’m not saying “resale’s” are not a great thing. They can be awesome and we need a robust resale market for our own liquidity and valuation. I just think first time buyers need to really really consider buying direct.


I like this board a lot and people have been very helpful to me. I just thought it was a spirited debate. If something was wrong with my tone or anything else, I am amenable to feedback and will modify my approach in the future

 

[striker1064]

Then everyone talks about that disney can take away the benefits at any moment. Sure they could, but they have absolutely no incentive to ever do that as they would completely cannabilize direct sales. The opposite it true, whenever direct starts to slow which eventually will happen, they will just increase benefits to entice folks. As I said, these benefits are peanuts to them compared to the income stream and cheap money we provide them. If they do increase benefits, then the after market will take a price hit as demand will shift. I would rather take my chances on an increase of benefits than a decrease...

I'm actually quite curious about this part as well.

I'm well aware that Disney spells out in the contract that all perks are incidental and they can be taken away at any time. I'm sure that's to cover them in case the worst ever happens. But as a new owner, I've been trying to see what's been taken away over the years, since everyone talks about resenting losing benefits over the years. As best as I can tell, they took away park tickets - definitely a big one. They also took away valet parking. But they added free WiFi before they rolled it out to the rest of the resorts, and they added the discounted gold pass recently. They've also added more events like Moonlight Magic this year than there were previously. Yes, they did increase the direct minimum to 75 points to qualify for perks, but they gave some time in between announcing and enforcing to allow people the chance to buy 25 direct to still qualify.

I'm certain I'm still just not seeing the forest for the trees. What other significant perks have been stripped away over the years? Or is it more the very clear terms that they can take them away at any time, and the expectation that they will?