DVC-How did you finance

[themudd4]

Ok...this is just my opinion, so you can take it or leave it. I called today about DVC. I have not bought YET, but plan do look over the paperwork that they are sending me (FED EX) and am pretty sure we will buy in.
I do plan on using the DVC financing plan for a couple of reasons.
The down payment, and monthly payments are more than affordable although I plan to try to pay this off within the next year or two. I, like many others look at it as they are getting my money one way or the other.
I do understand why a few of the post have said wait until you can pay cash. Well, I do have a savings, I am a home owner and could borrow against that if I needed to, BUT...I have a savings account for "JUST IN CASE". You know, to help cover the bills if either my DH or I were to become sick, or if he was to get laid off. So, I consider that to be off limits. As far as using my home...I couldn't personally do that. If something were to happen to my income, I would hate to think that my house could be at risk over a vacation time share. That is why I am leaning towards Disney financing. Yes, it would be another bill...and yes it is a bill that I do not have to have. But at the same time, if I am spending the money anyway (Mostly at Disney) why not go ahead and invest in the furture vacations as well.

 

[swich2mac]

If you can't pay cash, wait until you can.

 

[DisneyPhD]

If you can't pay cash, wait until you can.

You think the price will start going down at some point, but so far it hasn't. So far the longer you wait to buy, the more it cost and the less years of use you have. I wish we had bought back in 1996 when we started going to WDW, but there was no way we could afford it back then (still in grad school, didn't own a house.) Heck we couldn't even afforded a loan for it back then (and might have not been aproved for one.)

When we did buy in 2002 we had enough cash to buy the 170 points at the time. We however spred it out over 3 cc payments (our limit on each) to get points for it. We were able to use these points for airline tickets later. (This was before Disney Visa.) We of course paid them off right away.

I may have paid cash for ours, but I am not going to assume to tell others they have to do the same.

 

[swich2mac]

www.mytotalmoneymakeover.com

 

[gatorincs]

I'll add my $.02 here. I do not agree with all the posters who say "wait until you can pay cash."

Let's consider Joe and Mimi (my hypothetical couple) and their two kids. Joe and Mimi value their vacations and believe it is important to take them every year. Let's also say that Joe and Mimi have a small savings account ($4K) that they do not wish to use for DVC and are able to save only $2,500 per year to spend on a vacation.

Now, that $2,500 might buy you 7 nice days at a good, but not cream-of-the-crop, Disney hotel. They could keep taking these $2,500 annual vacations ad infinitum.

Or, Joe and Mimi could spend that $2,500 per year on a DVC contract. They could spend that same $2,500 per year for the contract (and the dues) and still take a week's vacation, but at a nicer resort, using their annual point allotment. In year 10 (or sooner), however, their annual cost will plummet to only the annual dues, saving them substantially. And, their annual vacations from that point forward will (in essence) be paid for, and they'll have more than 30 ADDITIONAL YEARS to enjoy Disney without having to pay.

If they were to wait until they could afford to pay for the contract in toto, they would either have to (a) take no annual vacations for approximately 6 years and save the $2,500 per year until they were able toafford to pay for the entire contract (assuming the price didn't go up!) or (b) keep taking their annual vacations, which would prevent them from ever saving enough money to buy a DVC contract.

The DVC is not for everyone, that's for sure, and it shouldn't cause one to be stretching to make ends meet. But for a couple like Joe and Mimi -- and I'm betting there are a lot of Joe's and Mimi's out there -- it makes eminent sense to me to finance.

 

[Rence]

One complaint I have about Disney financing - No Statements!

With every other loan I have ever had, I got monthly statements or I could check out balance etc on-line.

Disney will automatically take payments out of your account each month, but you never get a statement with regards to how much you owe and at this point they don't have account access on the web (but suposedly it is coming). The only way to find out what your balance is is to call.

That is my only complaint, I'd like an easier way to know what my balance is.

 

[Disney Doll]

I tend to disagree with the "wait until you can pay cash" mentality, because that day may never come! I do think you have to be very well aware of your financial status and your ability to set a goal and achieve it when it comes to financial things.

DH & I honeymooned in WDW and took at least one, and sometimes two, vacations there every year after our honeymoon. We knew we loved it, and would continue to want to go to WDW. We also knew how we were able to save money to go on a WDW trip. I am pretty organized about moving money into the different accounts we have that we save for things with...we have a vacation account, a car account, a tax account, a retirement account, and a special circumstances account. I have always been a big fan of saving a little bit every week, because it never feels like as big of a financial "hit" as having to come up with a big chunk of $$ does.

So, knowing we loved WDW and would want to keep going there, we looked into DVC. We liked the accomodations and we liked the flexibiltiy of the program as far as spending points rather than being locked into the same week or two weeks every year. We looked into Disney's financing, and decided to go with the 10 year loan. It had the lowest monthly payemnt, and our logic was that we would, in all likelihood, pay it off sooner than 10 years, but if we had a month where money might be "tight" all we had to make was the low monthly payment. But we also knew that we had pretty strict financial control, and would bust our butts to make bigger payments. We did exactly as we decided we would do, and had it paid off in about 3.5 years. So now, we pretty much have enough points to get us a lot of vacation time in deluxe level properties for about $2000/year in maintenace fees. Those of you who regularly stay in deluxes know that $2000 for accomodations might get you 10 days if you could find a really good deal. In 2004 we stayed at WDW for a total of 18 days, which means our per night cost for deluxe accomodations was $111.00. In 2005 we stayed a total of 16 days and had points left over, so our per night cost for deluxe accomodations was $125 with points which we carried over to use in 2006. I don't care what kind of discount you find, I doubt that you'll ever get $125 at the Beach Club or any other deluxe!!!!

DH & I consider vacation to be a very important part of our life. It is more than a luxury for us...it is a necessity, much like a car. I do not wish to spend my entire life saving for what I want, only to be too old to enjoy it when I finally have enough cash.

If you make an informed decision, taking out a loan is not the worst thing that you can do. Just make sure the loan payment doesn't strap you. In our case it didn't.

 

[PinkTink63]

I didn't spend $30,000 for my DVC thank goodness! We only have 150 pts! Yes, we financed ours through Disney (5 years) and are very happy with the payment. I don't believe that we would ever be in a situation where we could plunk down that kind of money for DVC (unless I hit the Powerball on Wed!). My DH and I don't have those big paying jobs (he's a deputy sheriff, I'm a graphic designer) for a big cash plunkdown. We decided to buy in before we had kids because we knew once that happened we'd never have the money to buy in. So glad we did-- I love the 1 bedrooms for us now with our DS2.

I agree with vascubaguy-- if I'm spending the money on a vacation anyway I might as well go ahead and get something in return--38 years of accommodations. We were already spending more than $1,000 per year on hotel stays and that was in moderates. We saw it as a win/win for us.

I think you have to go with however you are comfortable. What works for one doesn't work for all.

One person's "luxury" purchase is another's "necessity" purchase! We own our own home and all of our cars. For us, it's like a car payment. We don't have a big fancy house! We decided to stay in our small house right now, so we could buy DVC. We might even have to stay there for the rest of our lives, but we take an awesome vacation every year and our son is always going to remember that!
DVC is what ever it is to you! For us, it is priceless! I'm not giving up my vacation for anything!
I always remember my dad telling me, as he looked at my son, "He's only going to be that age once!"
So you really have to decide what is best for you. If you are comfortable with the payments, then go for it! It doesn't cost $30,000 to buy DVC. I'm sure most of the people that own DVC didn't pay cash.

Stephanie

 

[tinker&belle]

Wow! Thank you for so many replies (I had no idea the post had taken off like this.) Both sides of the discussion are points we have considered. No decision yet, but we also research a car FOREVER before buying, so for us taking a while is normal. I think that we will start saving and maybe go check out BWV and SSR in August and go from there.

(Thank you for the info in the PM Seneca Beach)

 

[krdisneybound]

If you can't pay cash, wait until you can.

I think this is a little harsh, generally speaking. As a rule, the American family would do nothing, if they waited until they had "cash" to pay for everything.

Just my .02 cents

 

[eliza61]

I agree with Krdisneybound, it was a little harsh. As with other posters, vacations are not a luxury for me and my family, it is a way for us to reconnect with one another in a often too hetic world. My husband & I purchased 180 points using disney financing for 10 years. We paid it off in 5 years. All the family reunions, magical moments, romantic dinners with my DH
were worth every single dime I paid in interest. and I have many more years of fabulous vacations and memories to look forward to. Now that my teenage sons are heading off to college these vacations have become worth even more to me. I often feel sad for my mom who worked hard all her life (H.S. teacher) saved every dime, never once splurged on herself and then passed away before ever enjoying it (my perspective, probably not hers, being a mom). I try to maintain a happy medium with my debt.

Eliza

 

[dianeschlicht]

Used home equity on the first 230 point contract and paid cash for the second 150 point contract.

 

[Disneyrsh]

Right now the amount of debt the 'typical' american family is in is larger in proportion to their income than in any other time in history except for the Great Depression.

This statement: I tend to disagree with the "wait until you can pay cash" mentality, because that day may never come!

I think is a contributing factor. If you don't believe you can save the money, than you never will.

I really worry about the future of our country when we're all so inculcated on the whole 'buy now, pay later' philosophy. It makes us think we can afford things we can't. We're being taught to 'finance', not to save. And that 'financing' is smart, but saving doesn't get you anywhere.

The guy who was being harsh, he had the Dave Ramsey (Ramsay?) website up there. Once you've dug your way out of debt and been in that hole, you don't ever want to go back there, and sometimes you get a little overzealous about wanting to help other people not fall in the hole, either.

I'm more of the opinion that sometimes you just have to do your own digging, both ways (I had to do mine), but I'm sad to watch you make that hole...

 

[DVC-Don]

First contract we bought and financed through DVC (something like 10% interest which we wrote off on our taxes) , then one year later paid it off with a Home Equity Line of Credit (4.25% at the time and again wrote the interest off on our taxes till it was paid for a year later). Second contract we paid for with the HELoC. The HELoC is now paid off.

DW has had 2 brothers who died in their 40's from cancer and a third (just turned 50) was just told last week he had maybe a year if he did not get a lung transplant. We're going on vacation while we can.

 

[gatorincs]

Right now the amount of debt the 'typical' american family is in is larger in proportion to their income than in any other time in history except for the Great Depression.

This statement: I tend to disagree with the "wait until you can pay cash" mentality, because that day may never come!

I think is a contributing factor. If you don't believe you can save the money, than you never will.

I really worry about the future of our country when we're all so inculcated on the whole 'buy now, pay later' philosophy. It makes us think we can afford things we can't. We're being taught to 'finance', not to save. And that 'financing' is smart, but saving doesn't get you anywhere.

The guy who was being harsh, he had the Dave Ramsey (Ramsay?) website up there. Once you've dug your way out of debt and been in that hole, you don't ever want to go back there, and sometimes you get a little overzealous about wanting to help other people not fall in the hole, either.

I'm more of the opinion that sometimes you just have to do your own digging, both ways (I had to do mine), but I'm sad to watch you make that hole...

I have so many potential responses to this that I do not even know where to begin. Suffice it to say, I'd bet you that there's not a single person posting on these boards who is completely debt free. I know very few people who purchase cars, homes, or much anything else without taking on some debt. And those who can afford to do so probably aren't too worried about buying into the DVC.

Regardless, it's all a matter of perspective and priorities, and obviously each person will have different views on those things. But I think most would agree that not all debt is bad, nor will debt necessarily lead to the next "Great Depression" (which your post seems to suggest is coming).

 

[dsneygirl]

I agree with vascubaguy-- if I'm spending the money on a vacation anyway I might as well go ahead and get something in return--38 years of accommodations. We were already spending more than $1,000 per year on hotel stays and that was in moderates. We saw it as a win/win for us.

I think you have to go with however you are comfortable. What works for one doesn't work for all.

That's how DH and I looked at it as well. We are paying 2 years of interest but would we have gone 2 years without a vacation? Probably not.

 

[Juliet25]

I'm really enjoying reading everyone's responses. I *really* want to buy into DVC but DH is not too keen on the idea yet. I've printing off some good points people have made about the financing. For us, there's no way we could do this without a loan. Our student loans are such that we're on a 30 year payment plan. Add in DH's recent bout with cancer and subsequent unemployment...I have no idea how we managed to keep from going under. Basically, I see DVC as my "reward" for doing without a lot of luxuries for a long time. Even if it means more debt, at least my meager paycheck will go towards something fun, kwim?

In a perfect world, DVC would be paid for with cash, but I'll be 100 years old before I have that kind of cash, lol.

 

[yitbos96bb]

Home equity for a luxury purchase???? Sounds like a ticket to the poor house. Hold off the purchase until you can pay cash. If you can't pay cash for the buy in, you cannot afford it. Not a popular stance on here but it is the truth. WDW trips are not cheap even with the paid for lodging. Do yourself a favor and wait. If you really want to buy in you'll find a way to save the money. If not you'll be glad you didn't buy in.


DAVE

I financed with Disney and have no issues at all. As someone said, for a lot of us it is difficult to come up with 10 thousand dollars all at once. Many people use home equity for luxury purchases such as vacation homes, etc. Sorry but your answer is extremely offensive to me. If youa re able to save $15,000 at a time, I applaud you. But just because I do not have $15,000 lying around doesn't mean I can't afford my DVC. My credit record is spotless, I make all my monthly payments and still have money left over for savings, so I would say don't make simplistic statements such as if you can't pay cash you can't afford it and instead look at the multitude of factors that need to be taken into account on the affordability of a purchase such as this.


To the OP... there are many ways to finance. I would recommend two routes... One, see if Disney is offering any additional money off or other offers if you finance through them. You can then transfer the loan to a fixed rate credit card (although unless you get a low interest rate, I would watch this as you lose your deduction) or pay it off with a Home equity loan. The other option has been mentioned... put it on a Reward card and then pay it with home equity or transfer to low interest card, etc. I went through Disney as it keeps the monthly payments down... we pay more to it per month and once we get it to the point we can pay it off in a year we will transfer to a 0% interest card for however many months promotion.

 

[Daitcher]

So I take it you purchase all your cars OPP also?

I don't think a lot of people have that kind of money to just cut a check to Disney up front and I don't think that should be the end all reason why or why not to purchase a time share.

I find the Tax Deductions quite nice actually for myself.

Yes, both of my cars, 2005 Toyota Avalon and 2002 Toyota Highlander were purchased with cash. We actually went with one car for a while to do this. Why pay finance charges when all you have to do is save a wait a little while?


DAVE

 

[yitbos96bb]

I'm really enjoying reading everyone's responses. I *really* want to buy into DVC but DH is not too keen on the idea yet. I've printing off some good points people have made about the financing. For us, there's no way we could do this without a loan. Our student loans are such that we're on a 30 year payment plan. Add in DH's recent bout with cancer and subsequent unemployment...I have no idea how we managed to keep from going under. Basically, I see DVC as my "reward" for doing without a lot of luxuries for a long time. Even if it means more debt, at least my meager paycheck will go towards something fun, kwim?

In a perfect world, DVC would be paid for with cash, but I'll be 100 years old before I have that kind of cash, lol.

The one really good thing with DVC is that the Points rental is very good.

We have a 160 points and pay about $250 (it is less than this but I am rounding up) per month for mortgage and dues. If you ran into any issues you can rent those points (currently about $10 pp) and get about $1600. This would pay for 6 months worth of your DVC, which will help immensely.