DVC-How did you finance

[yitbos96bb]

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

I applaud your ability to do it, but most people do not have this ability. You said you went with 1 car for a while... My wife and I couldn't do this because we both work. When my older car broke down, the cost to fix was prohibitive, so we got a new one.... One with a good record, but not too expensive. Point is though, I had no way to pay the entire cost with Cash.

 

[Daitcher]

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.

Your post is a good one but false on one account. You are wrong in the assumption that people will pay more by waiting. I bought in, in November 2003 at SSR. I paid more per point than those buying in in Jan. 2006. F&F promotion brought the price to $83 and change. I paid slightly more than this three years ago. Those waiting to save the money would have benefitted. I got 2 years of extra use but people who bought in recently saved money on the initial buy in. Also people who save now and buy later may have a new DVC resort to choose from which would provide the full 50 years.


DAVE

 

[DisneyPhD]

Your post is a good one but false on one account. You are wrong in the assumption that people will pay more by waiting. I bought in, in November 2003 at SSR. I paid more per point than those buying in in Jan. 2006. F&F promotion brought the price to $83 and change. I paid slightly more than this three years ago. Those waiting to save the money would have benefitted. I got 2 years of extra use but people who bought in recently saved money on the initial buy in. Also people who save now and buy later may have a new DVC resort to choose from which would provide the full 50 years.


DAVE

True, that is assuming there will be another deal like that one, and that people want the new resort or SSR. What if they want VWL, being sold out if you want to buy from DVC then the cost is now 101 a point (or will be). When we bought in 2002 I think it was 73 a point or somehthing like that and we got a bounus back on the 1st years of points. (not sure of the details, but we have taken 6 trips on those points now too.)

If we could of put the 1,000 or more that we spent on accomodations towards DVC when we started going in 1996 we they more would of went towards the loan instead of just a room and gone. (and we would of got free tickets too I think, but not sure of those details.)

It is differnent for every person and situation.

We didn't get a loan, for some people it can make sense to.

Not everyone who gets a loan is digging themselves in debt. Maybe they own their cars outright, and have a low house payments, but spend a lot of time in school and while have potential for income, don't have the full amount right now.

 

[Daitcher]

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.

Sounds good when reading it but it doesn't work the way you state. Buying into DVC costs far more than the $2,500 a year you are throwing out there. Payments and dues alone on 150 points would run around $200 a month. Add airfare and spending money and the $2500 a year they had for vacation budget doesn't cover there DVC trip. Now a one bedroom should be booked with a family of 4. A studio is far to small in my estimation for a comfortable family trip. Even at OKW 150 points doesn't cover a week in a one bedroom during the cheapest season. If they were forced to travel during peak season they would need 296 points. Payments on that would be far higher. Your scenario is a ticket to the poor house for Joe and Mimi. Joe and Mimi should be campoing intents or staying at value resorts for DVC trips with only 4K in savings and $2500 annual vaction budget. I'm sure they will have no problem explaing to the kids that the college fund isn't there because of the DVC purchase.


DAVE

 

[yitbos96bb]

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...

Yes, but your statement seems to be a black and white portrayal of the issue... It is similiar to the belief by some that all people who drink alcohol and gamble are alcoholics or broke from gambling. Obviously, yes... some people get into an extreme and can not get out... their are people who have serious problems with debt and are just liek alcoholics in that regard. They shouldn't finance because they will get in trouble.

But there are also people who can finance things and still be ok. Liek drinking two drinks at a bar once a week. They don't abuse alcohol and aren't alcoholics. They are responsible drinkers. Financing can be bad and can be good. It allows people who would have to save for years to be able to get the item they want or need. If my wife and I bought our first house 20 years ago, we would have had to have a 20% down payment and it would have taken us YEARS. But with the newer financing we could get in with much less down, allowing us to be homeowners earlier and thus start gaining equity,allowing for a better home purchase later and sooner.

I understand you had some issues with credit. But that doesn't make it a bad thing. It just makes it a bad thing for you. Most of us know are threshholds and stick to it. That is part of being responsible. Can stuff happen that will make it hard to pay... absolutely... most bankruptcies are caused by drains brought on by extended illness... there is job loss as well... but that is obviously a gamble most of us are willing to take... and something those who don't believe in credit are not willing to do. No right or wrong answer... just a gray answer each person must answer.

 

[Daitcher]

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...

Great post!


DAVE

 

[yitbos96bb]

Your post is a good one but false on one account. You are wrong in the assumption that people will pay more by waiting. I bought in, in November 2003 at SSR. I paid more per point than those buying in in Jan. 2006. F&F promotion brought the price to $83 and change. I paid slightly more than this three years ago. Those waiting to save the money would have benefitted. I got 2 years of extra use but people who bought in recently saved money on the initial buy in. Also people who save now and buy later may have a new DVC resort to choose from which would provide the full 50 years.


DAVE

But how do you guarentee a promotion like F and F in the future? CW says the price per point will go up... yes you got unlucky (and so did I frankly) but that happens. SOmeone missing F and F would have to pay $98 a point right now. SO they would pay more.

 

[Daitcher]

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.

No need to get so defensive. I'm just offering my opinion, which is not to finance luxury purchases. Others suggest financing. We are just bouncing opinions out there to help the OP reach the decision that makes sense for them.

DAVE

 

[yitbos96bb]

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

I am happy you can Scott. My savings are for emergency and retirement. I would rather finance it... After all it is my money and I am not really sure what right you or Dave or anyone else has to say we are fools for financing.

 

[yitbos96bb]

No need to get so defensive. I'm just offering my opinion, which is not to finance luxury purchases. Others suggest financing. We are just bouncing opinions out there to help the OP reach the decision that makes sense for them.

DAVE

That's my point dave, you didn't JUST offer an opinion. Your post comes off like it is THE ONLY choice and anyone who finances or uses home equity, etc is an idiot... Even if you don't use those exact words, your post drips with that tone.

This is an opinion:

I think you should wait until you can pay with cash. I know it can be hard to save, but if you run into trouble and get over extended, lose a job, or have a severe extended illness, you will not lose your DVC, nor will it be one more thing you have to come up with money for per month.


That to me would have been much better than what you wrote.

 

[krdisneybound]

However each one purchases their DVC, enjoy it to the fullest. We all deserve to have great vacations when we spend so much money at Disney.

I didn't buy my DVC with inheritance like some individuals or have to borrow $$'s to buy it, but I still managed to pay for it all at one time. And with my hard earned money working for so many years to build up a savings. That makes me enjoy my visits so much more.

 

[Disney-Kim]

I don't see anything wrong with making a purchase on credit, making payments, then owning. This gives us the ability to buy things that are big ticket like cars/houses/timeshares. I personally see nothing wrong in paying interest or financing. I have the cash but feel that it belongs in my savings. I know interest/debt/etc....for some this is an issue, but it isn't for me.
remember...we all have our own OPINIONS.

We can offer our opinions on how we live our life, but we should not tell others how to live theirs, or judge them for not living like us.
Instead of condeming the OP's question about financing, she has been told to pay cash or else she doesn't deserve to own DVC.

we shouldn't judge. (flame suit)

 

[yitbos96bb]

I don't see anything wrong with making a purchase on credit, making payments, then owning. This gives us the ability to buy things that are big ticket like cars/houses/timeshares. I personally see nothing wrong in paying interest or financing. I have the cash but feel that it belongs in my savings. I know interest/debt/etc....for some this is an issue, but it isn't for me.
remember...we all have our own OPINIONS.

We can offer our opinions on how we live our life, but we should not tell others how to live theirs, or judge them for not living like us.
Instead of condeming the OP's question about financing, she has been told to pay cash or else she doesn't deserve to own DVC.

we shouldn't judge. (flame suit)

No flames from me. Nicely said.

 

[cgcw]

We can offer our opinions on how we live our life, but we should not tell others how to live theirs, or judge them for not living like us.
Instead of condeming the OP's question about financing, she has been told to pay cash or else she doesn't deserve to own DVC.

we shouldn't judge. (flame suit)

ITA. And, in the end, what does it matter to anyone how someone else paid for DVC? Does it impact anyone but the purchaser? No one is personally going to be impacted by choices we make for us but ourselves. So, really, what business it is of anyones how one person bought or another person bought. NONE of us walk in anyone elses shoes. It sure seems like some on this thread are forgetting that.

 

[erikthewise]

"Don't buy until you can pay cash"
"Home equity for luxury is a ticket to the poorhouse."

Comments like these are too judgemental.
We used home equity to pay for our purchase.
We had savings in the form of mutual funds that could have paid for our purchase several times over, and a substantial positive net worth just from liquid assets. But at the time our home equity line was charging 4% interest, and I didn't want to cash in any of the mutual funds. I felt they would do better than 4% (I was right), and in any case it was inconvenient -- I wanted to keep the money invested.

Home equity was the best alternative as a traditional loan would have had a much higher interest rate. It worked just fine, and our home was never in danger.

 

[gatorincs]

That's my point dave, you didn't JUST offer an opinion. Your post comes off like it is THE ONLY choice and anyone who finances or uses home equity, etc is an idiot... Even if you don't use those exact words, your post drips with that tone.

This is an opinion:

I think you should wait until you can pay with cash. I know it can be hard to save, but if you run into trouble and get over extended, lose a job, or have a severe extended illness, you will not lose your DVC, nor will it be one more thing you have to come up with money for per month.


That to me would have been much better than what you wrote.

I like the way you think. I agree with this post 100%.

 

[JimFitz]

I always use other peoples money whenever I can. My savings is for when the **** hits the fan. My savings is substantial and it's for me and my family. I have no problem paying to use someone elses money. Having said that, I think using financing through Disney is not a wise decision, you have to pay too much to use their funds. 10%!!!! There are cheaper sources to get cash.

 

[DAG]

I enjoyed reading all of the great posts here...so many different points of view. In my opinion, financing is the way to go, especially if you put the purchase on a low or 0% credit card. There are many 0% offers nowadays.


Hopefully my next financed purchase will be a new plasma t.v. from Best Buy !

 

[swich2mac]

I am happy you can Scott. My savings are for emergency and retirement. I would rather finance it... After all it is my money and I am not really sure what right you or Dave or anyone else has to say we are fools for financing.

Ummmm, I believe that my response was quick, non-abrasive, and made to the original poster who asked the question. NOT YOU!

 

[TEK224]

OK, I'll wade in here. I financed thru Disney in August. Since my payment is deducted from my checking account the interest is 9%. I financed for 10 years, but plan to pay it off sooner.

Should i have taken on another debt? Probably not. Can I afford my DVC? I think so. The bill gets paid every month, as do all my other bills. I still put money away for emergencies and my retirement. Would I have extra money if I wasn't paying interest? Sure. But I don't think I'd ever have an extra 14K just lying around to give to DVC.

I had a trip planned to WDW, in which my hotel room would have cost 2k for the week. So instead I used that money to put down for the DVC. Once it's paid, I'll have 40 more years of accomodations just waiting for me. Works for me.

I'd rather enjoy it now. I could get hit by a bus next week. If it ends up costing a little more because of the interest, that's okay with me. I would have had many fun vacations in the meantime.

Terri