DVC Owners...Question

[ptrbryant]

Like many of us on the Budget Board, our family has a limited income and we do alot of scrimping (and usually a little charging) to afford yearly trips to WDW for my DH, DS8 and myself. Last year, we rented DVC points at VWL for a week, which came to about $1040. I've noticed that many have said they can only afford yearly visits to WDW because they bought into DVC. I've looked into it, but with a small downpayment, how is that more cost-effective than renting points each year? Could someone point out the details I' m missing!
Thanks!
Karla B.

 

[LeftCoaster]

It all depends on how you use your DVC. I have no problems staying in a studio which is the "Cheapest" option of DVC. The studios are also closest to a regular resort room.
Short term, it'll be more expensive but longterm, it can pay off.
My first contract was 100 points at Old Key West. That can get me at least a week in a studio there for most of the year. My total cost for a resale (including my closing costs) came to $7400.
If you break down that $7400 over the life of the contract, it comest out to about $195 per year or $1.95 a point for the purchase price. Then, you need to add in the maintainence fees. This year, they came to $3.69 a point (at Old Key West). So, you could say that my actual cost per point this year was $5.64 per point.
Now, I was able to pay up front for that contract so from here on out, I only pay maintainence fees every year. Historically, they've gone up about 3.5%. The big danger is the add on bug. I've already succumbed to that.
If you get the one bedrooms, two bedrooms, etc, you likely won't come ahead. In that situation, it can be like having a nice upgrade for the same price.

 

[BostonDisneyKid]

The reason it works out to be more cost effective is that you are locking in your resort accommodations rates at today’s prices for the next 38/50 years respectively. Feel free to PM me for a detailed explanation and example.

 

[mom23boys]

Karla,

For my family we bought DVC in Dec 2002. The main reason we bought into DVC is the accomandations, I have three boys so we would need two rooms, usually at a Moderate/Deluxe. So cost wise it was more expensive every year to do that then buy DVC up front since we are locked into todays rates. I also only pay maintenance fees monthly.

We did only buy 150 points at the Beach Club Villas knowing we will only be going to Disney everyother year. We also enjoy the Jersey Shore on the oppisite years.

This year in August I was able to get a 2 bedroom using two years worth of points. Long term it is a good use of our money.

I hope this helps.

 

[dis-happy]

In a lot of ways, you are correct and it doesn't make sense financially. I would only buy into DVC with extra money, once retirement savings are well into place, children's college savings is set, emergency funds and insurance are all lined up.

We bought into it because we are a family of 5, like going to Disney, and really enjoy the extra room and kitchen. I probably would have stuck with renting points, but liked the ability to make my own reservations on my schedule, and we had the extra funds available. Our plan is to use it for 10 years, enjoy it with the kids, and then sell it. One thing that did sell me on Disney is their right of first refusal, which keeps the resale prices up, unlike other timeshares.

 

[ptrbryant]

Yes, Dis-Happy, that's my thinking. Our retirement fund is on target, but we need to put more towards DS' college fund and build up savings. We'd have to put every spare savings dollar into buying into DVC outright...and if we didn't do it, we'd have those monthly payments along with maintenance fees.
I think we'll (hopefully) keep renting points until we have enough extra $$$$ to become owners.
Thanks, everyone!
Karla B.

 

[crisi]

DVC is a form of vacation insurance. My dues will go up a maximum of 15% a year, and are legally capped to only cover expenses - DVC can't make any more than their "management profit" which is capped.

Can't say that about either renting points (which have held steady for a number of years, but may or may not in the future) or a hotel room.

But it hasn't saved us money - although we haven't really intended it to. I think it CAN save you money if you are disciplined to continue to vacation the way you always have - studio accomodations in a moderate or deluxe without a lot of weekends.

I don't recommend it for anyone on a tight budget. Its a financial committment to a luxury - Disney vacations. It will always be cheaper to stay in a value or offsite. If your budget gets tighter and you can't afford park tickets, airfare, food, you'll still need to pay dues (some people rent their point in that situation, but that is not risk free either). $10,000+ in up front costs is not terribly affordable to many people. We bought with "found" money - my husband's bonus which we don't budget because it may or may not come, and no loan (ok, we had a short charge on our home equity line of credit because we closed before we actually had the bonus in hand).

 

[caverill]

I think this is a great question and the answer will change based on each families situation.

In our case, we looked at it as a pre-paid vacation plan.

Prior to purchasing DVC, we had gone to WDW 3 out of the 4 previous years.

As my wife and I discussed it, but decided that vacationing was a very important item for us and that we could not forsee a time when we wouldn't want to go to WDW. That was the main reason for our purchase.

We normally only visit WDW once per year, however that actually is constrained more by the cost of airfare then DVC. We can use our points anyway we want for as many visits as we want.

I also don't believe DVC saves "us" any money! All the money we save on the room gets spent on other stuff.