DVC paying for itself?

[donald#1]

We're interested in buying into DVC. I have often seen statements on the boards similar to "in 7-10 years the cost of DVC pays for itself" or "in several years you are only paying the annual dues" Can someone explain this logic? I have always figured in my own calculations that the initial cost is spread out over the life of the contract.
Thanks for helping clear this up in my mind.

 

[pilferk]

We're interested in buying into DVC. I have often seen statements on the boards similar to "in 7-10 years the cost of DVC pays for itself" or "in several years you are only paying the annual dues" Can someone explain this logic? I have always figured in my own calculations that the initial cost is spread out over the life of the contract.
Thanks for helping clear this up in my mind.

Think of DVC as prepaid vacation accomodations.

If you were staying, in a Disney deluxe hotel, every year, for a week, what would you spend? Say about 2100.

Multiply that out by 7 to 10 years...and you get between 14700 and 21000.

DVC membership costs you the same-ish (assuming enough points for a one week studio stay and the minimum 150 point contract), for the same amount of time, in better accomodations....

I think that's what people mean....and after that 7-10 years you still have (depending on your resort) 30 - 40 years left of travel...of course, you're still paying dues on your points.

 

[utahkennedys]

In our case, DVC paid for itself even faster since we bought a small contract at OKW. Our first trip was 5 nights in a 2BR, which would have cost more than what we paid for our contract...if we paid rack rates. So, now, I consider my maintenance fees my only true "cost" and we are planning to add on.

 

[vandy]

There are many ways to look at numbers and I started like you did, spread the price over the contract term and then guess at an average figure for dues over the term. But what really eased my mind was just doing the "for now" scenario and what my lodging options will cost.

For now: we like a kitchen and a villa when we travel. We bought 175 SSR points which gets us a 2br villa every other year. The purchase price was about $320/year and dues are $721 this year and est. $745 for next. My two year cost will be about $2106 . This gives us 10 nights at OKW and SSR in a 2br villa. We would need 2 rooms at a value resort and at the time we travel we MIGHT get a discount price of around $89 per room, times 2 rooms times 10 nights equals $1780 plus tax comes to around $1986. For now, I get a tremendous upgrade in lodging for only around $12/night. And this isn't even comparing to a moderate or deluxe resort so think of the value now!

Remeber that dues will go up, but so will the room rates. I really am not sure when I break even and I don't really care. All I know is that DVC provides me with a tremendous value right NOW and I own it! I am not renting rooms with money I will never see again.

 

[tobidisney]

The cost per night at Contemporary 30 years ago was approx $30/night. Now it is around $400/night.

With buying DVC, the points per night won't increase, so it will be more valuable as years go buy...

this made sense to me...
If only DVC were around 30 years ago!!!!

 

[DisneyWacker]

The cost per night at Contemporary 30 years ago was approx $30/night. Now it is around $400/night.

With buying DVC, the points per night won't increase, so it will be more valuable as years go buy...

this made sense to me...
If only DVC were around 30 years ago!!!!

Don't get me wrong, I love DVC (I rented points at SS for my trip I took last week) and am considering purchasing. However, your logic is slightly flawed. I've looked at the maintenance fees and they have gone up about 10% a year every year for the past 5 years. If this continues at this rate, most of the savings from the room charge increases is overcome by the increase in maintenance fees. It's still not a bad deal, and I'm thinking of buying. If I bought and decided to rent out our points for the first 10 years, it should pay for the remaining 30 years in the contract. At that point, all I would have to pay is the maintenance fees.

 

[disneykidatheart]

Don't get me wrong, I love DVC (I rented points at SS for my trip I took last week) and am considering purchasing. However, your logic is slightly flawed. I've looked at the maintenance fees and they have gone up about 10% a year every year for the past 5 years. If this continues at this rate, most of the savings from the room charge increases is overcome by the increase in maintenance fees. It's still not a bad deal, and I'm thinking of buying. If I bought and decided to rent out our points for the first 10 years, it should pay for the remaining 30 years in the contract. At that point, all I would have to pay is the maintenance fees.

I am not sure where the link is to the maintenance fees. I think the average increase has been 4-5%. I have only been a member for a couple years but my fees have not gone up 10% in any year.

 

[mikesmom]

Where are you getting your numbers? We have not seen increases in our fees of 10% in any year and we have owned since 2000. As a matter of fact, one year we actually saw a decrease.

 

[Mtnman44]

Here's a rough chart that might help. It assumes an annual 3% increase in annual dues and a 3% increase in cash hotel cost over 20 years. You can see that given these assumptions you would have saved enough after approx 7 vacations to have earned back your initial investment of 160 points plus the maint fees of those years. For the remaining years, you start "earning" money which is really the amount you save over your maint fees vs. paying cash for 7 nights at a deluxe hotel. For this illustration, hotel cost was estimated at $350 per night starting in year 1.

 

[hematite153]

Don't get me wrong, I love DVC (I rented points at SS for my trip I took last week) and am considering purchasing. However, your logic is slightly flawed. I've looked at the maintenance fees and they have gone up about 10% a year every year for the past 5 years.

I am not sure where the link is to the maintenance fees. I think the average increase has been 4-5%. I have only been a member for a couple years but my fees have not gone up 10% in any year.

Before we bought in I did a full dues increase analysis.

OKW went up a net 3.75%/yr from 1991 to 2007
BWV went up a net 2.5%/yr from 1996 to 2007
VWL went up a net 4.0%/yr from 2000 to 2007
BCV went up a net 4.25%/yr from 2002 to 2007
SSR went up a net 2.75%/yr from 2004 to 2007
(All percentages were round up to the nearest quarter.)

If anyone wants to see the full spreadsheet pm me and I can email it to you.

 

[LisaS]

Here is a link to a table of dues increases: http://personalpages.tds.net/~rb/DIS/DVC/DVCDuesHistory.htm

 

[DisneyWacker]

I guess I stand corrected. When I looked into DVC I looked at the fee increases and thought they were a little high. I thought I'd seen 10% somewhere, I guess I was wrong. 4-5% a year is still higher than inflation.

 

[Dean]

Ultimately you have to look at how you would have vacationed otherwise. I think 7 years is pretty optimistic for most unless you just do studios and for Sun-Fri. For some it'll never pay for itself and will actually cost them money. I suspect the average is around 12-15 years if you take the appropriate items into consideration.

 

[hematite153]

I guess I stand corrected. When I looked into DVC I looked at the fee increases and thought they were a little high. I thought I'd seen 10% somewhere, I guess I was wrong. 4-5% a year is still higher than inflation.

Yes, it's higher than inflation but so is just about everything at wdw.

"In 1992 a standard room at Caribbean Beach Resort in regular season cost $77, while in 2007 it is $165 -- a 5.2% increase, compounded annually." -- from mousesavers.

Some resorts have lower increases and some have higher. So, it's a matter of what you compare it to.

Plus, I agree with Dean, how long it takes for DVC to "pay for itself" depends what you would have done otherwise. I think that 7-10 years is optimistic. We would have stayed in value (and occasionally moderate) resorts and we calculated that it would take us closer to 16 years to break-even (assuming a 5% annual increase in dues). However, we've had much nicer vacations and if you compared our DVC costs to the cost of comparable deluxe rooms we'd probably break even around 7 years.

 

[magicmama]

However you calculate it, its your decision on how you want to spend your vacations & money. And what you will get or 'value' from your DVC purchase.

Someone on these boards has shown calculations down to the cost per point. Which is another interesting way to look at your final cost and 'is it worth it?'.

Final decision will be up to you to decide if DVC is worth the cost to experience the magic yearly or every other year. For a lot of us - we wish we had DVC sooner and suffer from addonitis!

 

[calypso*a*go-go]

These scenarios always crack me up because it's so easy to have the numbers fall in your favor (whichever direction that might be ).

Bottomline -- if you want it, buy it. When you get tired of it, sell it. If you feel you have to keep justifying it in someway, then maybe you aren't as comfortable with the decision to buy as you should be and should revisit it at a later date.

BTW, these comments aren't directed at anyone in particular so please don't be offended.

 

[DisneyDVCdad]

DVC math drives me Crazy! I just knew I wanted to be able to take my family to Disney every year! I bought in to have a good time!

 

[jctwizzer]

Are we saving money?? I don't have a clue whether we are or not. When we first looked at DVC we made projections based on staying in a studio. On that basis, and looking at expectations for staying on site at the moderates, we showed a break even in under ten years---which allowed for some unknowns. The second trip, the two of us stayed in a one bedroom and that's been our practice since 1996....and we generally make three to four 5 to 6 day trips annually. We give no thought to whether we save money or not. We have regular trips to a place we enjoy. We stay in facilities that allow us individual space, if needed. From time to time we bring friends or family along and stay in a two BR. The ability to regularly come down and get away from the routine makes any savings secondary. JMHO

 

[pickles]

"Saving money" and "Disney" said in the same sentence is an oxymoron isn't it? Disney is about wasting money. That said we can waste our money to our best advantage.

Here is my very basic scenario(I am NO math genius)
OKW I bought 190 points
if I take the averages of the points(I pay cash on weekends, so I am not including those points) a 1 bedroom averages to 21.20 a night and a 2 bedroom to 36 pts a night those numbers go into 190 8.96 and 5.28 respectively. So, that is how many point nights I can get. My family doesn't fit in a studio so that is a non issue for me

If I average how much it costs to stay at OKW paying cash its $485.75 and $680 a night and then I multiply those times the number of nights my points allow me to go its $4352.32 and $3590.40. So, that is what my trip would on average cost me per year paying cash and so what my points "save me" I invested $13870.00 to buy my points so in 3.19 my initial investment is paid for in a 1 bedroom and in 3.86 for a 2 bedroom

this doesn't include the fact that I pay cash for weekends and save $141.69 and $170.00 on average per cash night I stay using my DVC discount that savings comes close to paying for my yearly dues, especially when you consider I also rented a room for my inlaws and saved a weeks worth with my discount.

My husband and I are not very rich, it was tough for us to get the initial money for the purchase.(we used our 401 and paid it off within a year) but we like the deluxes and would be unhappy staying in the values and with our family size wouldn't do well at most deluxes. oddly we like our own bedroom away from our kids, it would not be a vacation to us if we were stuck sleeping in the same room as them. So, we consider what we did a long term investment. It forces us to take vacations at least every other year..an investment in our emotional health. It will allow us to take those vacations in the type of enviroment that will be most relaxing to us

Hope our silly way of doing math helps you out.

 

[RobDoc]

When we joined DVC in 1993, we had usually stayed in either townhouses at Disney Village or Deluxe resorts on most of our trips. I tracked our DVC expenses (purchase price, maintenance fees), benefits (discounts we would otherwise NOT have gotten- and free admission tickets for 6 years) and compared those costs to what we would have spent for the accommodations we usually reserved in the past. I even amortized lost interest on the purchase price.

On our original purchase of 230 points we had reached a "break-even" in just under 4 years. We have added on 7 times since then as well as purchasing 3 resales and I lost interest in tracking our expenses since I had satisfied my curiosity that DVC was a "good deal" for our family.

Having said that, I do agree that whether DVC "pays for itself" will vary greatly depending on how each owner chooses to use the program. The "costs" will vary greatly for those who choose to use DVC points for the cruise, to stay at non-DVC resorts, to stay at DVC resorts on weekends or during higher point times of the year. I'm satisfied that DVC is a "good deal" even when using points for those options just based on the cost of the maintenance fees.

I find the flexibility of DVC to be the foundation of the program. Since we can choose when we want to go, how often we want to go, what resort we'd like, what villa-type we want and what other option we'd like to try - the only real limitation is the number of points we have access to at any given time. Even banking/borrowing enhances the flexibility of the program.

I think at times we tend to oversimplify and overstate the economic "value" of DVC and interject the way it makes us feel - and that emotional value is also a valid component of DVC ownership (and it is not an accidental component, IMO ).

Bottom line is that for most of us, DVC does pay for itself - if not financially, then certainly emotionally.