Financing

[gr8ful]

My guess is financing allows people to justify buying more points (oh look, it's only $100 more a month for an extra 100 points let's just do that), so they make more commish that way. I doubt they make more if a member finances vs. pays cash, but who knows really.

I do suspect guides receive an incentive if you finance. Just as sales and finance managers at car dealerships likely do. And retail associates who constantly try to get you to sign up for their store’s credit card.

 

[cruisehopeful]

We told him we wanted at least 100 points to add to our June UY VGC, and that’s what he grabbed for us! The strange thing is that I’ve been keeping an eye on VGCs that were taken and none of the ones posted had 2024 points. I was thrilled that we got the “bonus” 2024 points to bank into 2025.

Our guide/counselor is really good about checking and acquiring the VGC points that become available. If you aren’t too attached to yours, I can give you Brandon’s contact info

No hurry, but when I have a chance, please send me his contact info. I've only had my current guide for a short while and I want to give her some time since she's the first person who has explained the process and offered to help me with VGC.

 

[Girlstar30]

Financing DVC should be viewed through the lens of other consumer debt. The average car loan (according to Google) is now close to six years. So, a 10-year DVC loan isn't absurdly out of whack for a resort-dependent product you can use for over 40 to 50 years.

If we want to keep the comparison within the vacation and leisure realm, financing an RV (there are a gazillion of them around) typically lasts between 10 and 15 years, and your DVC ownership lasts far longer.

I'm willing to bet that financing DVC ownership is far more common, even on these boards, than many will admit to. Is it a good idea for everyone? Probably not, but comparatively, it's not the worst thing in the world, either.

Easier to justify financing a car that most people need than a vacation membership... regardless there is nothing wrong with financing, I financed both of my resale contracts, but people should be aware of how much interest they're being charged over the life of their loan and what that means in comparison to renting out points from others or booking a trip directly through Disney.

I bet that when some people see that the interest rate is 17.5%, they don't realize that this means that if they pay the minimum they will be paying more in interest than the entire contract is worth.

Now with 15 year loans and higher interest rates, I haven't done the math and I dont even want to, to me that shouldn't even be legal, it seems predatory to me, just my take.

 

[Bo1203]

I bet they move more units with these 15-year loans. The 9.99% rate seems more appealing now compared to a few years back when we had 0% auto loans and 3% mortgages. Actually, surprising they haven't raised the rates.

 

[muppets3d]

I do suspect guides receive an incentive if you finance. Just as sales and finance managers at car dealerships likely do. And retail associates who constantly try to get you to sign up for their store’s credit card.

At a dealership, the finance company pays a spiff to the dealership in exchange for financing. Disney handles the mortgage financing for DVC themselves, so I'm not so sure they pay a spiff.

 

[cruisehopeful]

At a dealership, the finance company pays a spiff to the dealership in exchange for financing. Disney handles the mortgage financing for DVC themselves, so I'm not so sure they pay a spiff.

Perhaps it's more of a sales quota thing, then. Maybe the guides push financing because they've been taught that they can get people to add on more if they are spreading out their payments. Thus, increasing the odds that someone will have the money to add on since they are spreading out their payments for so dang long.

 

[muppets3d]

I bet they move more units with these 15-year loans. The 9.99% rate seems more appealing now compared to a few years back when we had 0% auto loans and 3% mortgages. Actually, surprising they haven't raised the rates.

On the current sales sheets I'm seeing for Riviera, rates are 12% for financing. Not sure if 9.99% is still an option or not. Maybe if you have better credit than what they assume in this sheet?

Perhaps it's more of a sales quota thing, then. Maybe the guides push financing because they've been taught that they can get people to add on more if they are spreading out their payments. Thus, increasing the odds that someone will have the money to add on since they are spreading out their payments for so dang long.

They probably assume that most people, even people who sit down for a DVC sales presentation, aren't in a position to drop $35k+ in one fell swoop, so they just do financing by default. Those who can pay cash can.

I do think that people who are committed to financing could be more easily talked into buying more points versus a cash buyer. $100 more a month is a lot easier to swallow than $1200 up-front for an extra hundred points.

 

[SL6827]

Wonder when they will need to bump up to a 20-year loan? Maybe when the pricing hits $300 a point for new resorts?

 

[Girlstar30]

I bet they move more units with these 15-year loans. The 9.99% rate seems more appealing now compared to a few years back when we had 0% auto loans and 3% mortgages. Actually, surprising they haven't raised the rates.

I agree a $300 something payment a month is very affordable (seemingly)

 

[gr8ful]

At a dealership, the finance company pays a spiff to the dealership in exchange for financing. Disney handles the mortgage financing for DVC themselves, so I'm not so sure they pay a spiff.

Sales incentives across business units within an organization are fairly common.

 

[BeachClub2014]

Easier to justify financing a car that most people need than a vacation membership... regardless there is nothing wrong with financing, I financed both of my resale contracts, but people should be aware of how much interest they're being charged over the life of their loan and what that means in comparison to renting out points from others or booking a trip directly through Disney.

I bet that when some people see that the interest rate is 17.5%, they don't realize that this means that if they pay the minimum they will be paying more in interest than the entire contract is worth.

Now with 15 year loans and higher interest rates, I haven't done the math and I dont even want to, to me that shouldn't even be legal, it seems predatory to me, just my take.

I understand your point and fully understand that "justifying" financing a car differs from "justifying" the purchase or financing of a vacation membership. My comments were directed more at the often-stated narrative that taking a 10-year loan to pay for a DVC membership is crazy. Well, it isn't so crazy compared to RV loans that are 10-15 years on average. Is financing an RV or DVC the "right" decision for everyone? No. Is it a "bad" decision for everyone? No.

I would also comment that not everyone financing DVC is paying 17.5%. Many people pay far less. Lastly, any borrower should know what they are paying both as an annual interest rate and the total interest over the life of the loan. Those are required disclosures, and yes, that number can be staggering to many.

 

[VGCgroupie]

I understand your point and fully understand that "justifying" financing a car differs from "justifying" the purchase or financing of a vacation membership. My comments were directed more at the often-stated narrative that taking a 10-year loan to pay for a DVC membership is crazy. Well, it isn't so crazy compared to RV loans that are 10-15 years on average. Is financing an RV or DVC the "right" decision for everyone? No. Is it a "bad" decision for everyone? No.

I would also comment that not everyone financing DVC is paying 17.5%. Many people pay far less. Lastly, any borrower should know what they are paying both as an annual interest rate and the total interest over the life of the loan. Those are required disclosures, and yes, that number can be staggering to many.

An RV is actually a great comparison.

 

[Bo1203]

An RV is actually a great comparison.

I agree. DVC dues are likely lower than maintaining a RV, and DVC likely retains its value better in 10-15 years.

***This is not financial advice.

 

[Brian Noble]

An RV is actually a great comparison.

It is! Because financing an RV is probably also not the wisest possible idea.

Now, if you can't afford to pay cash for your RV, that doesn't mean you can't go camping. We did a lot of tent camping when I was a kid. WIth time, my parents bought a pop-up. That was a nice upgrade. It was also bought with cash, and at a small fraction of what it would have cost for an RV.

The same is true of WDW. It turns out you don't have to stay in DVC resorts when you visit WDW. In our earlier days when money was a lot tighter, we were big fans of offsite condos and pool homes. They were great deals, exceptionally comfortable, and many of those affordable options are close to the parks. The total cost to rent the condo plus get a rental car and pay for theme park parking was somewhere between what a Value and Moderate room would have cost with whatever discount Disney was offering at the time. Those trips were still great fun.