Have you paid off DVC?

[eliza61]

We put down 1/2 and financed the other 1/2 (not through Disney). We pretty much have an unspoken rule whenever we take out a loan, we don't buy any thing else while the we have the current loan. So we had a really big incentive to pay it off. It took us a total of 3 years.

 

[funatdisney]

Yes..on the DVC member site there is an area with your loan info and you can pay there. You can also pay with Bill Pay..I did this..just put in all the info and account number in my Bill Pay account and shot off extra payments and then the pay off. Worked fine.

Awesome! That is good to know. I plan on making extra payments when things get better. This would this very easy. I found the page and it is very straight forward. Thanks for the info.

 

[dianeschlicht]

This philosophy of waiting until you can pay cash is not always the cheapest method. For example, we bought 275 BLT points after DVC's first webcast. We bought for $92 per point. Those same points are now selling for $112 per point. That's a 22% increase. The interest rate was 10.75%. When you factor in the tax deduction, the actual interest rate is about 7%-8%. We were able to pay off the loan in a year, had we not been able to then financing would have cost more, however by financing and paying off in a year, we actually saved about $3500.

That's true more now, but back in 1997 when we purchased, the price we paid was only $2.50 a point different from the price we were quoted 5 years earlier.

 

[jco_direwolf]

If you finance a car, did you get the most basic of basic cars?

I wouldn't say the most basic, but yes. I get a car and hold onto for 8-10 years at least. And they have all been Fords. I'd really like a VW or an Audi but those aren't luxury brands, but the equlivent car is about 1.5x the cost.

Is your house the minimum house size-wise that you need?
If not, at least a portion of that purchase can be considered a "luxury".

No but there are offsets to the cost of the house in the US Tax code (which don't exist for vacation/second properties.)

I do take those things in consideration. But the cost of the loan really kills the savings DVC gets you.

johno

 

[beccasmom]

Ours is long since paid off. We did get financing initially through Disney, but opted within a few months of purchase to pay it off in full.

 

[jodifla]

Personally I don't see buying DVC on credit. If I didn't have the money to buy it outright I wouldn't.

If you really can afford the payments, then put the money into an account every month and earn the interest. While DVC does go up in price, $50 -> $110 in 20 years (which is an increase of $3/point per year so expect to pay another ~$15 in 5 years.)

I'm in the other boat... I'm surprised at how many people are willing to buy DVC on credit.

johno

Why do this? I'm already spending money on Disney accommodations, so it makes A LOT MORE SENSE to put it toward something I will own.

Like I said...worked for us. We bought back when we were DINKS, points were half of what they were going for now, and we've had 14 years of vacations on our DVC points.

It's a win, win, win.

Not sure I'd do it today....points are too costly. But I'm sure glad I didn't waste time back then.

 

[jco_direwolf]

It depends on your situation. How much can you pay per month, are you expecting a win-fall (say a end of year bonus.) With out a few numbers I can't tell if you are correct or not. Also you have to play some "what-if"...

But for example...

160 points at $100/pt is $16,000 10 year loan you will end up paying $25,372.94 ($211.44 per month) which means at year 10 the points have to cost more than $158.58/pt (your true point cost) for this to have been a good investment.

Now lets say you put away $211.44 per month in an account that gets 2.5% you end up having $28,852.18 after 10 years or $180.32/pt. If points end up at that point being less you've come out ahead.​

I'm glad it worked out for you, but it's far from a it's will always be a win. If you want you can start working in to your calculations the additional you have to pay in MF vs what you pay in paying out of pocket till you have your money to pay for the points outright. And this is where it gets really really hard, because you are making guesses about the economy, ie 3-4 years ago I don't think any one would be betting you would be seeing the discounts we are seeing this year INTO December.

hows this one (prices for this come from http://www.****************/DVCPriceHistory.html)

Buy DVC 160 pts in 1996 for $62.75/pt with a 10 year loan you end up paying $15,921.52.
Invest $132.68 per month for 10 years @2.5% is $18,104.93 or $113.16/pt but points cost $101/pt in May 2006.​

So in the above example you could have had enough money banked to buy your 160 points around 2004. And yes it's more complex, because the owner has MF while the investor has room costs. The owner got park passes from 94-2000, the investor had to pay for them. The investor got to ride the tech and housing bubbles, and may well have been able to do better than 2.5% (Buy Cisco in 1996, sell in 2000 you'll see 1104% [based on google finance] increase in your investment!)

Why do this? I'm already spending money on Disney accommodations, so it makes A LOT MORE SENSE to put it toward something I will own.

Like I said...worked for us. We bought back when we were DINKS, points were half of what they were going for now, and we've had 14 years of vacations on our DVC points.

It's a win, win, win.

Not sure I'd do it today....points are too costly. But I'm sure glad I didn't waste time back then.

 

[dawngee]

we had everything paid off until we bought BLT. so 6 of 7 contracts are paid.

 

[corpcomp]

We have three contracts and we paid cash for each.

 

[rentayenta]

Of course it's paid off. Didn't you know that no one carries debt on the DIS.

 

[Nikisha421]

Of course it's paid off. Didn't you know that no one carries debt on the DIS.

smart answer I never seem to be able to come up with anything so great...

 

[Golden Rose]

Count us in as another family who paid cash for both our contracts. We knew about how many points we wanted, and we knew we wanted AKV (bought direct) and an Epcot resort (bought BWV resale.) We actually share the contracts with my mother (whom we travel with more than half the time), so we split the cost with her. (Effectively, she bought one contract and we bought the other, but all three names are on both.) We're contemplating purchasing a third contract in the relatively near future, which we would also pay cash for, but we really love to do non-disney travel as well.

As a brief digression, I will say, we're tempted by Aulani, and we're seriously thinking about getting some Hawaii timeshare, but I'm not sure we'll purchase until we've seen the completed property. (We know we like several other properties in Hawaii, and I'm not inclined to purchase based on the beauty of some artists' renderings.)