Help me understand true cost of DVC vacation

[Tiger926]

We will celebrating our 5th DVC anniversary this May. Although we have enjoyed some awesome vacations, we are now starting to analyze our true DVC cost as we are really on a strict budget. Here is our story:

When we purchased in May '04, we had 1 baby (she was 11 months old) and didn't plan on having any other children, so we purchased 175 points for 10 nights at Saratoga during summer months (I'm a teacher). We had planned on this being enough for many years to come. We financed a bit as hubby is a banker with a very cheap rate, and paid that off in a few years. Being Canadian though, we had to add in exchange so our purchase cost us almost $22,000 CDN. We went to WDW several times per year and planned on this for a good long while.

Fast forward to '07. We were told no more children, had a miscarriage and then God gifted us with our beautiful son! We then realized that we might need more points as a studio would not suffice, due to space limitations and opposite sex children (they wouldn't be sleeping together as they got older). So, we purchased an Animal Kingdom add-on for 125 points and basically got that at-par as our Candian dollar was very high at the time. We planned on using our 300 points for 1 beds, but I confused the point charts, and quickly realized that we wouldn't have enough points as 1 beds are quite a bit more points than studios are, so we have to do a combination as we drive from Canada, so we like to stay for at least 10-14 days to make it worth oure long drive. We also didn't know that our baby would be so sickly and so we are only able to go to WDW in the summer months, so no more multiple vacations per year.

Now, it is the beginning of '09 and we almost about died when we paid our dues this week. As Canadians we can't pay per month (totally unfair), so we got hit for almost $1800.00 CDN on our Visa with exchange. Ouch! We are now not so sure we have made a good choice for our small family and are very confused.

We have read countless posts about trying to figure out the actual cost, which we know we can't do now as we are at the beginning of our membership - don't know what exchange rates will be, don't know what dues will be, don't have an exact figure on interest paid yet (it will be a small number, but nevertheless, it needs to be counted in), etc.

As of right now, we have 12 nights booked for July 09 - 7 nights in BCV studio, and 5 nights in AKV 1 bed. When we add up our initial membership cost (plus a bit of interest), dues and exchange we get approx. $210.00 CDN/night for this July. This seems high to us, as SSR and AKL are always on sale for good cash rates (compared to rack rates it's good, but we have never paid rack rates) - we did it several times and paid a lot less than $210.00CDN/night.

We think we are overanalyzing because we are on a serious budget in order to pay off our DVC and several other luxury purchases that we didn't need (please no lectures or flames here). Can anyone help us and set our minds at ease? We totally know that Disney room rates will always go up, but at this point, so are dues and so now we are looking at 50 years of membership, plus dues and exchange rate and we could have bought a condo! We are used to our 175 points at SSR with lower dues giving us 10 nights of vacation, and now, for almost $800.00-$1000.00 in costs (dues plus exchange), we are able to stay an extra 2 nights, but only 5 of those nights are in a 1 bed, so now, our add-on seems to be very expensive for the 12 nights we have planned. Help!

What are we doing wrong? Please help! Tiger

 

[poohbear7]

As a Canadaiam you can pay your dues monthly .
You would need to set up an account at an American bank. We set up an American bank account through our bank here RBC. They use RBC Centura in the US and our dues are taken out monthly.

 

[Brancaneve]

You are smart to analyze all major purchases and I find myself analzying even the small ones too. When we first bought into DVC, I really disliked having to pay the annual dues-it was the thorn in my side. But then the lightbulb went off after our first trip home last year. I realized that if I put the amount of my dues into a savings account(strictly for vacations), at the end of the year I would not have enough to cover the vacation I had just experienced. Does that make sense?

We have 210 points and those covered a week long DCL trip and a week at AKL(we banked and borrowed). We are going again in 11 days and only have to pay for airfare. If we paid cash for both of these trips, it would easily cost us $10,000 or more.

I hope that helps. Money comes and goes but your memories stay put!

 

[Tiger926]

As a Canadaiam you can pay your dues monthly .
You would need to set up an account at an American bank. We set up an American bank account through our bank here RBC. They use RBC Centura in the US and our dues are taken out monthly.

Thanks, but hubby is a bank manager for TD Canada Trust, so we don't bank at RBC. It bothers us that DVC can charge our credit card for a 1 time lump sum in Jan., but they can't do it monthly.

You are smart to analyze all major purchases and I find myself analzying even the small ones too. When we first bought into DVC, I really disliked having to pay the annual dues-it was the thorn in my side. But then the lightbulb went off after our first trip home last year. I realized that if I put the amount of my dues into a savings account(strictly for vacations), at the end of the year I would not have enough to cover the vacation I had just experienced. Does that make sense?

We have 210 points and those covered a week long DCL trip and a week at AKL(we banked and borrowed). We are going again in 11 days and only have to pay for airfare. If we paid cash for both of these trips, it would easily cost us $10,000 or more.

I hope that helps. Money comes and goes but your memories stay put!

This is brilliant! I never thought of it this way. We are overanalyzing by trying to figure out our cost per night for this trip by taking our initial cost to buy-in (including interest and exchange), plus membership dues and this equals out to close to $2100.00 USD for 12 nights - 7 nights studio/5 nights 1 bed, or, 6 nights studio/6nights 1 bed. This just seems like a high cost to us as we are used to paying less when we just had our 175 points at SSR for 10 nights. If you compare it to rack rates, then sure, it's a good deal, but if we didn't own DVC, we wouldn't be staying at Beach Club anyway.

I just said to my hubby that 175 points at SSR would have been just fine and we probably jumped the gun as we succumbed to addonitis due to our dollar being at par. The problem is that we really didn't need these extra points, so add in the bit of interest before we pay it off, plus the higher dues, and it's an amount that we really could have used elsewhere. Since we have really been focusing on our budget, we are now looking at this kind of stuff more closely.

You are right that memories are important, but we always made such wonderful memories with our 175 points and so at this point, we are feeling like our add-on was not necessary at this time.

Thanks for your thoughts, Tiger

 

[Liljam]

We recently considered getting rid of our SSR points because the deals Disney has is always so cheap! I was calculating that we could go to WDW for $1000 less than what it "costs" in points and MFs if we had taken advantage of the 4 get 3 deal. THAT deal also included tickets so the savings was even bigger that $1000 but... Anyway, I was actually ready to be done with DVC. My whole family loves my DVC though and was shocked when I told them what I was thinking. I rationalized that I could still stay anywhere I wanted although It'd be in mods mostly which is more my speed in terms of decor (seriously.) I didn't buy DVC for the accommodations, I bought it for the vacations. I'm not in need of space or luxury or high class. That was never the issue. But then DH kept saying he wanted to wait because he likes knowing it's there. He likes knowing that our vacation is paid for. The expense might be higher than what I had just found in terms of the 4 get 3 deal on WDW site, but we CAN book large villas and take friends and family and give them great vacations without requiring payment. Knowing that we don't have to worry about coming up with room costs is nice. We just need our spending and travel money, and food.

Geesh... Did I mention the DDP was in the price I got quoted that was so much less for CRO? Still makes me think.... Do what feels right for you as a family, we love DVC and right now we're keeping it, but with each little thing, I see myself letting go more and more. The thing that makes me hold on most is being able to take my family members along! Sorry so long winded!

 

[alldiz]

Why don't you try transfering you "extra" points....that will help you pay your dues.
Kerri

 

[rsimon]

I think one major cost factor that I haven't seen posted here yet is being over looked. Food!

Of course you have to take advantage of the kitchen, but for us anyhow, it can save a lot off the cost of the trip. We just got back and ate every dinner out at a nice signature dining place, but all our other meals for the most part were eaten at the room. With grocery costs figured in, we still saved over a lot of money over previous trips were we were either on the dining plan or paid to eat everywhere.

In a "normal" room, you just aren't going to have the option to eat really unless it is just simple things that don't require fixing. You could always go and eat fast food, but even that costs more than groceries and isn't as healthy.

Just something else to consider in your calculations of the DVC value. However, if you can get the same rooms at the cash price cheaper than your dues and buy in cost then I would say that is definitely an option. Being a DVC member has other perks too though that save money. Cost of an AP is cheaper, free valet parking, etc.. Those would have to be factored in as well.

 

[RumpleMom]

In a villa you, can enjoy a vacation without even entering a park. Could you do that in a hotel room?

Remember you can use your points for a great beach vacation at Hilton Head Island and Vero Beach. We love both resorts.

 

[jamstew]

Thanks, but hubby is a bank manager for TD Canada Trust, so we don't bank at RBC. It bothers us that DVC can charge our credit card for a 1 time lump sum in Jan., but they can't do it monthly.

They don't to monthly credit card charges for Americans either. At least it's my understanding that it has to be a checking account draft. I'd love to be able to pay monthly on my CC for frequent flyer miles.

 

[JasonDVC]

Do an Excel spread sheet and factor in all costs of owning (buy-in, closing costs, MF's, etc.) and add them up as you go along. Then factor in cost of the same rooms if you were to pay cash(we use the Disney site to do this). Now see if you are ahead of the game.

For example: We are planning a a July 2010 family trip requiring a 1br and a 2br at Kidani. We have 210 points so our costs at that time will be around $23K, This trip alone, again using Disney's site, would have cost us around $11,000 for a 6 night stay. If we were to do this trip twice, we will be at almost break even and the third time be ahead of the game. With banking and borrowing it would take about 5-6 years to be ahead. Works for me!

Those specials like 4/3 come and go and you can't on them plus you are at their mercy. With DVC we vacation on our schedule and don't have to wait specials. Freedom is a wonderful feeling!

 

[Belle & Ariel]

When we were deciding to buy I took our total price with closing costs of $13,500 and divided it by the 35 years of use left on the contract to get $385 per year. I add my dues which are at this time $780 for an annual cost of $1115. I know dues will go up, but so do room prices if we were renting.

I priced my stay using this year's points and it was over $5000, so my $1115 is a great deal.

Savings by cooking in, no parking fees, discounts on APs, golf, and other things can in a way reduce the cost.

I wish we knew about DVC when our kids were small. I hope you enjoy it many years and your baby stays well.

 

[tecodis]

Do an Excel spread sheet and factor in all costs of owning (buy-in, closing costs, MF's, etc.) and add them up as you go along. Then factor in cost of the same rooms if you were to pay cash(we use the Disney site to do this). Now see if you are ahead of the game.

For example: We are planning a a July 2010 family trip requiring a 1br and a 2br at Kidani. We have 210 points so our costs at that time will be around $23K, This trip alone, again using Disney's site, would have cost us around $11,000 for a 6 night stay. If we were to do this trip twice, we will be at almost break even and the third time be ahead of the game. With banking and borrowing it would take about 5-6 years to be ahead. Works for me!

Those specials like 4/3 come and go and you can't on them plus you are at their mercy. With DVC we vacation on our schedule and don't have to wait specials. Freedom is a wonderful feeling!

In my view, comparing DVC cost against rack rates is a little optimistic. Over the years prior to becoming a DVC owner, I rarely paid rack rates. I try to compare mine to estimated discounted room rates, say 25% or so. This method could extend your break even point but would be a little more realistic to my situation. If I truly had to pay rack rates all the time, I would not ever be able to go as often as my habits have been. So for me, it's a much more fair comparison.

Just like real-world financial statements, it's all a matter of how you present the numbers! Hard to believe accounting can be subjective, huh?


Truth be known, when I saw how many years before I would break even on mine (including all the incentives) I gave up tracking it! I try to forget the purchase price and focus on my vacations only costing the annual MF's now.

 

[flyerron]

WOW, you all have too much tme on your hands. Over anaylsizing is an understatement. You cannot compare a hotel room with a villa. Apples to Oranges! Keep in mind that DVC retains value. Once you spend for a hotel room the money is gone. As the years go on & prices go up so does the depreciated value of DVC. If you go to WDW on a regular basis DVC ownership is a no brainer.

 

[bookswin]

Do it as an amortization over 50 years, just as if you were buying a house. The math works the same. Then add annual dues.

Aside from fluctuations in the CAN dollar, which indeed might play havoc with things, you should find that you are paying about 1/2 of what a comparable room would cost.

For the first time, I put our dues this year on a airline mileage earning credit card (Southwest). The interest rate we are paying on our home loan is so low it's worth the interest we are giving up by not paying monthly.

Dues will go up over time, but hotel rooms will go up more, and you have locked in the price for 50 years.

DVC cannot be properly analyzed on a short-term basis. Think what a room in a nice hotel cost 50 years ago. Maybe $20? So think what a bargain you'll have 3-5 decades in the future.

 

[alisonslp]

DVC cannot be properly analyzed on a short-term basis. Think what a room in a nice hotel cost 50 years ago. Maybe $20? So think what a bargain you'll have 3-5 decades in the future.

This is interesting and correct. IT was a "selling quote" our guide used. I can't remember the specifics but it was something like in 1978 (30 years ago), the rack room rate of the Disney Polynesian was $35 a night. today you can't get a room for under $80 and that's in the "dorm style" hotels where I would never stay. The better WDW hotels are well over $200 a night.

Now, will this continue to happen over the NEXT 30 yrs? I can't possibly imagine rates rising another 600%. That would be 1200 a night! But then again, could my parents have imagined paying $200 a night back in '78?

 

[Tiger926]

Thank you all! My hubby and I pondered over this last night, and just spent the last 1.5 hours doing so again - the kids are actually both sound asleep!

We are both overanalyzers, so this is par for the course with us, but especially since we are staying on a strict budget (it's going very well). Once we started analyzing our budget, with a fine tooth comb, this whole discussion got started.

So, here is where we stand, and we are feeling pretty good about it, I might add:

We originally had 7 nights studio @ BCV and 5 nights 1 bed savannah @ AKV for 284 points in July. The studio part was what was throwing me off as I didn't see value in that as we did our add-on for 1beds, so tonight, we went back to drawing board with hubbby knowing that I want a 1 bed and here is what we have: 4 nights 1bed @ BCV and 7 nights value 1 bed @ AKV for 309 points, if we can't get value (not sure this is possible) we can do standard view for 339 points. 1 beds are very important to me for added space, big bathroom, kitchen and laundry room. We love family sleepovers, so the king sized bed is a plus too - these are special memories and one of the reasons we love DVC, and we definitely were never able to do this when we stayed in moderates.

This new scenario seems like a much better deal to me! We have 21 banked points, so not much to borrow, and next year, this vacation will cost 20 more points thanks to DVC's new allocation, so we'll cross that bridge when we come to it - either knock off a night, or borrow more.

I want to thank all of you with reminding us how special our DVC is to us - when you overanalyze though, sometimes the special stuff gets lost. We are grateful that you all reminded us that it's ok to borrow (we've banked several times, but never borrowed). It shouldn't be a big deal as in 5 years for our 15th wedding anni, we want to go back to Hawaii.

My hubby thanks all of you for your guidance and input, as do I! Tiger

 

[Liljam]

I'm glad you guys figured what's right for your family, Tiger! I have bothered DH anymore with selling because he can't wait to try out THV and I do realize how important it is for us to take our family! My frustration has been with the changes, and maybe a little to do with having decided to not go in May so we could go in Jan. instead. I'm sure things will work out in the big picture for you and I hope your vacation is wonderful! I could sleep in a cardbord box at WDW and I'd be tickled pink! Well, maybe not when the love bugs are there or when the snakes and salamanders are around!