Help with the basics: Financing, yearly costs, etc.

[Love That Mouse]

I am thinking of buying into DVC, but I need some general questions answered, and I am trusting this great forum to come through for me!

A bit about my vacation habits. I tend to visit WDW twice a year. In the summe it is for a week, and usually in the fall for a long weekend. I try to stay at a value resort to keep my costs down.

Is it possible to finance your purchase? If so, for how long will they allow you to finance your purchase? Has anyone done this and what has been your experience?

I see there are yearly maintenance costs. Could someone explain these to me? Are they due yearly?

I am a Disney nut, and perhaps this will be a great way to enjoy our at least yearly vacations to WDW! Thanks for any and all help!

 

[poohj80]

Is it possible to finance your purchase? If so, for how long will they allow you to finance your purchase? Has anyone done this and what has been your experience?

Yes, if you purchase through Disney (resales require that you already have your own financing). Disney requires a certain percent down to use their financing and the interest rate usually goes down the more you put down. We actually used our home equity line of credit to pay for ours.

I see there are yearly maintenance costs. Could someone explain these to me? Are they due yearly?

You can either pay one lump sum annually or make monthly payments. The annual maintenacne fee is based on which resort is your home resort and is a per point cost (the more points you own, then the more your annual fees will be). Here are the newly released DVC dues for 2006:

2006 Maintenance fees are:

SSR - $3.98

VB(subsidized) - $4.12

OKW - $4.24

HH - $4.34

BCV - $4.48

VWL - $4.61

BWV - $4.69

VB - $5.27

 

[lovinthemouse]

The more you go the more you save. From your signature line I see you go quite a bit. In the long run it will save some money. But you get higher quality accomodations. We have stayed at AS Movies and Music and I love the themes they have, but they are so small. We just bought in July on our last trip and I wish we had done it sooner. The money we spent going we could have owned. It all comes down to how often you go. We love Disney so for us it was a no brainer. Good luck

 

[spiceycat]

the financing was for 1, 3, 5, 7 or 10 years.

they give you a discount on interest if you allow them to use direct draft to your checking account.

I can't tell you the interest rates.

You can put down 10% if you have good credit, or 20% if only so-so - or if you want too.

that say please be aware than Fri/Sat are EXPENSIVE point rise. See the point charts

http://www.wdwinfo.com/disney-vacation-club/DVCpoints.shtml

 

[stampinshauna]

Here is what we figured about cost...

SSR you get 49 years. If you buy 150 points with the current promotion, that is approx $250 per year purchase price. Then add the dues. Currently dues are about $600 per year ($3.98 per point). That makes DVC cost $850 per year (knowing that it will go up as dues do). That is pretty close to what a hotel room at a value/moderate goes for. Hotel costs will go up over the next 49 years, DVC point requirements will remain the same. For a studio, which is similar to a regular hotel room, we could stay for over a week. If you stay during the value season, you could stay even longer. Here is the SSR point chart, you should look at it and figure out how many points you would need to suit your travel habits.
http://www.wdwinfo.com/disney-vacation-club/SS-Points.htm

You can finance for 1 year at 4.95% direct debit or 5.95% regular. You can also choose 3, 5, 7, or 10 years at 9.75% direct debit or 10.75% regular. Most opt for 10 years as the interest is the same and you can always pay it off early.

If you decide to buy before January 15th, make sure you get the 15% discount (you need the name of a member for referral). There are a lot on this board who would be happy to refer you. You can use us if you need a name, just pm me.

If you have any questions about the joining process, feel free to pm me as we just went through it. Also, if you have a lot of questions, you could call DVC. I called them and talked to them for about 30 minutes and had all of my questions answered. They didn't pressure me at all. Good luck with your decision.

 

[spiceycat]

-Shauna

please don't post your name.

take it off and send her a pm or email with your name.

just don't post it on an internet where anyone could see.

 

[cobbler]

We financed ours for the 10 years to get the lower payments and will pay it off in 3-3.5 years.

Most say not smart to finance and generally I agree with this. We chose to for a number of reasons.
1 - We were going anyway so might as well bite the bullet and at least not still be paying later.
2 - The 15% off deal at SSR, clincher.
3 - I actually ran the numbers. If I saved the $$ for 3.5 years (the time it would take us to pay it off) and collected interest at a modest amount. I figured 3.5-4% which is higher than the current. And I did a guesstimate of what points will be in 4 years (I figured 98/point). Then I took what we would finance and the interest we would pay. We actually came out quite a bit better to finance. Meaning we would pay less in interest then I could save and pay cash outright with points being more expensive.

Added to that we would be traveling anyway down there and the $$ we would still fork over.

So you really have to do the numbers.

I have 220 points. I put down just over the 20% and my monthly payments are 210 month + dues. Dues on 220 points = 72.96 a month so basically my monthly payments are 283-285. This year for 2005, it will be a hair more in 06 when the dues go up.

 

[Daitcher]

Financing a luxury purchase like DVC is not the way to go IMO. Spend the next few years saving the money and buy in when you can afford to pay cash. Also I see that the majority of your stays are at value resorts. If you are OK staying at value resorts I'd stick with it. Financing something that isn't a necessity of life is a ticket to the poor house. Remember annual dues go up each and every year. Those annual dues will be a payment you have for the next 50 years, way into your retirement. Financing just really make your break even point take that much longer. Remeber I'm playing the devis advocate here and this is only my opinion. This is also coming from a guy that pays credit cards in full and pays for vehicles in cash. My house is the only thing I finance. Paying extra for something by adding on finance charges seems like a waste to me. If you really want that DVC purchase start saving and make it a priority. You'll be surprised how fast you save the money if you really want it. Good luck with whatever you decide. Besides I think the next DVC offering will be far more attractive than SSR. ( maybe that is just wishful thinking.) DVC is a great program and we have never regretted our decision.


DAVE

 

[Daitcher]

Sorry forgot this. Consider renting points at DVC Resorts for future stays to get a feel for the resorts. You may decide that a resale purchase elsewhere may be better for you. Renting can be a great value also. It is nice to get a feel for all the resorts before a purchase.

DAVE

 

[JimMIA]

A bit about my vacation habits. I tend to visit WDW twice a year. In the summe it is for a week, and usually in the fall for a long weekend. I try to stay at a value resort to keep my costs down.

As Spiceycat noted, weekend (Friday and Saturday) points costs are considerably higher than Sunday - Thursday. About double most of the time. However, with your visitation schedule, you still should do well even with a few weekend nights.

Is it possible to finance your purchase? If so, for how long will they allow you to finance your purchase? Has anyone done this and what has been your experience?

The suggestion of using a home equity line of credit will probably give you the most flexible and least expensive option.

Disney finances for a maximum of 10 years, and your guide can give you the exact rates and payments for the various alternatives.

Some of the resale brokers have connections for financing. I know TTS does, and others may as well.

I see there are yearly maintenance costs. Could someone explain these to me?

Others have already answered how much and how you pay. The dues are the costs of running the resort for a particular year, and cannot exceed the actual costs. In other words, Disney can't make a profit from the dues under Florida law. The dues cover normal maintenance and upkeep, the regular refurbishing schedules, taxes, insurance, the cost of bus service and resort staff, contingency reserves, etc. You get a specific breakdown every year.

 

[JimMIA]

Financing a luxury purchase like DVC is not the way to go IMO. Spend the next few years saving the money and buy in when you can afford to pay cash.

I think Dave has a valid point here, but I would not rule out financing DVC, provided it makes sound financial sense in the context your family's overall economic situation. Unfortunately, those 3-4 years it takes to save the money often fall in the years when you most want to take your kids to Disney every year. If you're willing to pay extra for the luxury of those vacations, I would not argue with your decision.

This is also coming from a guy that pays credit cards in full and pays for vehicles in cash.

Great point. If financing DVC is going to cause you to carry monthly balances on your credit cards, I'd submit that you've made a pretty poor decision. If you do that, you are really paying 18-22% on the balances carried in addition to whatever interest rate Disney is charging you. That's not a formula for financial success...at least not for the consumer!