Here’s Why Resale Has Plenty of Room to Rise

[Nabas]

When there are only 5-10 years left on the 2042 resale contracts ( with the exception of OKW) DVC will not be exercising ROFR and the prices will plummet down to earth. Not many people are going to buy a contract with 5 or less years left on it especially since you still have to pay closing costs. People who no longer want to go to WDW will be selling their contracts cheap to get out from having to pay maintenance fees or they will be renting out their points to pay for those fees.

Just remember that 5 or 10 years of cheap vacations are a lot of cheap vacations for a bunch of people.

With DVC rentals at $20pp, and Maintenance Fees at $8pp, that’s still a $12pp difference PER YEAR. Now multiple that by 5 or 10 years, and then subtract whatever discount you think is appropriate.

Even with 5 or 10 years left, there’s still a lot of value in a DVC membership.

 

[Bearval]

I can see why you didn’t touch this subject again. I’ve been really surprised at the emotional reactions to this.

Perhaps some owners who bought at far lower prices are offended at the notion that they would buy at today’s prices, and that by not selling this is basically what they are doing.

It’s like the idea they are putting the same amount of equity into their DVC contracts as current resale buyers (they are) frustrates them.

Who knows, but probably best for me to leave this topic alone as well.

I have a 2006 Honda CRV with 540K miles on it. I runs great and the book value is probably around a could of grand but I wouldn't sell it for that price because I can't replace it for that price nor would I ever buy a vehicle that has over 100k miles on it.

 

[Robert Stoddart]

I have a 2006 Honda CRV with 540K miles on it. I runs great and the book value is probably around a could of grand but I wouldn't sell it for that price because I can't replace it for that price nor would I ever buy a vehicle that has over 100k miles on it.

This is really the key issue. I have a resale VGF contract, bought before most of the restrictions (can't use for cruises) but it cannot be replaced at even close to where current prices are. Resale is a different product now so would have to be direct. We shall see what the new VGF pricing is when it goes on sale, but it is still a big gap.

 

[ldo]

With DVC rentals at $20pp, and Maintenance Fees at $8pp, that’s still a $12pp difference PER YEAR. Now multiple that by 5 or 10 years, and then subtract whatever discount you think is appropriate.

not expiring in 2042, but this is why I repurchased AKV @ $125: subtracting value of loaded and next year's points (minus annual fee) against cost to transfer points reduces my purchase price to $110. Every time I use points that I would've gotten a transfer reduces it by another $10.

 

[Drewski77]

I have a 2006 Honda CRV with 540K miles on it. I runs great and the book value is probably around a could of grand but I wouldn't sell it for that price because I can't replace it for that price nor would I ever buy a vehicle that has over 100k miles on it.

If you woke up tomorrow and your CRV was gone, but you had $1k cash to buy it back immediately...would you?

 

[Bearval]

[QUOTE="Bearval, post: 63042989, member: 614920"

I have a 2006 Honda CRV with 540K miles on it. I runs great and the book value is probably around a could of grand but I wouldn't sell it for that price because I can't replace it for that price nor would I ever buy a vehicle that has over 100k miles on it.
[/QUOTE]

If you woke up tomorrow and your CRV was gone, but you had $1k cash to buy it back immediately...would you?
[/QUOTE]
If I sold my resale AKL today I would not buy it back for the same price since it was purchased before all of the changes also I wouldn't buy it at todays prices since I don't think it is worth what people are currently paying for it and I wouldn't sell it because I am still currently using it. . And no I would not buy another CRV or any other vehicle that had that many miles on it.

 

[Bearval]

Just remember that 5 or 10 years of cheap vacations are a lot of cheap vacations for a bunch of people.

With DVC rentals at $20pp, and Maintenance Fees at $8pp, that’s still a $12pp difference PER YEAR. Now multiple that by 5 or 10 years, and then subtract whatever discount you think is appropriate.

Even with 5 or 10 years left, there’s still a lot of value in a DVC membership.

You forgot to add the cost of purchasing the points. If you pay 100.00 for 150 points for 10 years left that is 15,000.00 plus closing costs lets say are 500.00 that would be 15,500.00 divided by 10 years plus 1, 200.00 a year for maintenance costs is roughly $2750.00 a year as opposed to renting points at 20.00 per point for 150 points you are only " saving $250.00. I don't think many people are going to go thru the trouble for such little savings. The price per point would have to be significantly lower and this get worse as the remaining year get less and less. The breakeven price is ~ $57.00 per point for 5 years left on contract.

 

[Drewski77]

I have a 2006 Honda CRV with 540K miles on it. I runs great and the book value is probably around a could of grand but I wouldn't sell it for that price because I can't replace it for that price nor would I ever buy a vehicle that has over 100k miles on it.

If you woke up tomorrow and your CRV was gone, but you had $1k cash to buy it back immediately...would you?
[/QUOTE]
If I sold my resale AKL today I would not buy it back for the same price since it was purchased before all of the changes also I wouldn't buy it at todays prices since I don't think it is worth what people are currently paying for it and I wouldn't sell it because I am still currently using it. . And no I would not buy another CRV or any other vehicle that had that many miles on it.
[/QUOTE]

Fair enough, not sure why you wouldn’t buy your CRV back as you continue to drive it...but it doesn’t need to make sense to me.

As an aside, I drove my 2004 CRV till it had 260k+ miles on it, and was still running when I traded it in. Great car!

 

[Bearval]

If you woke up tomorrow and your CRV was gone, but you had $1k cash to buy it back immediately...would you?

If I sold my resale AKL today I would not buy it back for the same price since it was purchased before all of the changes also I wouldn't buy it at todays prices since I don't think it is worth what people are currently paying for it and I wouldn't sell it because I am still currently using it. . And no I would not buy another CRV or any other vehicle that had that many miles on it.
[/QUOTE]

Fair enough, not sure why you wouldn’t buy your CRV back as you continue to drive it...but it doesn’t need to make sense to me.

As an aside, I drove my 2004 CRV till it had 260k+ miles on it, and was still running when I traded it in. Great car!
[/QUOTE]
Well I can pretty much guarantee that in less than 4 hours where I live the car would have already been stripped down to the unibody.

 

[Sandisw]

If you woke up tomorrow and your CRV was gone, but you had $1k cash to buy it back immediately...would you?

If I sold my resale AKL today I would not buy it back for the same price since it was purchased before all of the changes also I wouldn't buy it at todays prices since I don't think it is worth what people are currently paying for it and I wouldn't sell it because I am still currently using it. . And no I would not buy another CRV or any other vehicle that had that many miles on it.
[/QUOTE]

Fair enough, not sure why you wouldn’t buy your CRV back as you continue to drive it...but it doesn’t need to make sense to me.

As an aside, I drove my 2004 CRV till it had 260k+ miles on it, and was still running when I traded it in. Great car!
[/QUOTE]

IMO, having something that may be worth $1k and using it is not the same as saying let me buy something that is really not worth $1k to replace.

The value of keeping something older is in its use which is why those of us who may own points bought years ago would not sell today because it’s worth more to keep it and go to Disney, than replace it with the other non DVC options out there.

Remember, everyone looks at things different and I just do not think you can only looki at the bottom line dollar. Sometimes there is more to somethings worth than the cost.

 

[Nabas]

You forgot to add the cost of purchasing the points. If you pay 100.00 for 150 points for 10 years left that is 15,000.00 plus closing costs lets say are 500.00 that would be 15,500.00 divided by 10 years plus 1,200.00 a year for maintenance costs is roughly $2750.00 a year as opposed to renting points at 20.00 per point for 150 points you are only saving $250.00. I don't think many people are going to go thru the trouble for such little savings. The price per point would have to be significantly lower and this get worse as the remaining year get less and less. The breakeven price is ~ $57.00 per point for 5 years left on contract.

Exactly.

As I previously mentioned, the exact selling price of a DVC membership with 5 or 10 years left on it depends on the amount of discount a buyer needs to go through the effort.

Some will say it’s no effort at all (“all I do is sign some paper”). Some will say it’s a tremendous effort.

I cannot say what others will think, which is why I originally wrote “subtract whatever discount you think is appropriate.”

In your particular example, that’s a savings of $250 per year. Multiple that by 10 years and that’s a savings of $2500.

Some might consider $2500 to be consequential. Others might not.

The point at which the savings is worth the effort will vary from person to person.

Me? I view renting points as a hassle. I have to find a seller, who I probably don’t know. I have to rely on them to find the nights I want. I have to pay them ahead of time and hope they don’t cancel my reservation. I have to sign some sort of rental agreement. I might even want to take out vacation insurance, since they are not going to refund me if I cancel.

I would much rather have complete control over the points I am using then rent them from someone else.

Again, it all depends on what sort of discount you need to motivate you to buy a contract.

 

[Drewski77]

If I sold my resale AKL today I would not buy it back for the same price since it was purchased before all of the changes also I wouldn't buy it at todays prices since I don't think it is worth what people are currently paying for it and I wouldn't sell it because I am still currently using it. . And no I would not buy another CRV or any other vehicle that had that many miles on it.

Fair enough, not sure why you wouldn’t buy your CRV back as you continue to drive it...but it doesn’t need to make sense to me.

As an aside, I drove my 2004 CRV till it had 260k+ miles on it, and was still running when I traded it in. Great car!
[/QUOTE]

IMO, having something that may be worth $1k and using it is not the same as saying let me buy something that is really not worth $1k to replace.

The value of keeping something older is in its use which is why those of us who may own points bought years ago would not sell today because it’s worth more to keep it and go to Disney, than replace it with the other non DVC options out there.

Remember, everyone looks at things different and I just do not think you can only looki at the bottom line dollar. Sometimes there is more to somethings worth than the cost.
[/QUOTE]

No argument from me that not everything is about the dollar value of something, very true.

I still don’t know why you wouldn’t buy your CRV right back with the $1k that was given to you in my example, as that is the same as keeping the car...but again, it only needs to make sense to you.

 

[Sandisw]

Fair enough, not sure why you wouldn’t buy your CRV back as you continue to drive it...but it doesn’t need to make sense to me.

As an aside, I drove my 2004 CRV till it had 260k+ miles on it, and was still running when I traded it in. Great car!

IMO, having something that may be worth $1k and using it is not the same as saying let me buy something that is really not worth $1k to replace.

The value of keeping something older is in its use which is why those of us who may own points bought years ago would not sell today because it’s worth more to keep it and go to Disney, than replace it with the other non DVC options out there.

Remember, everyone looks at things different and I just do not think you can only looki at the bottom line dollar. Sometimes there is more to somethings worth than the cost.
[/QUOTE]

No argument from me that not everything is about the dollar value of something, very true.

I still don’t know why you wouldn’t buy your CRV right back with the $1k that was given to you in my example, as that is the same as keeping the car...but again, it only needs to make sense to you.
[/QUOTE]

Here is why. Its worth it to keep a car that old when it isn’t costing me $1k to drive it. I’m running it on borrowed time,

But, if I am taking $1k out of my account, I’ll spend an extra few thousand to get something that is bound to last longer.

Its like buying a 2042 resort vs. one that expires in 2054. I spend more to get a guaranteed extra 12 years. BCV isn’t worth $140/point some are paying but RIV was at $152/point for me because I get 27 more years use.

 

[Drewski77]

IMO, having something that may be worth $1k and using it is not the same as saying let me buy something that is really not worth $1k to replace.

The value of keeping something older is in its use which is why those of us who may own points bought years ago would not sell today because it’s worth more to keep it and go to Disney, than replace it with the other non DVC options out there.

Remember, everyone looks at things different and I just do not think you can only looki at the bottom line dollar. Sometimes there is more to somethings worth than the cost.

No argument from me that not everything is about the dollar value of something, very true.

I still don’t know why you wouldn’t buy your CRV right back with the $1k that was given to you in my example, as that is the same as keeping the car...but again, it only needs to make sense to you.
[/QUOTE]

Here is why. Its worth it to keep a car that old when it isn’t costing me $1k to drive it. I’m running it on borrowed time,

But, if I am taking $1k out of my account, I’ll spend an extra few thousand to get something that is bound to last longer.

Its like buying a 2042 resort vs. one that expires in 2054. I spend more to get a guaranteed extra 12 years. BCV isn’t worth $140/point some are paying but RIV was at $152/point for me because I get 27 more years use.
[/QUOTE]

In my example you lose you car, but $1k falls into your lap that you didn’t have before, which then could be used to rebuy your car.

And then you are in the exact same situation as not selling your car...but I think we’ve hit a dead end on this.

BCV is an entirely different resort so not sure how applies to this, but certainly RIV is a better fit for you which is great.

 

[ParkHoppers]

Cargument alert *

 

[Bruggok]

I wouldn't be so overly bullish on DVC pricing trend. Right now it's a sellers/bull market, so it's easy to make bullish predictions. If interest rate ever goes up significantly, we'll see how many DVC owners aren't periodically pay off their credit cards and suddenly find themselves struggling financially. DVC isn't exactly a highly liquid market; it won't take that many owners dumping their contracts to crash prices. Look at the last recession for example.

 

[Bearval]

I wouldn't be so overly bullish on DVC pricing trend. Right now it's a sellers/bull market, so it's easy to make bullish predictions. If interest rate ever goes up significantly, we'll see how many DVC owners aren't periodically pay off their credit cards and suddenly find themselves struggling financially. DVC isn't exactly a highly liquid market; it won't take that many owners dumping their contracts to crash prices. Look at the last recession for example.

Exactly, DVC is a luxury item. When the next recession hits and it is a choice between car/mortgage payments DVC will be the first to go, especially when the maintenance fees are due. We also do not need a full blown recession for some, just a economic slow down and kids going off to college.

 

[dvc lover 1970]

I wouldn't be so overly bullish on DVC pricing trend. Right now it's a sellers/bull market, so it's easy to make bullish predictions. If interest rate ever goes up significantly, we'll see how many DVC owners aren't periodically pay off their credit cards and suddenly find themselves struggling financially. DVC isn't exactly a highly liquid market; it won't take that many owners dumping their contracts to crash prices. Look at the last recession for example.

Yes this year everything is artificially inflated with stimulus money.

 

[Drewski77]

Exactly, DVC is a luxury item. When the next recession hits and it is a choice between car/mortgage payments DVC will be the first to go, especially when the maintenance fees are due. We also do not need a full blown recession for some, just a economic slow down and kids going off to college.

For sure, and just imagine a scenario in which overnight a pandemic starts causing a recession, with millions upon millions laid off, people stuck in their homes, airlines shut down, all Disney parks and hotels closed and DVC points unable to be used...amazing to think how quickly and far DVC values would drop...right???

Seriously though, no one is arguing that DVC will go up this fast forever, and like anything the price will ebb and flow to a degree based on many factors.

However, if you are wanting points today, there is no guarantee that waiting 3-6 months will bring about cheaper prices.

 

[Bearval]

For sure, and just imagine a scenario in which overnight a pandemic starts causing a recession, with millions upon millions laid off, people stuck in their homes, airlines shut down, all Disney parks and hotels closed and DVC points unable to be used...amazing to think how quickly and far DVC values would drop...right???

Seriously though, no one is arguing that DVC will go up this fast forever, and like anything the price will ebb and flow to a degree based on many factors.

However, if you are wanting points today, there is no guarantee that waiting 3-6 months will bring about cheaper prices.

The " COVID recession" did not hit the working population equally across the board like the recession in 2006 did. The COVID recession hit the people is the service industry incredibility hard ( think food service, tourism etc.) Most of these people wouldn't be owners of DVC so they would not be sellers in hard times either.