? how have Canadians financed their DVC purchase?

[Tiger926]

We just bought this past weekend directly from Disney, and are now looking at financial options. We've signed up to take Disney's financing at the moment since my DH is a banker needs the next couple of weeks to research some new options. He quickly explained some alternate options to me (besides home line of credit and credit cards) but since we just returned from our 2 week vacation, he's swamped at work, and doesn't have time to look into some other credit products that he doesn't sell at his bank, so I thought I'd do a little bit of leg work for him.

Without getting too personal, would anyone care to share if they've found some really creative financing options for us Canadians (we have several credit cards that get paid off each month - interest is middle of the road)? Other cards, lines of credit, loans?

Thanks a bunch, Tiger

 

[Susan--Ontario]

We just bought in March and also went with Disney financing. I know that it is a lot more expensive but it makes cash flow easier for us. We are currently hedging our bets on the dollar as well. If our dollar gets better than we will continue with Disney but if the dollar starts to go south then we will buy some American money and put the cost on our Line of Credit. I like the fact that we can make bulk payments on the Disney financing whenever we like. Currently I'm trying to make more room on our line of credit because that is our best rate. My DH works for the bank and gets a nice discount on our line of credit rate. Our line of credit is an unsecured one (not tied to our house mortgage at all). We don't start paying until August (I think) so there is still time to figure this out. I try not to think about the difference in rates because over the next 50 years will it really make a difference in my financial state to be with Disney financing. Not really.

I also like the fact that they put the monthly payment on our credit card, so that I still get my loyalty points for the credit card. For us that is free groceries, or a new car.

So for me it comes down to the performance of the dollar and what I plan to do. Let 's hope that the dollar reaches 80 cents and then I will pay off the whole thing if I have enough room on the line of credit.

Good luck deciding.

 

[MikeyNS]

Anyone have any clue where the dollar is heading? I just received my unsecured line of credit for DVC this week, and I'm going to pay DVC off with my credit card and then pay that off with my LOC.. but I may wait if it's expected for the dollar to go up a smidge in the next few weeks... ideas?

 

[Stitch 03]

It is anyone's guess where the Canadian dollar is headed. My expectation is that downward pressure will continue a long as there is an indication that US interest rates will be going up soon. If the Bank of Canada wanted to prop up the dollar they would probably need to increase interest rates in the short term. However, a rate increase is not expected until next year.

I have to admit, one of the financial advantages that I saw with DVC was a hedge agianst future drops in the exchange rate. I bought when the dollar was at .78 which in hindsight looks like impeccable timing.

As far as financing, I would not keep it with DVC financing. You are better off with a line of credit. The reason being interest rates and foreign exchange risk. With DVC financing, if the dollar was to go back up to .78 then you would be in a pretty good situation. This effectively lowers your DVC purchase cost (unless the difference is eaten up with the extra interest costs) . However, if the dollar was to drop down to about .67, well you have now increased your purchase cost.

All this rambling and we have come full circle. Where is the Canadian Dollar heading? And how best to finance your purchase? There are alot of variables that will result in different answers depending on you specific situation. When deciding though keep in mind the following:

1) How quickly you expect to pay it off. (this will help you determing total interest costs.)

2) Where is the dollar headed. Even small changes can have an impact. And do not forget that the interest is also calculated in US dollars.

Hope this helps.