If you purchased resale, foregoing direct benefits...

[Dean]

Good question, because it seems like most of the people who comment on the direct benefits not being worth much actually HAVE direct benefits.

Although, the biggest restrictions came in 2016 and a lot of people did 25 points up until that was raised to 75 in 2018. So, it stands to reason, most people on here do have direct benefits or haven't owned for long.

IMO the first set of restrictions was a positive for resale buyers because it defined what was a reasonable use of points anyway. Actually most owners are qualified and a very small % are restricted in a meaningful way. It'll be many years before there are enough owners who are restricted and selling to make much difference. But eventually there will be enough to matter at least some.

 

[kboo]

For what I paid, I have a $4800 blue card. Was it worth it...ultimately I think that is in the eye of the beholder!

We only bought 25 points direct (until our recent RIV purchase), and I was joking with my DH that on this trip we both lost The Most Expensive Hats in the World - dvc baseball caps that cost almost $2500 each.

I've been a member since 2012, during this time I got the following perks:
- one Premium Plus AP for the cost of a Goldpass offer. This saved me $500 over the tickets I would have bought (two sets of UK Ultimate tickets)
- a few dining and merchandise discounts: not sure how much I've saved, but let's say $300 (I'm probably overestimating)
- one Moonlight Magic: Disney sells tickets for the similar After Hours for $120
- one tour discount: $15
- one free Soarin tour: not sure how much it's worth, similar short backstage tours are sold for around $50
- Epcot lounge access: 4 or 5 free coffees and some snacks, worth $30
- one magnet

So in nearly 7 years I saved around $1,000 worth from perks; buying resale I saved $8,600. If I had bought direct it would take me more than 50 years to break even.
However, economics for a larger family may be very different, as the AP discount can add up quickly and can make a 75 points add-on worth it.

The PAP+ for the price of gold was a great deal; we got 6 of them, and a discounted PAP, for a savings of $2000 so far. Merchandise discounts have added up, but even if it’s $300 (which would mean spending $3000, since I would’ve gotten a 10% discount with an AP). So say it’s $2300 saved so far ...

AP Renewals will save us about $500 a year, so another 5 years of savings will pay for the 25 points. (Shrug)

 

[Maistre Gracey]

We only bought 25 points direct (until our recent RIV purchase), and I was joking with my DH that on this trip we both lost The Most Expensive Hats in the World - dvc baseball caps that cost almost $2500 each.



The PAP+ for the price of gold was a great deal; we got 6 of them, and a discounted PAP, for a savings of $2000 so far. Merchandise discounts have added up, but even if it’s $300 (which would mean spending $3000, since I would’ve gotten a 10% discount with an AP). So say it’s $2300 saved so far ...

AP Renewals will save us about $500 a year, so another 5 years of savings will pay for the 25 points. (Shrug)

Correct mi I’m I’m wrong, but that savings is only if you are entering the parks during gold (or silver) black ou periods..??
I guess if you actually do the water parks that could be a factor.

 

[kboo]

Correct mi I’m I’m wrong, but that savings is only if you are entering the parks during gold (or silver) black ou periods..??
I guess if you actually do the water parks that could be a factor.

There is was a deal 2 years ago that you got the platinum annual pass (no blockout dates and water parks) that cost the same as gold - I don’t recall if there was another discount for gold passes because we are going over Easter and Xmas this year, so it was worth it for us. But my point was even if you only planned to buy/use the gold AP, the discount would be significant because without dvc you’d have to buy at least a platinum AP. So we saved more than usual and it still will take a while to make up the cost of 25 points. It’s harder to make a case for 75 points direct, especially at the very high prices they’re charging now.

 

[DduzDis]

There is was a deal 2 years ago that you got the platinum annual pass (no blockout dates and water parks) that cost the same as gold - I don’t recall if there was another discount for gold passes because we are going over Easter and Xmas this year, so it was worth it for us. But my point was even if you only planned to buy/use the gold AP, the discount would be significant because without dvc you’d have to buy at least a platinum AP. So we saved more than usual and it still will take a while to make up the cost of 25 points. It’s harder to make a case for 75 points direct, especially at the very high prices they’re charging now.

Hard to believe I questioned buying our 25 points direct. Thank goodness the heart won over the head on that one!! We also just added a July trip with the AP discount rooms... so the Mouse is still getting more money from us.

 

[motherof5]

We did a 25 point direct add on for about $4700 when they were also having the Platinum AP for the price of gold deal going on. It saved us about $400 per pass. We bought 6 passes for a savings of $2400. Would we have bought the PAP instead of Gold? In 2019 we are going over Easter and Xmas, so it's become a bit of a chicken and egg issue. But even if we count maximum savings, that means we are still $2300 "in the hole." (Probably a lot less than that, because of savings in the gift shops, but we probably also wouldn't have spent that much on stuff...)

Going forward, we will probably save about $300 per pass (or $1200 per set of passes for our family of 4) so long as they don't do that special again. Which is really only about 2 more sets of passes, or 3-4 years depending on how frequently we go. So we'd break even cost wise at 5-6 years for a 25 point add on. Now, even keeping price per point the same, with a 75-point direct minimum, you've now tripled the amount of time it takes to break even on the AP savings, which IMO is the only savings/discount worth much of anything.*

*We did get a tote bag and a magnet. Ooooh. Also - we do consider it to be of *some* value that we can book a member cruise (and pay cash), even though we haven't done it yet. That said, unless it's really amazing, a member cruise may be a one and done for us.



Given your screen name, your AP savings would be significant!! Plus, you'd be looking at booking 2BR on points v. paying cash for multiple hotel rooms. That adds up.

Yes the AP discount is worth it since we are a large family and we need at least 2 bedrooms.

 

[Arthur2990]

We just purchased our first contract resale knowing what the limitations were going to be including not being able to book at any "new" properties. I figured most of the perks I would not use. The discounts on food and merchandise we can get by using an AP (silver) which we would get anyway to save money on park tickets.

 

[jodifla]

I love your post! We love Dave Ramsey too and eyed dvc for 15-20 years before going big and buying a lot of points resale this last year. We were finally in a position to pay cash and saved over 20k when we bought resale.

I bought 23 years ago and financed. I think I got the much better deal. Paid 63 a point. And got 23 years of DVC vacations.

 

[Bing Showei]

I bought 23 years ago and financed. I think I got the much better deal. Paid 63 a point. And got 23 years of DVC vacations.

You’ve always been a proponent of financing, and I respect that you’ve managed to do that successfully.

Would you mind sharing whether or not you financed through Disney and what the terms of the loan were? It would be nice to give prospective buyers a more complete picture of what the costs are when financed. $63/point is an impressive number but I think it deserves some context.

There is no dearth of people who default on timeshare loans, and Disney is no exception. If you’re going to advocate for taking a loan out on what many consider to be a luxury purchase, sharing that information would be equally important, as it’s easier to quantify than 23 years of memories and magic.

 

[RaymOOOnd]

Question is whether the DVC direct price increases outpace the interest which accrues on the loan. If you can finance at 9% now versus save for 3 years and buy it outright, and if Disney is raising they prices by 15% per year, then financing is (perversely and contrary to all normal economic advice) the better deal!

 

[Katie L]

Question is whether the DVC direct price increases outpace the interest which accrues on the loan. If you can finance at 9% now versus save for 3 years and buy it outright, and if Disney is raising they prices by 15% per year, then financing is (perversely and contrary to all normal economic advice) the better deal!

Except that you aren't factoring in the costs of risk. And this is how we got 2008. It feels like we (as a country) are more leveraged than ever. Most in this country have less than $1k in savings. $1k. Of course, a DVC timeshare holder is not going to (likely) be one of those people.

Just as you can't explicitly quantify "magic and memories", it's very hard to quantify "risk" - until you lose a source of income for any myriad of reasons and you can't make your bills. I think Dave Ramsey is pretty extreme - but he's not wrong about a lot of what got us into the 2008 mess, and it just feels like we're doing it again.

 

[RaymOOOnd]

Except that you aren't factoring in the costs of risk. And this is how we got 2008. It feels like we (as a country) are more leveraged than ever. Most in this country have less than $1k in savings. $1k. Of course, a DVC timeshare holder is not going to (likely) be one of those people.

Just as you can't explicitly quantify "magic and memories", it's very hard to quantify "risk" - until you lose a source of income for any myriad of reasons and you can't make your bills. I think Dave Ramsey is pretty extreme - but he's not wrong about a lot of what got us into the 2008 mess, and it just feels like we're doing it again.

So my addended opinion is "so long as you don't default on your loan!"

 

[we"reofftoneverland]

I bought 23 years ago and financed. I think I got the much better deal. Paid 63 a point. And got 23 years of DVC vacations.

Different things work for different people. We chose not to finance because we did not want to take on debt for vacations. But we did not suffer. We cash flowed vacations and went to wdw pretty much every year from 2000 on and starting cruising around 2013. We stayed at many different disney resorts from all star to grand floridian (4x before dh got tired of being the last hotel to get on the monorail. Lol), from beach club to port Orleans, from wilderness lodge to poly-- and offsite at the Waldorf. We got great rates through travel agents. We thought hard about financing dvd more than a few times but just couldn't do it. I think different people are comfortable with different levels of debt-- and different types of debt. We are not comfortable with debt at all. We do still have a mortgage but not for long.

 

[Dean]

Question is whether the DVC direct price increases outpace the interest which accrues on the loan. If you can finance at 9% now versus save for 3 years and buy it outright, and if Disney is raising they prices by 15% per year, then financing is (perversely and contrary to all normal economic advice) the better deal!

I'm a big believer that financing brings risk. Years ago I used to say no financing with exceptions like price increases, tax refund coming and the like but I no longer believe those are reasonable. The reasons are that it works if you only look at math and things happen as they should but they never do. Just like everyone that buys no interest for 90 days or similar plans to pay it off but a large % don't and get hammered. Certainly the risk is different for different situations. If one is sitting on a big IRA and no other debt but decides to finance is much different than one who finances many things and lives month to month. Unfortunately I've learned that financing is more a way of life than a strategic move for many. So they don't just finance a timeshare but their phone, car, timeshare, couch and vacations among other things. My feeling is that if DVC is important, anyone who can actually afford it and it's important to, can save up and buy on cash within a couple of years. If they can't they either can't really afford it or it's not something important to them or both.

 

[jodifla]

You’ve always been a proponent of financing, and I respect that you’ve managed to do that successfully.

Would you mind sharing whether or not you financed through Disney and what the terms of the loan were? It would be nice to give prospective buyers a more complete picture of what the costs are when financed. $63/point is an impressive number but I think it deserves some context.

There is no dearth of people who default on timeshare loans, and Disney is no exception. If you’re going to advocate for taking a loan out on what many consider to be a luxury purchase, sharing that information would be equally important, as it’s easier to quantify than 23 years of memories and magic.

It's been a long time, but I checked with my DH, who has even forgotten some of the details:

We bought in 1996 when they had dropped the minimum point buy-in to 150 instead of 220. Buying 150 points cost just below $10,000, which just seems so much more doable. We financed straight from Disney at about 6 percent. So we had about $1,500 in finance costs, and DVC then was covering closing costs. Our monthly bill was less than $200, I think $183 or so. We ended up paying off the loan a bit early.

We put off purchasing a new car to do DVC instead. We also focused all our vacation dollars at WDW for the next couple years, so we weren't spending money on vacations elsewhere. Since we lived only 3 hours from Disney, we didn't need plane tickets, and we just threw a cooler in the car and skipped eating out much, and used our DVC kitchen instead. We got our Florida Resident passes. We brought friends with us and turned our vacations into parties, grilling by the pools, relaxing with wine, etc. We vacationed for those years for little out of pocket money, since our accommodations were paid for and Florida resident passes were incredibly reasonable then.

Timeshares had a terrible reputation back then, and we did our due diligence, looking at the issue from all angles. We knew we wouldn't tire of Disney vacations. We thought the point system gave us enough flexibility to not feel stuck. We bought in an a comfortable point level, so we wouldn't feel overburdened. We first toured Vero, then a few weeks later went to WDW to tour OKW and BWV. We both had good jobs, we didn't have children, and we could have raided our savings to pay cash, but we preferred to let our saved money sit and grow. We are really glad we did that now, as we have a hefty retirement savings (although we could always have more!)

So ultimately, the $1,500 or so we paid to finance was worth it. All those five years we were paying it off, we were going to WDW multiple times a year.

Today, even resale points for OKW are going for the $90 range, so people are paying more in cash than we paid for direct points plus our financing.

When we did finally have children, and one of us cut back work hours to stay home with our son, our DVC was all paid off, and we could stay in really lovely accommodations without financial worry. We also have taken full advantage of all the direct perks, and those our important to us.

 

[Bing Showei]

Thanks for the response, jodifla. It’s great you were able to make it work for your family. More importantly, you have no regrets and find the years ownership as invaluable; hard to put a price on that.

Today, even resale points for OKW are going for the $90 range, so people are paying more in cash than we paid for direct points plus our financing.

What’s tricky about this is the raw numbers don’t tell a complete story.

$65/point with the interest you identified bumps the cost to $76.67/point (that’s 18% more than a cash purchase equivalent at the time), and $1 in 1996 is equal to about $1.63 today. So all told, the $11,500 spent in 1996 is the equivalent of $18,745, or $125/point, selling at $90/point today would represent a 28% loss on dollars spent. Not the slam dunk comparing 1996 to 2019 dollars would imply.

No one can dispute the joy your family has experienced by buying when you did, all the wonderful memories you’ve enjoyed, or that buying by way of finance was the best decision for your family. Where the argument becomes a little more dubious is when you try to make the case that you are better off financially because you financed than if you had waited to buy in, the math just doesn’t support that assertions.

At the 67% higher interest rate, Disney closing costs, and higher retail prices that buyers would face today, replicating your success would be even more challenging.

 

[jodifla]

Thanks for the response, jodifla. It’s great you were able to make it work for your family. More importantly, you have no regrets and find the years ownership as invaluable; hard to put a price on that.

What’s tricky about this is the raw numbers don’t tell a complete story.

$65/point with the interest you identified bumps the cost to $76.67/point (that’s 18% more than a cash purchase equivalent at the time), and $1 in 1996 is equal to about $1.63 today. So all told, the $11,500 spent in 1996 is the equivalent of $18,745, or $125/point, selling at $90/point today would represent a 28% loss on dollars spent. Not the slam dunk comparing 1996 to 2019 dollars would imply.

No one can dispute the joy your family has experienced by buying when you did, all the wonderful memories you’ve enjoyed, or that buying by way of finance was the best decision for your family. Where the argument becomes a little more dubious is when you try to make the case that you are better off financially because you financed than if you had waited to buy in, the math just doesn’t support that assertions.

At the 67% higher interest rate, Disney closing costs, and higher retail prices that buyers would face today, replicating your success would be even more challenging.

I think your numbers don't make any sense. The difference is I had all those years -- 23 -- of DVC vacations. I paid about 1,5

Thanks for the response, jodifla. It’s great you were able to make it work for your family. More importantly, you have no regrets and find the years ownership as invaluable; hard to put a price on that.

What’s tricky about this is the raw numbers don’t tell a complete story.

$65/point with the interest you identified bumps the cost to $76.67/point (that’s 18% more than a cash purchase equivalent at the time), and $1 in 1996 is equal to about $1.63 today. So all told, the $11,500 spent in 1996 is the equivalent of $18,745, or $125/point, selling at $90/point today would represent a 28% loss on dollars spent. Not the slam dunk comparing 1996 to 2019 dollars would imply.

No one can dispute the joy your family has experienced by buying when you did, all the wonderful memories you’ve enjoyed, or that buying by way of finance was the best decision for your family. Where the argument becomes a little more dubious is when you try to make the case that you are better off financially because you financed than if you had waited to buy in, the math just doesn’t support that assertions.

At the 67% higher interest rate, Disney closing costs, and higher retail prices that buyers would face today, replicating your success would be even more challenging.

I disagree completely.

I had 23 years of DVC vacations and wasn't spending cash on rooms the whole time, unlike the people who sat on the sidelines, afraid to finance. How quick does $1,500 go when you are trying to pay cash for a 2 bedroom DVC room.

I don't think the numbers work for new buyers. And we always suspected this -- that the price would skyrocket.

So we financed, got direct points with all the benefits, 23 years of DVC and many more years stretching ahead of us.

Unlike people who sat on the sidelines 20 years ago because Dave Ramsey told them to.

 

[Eastcoast02]

Dean’s post above I very much agree with.

Jodifla, I think there’s not much negative to your financing situation besides the fact you paid interest. I think you got a wonderful return on your “investment.” So much of your DVC tenure was during a time Disney was less crowded and easier on the pockets. Can I hop in a time machine?

Bing, I appreciate the level of detail in your post. Straight up savage. Lol. I tend to not take things so seriously. Financing at today’s prices is without a doubt not the best option. There should be no argument there. Cash is the best option. But people want to own and I’m sure most of the “general public” so to speak is financing their direct purchases these days.

I remember there being a good argument to buy in when I did at the price I did, about $79/pt for AKV. I think the break even was around 7 years of ownership. I have a 25 pt. direct add on I’m just finishing paying off on a 18 mo. 0% credit card.

Adding on is fun. Reading the broker emails is fun. And then I’m sobered up by the not so fun direct prices, high resale prices, and increasing annual dues. I wonder how many people that finance DVC end up financing a portion of their vacation whether it be flights or admission. Then that is where you could get in trouble...

 

[Bing Showei]

I think your numbers don't make any sense. The difference is I had all those years -- 23 -- of DVC vacations. I paid about 1,5

If you let me know what numbers don't make sense, I'm happy to break it down more explicitly if that would help. The math is sound.

I had 23 years of DVC vacations and wasn't spending cash on rooms the whole time, unlike the people who sat on the sidelines, afraid to finance.

It's inaccurate to say that you paid $1,500 for 23 years of vacations as it ignores the highest cost of ownership, namely ADs. On 150 points, over 23 years, you paid roughly $20,0000 in AD's adjusted each year to today's dollar (averaging $837.49/year - again in today's dollars). So while you didn't technically pay cash for a booking, you did pay cash every January (or monthly/wrapped into loan payments). Those annual trips did cost something beyond your finance costs.

I don't think the numbers work for new buyers. And we always suspected this -- that the price would skyrocket.

The numbers are harder to justify for new buyers today, but from a strictly financial standpoint, the numbers didn't make a lot of sense financing back in 1996 either. What's different today is that it's even less in the buyer's favor to do so, financially.

So we financed, got direct points with all the benefits, 23 years of DVC and many more years stretching ahead of us.

Unlike people who sat on the sidelines 20 years ago because Dave Ramsey told them to.

Did you save on 24 years worth of timeshare bookings? Probably? But you also continued to make those payments through rough economic downturns in the economy, dot-com bust, 9/11, banking crisis, etc., all periods when a lot of people stopped going to Disney, rack rates plummeted, and people were losing their jobs left and right. You weathered those times well and were successful in paying off your loan and keeping your timeshare. While commendable, it's a bit cavalier to ignore the financials and belittle a healthy fear of financing as misguided, especially when your own financing path doesn't make sense to you.

Had you said, "Buying when I did, how I did, brought an unbelievable amount of happiness and joy to my life," that would've been an easy sentiment for many to applaud. I wish everyone can find that kind of happiness in their life. But you're not just saying that. Instead, you chose to be condescending to those who choose to seriously consider the risks of financing a timeshare. You make them out to be automatons incapable of free will and missing out on life.

Try just being happy with your purchase. It would be a lot easier than trying to justify your purchase financially. The math just doesn't add up. I swear.

 

[Bruin_mouse]

I think your numbers don't make any sense. The difference is I had all those years -- 23 -- of DVC vacations. I paid about 1,5


I disagree completely.

I had 23 years of DVC vacations and wasn't spending cash on rooms the whole time, unlike the people who sat on the sidelines, afraid to finance. How quick does $1,500 go when you are trying to pay cash for a 2 bedroom DVC room.

I don't think the numbers work for new buyers. And we always suspected this -- that the price would skyrocket.

So we financed, got direct points with all the benefits, 23 years of DVC and many more years stretching ahead of us.

Unlike people who sat on the sidelines 20 years ago because Dave Ramsey told them to.

Outstanding response! My comments aren’t about Bing’s post, just your response. I stumbled onto this board in 2017 after I read about DVC on a personal finance board and wanted to learn more. I learned so much about DVC on here that ended up easily saving me $30,000+, so I just kept reading daily. As I read though, I noticed a certain mentality about some ideas that just became blindly followed dogma: only pay cash, you’re stupid if you buy anything but resale, you shouldn’t buy any WDW resort besides SSR, etc. I don’t care about general guidelines like buying resale is usually better than buying direct. What bothered me, and still bothers me, was people getting bullied for not agreeing with other people’s point of view. Good for you for thinking through your own situation and acting decisively. I’ve always said you need to do folks need to do their own math and look at their own needs before deciding what to do, not just blindly follow the crowd like a bunch of lemmings. I’m so glad your direct purchase worked out and that you had the courage to go against the hostility of the crowds to share your experience. Bravo!