Interested in Buying, But Is It A Savings For Us?

[pgowder]

We've gone to the presentation and did a phone call about the program.

Think we understand it.

I know it doesn't work in all situations. Since we go often, we wanted to consider DVC. But it doesn't seem like a savings for us.

Am I missing something?

We were looking at buying 200ish points at WL. We would be looking at about $1,120 in yearly fees. Right?

We usually go 2-3 times per year. Mostly for long weekend trips. We do a longer trip every other year.

So most years we have 6-10 nights on property. We usually stay at value or moderate. We will sometimes splurge for deluxe if we have an AP discount.

To us it seems that with the yearly fees we'll won't be saving much. And we'd need more points to cover all our trips.

Are we just not the right fit for DVC? We want to save if we can.

Thanks!

 

[Msmithmd]

Yes, it is a significant savings if you purchase via resale and pay cash. Not so much, if you purchase direct from Disney and use a loan to buy.

We own 300 points at VWL. Our maintenance fees of $5.93 a point cost us $1,779 this year. Those points would be enough for a studio for 2 1/2 weeks or a one bedroom for about ten days. Even after accounting for amortized initial resale purchase cost, we figure we save anywhere between 1/3 and 1/2 of the cost of similar lodging if we were paying cash for reservations to Disney.

Do be aware that owning a DVC interest makes many people vacation either longer or in a nicer accommodation than they previously used. While this adds quality-of-life value, it wouldn't be strictly a financial "savings" versus what you were doing before.

As a rule of thumb, DVC saves a lot versus a deluxe cash resort, a moderate amount versus a moderate resort, and little to nothing versus a value resort. Also, DVC costs dramatically more than other off-property timeshares or other cash/rental properties.

If you're content in a value resort, don't buy. If you want much nicer accommodations, and can afford both the initial purchase and the maintenance, as well as associated trip costs, then ownership might be right for you. Spend at least six months following these boards before you ultimately decide.

 

[pgowder]

Yes, it is a significant savings if you purchase via resale and pay cash. Not so much, if you purchase direct from Disney and use a loan to buy.

We own 300 points at VWL. Our maintenance fees of $5.93 a point cost us $1,779 this year. Those points would be enough for a studio for 2 1/2 weeks or a one bedroom for about ten days. Even after accounting for amortized initial resale purchase cost, we figure we save anywhere between 1/3 and 1/2 of the cost of similar lodging if we were paying cash for reservations to Disney.

Do be aware that owning a DVC interest makes many people vacation either longer or in a nicer accommodation than they previously used. While this adds quality-of-life value, it wouldn't be strictly a financial "savings" versus what you were doing before.

As a rule of thumb, DVC saves a lot versus a deluxe cash resort, a moderate amount versus a moderate resort, and little to nothing versus a value resort. Also, DVC costs dramatically more than other off-property timeshares or other cash/rental properties.

If you're content in a value resort, don't buy. If you want much nicer accommodations, and can afford both the initial purchase and the maintenance, as well as associated trip costs, then ownership might be right for you. Spend at least six months following these boards before you ultimately decide.

Thanks, that helps alot.

We would have to finance the initial purchase.

 

[Msmithmd]

My recommendation to you would then be to stay at a value for a couple more years, and put the cost difference between that and a deluxe into a money market account each trip. Add some extra savings to this pot and you will be able to buy a resale contract outright in the not-too-distant future.

While some may present a lot of convoluted math that it "makes sense" to buy a timeshare on credit, I disagree with that line of thought on principle. Timeshare purchase via credit is simply not a good path toward financial freedom, in my opinion.

Once you have the savings to buy outright, I do think that you would get a lot of satisfaction owning DVC. Be patient, DVC isn't going anywhere-in fact, it seems to be the only thing that TWDC is able to build quickly these days...

 

[disneynutz]

If you are happy saving money in the values then DVC will not save you money.

Bill

 

[River Country]

Here is another example

in 2011 I stayed in a 2BR for 7 nights and it cost with Food and Tickets around $7500.00 for 5 people with airfare this was at SSR

It was on this trip that me and DW along with my parents invested in DVC
We purchased 160 points at SSR @$99/pt

Here is my current Reservations
2 Deluxe Studios at OKW for 7 Nights
5 Airfare from EWR $1298
Est. food cost of $2000
Annual Passes $2500

So just this trip and its $1,700 less than paying cash I have made multiple trips per year since 2011 and DVC comes with the added benefit of getting discounts on AP's and being able to purchase TiW which helps on food cost. So there is a definite savings. IMHO Good luck with your decision

 

[speniner]

In most cases, Timeshares are a great emotional investment, but a poor financial investment. I saw the presentation 10+ years ago when they were selling at BW. Saw it again 5+ years ago at Saratoga. Both times at the end of the presentation I was ready to buy. However, I'm an accountant and ran the numbers and it just isn't a very good financial investment from a PURE money standpoint. Especially if financing is required. IF the emotional gain is so great to be able to plan in that trip every year, go after it.

I will admit, if you are going to own a timeshare, Disney is probably the best value (not cheapest). It holds it's price because Disney has first right of refusal on all resales, which ensures market stays up. When (could be 5 or 500 years) Disney decides to stop building resorts, the value per points will PLUMMET. Remember DVC is a lease, not a purchase.

 

[disneynutz]

In most cases, Timeshares are a great emotional investment, but a poor financial investment. I saw the presentation 10+ years ago when they were selling at BW. Saw it again 5+ years ago at Saratoga. Both times at the end of the presentation I was ready to buy. However, I'm an accountant and ran the numbers and it just isn't a very good financial investment from a PURE money standpoint. Especially if financing is required. IF the emotional gain is so great to be able to plan in that trip every year, go after it.

I will admit, if you are going to own a timeshare, Disney is probably the best value (not cheapest). It holds it's price because Disney has first right of refusal on all resales, which ensures market stays up. When (could be 5 or 500 years) Disney decides to stop building resorts, the value per points will PLUMMET. Remember DVC is a lease, not a purchase.

I would think that supply and demand keeps the prices where they are not ROFR.

Bill

 

[crisi]

Probably not - you'll stay at moderates or values - deluxe with an AP discount. You use weekend nights - and although they are more of a value than they used to be, they are still expensive. You'd have to finance. All that implies this won't save you money - you MIGHT come out ahead, but then, there is also risk with a DVC purchase that you need to be willing to take (people who bought and financed in 2008 who then lost jobs in 2009 lost their shirts).

 

[Dean]

We've gone to the presentation and did a phone call about the program.

Think we understand it.

I know it doesn't work in all situations. Since we go often, we wanted to consider DVC. But it doesn't seem like a savings for us.

Am I missing something?

We were looking at buying 200ish points at WL. We would be looking at about $1,120 in yearly fees. Right?

We usually go 2-3 times per year. Mostly for long weekend trips. We do a longer trip every other year.

So most years we have 6-10 nights on property. We usually stay at value or moderate. We will sometimes splurge for deluxe if we have an AP discount.

To us it seems that with the yearly fees we'll won't be saving much. And we'd need more points to cover all our trips.

Are we just not the right fit for DVC? We want to save if we can.

Thanks!

It's unlikely you'll save money on paper and certainly not in the long run, however, the added value may be worth it depending on the makeup of your group. You also need to be OK with the limitations and be able to plan ahead, at least 7 months to be reasonable.

Thanks, that helps alot.

We would have to finance the initial purchase.

I always recommend against financing. For most that simply means they can't afford it but it adds risk and complications for everyone that finances.

 

[Nicoleinwi]

As a rule of thumb, DVC saves a lot versus a deluxe cash resort, a moderate amount versus a moderate resort, and little to nothing versus a value resort. Also, DVC costs dramatically more than other off-property timeshares or other cash/rental properties.

Agreed.
For us dvc ends up costing less per year (figured initial purchase plus annual dues) than staying at a moderate or about break even at a value. I couldn't justify spending the rate per night to stay at a deluxe so for us it allows us to stay at those resorts a tad cheaper then we'd usually go (we usually stay at moderate).

 

[McCrae]

In most cases, Timeshares are a great emotional investment, but a poor financial investment. I saw the presentation 10+ years ago when they were selling at BW. Saw it again 5+ years ago at Saratoga. Both times at the end of the presentation I was ready to buy. However, I'm an accountant and ran the numbers and it just isn't a very good financial investment from a PURE money standpoint. Especially if financing is required. IF the emotional gain is so great to be able to plan in that trip every year, go after it.

I will admit, if you are going to own a timeshare, Disney is probably the best value (not cheapest). It holds it's price because Disney has first right of refusal on all resales, which ensures market stays up. When (could be 5 or 500 years) Disney decides to stop building resorts, the value per points will PLUMMET. Remember DVC is a lease, not a purchase.

Pretty bold assumptions and surprising from a cautious accountant.

The ROFR helps support the resale market, but without interested buyers prices would still fall. Resale prices are impacted more by supply and demand.

No evidence that resale prices will fall once Disney stops building new resorts.
The biggest impact will be what are the alternative costs of staying at Disney. If visit numbers remain good and rack rates continue to rise the value of owning DVC will remain.

I would love to see the math behind your assumptions that buying DVC does not save you money....my guess is that you are not comparing like with like and it's the assumptions you making that are driving the result. In 5 years we have saved more than the costs of our initial investment. For us DVC was one of the smartest investment decisions we ever made.

 

[River Country]

Pretty bold assumptions and surprising from a cautious accountant.

The ROFR helps support the resale market, but without interested buyers prices would still fall. Resale prices are impacted more by supply and demand.

No evidence that resale prices will fall once Disney stops building new resorts.
The biggest impact will be what are the alternative costs of staying at Disney. If visit numbers remain good and rack rates continue to rise the value of owning DVC will remain.

I would love to see the math behind your assumptions that buying DVC does not save you money....my guess is that you are not comparing like with like and it's the assumptions you making that are driving the result. In 5 years we have saved more than the costs of our initial investment. For us DVC was one of the smartest investment decisions we ever made.

I have to agree here. I am in Finance as well, while I am not an accountant though. Prior to my purchase I called my accountant and asked her what she thought of it from a non-emotionally involved 3rd party. Her response was "Joey....I have 460 points at BWV....."

 

[crisi]

Pretty bold assumptions and surprising from a cautious accountant.

The ROFR helps support the resale market, but without interested buyers prices would still fall. Resale prices are impacted more by supply and demand.

No evidence that resale prices will fall once Disney stops building new resorts.
The biggest impact will be what are the alternative costs of staying at Disney. If visit numbers remain good and rack rates continue to rise the value of owning DVC will remain.

I would love to see the math behind your assumptions that buying DVC does not save you money....my guess is that you are not comparing like with like and it's the assumptions you making that are driving the result. In 5 years we have saved more than the costs of our initial investment. For us DVC was one of the smartest investment decisions we ever made.

There is endless math on the board, and you can work it to work out however you want - depending on what assumptions you make. What interest rate you use (the stock market did go up over 20% last year, on the other hand, you can claim no TVM)....if you finance...do you use rack rate for a regular room.....

But the biggest issue in my mind with saving money is that while it can - depending on your assumptions - it only does if you don't change you behavior patterns at all. If you stayed in a hotel room - you stay in a DVC studio - if you move to a one bedroom, you are usually sunk money wise. If you take the same number of trips - and skip the trips you would have skipped without DVC (for instance, the year the house needs a roof or your kid breaks an arm right before the trip). If you don't take guests and treat them to a room. There ARE people who do that, but honestly, I've been watching for years and its a minority of people here - and its a minority of people who come here, ask this question, and then buy. A year later and they are adding on - they need more points because they go more often. Or have discovered a one bedroom. Or want to take their parents or grandkids.

And even if you save, you do give up some things for the savings - you give up two beds in a studio - unless you stay at OKW. You give up a lot of choice, short booking windows, cancellation policies, daily mousekeeping (which a lot of DVCers don't mind, but you are giving it up), more frequent room refreshes. DVC resorts operate at close to 100% capacity - if large family with small kids is way down at the end of a long hallway, there may not be a room close tot he lobby open to move your family to.

When people come and ask if its a savings - I assume that they are price constrained - that spending less money at Disney every year is important to them. That certainly seems to be the case with this OP - who stays in values. When they add that they'd need to finance, I assume that they don't have a lot of capital to invest - that there isn't a lot of money sitting around if the washing machine breaks the same month the transmission goes out in the car and they get an assessment for the street. With risks like that, you don't only have the question of savings - you have risk in opportunity cost - if I didn't have DVC and dues, I wouldn't need to put a new washer on the credit card at 21% interest.

Few people come on and ask if its a good value - for a lot of people it is a good value. And that is a different question. But a savings? Its a way for the mouse to take more money from us - and for us to be quite happy doing it.

 

[pgowder]

There is endless math on the board, and you can work it to work out however you want - depending on what assumptions you make. What interest rate you use (the stock market did go up over 20% last year, on the other hand, you can claim no TVM)....if you finance...do you use rack rate for a regular room.....

But the biggest issue in my mind with saving money is that while it can - depending on your assumptions - it only does if you don't change you behavior patterns at all. If you stayed in a hotel room - you stay in a DVC studio - if you move to a one bedroom, you are usually sunk money wise. If you take the same number of trips - and skip the trips you would have skipped without DVC (for instance, the year the house needs a roof or your kid breaks an arm right before the trip). If you don't take guests and treat them to a room. There ARE people who do that, but honestly, I've been watching for years and its a minority of people here - and its a minority of people who come here, ask this question, and then buy. A year later and they are adding on - they need more points because they go more often. Or have discovered a one bedroom. Or want to take their parents or grandkids.

And even if you save, you do give up some things for the savings - you give up two beds in a studio - unless you stay at OKW. You give up a lot of choice, short booking windows, cancellation policies, daily mousekeeping (which a lot of DVCers don't mind, but you are giving it up), more frequent room refreshes. DVC resorts operate at close to 100% capacity - if large family with small kids is way down at the end of a long hallway, there may not be a room close tot he lobby open to move your family to.

When people come and ask if its a savings - I assume that they are price constrained - that spending less money at Disney every year is important to them. That certainly seems to be the case with this OP - who stays in values. When they add that they'd need to finance, I assume that they don't have a lot of capital to invest - that there isn't a lot of money sitting around if the washing machine breaks the same month the transmission goes out in the car and they get an assessment for the street. With risks like that, you don't only have the question of savings - you have risk in opportunity cost - if I didn't have DVC and dues, I wouldn't need to put a new washer on the credit card at 21% interest.

Few people come on and ask if its a good value - for a lot of people it is a good value. And that is a different question. But a savings? Its a way for the mouse to take more money from us - and for us to be quite happy doing it.

Great info! Thanks!!

 

[crisi]

By the way, that most of us do change our patterns (thereby spending more money) is why DVC is a value for so many people. How else can you affordably put your kids in a different room onsite so you and your spouse can enjoy couple time on vacation? (DVC, Family Suites and Ft. Wilderness cabins are your choices). Knowing you'll go next year, because you have the timeshare, tends to slow down the trips you take - who cares if Space Mountain is closed this year, there is next year. Taking family is something many of us really value. When not having a room bill (well, you have it, but its hidden in dues and up front costs) means you try La Nouba or have eaten at every sit down restaurant in Disney - that's a nice thing. It just isn't CHEAPER than the way you used to travel when you add it all up.

 

[McCrae]

There is endless math on the board, and you can work it to work out however you want - depending on what assumptions you make. What interest rate you use (the stock market did go up over 20% last year, on the other hand, you can claim no TVM)....if you finance...do you use rack rate for a regular room.....

But the biggest issue in my mind with saving money is that while it can - depending on your assumptions - it only does if you don't change you behavior patterns at all. If you stayed in a hotel room - you stay in a DVC studio - if you move to a one bedroom, you are usually sunk money wise. If you take the same number of trips - and skip the trips you would have skipped without DVC (for instance, the year the house needs a roof or your kid breaks an arm right before the trip). If you don't take guests and treat them to a room. There ARE people who do that, but honestly, I've been watching for years and its a minority of people here - and its a minority of people who come here, ask this question, and then buy. A year later and they are adding on - they need more points because they go more often. Or have discovered a one bedroom. Or want to take their parents or grandkids.

And even if you save, you do give up some things for the savings - you give up two beds in a studio - unless you stay at OKW. You give up a lot of choice, short booking windows, cancellation policies, daily mousekeeping (which a lot of DVCers don't mind, but you are giving it up), more frequent room refreshes. DVC resorts operate at close to 100% capacity - if large family with small kids is way down at the end of a long hallway, there may not be a room close tot he lobby open to move your family to.

When people come and ask if its a savings - I assume that they are price constrained - that spending less money at Disney every year is important to them. That certainly seems to be the case with this OP - who stays in values. When they add that they'd need to finance, I assume that they don't have a lot of capital to invest - that there isn't a lot of money sitting around if the washing machine breaks the same month the transmission goes out in the car and they get an assessment for the street. With risks like that, you don't only have the question of savings - you have risk in opportunity cost - if I didn't have DVC and dues, I wouldn't need to put a new washer on the credit card at 21% interest.

Few people come on and ask if its a good value - for a lot of people it is a good value. And that is a different question. But a savings? Its a way for the mouse to take more money from us - and for us to be quite happy doing it.

If you change the way you take a holiday by staying longer or staying in bigger rooms trying to compare it with what you used to spend is pretty meaningless.

You need to compare what your new holiday would cost you if you were not DVC members.

Comparing like for like you will save money using DVC .... The person I was responding originally to made some pretty bold claims which are pretty far off the mark....

False information can wrongly influence people and needs to be corrected.

 

[Dean]

Some of my opinions as it applies to this situation include the following.

• That the psychology of timeshares is far more important than the math.
• That DVC must make sense compared to present patterns to be a reasonable consideration by at least a 20% discount or 20% added value compared to either real world options or discounted rack rates for what one would have used.
• That comparing to DVC rack rates, even discounted, is a fools comparison unless one would routinely pay cash for a suite or DVC anyway.
• That the best comparison for many is renting vs buying.
• That almost no one will end up saving money in the long run but MAY or may not have added value.
• That those who buy for non DVC options (currently) like the DC, DCL, CC, RCI etc will always pay more in the long run, have less options and ultimately make worse decisions.
• That the psychology of the thinking that points are already paid for so I'll just use them for something I wouldn't pay cash for otherwise is a major item that increases costs.
• That buying multiple smallish contracts (less than 150) simply for insurance in case one has to sell later is a dramatically high insurance far worse than extended warranties on automobiles and electronics.
• That the math for almost everyone is close to the best case scenario.
• That most people ignore most of the risks.
• That many people who buy in really can't afford it.
• That many buy on emotion and that most don't have all of the info that'd be important to make the best decision possible.
• That DVC only makes sense for those that can plan ahead, are comfortable with the compromises, want to use the points for DVC resorts only, can afford it (not just pay the payments) and who have enough info and experience to make an informed decisions. Normally this includes good knowledge in at least 2 of the 3 areas of DVC, Disney resorts and off property timeshares.

 

[crisi]

I agree with Dean, which is why after years of running numbers (I'm an accountant and process analyst - and currently a trophy wife), I've come down on the side of running the numbers is fun - but its fairly meaningless - because the assumptions are all over the place and it is the changes to behavior that really increase the cost. And because - risk. When the economy was good in 2006-2007, we saw a lot of people buy DVC using this sort of math and assumptions that didn't prove out when the economy got worse - some of those people lost their shirts on DVC - some of them lost their homes. I'll never again tell someone DVC will save them money - it sure didn't save people who bought in 2008 and sold at a loss in 2009 any money. The assumption there - you can resell it for what you bought it for - and you won't anyway because you'll be going to Disney for at least ten years - didn't pan out for those people.

Dean and I disagree on one point - he thinks it needs to make some financial sense. I think that if you have enough money, it doesn't need to make any sense at all. I used this example last week - I drive a Prius. I probably don't save money on gas over buying a Jetta diesel - not enough to pay for the difference in the price of the car - but its an affordable loss and I like my Prius - even though it has hamsters for an engine and a huge blind spot out the back window. My husband wants a Tesla - and not one of the next year affordable sedans - he wants an S. While we'd save on gas, his Mercedes is going to come out much cheaper to own than the S - and we CAN'T afford that delta - not without dipping into the kid's college money. But I have a friend with an S - apparently financial sense did not enter into the equation - he wanted, and can afford, an S. Neither car really makes financial sense (neither does the Mercedes), but you should drive something you enjoy - and you can afford.

To me, it comes down to "is DVC a good fit for you" (the onsite, no housekeeping, make plans in advance, be able to get multiple room units, like the resorts, etc. attributes) - and "can you afford to burn the money - or at least a significant amount of it - because if the economy crashes next week, you might be doing pretty much that."

And almost no one asking if DVC saves them money over a regular resort room, or asking for the math, meets the second criteria. When they come asking if DVC is a good fit - it might be.

 

[Minniesgal]

I kinda agree with Crisi, we didn't really run the numbers. We started with 1 child at POR, once we had two POR was a bit small, once we had three we were staying in 3 bedroom Condos offsite but I always wished we were on site. We bought DVC when we could afford to pay cash for it and it has done two things for us. It has allowed us to move back on site into 2 bedroom condos and it has forced us to plan our holidays to Orlando so we go regularly. I can't tell you how good the feeling was just after we bought leaving Orlando not only knowing we would be back but knowing within which timeframe we would be back. We have been moved to Australia with my job, and we should be going next year but can't due to my holiday time schedule no worries I have rented my points and we have planned on going 2016 instead and although we are a little sad we are not going next year we know we will be back soon. If we hadn't bought I probably wouldn't be even considering going from here but it is our most preferred holiday so we are and I'm glad we are.