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

[Dean]

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.

On the low end of financial options it has to make sense or one is making a large mistake, on the high end one can look at it as a toy if they want though I still don't think it reasonable to buy it if the RTU if it doesn't make sense financially. In that case you'd likely be comparing to suite's, DVC on cash or deluxe hotels on cash. If it doesn't make sense financially for those comparison's, one is simply throwing money away to be a member of a club, it's not that exclusive and you're creating headaches and risk you don't have to deal with.

 

[crisi]

Agreed, when DVC starts to be a toy rather than a tool, you have other options that are more attractive - like staying in suites, or just paying cash.

 

[Dean]

Agreed, when DVC starts to be a toy rather than a tool, you have other options that are more attractive - like staying in suites, or just paying cash.

Just to clarify because I got to thinking it might not be clear on this thread, my view is savings and/or added value to make financial sense. I do believe one needs a certain amount of either or both, at least 20% worth though it's easier to qualify on the savings than on the value side. I use that number for several reasons but mostly related to risk because I look at DVC much like I would a high risk investment.

 

[spleuchan]

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'm sure there are some scenarios that DVC could save you money. There are many others, it won't. For example, we are a family of 4 (2 adults, 2 kids) and will be staying at Beach Club Resort for 6 nights for the last week of August. Tickets and room will cost $2,562.50. 7-day tickets with park hopper total $1,593.24, so 6 nights will cost us $969.26 for the room. Comparing to BCV studio, it would be 100 points, or $579 in maintenance costs, a $390.26 difference. Let's say you could get BCV for $90 a point, it would cost an investment of $9,000. Not accounting for interest, it would take more than 23 years to break even. So you would get to enjoy 4 years of savings before Disney takes the property back. Accounting for interest, its a losing bet.

We will likely book the bounceback offer for August 2015, but stay at POFQ. I realize this isn't a deluxe, but dining, tickets, and room for 7 days/6 nights will cost $2513. Tickets account for $1338 (no park hopper next year) and dining plan is $951. Therefore, we will be paying $37 per night for the room.

If you stay mostly at moderates and values, you will likely start spending a lot more at Disney if you get DVC. If you get deals, like us with BC this year and POFQ next year, you will be much better off staying away from DVC.

 

[btk2333]

I'm sure there are some scenarios that DVC could save you money. There are many others, it won't. For example, we are a family of 4 (2 adults, 2 kids) and will be staying at Beach Club Resort for 6 nights for the last week of August. Tickets and room will cost $2,562.50. 7-day tickets with park hopper total $1,593.24, so 6 nights will cost us $969.26 for the room. Comparing to BCV studio, it would be 100 points, or $579 in maintenance costs, a $390.26 difference. Let's say you could get BCV for $90 a point, it would cost an investment of $9,000. Not accounting for interest, it would take more than 23 years to break even. So you would get to enjoy 4 years of savings before Disney takes the property back. Accounting for interest, its a losing bet.

We will likely book the bounceback offer for August 2015, but stay at POFQ. I realize this isn't a deluxe, but dining, tickets, and room for 7 days/6 nights will cost $2513. Tickets account for $1338 (no park hopper next year) and dining plan is $951. Therefore, we will be paying $37 per night. If you stay mostly at moderates and values, you will likely start spending a lot more at Disney if you get DVC.

$970 for 6 nights at BC? That is $161.50/night. Rack rate for the end of August is $400-$428. How are you getting a 60% discount?

 

[spleuchan]

$970 for 6 nights at BC? That is $161.50/night. Rack rate for the end of August is $400-$428. How are you getting a 60% discount?

Through a travel agency that is not allowed to be named. They book a lot of rooms at convention rates I think. I also got convention tickets, so the room is likely a little more and tickets are less, but I don't know the exact break down and wouldn't be able to buy the tickets at that rate, so I'm using what I'd be able to buy the tickets for.

 

[btk2333]

Through a travel agency that is not allowed to be named. They book a lot of rooms at convention rates I think. I also got convention tickets, so the room is likely a little more and tickets are less, but I don't know the exact break down and wouldn't be able to buy the tickets at that rate, so I'm using what I'd be able to buy the tickets for.

well then you are obviously a special case and would not save money. However, there's no guarantee that that travel agency will be able to get those deals long term either.

I wouldn't want to base my decision to buy or not to buy on your numbers though...

 

[spleuchan]

well then you are obviously a special case and would not save money. However, there's no guarantee that that travel agency will be able to get those deals long term either.

I wouldn't want to base my decision to buy or not to buy on your numbers though...

I agree and that is why I said that there are probably some cases where it works out. I'm just combating the blanket statement made that with deluxes you will save a lot of money and moderates you will save a moderate amount and to show an example where it doesn't save money.

 

[Dean]

well then you are obviously a special case and would not save money. However, there's no guarantee that that travel agency will be able to get those deals long term either.

I wouldn't want to base my decision to buy or not to buy on your numbers though...

Historically my costs have been well under $100 per night for a 1 BR or 2 BR DVC for 7 nights because I'm usually trading in timeshares. That includes direct and indirect costs including underlying maint fees of the item used. I mention it because everyone's case is different and I find that many back themselves into a corner to justify the cost like the person recently that only wanted to use rack rates of DVC as the comparison, that too is a special case and no more applicable for most people. One of my contentions is that many assume they won't be happy off property because they don't have experience that's applicable for a real comparison. Either they've stayed at dingy condo's 20 yrs ago (recent example someone posted) or they've stayed in basic hotels but haven't stayed in top timeshares off property enough to really know. The reality is that there are a good dozen or so timeshares in Orlando that are as nice or nicer in many areas than are the DVC resorts (many actually nicer in many ways). Sure they're not on property and that's important to some but for many they just think it's important because they don't know anything else. Personally we prefer DVC but are just as happy off property and for a given trip, off property can often work out better.

 

[crisi]

well then you are obviously a special case and would not save money. However, there's no guarantee that that travel agency will be able to get those deals long term either.

I wouldn't want to base my decision to buy or not to buy on your numbers though...

For years now, there have been very good deals on Disney resorts for those that have both the flexibility to travel when they are available, and the patience to look for deals. AP rates are regularly 60% of rack rate - sometimes better. Big travel sites will fire sale rooms they buy as a block. Free dining has OFTEN been a better deal than DVC - not always, but often. The British Expedia site had some bargains earlier this year - you could get them as an American, but you had to go through the British site.

Which is why running a comparison off rack rates is a fools game - will you get 60% every time? No. But will you pay rack rate? I don't know many people on this board who do.

Whether the numbers work all depend on what assumptions you make - if you make rack rate and low TVM assumptions, don't figure in any other expenses, assume you'll sell in ten years for as much as you bought it for, and negate all changes to travel plans - it will come out to be a much better deal much faster than if you assume it will be worthless, that TVM has a large number associated with it, that you'll be able to find bargains (and when you can't - you won't travel or you'll stay offsite), and that owning a timeshare will mean that some number of your trips will end up in a larger room or for more nights than if you didn't own.

 

[btk2333]

For years now, there have been very good deals on Disney resorts for those that have both the flexibility to travel when they are available, and the patience to look for deals. AP rates are regularly 60% of rack rate - sometimes better. Big travel sites will fire sale rooms they buy as a block. Free dining has OFTEN been a better deal than DVC - not always, but often. The British Expedia site had some bargains earlier this year - you could get them as an American, but you had to go through the British site.

Which is why running a comparison off rack rates is a fools game - will you get 60% every time? No. But will you pay rack rate? I don't know many people on this board who do.

No I never compare off of rack rates- I like to compare off of 30% discounts because that's what I"ve found to be reliably available for deluxes.

Also- I've had an AP for 5 years running now- I've never seen an AP rate at 60% off rack rate...
http://www.mousesavers.com/historical-information-on-walt-disney-world-resort-discounts/
Mousesavers doesn't report any either...

 

[Msmithmd]

Dean, I'd be interested, and don't think it is off of the original thread topic, to ask you to list a few of the local off-property places you find to be equal or better than DVC- what you like about them that makes them so good, and a general guideline of relative purchase and ownership costs at those options relative to a similar ownership stake in DVC.

I think it would help paint the picture of true DVC value if some folks (myself included) could get a better perspective of what is out there beyond the Disney bubble. It just seems we often within this board only discuss "Disney options versus Disney options" when we discuss value and cost, while ignoring a whole lot of the local overall market.

Considering what else is available locally might further illuminate whether DVC would save a new purchaser money, or add value, over what else might actually be much less expensive.

 

[Dean]

Dean, I'd be interested, and don't think it is off of the original thread topic, to ask you to list a few of the local off-property places you find to be equal or better than DVC- what you like about them that makes them so good, and a general guideline of relative purchase and ownership costs at those options relative to a similar ownership stake in DVC.

I think it would help paint the picture of true DVC value if some folks (myself included) could get a better perspective of what is out there beyond the Disney bubble. It just seems we often within this board only discuss "Disney options versus Disney options" when we discuss value and cost, while ignoring a whole lot of the local overall market.

Considering what else is available locally might further illuminate whether DVC would save a new purchaser money, or add value, over what else might actually be much less expensive.

Clearly there is a lot of personal preference as to what's important to a given person. For example, AKV and VWL are less deluxe than say VGF and YC/BC but some people are offended by even thinking of it that way. And some people are more location oriented and others more quality oriented. We are timeshare snobs, we expect a quality room and resort. Just clean and functional is not good enough for us. Obviously it depends on how you compare them. In general I tend to compare them as if they were side by side and look at size and quality of the rooms, pool and other common amenities as well as location where applicable.

Here's a portion of a list I'd posted previously.

Here's my list, there are a few resorts I dont know enough to place but based on other info, I wouldn't list any of them in the top group. There is one alternative lifestyle resort if that matters to anyone. Some are II, some RCI, some both.

Top Group.
4 top Marriott's (1 in RCI)
3 Hilton's
The Fountains (and Oasis Lakes)
Vistana Villages.
Wyndham Bonnet Creek & Reunions

The next group, worth staying or at least considering but definitely less would include the following. This is a broader grouping than the last time I gave this list. There are a few others that I didn't list that should be OK based on rating and awards.

Silver Lake (both ID's)
Vistana
Orange Lake (River Island best) (Now Holiday Inn)
Liki Tiki Maybe
Summer Bay, esp Houses at
Village at Parkway
Westgate Lakes
Other Marriott's (2 in RCI)
Some other Wyndham's

Here are a few qualifying caveat's.
Marriott's Lakeshore reserve is best for adults.
Marriott's Harbour Lakes is best for younger kids.
Marriott's Grande Vista is the best balance and very often easily available due to size. It also has a fair number of 3 BR units.
The Hilton's are often available in RCI points including 3 BR.
The Fountains has only regular 2 BR and 3 BR presidentials though that may change with their acquisition of the condo building next which has larger and smaller units. It also has a pool area that's nicer than most.
Bonnet Creek is right behind CBR.
Silver Lakes is close to AK.

IMO the benefit to looking at other timeshares is in two areas. Those are economy of scale with some and the combo of Orlando compared to other places. I believe the compromise of staying non DVC (or trying to trade in) plus using other locations than trying to buy DVC to use for Disney AND other places. Of course the 2 are not exclusive of each other and many of us own both. If I could only own one it would not be DVC.

 

[Msmithmd]

Thanks! And costs of ownership (purchase plus maintenance), in general: more, less, or way less than DVC? Resale of course...unless there is a compelling reason for direct purchase in these systems?

 

[StinkyPete&Jessie]

Save yourself a ton of time and only consider purchasing DVC when you have the cash on hand and the contract you want is available on the resale market.

We only use our points for WDW, DL, and Aulani vacations. I personally would never use them for a Disney cruise, adventures, or RCI conversion.

We use HGV when spending time at universal but I would not recommend it for Disney vacations.

 

[Dean]

Thanks! And costs of ownership (purchase plus maintenance), in general: more, less, or way less than DVC? Resale of course...unless there is a compelling reason for direct purchase in these systems?

It depends on the scale and specifics but as a rule and assuming a 2 BR for a week one is looking buy in between $500-1500 inclusive (maybe less) and yearly fees around $1300 inclusive for Bluegreen or Wyndham, Marriott Grande Vista maybe $3500 and yearly fees around $1300, Marriott points more but more flexible (maybe $10-15K and yearly fees around $1800 yearly but you pick up a lot for the extra), I'm not quite sure about Starwood or Hilton for numbers. Each has their quirks, advantages and disadvantages including DVC. Compare that to $20K for SSR plus yearly $1500. Obviously one has to look at how and where they'd use it and dig down further to see if DVC or another system were the best single option for a given person. I'm always happy to discussing privately with anyone to try and not get too far off on this subject.

 

[howardlee2]

Looking back we bought in 1994 for cash,our reasons for buying were varied but most importantly it forced me to take time off work for vacations. Not only did we take vacations as a family, i also took each of our kids down for short trips individually. it was an opportunity to spend quality time with each of them! (and give my wife 3-4 days off!!) Also, disney gave us the perk of free park passes through the end of 1999. Pool hopping was allowed to storm a long bay at BC which is our favorite pool. Everyone loved those trips and we made lasting memories.

About 8-9 years ago it began to get harder getting everyone together as kids started going to college and we went less frequently. Currently, we haven't been down to WDW in 2 years. I thought about selling but, our kids are now in their 20's and will hopefully have their own kids and we will be able to once again take family vacations! I doubt we will ever go with our earlier frequency but with the ability to rent unused points i am ok with that.

 

[Amanda999]

We will likely book the bounceback offer for August 2015, but stay at POFQ. I realize this isn't a deluxe, but dining, tickets, and room for 7 days/6 nights will cost $2513. Tickets account for $1338 (no park hopper next year) and dining plan is $951. Therefore, we will be paying $37 per night for the room.

If you stay mostly at moderates and values, you will likely start spending a lot more at Disney if you get DVC. If you get deals, like us with BC this year and POFQ next year, you will be much better off staying away from DVC.

You'll get free dining for next August, when you book your bounceback later this month. There's an advantage to add to the DVC v. non DVC math.

 

[rotlex]

You'll get free dining for next August, when you book your bounceback later this month. There's an advantage to add to the DVC v. non DVC math.

While my wife and I have been considering DVC for the past 10 years or so, things like the bounce back offers, free dining, room discounts etc. etc. are what continue to postpone that purchase year after year.

For us, and I'm in this forum again as we have a trip in a few days, we go through this every year. We stay either moderate, or "lower end deluxe", every year. (WL, AKL etc. cost wise). Try as much as I can, I simply cannot see any savings or value for us in DVC. And believe me, I keep trying, LOL.

The problem for me is that when I take the up front cost, and I would buy resale, the yearly passes or park tickets, food, etc., there is no savings at all. Granted, if we didn't book a bounce back each year there MIGHT be, but it would take a very, very long time. We average 10-15 nights per year, so the number of points we would need would be fairly large. I find it funny how two different couples we know keep telling us what a deal it is, basing the entire trip cost on the maintenance fees they pay each year. Excuse me folks, you still have to buy your passes, food, pay your maintenance fees, and figure in that 15-20K initial outlay for points.

Lastly, accommodation wise, the fact that a studio doesn't even have two beds is frustrating to say the least. Factor in no regular housekeeping, and honestly, I go from wanting to buy DVC, to thinking it's the biggest rip off anyone ever pulled. And yeah, I'm a Disney lover, and will probably be scanning the timeshare store for deals often in the next year once again.

If someone is getting the yearly discounts and deals offered pretty much all the time by Disney, it really doesn't make a lot of sense unless you really, really need those 1, 2 or 3 bedroom accomodations. At least that is how it has worked out for us over the past 10 years no matter how I "run the numbers".

 

[spleuchan]

You'll get free dining for next August, when you book your bounceback later this month. There's an advantage to add to the DVC v. non DVC math.

"Free" dining was included in my example. However, instead of counting it as free, I subtracted the cost of a non-free dining plan and cost of tickets from my package total to get the equivalent of what I am paying for a room so I could make a more apple to apple comparison to DVC.