Interested in DVC but we did not initially budget for this...

[pinipig523]

Hey guys,

We enjoy our Disney vacations and stumbled into the Disney Vacations Club at our mall... we took the video tour, then the physical tour, and the sales pitch.

To me, it seems like a long term deal - it sounds like it *might* work out well if you use it every year.

My wife and I are 29 years old and we were looking at BLT as our home resort. We were looking at 100 points and we were interested in a direct buy from Disney.

That said, I noticed that there are resales available on this site - but I also read somewhere that there are restrictions to what I can use resale points for.

Questions:
1. What are the restrictions for resale points?
2. Is DVC a good deal if you start young and go every year?
3. What are the pros of going direct? What happens when I pass the time share to my kids? Do they get limitations just as if they had bought resale points?

Also, how did you guys justify the purchase? $14500 for 100 BLT points is quite a lot of money upfront... we're still young and starting our lives so I don't want to make rash decisions.

Thanks for reading!

 

[zavandor]

1. What are the restrictions for resale points?

You cannot make reservations for Cruises, Disney Collection (i.e. reserving rooms in a Disney Hotel) and ABD using your points.
Many agree that that would not be the best use for your points anyway. The best value for your points will always be staying in a DVC resort.
And you are not planning to buy many points, so I don't think that you'll find yourself with hundreds of points to burn.

3. What are the pros of going direct? What happens when I pass the time share to my kids? Do they get limitations just as if they had bought resale points?

There is no limitation on reselling or passing your deed to your children if you buy resale.
However, always remember that in the future Disney might change the rules in any way they want. The only think that's guaranteed to you is being able to book your home resort at least one month before people how do not own there. Everything else can be changed, both for who buys direct and resale.
that does not mean that they will, but they might.

Also, how did you guys justify the purchase? $14500 for 100 BLT points is quite a lot of money upfront... we're still young and starting our lives so I don't want to make rash decisions.

I think it's a good idea not to buy too many points. If you find yourself short in points you'll be able to add later, the opposite it's not as easy (and can cost you a lot of money).

You might be able to buy point at BLT for 90$ a point or even lower going resale. That would mean 5500$ less. Is the ability to book a cruise with points worth 5500$?
There are threads on this board about booking a cruise with points, you may want to research it before deciding to go direct for this reason.

 

[juncker]

You'll find that people on these boards are pretty educated about DVC. Most people (myself included) think that resale is the way to go even with the restrictions added last year. Definitely read up on direct vs. resale. There is a big price difference. An option that is often discussed for things like DCL is that you could rent your points for a year and pay cash for the cruise. It's a bit more work, but you'll get a lot more for your money this way. Points for cruises is not the best use of your points.

Certainly more changes could be coming, and the only sure thing that you have is that you get the opportunity to use your home resort. Everything else is a 'bonus' that Disney can take away at any time. We do expect to have things change over time, but don't really expect to have privilges at other DVC resorts ever revoked.

A couple of points of direct vs. resale:
* Direct can be good for people that need to finance the purchase
* If you go direct, you could be vacationing next week. No waiting for ROFR and closing. Sometimes they even can get you time at a resort that is full in order to get you to sign.
* If you think that you really want BLT standard or MK views, then definitely buy BLT points. If that isn't important, you might consider cheaper points (SSR/OKW, ...). Only difference is that you would only be able to book BLT at 7 months. Experience shows that you can usually get LV rooms at 7 months, but other categories are not as available. A lot depends upon when you travel.
* I definitely think that multiple smaller point contracts are the best. They sell quickly and for more money. You can't split up a contract once it is purchased. 100 points sounds like a good start.
* One other limitation of resale is that they occasionally have DVC member cruises. These are limited to direct (and grandfathered) contracts only. I don't think that you can even get on one of these with cash.

Not too many people that have been able to purchase DVC regret it. Certainly not the posters on these boards. We love it. Worst case, you end up reselling your interest. DVC has held its value pretty well. Best of luck with what you decide.

 

[juncker]

One other thought about resales is that they are not all equal. You could get a contract that is stripped of all points, or completely loaded. The best scenario for a 100 point contract is that you could get one that still has all the 2011 points banked, and no 2012/2013 points used so you could have 300 points to use on day 1.

You could also get a stripped contract for a much cheaper price. It's not usually comparing apples to apples.

 

[Deb & Bill]

...Also, how did you guys justify the purchase? $14500 for 100 BLT points is quite a lot of money upfront... we're still young and starting our lives so I don't want to make rash decisions.

Thanks for reading!

I couldn't justify $14,500 for 100 BLT points because I spent a lot less than that for my 175 OKW points directly from Disney in 1997 and my 100 BCV points in 2002. I think the prices DVC is asking for direct points is rather absurd personally. I know they are justified with the cost of construction and everything, but these prices are just too high. Go resale. I don't think the restrictions are all that restrictive at this point. Disney can do anything they want with restrictions except not allow you to stay at your home resort.

If you don't own a house or have other major purchases to make, make them first before you buy DVC. If you don't have children already and plan to have them, would one parent not working make a difference in going to WDW?

 

[77kool]

Look at resale, you could save thousands. With only 100 points, you can't really book a cruise or use it for the other things resale buyers cannot use. The DVC resorts are the best use of points. Also, DVC can take those rights away from direct buyers, too.

 

[pinipig523]

I couldn't justify $14,500 for 100 BLT points because I spent a lot less than that for my 175 OKW points directly from Disney in 1997 and my 100 BCV points in 2002. I think the prices DVC is asking for direct points is rather absurd personally. I know they are justified with the cost of construction and everything, but these prices are just too high. Go resale. I don't think the restrictions are all that restrictive at this point. Disney can do anything they want with restrictions except not allow you to stay at your home resort.

If you don't own a house or have other major purchases to make, make them first before you buy DVC. If you don't have children already and plan to have them, would one parent not working make a difference in going to WDW?

That's the scary part, Disney can do anything they want, but I suppose they won't screw over the direct buyers. That would be terrible!

Regarding the major purchases - we still have to buy a house and we don't have any kids. We are pretty well established as a couple and we have great jobs. We are very "stick to the budget" folks and we have everything written down to the last dollar.

We just didn't know about DVC and now we have to wrestle with the idea of purchasing one vs not and missing out over the long term.

 

[melodyka]

We are close to your age, and just went through all the research. We ended up buying 100 points through the resale market and saving almost $5500 vs. retail. We ran all the numbers for different resorts to come to our decision. We also considered the opportunity cost if we were to invest this cash into our IRA today instead and pay out of pocket for each trip to Disney. If you pay DVC retail prices, it would always cost you less money to just rent DVC points or pay out of pocket rack rates because you will end up with a lot more money (compounding annually at 7%, a modest estimate) in the 30-50 years of the contract than you would save by purchasing DVC. You would also avoid the "what-ifs" like restrictions and unknown annual dues increases. I did find a magic number where it started to make sense to buy DVC vs. investing the money, and was able to pay that price on the resale market. I must say though, that the numbers just break even, so there really isn't any long term savings in buying DVC. However, I WANTED to own DVC because I love the idea of having a prepaid commitment to vacationing on-site in Disney regularly with my family. If I didn't get DVC, I know I will get cheap and try to skip a few years between trips or stay off-site to save money. So, I justified the purchase by knowing that we already invest 20% of our income into our retirement plans, and regularly invest into our children's college funds. So, I took the $5500 savings and made a Roth IRA contribution, and bought the DVC points as well I made sure to buy at a resort that would not disappoint IF they decided to restrict us to home resort only. I also made sure to buy a lower number of points, so that we would not feel much of a difference in our overall budget by adding the dues payments (less than $50 a month).

If you look through these threads, there is a wealth of information including better explanations on how to run the numbers, and see if this is right for you.

I thought this was a helpful summary that leans slightly towards not purchasing DVC, but still better to see all the theories- http://www.mousesavers.com/dvc.html

best of luck

 

[disneynutz]

I recommend that you rent a reservation from a DVC owner and check out the DVC resorts and what WDW has to offer and also consider renting as a way to enjoy future Disney vacations.

The cost of buying is really not the big expense, it's the yearly cost of dues, food, travel, and Disney extras which increase each year is the biggest cost.

Owning a DVC interest is a luxury purchase and IMO should be considered after all other financial obligations.

Bill

 

[hmire]

We are the same age, but we have 3 young kids. We knew we needed enough points for a family of 5. There is just no way I could buy direct with resale being so much cheaper. The restrictions don't both me. We just signed a contract for 210 points at SSR for $48 a points with 420 points coming 2012. Read, read, read. People on here are SO HELPFUL!!

 

[pinipig523]

We are close to your age, and just went through all the research. We ended up buying 100 points through the resale market and saving almost $5500 vs. retail. We ran all the numbers for different resorts to come to our decision. We also considered the opportunity cost if we were to invest this cash into our IRA today instead and pay out of pocket for each trip to Disney. If you pay DVC retail prices, it would always cost you less money to just rent DVC points or pay out of pocket rack rates because you will end up with a lot more money (compounding annually at 7%, a modest estimate) in the 30-50 years of the contract than you would save by purchasing DVC. You would also avoid the "what-ifs" like restrictions and unknown annual dues increases. I did find a magic number where it started to make sense to buy DVC vs. investing the money, and was able to pay that price on the resale market. I must say though, that the numbers just break even, so there really isn't any long term savings in buying DVC. However, I WANTED to own DVC because I love the idea of having a prepaid commitment to vacationing on-site in Disney regularly with my family. If I didn't get DVC, I know I will get cheap and try to skip a few years between trips or stay off-site to save money. So, I justified the purchase by knowing that we already invest 20% of our income into our retirement plans, and regularly invest into our children's college funds. So, I took the $5500 savings and made a Roth IRA contribution, and bought the DVC points as well I made sure to buy at a resort that would not disappoint IF they decided to restrict us to home resort only. I also made sure to buy a lower number of points, so that we would not feel much of a difference in our overall budget by adding the dues payments (less than $50 a month).

If you look through these threads, there is a wealth of information including better explanations on how to run the numbers, and see if this is right for you.

I thought this was a helpful summary that leans slightly towards not purchasing DVC, but still better to see all the theories-

best of luck

Thanks so much.

Yes, so we are not taking any money out of any IRA or 401K or retirement plans. This is from our disposable income. We have maxxed our 401K contributions to over 49K per year.

I think to take money out of retirement plans is not the best way to go about it, but I may have to budget around this DVC purchase. No new car for a little bit then.

 

[pinipig523]

I recommend that you rent a reservation from a DVC owner and check out the DVC resorts and what WDW has to offer and also consider renting as a way to enjoy future Disney vacations.

The cost of buying is really not the big expense, it's the yearly cost of dues, food, travel, and Disney extras which increase each year is the biggest cost.

Owning a DVC interest is a luxury purchase and IMO should be considered after all other financial obligations.

Bill

Agree on the luxury purchase point you made - I think we might be stable enough to make the jump.

The cost of the actual travel itself, food, tickets, etc.... yes they are expensive and add to the overall cost of the DVC, but we take at least 2 vacations a year so either way, we would have those expenses included in our budget anyway.

In our budget, we have budgeted $10,000/yr on vacations.

 

[disneynutz]

You need to remember that Disney has designed the DVC to lock you into Disney vacations. If you don't already vacation at Disney every 2 years then you would be committing to a change in your current favorite vacations destinations.

Owning only makes sense if you are saving money compared to cash rates and you love your home resort.

You mentioned that you wanted to justify the up front costs, I suggest that you take the time to experience the resorts to determine where you really want to own before you spend your cash.

Assuming that you will pass on your ownership to your kids is a long way off. By then, you and your kids might be sick of Disney.

Like most relationships or something new, you are all excited and as time goes on, little by little, the excitement wears off and it becomes a different kind of vacation.

Bill

 

[Dean]

That's the scary part, Disney can do anything they want, but I suppose they won't screw over the direct buyers. That would be terrible!

Regarding the major purchases - we still have to buy a house and we don't have any kids. We are pretty well established as a couple and we have great jobs. We are very "stick to the budget" folks and we have everything written down to the last dollar.

We just didn't know about DVC and now we have to wrestle with the idea of purchasing one vs not and missing out over the long term.

Actually that's not true. There is a lot they can do but there isn't much they can do to the core product that would be different between resale and retail. Since it only makes sense to buy for DVC resorts anyway, you really lose nothing resale. I do not believe they can draw a distinction on home resort use OR use of other current club resorts between resale and retail and I consider myself pretty educated on the subject.

I'd concur with renting and educating yourself while this process is going on. If you decide to buy, buy around the number of points you think you need now, maybe a small cushion. Buy the lowest resort that you'll be happy with if you have to stay there most trips. BLT at that much makes sense ONLY if you can't find a resale contract and most trips must be at BLT OR there's a specialty option you can't live without.

 

[pinipig523]

You need to remember that Disney has designed the DVC to lock you into Disney vacations. If you don't already vacation at Disney every 2 years then you would be committing to a change in your current favorite vacations destinations.

Owning only makes sense if you are saving money compared to cash rates and you love your home resort.

You mentioned that you wanted to justify the up front costs, I suggest that you take the time to experience the resorts to determine where you really want to own before you spend your cash.

Assuming that you will pass on your ownership to your kids is a long way off. By then, you and your kids might be sick of Disney.

Like most relationships or something new, you are all excited and as time goes on, little by little, the excitement wears off and it becomes a different kind of vacation.

Bill

We've been to WDW 3x in the past 3 years so we go there quite a bit and enough to justify the annual or biannual visits. Plus, we get to visit DLand and the other parks around the world.

Atleast, that's what I tell myself.

I've also been to the Contemporary and toured the rooms at BLT... it definitely fits our style.

 

[disneynutz]

I've also been to the Contemporary and toured the rooms at BLT... it definitely fits our style.

As long as you are happy that's all that matters. I just didn't want you to be disappointed if you ended up liking a different resort better than BLT. We currently love our stays at BWV the best. How do you know if a shoe fits if you don't try them on?

Bill

 

[Tamar]

I would suggest doing your homework on banked and borrowed points and Use Years, so that you understand loaded contracts and stripped contracts in the resale market and how they compare apples to apples with what you will get direct from Disney. With a direct purchase, you will always get current year points (even if there's only a few days left in the "current year").

These days, resales are less expensive than direct, but in some cases not as much as you'd think.

 

[DisneyRegulars]

We went through this as well. My wife and sat in on the presentations multiple times and kept thinking we wouldn't go enough to be worth it. We finally purchased after going to Disney every year for about 9 years. We are similar in age and have 1 son. We ran the numbers like everyone else and decided that yes, the cost was slightly more than we would have spent to just go on vacation. But, and this was the big but, with DVC we can get at least a 1 bedroom for the same price we would have spent for a typical hotel room. Taking in to account slightly more privacy, the ability to make some of your own food, having a nicer resort to stay at when our son is young and would rather spend time in the pool, a more relaxed atmosphere than a hotel room, etc... And we were in. We purchased a resale in November, 160 points, with lots of points available on contract. We took our first week long trip in January, have a 3 day anniversary trip (first vacation without our son) in July, a 6 day trip in September and another 7 days next January; all within the 1 year annual pass window. After that we will be going once a year.

We bought 160 points because we know we might want to upgrade to a better view once in a while. But, in general, I am in agreement with people on here, buying smaller contracts makes sense because you can always add something else small, but if you buy one large one, you can only sell the whole thing... Also, to be honest, we didn't have all the cash on hand for the purchase at the time. But if you have good credit, there are ridiculously low rates to be had out there. We took an unsecured personal loan at about 4% with a 1/4% discount with direct debit payments. It is something I don't even have to think about.

As for maintenance fees, etc. Remember when looking, just because you might see some that are lower, they may not stay that way. But, you sound like you are an analyzer, so I am sure you will decide what is best for you. Best of luck with your decision.

 

[DizBub]

Thanks so much.

Yes, so we are not taking any money out of any IRA or 401K or retirement plans. This is from our disposable income. We have maxxed our 401K contributions to over 49K per year.

I think to take money out of retirement plans is not the best way to go about it, but I may have to budget around this DVC purchase. No new car for a little bit then.

This is exactly how we justified our direct purchase, like a car loan. Monthly payments and the member fees were like gas, insurance, tags, maintenance, etc. No new car for us either, until this is paid off.

We also DID NOT finance thru Disney. We came home and arranged our own financing with our credit union. Got a secured loan (pledged shares) at 4.24% at the time. Since then we have refinanced at 3.24% and currently it is down to 2.14%. We are adding on (in ROFR now) and will refinace at the new lower rate. I know we are paying interest but we still have our $$ at the end of the day.

Just another way to do it. Works for us.

 

[Caren90]

Rent if you are not completely sure that this is for you. I believe that as the years move along, resale prices will continue to fall so the option to buy will always be there for you.

We looked at DVC 6 years ago (direct) but did not pull the trigger. During the following years we rented points from owners and decided to finally buy in (resale). I am glad we waited since we are now at a different point in our lives financially. One could argue that buying early would have our "break even" year come a lot sooner, but I am finding that saving over 50% on the resale purchase price this past year (from the original price when we first looked) actually has saved us more money!

My children are now 16 and 20 and we just bought in this year. We took our eldest on a weekend getaway trip in January and it was one of the best trips we have ever had to Disney(and we have been there A LOT). Getting to know your adult child and giving her a break from the stress of college was quite a gift for all of us.
Good luck!
Stephen