Just got an SSR tour, have a few questions

[Groucho]

Hi, my two cents is a bit different than the others it seems. While the current deal does seem to be good, I'd caution against getting caught up in the excitement.

DVC is a luxury that should be entered into when it is not a financial stretch -- and preferably paid with at least 50% cash.

All valid points, and those are why I'm not just jumping right in.

I own (well, paying mortgage!) a house, so I'm all set there. I do have credit card debt but it's not crushing (4 digits but not five!) and is steadily declining (although it admittedly bumped over the last couple months after a DL trip in August, big Christmas, and WDW in January - but no trips now until probably sometimes in '07). I do have enough left in the monthly budget to cover the annual fee + DVC mortgage, but my current thinking is...

I'm going to try to see into the future to guess at how much points will cost then. I haven't looked yet to try to find a historical listing of points costs over the years, but hopefully I could roughly guess at how much they'll go up over the next 3-5 years. So basically, I have three options and I need to decide which is the best:

1) Do nothing and just keep going and staying in the cheap resorts.

2) Buy now, rent points for the first 2-3 years, and take approx. 5 years to pay off the DVC mortgage.

3) Wait 3-4 years, buy then (new or through a reseller?), pay DVC mortgage in 2-3 years.

#1 is no fun, so I'll ignore it.

#2 I'm still considering because hopefully the profit from the points will help offset the extra financing cost, as I don't plan to use any points for 2-3 years most likely, and the potential of getting 2005 points helps, too. (I haven't figured out the details - can you get them only by picking an August UY?) Jumping right in and using the points would definitely be more of a financial strain!

#3 If the cost of the points has gone up enough, it negates the advantage of shorting financing - and who knows what interest rates will do between now and then. I also probably wouldn't have any income fron renting the points, as I'd be itching to make another WDW trip by then.

So, I need to try to estimate the points costs in, say, 2008, 2009, 2010, and then start crunching numbers. And figure in the cost of credit card debt, although there's always the possibility of transferring balances to a new card to avoid interest charges (which we ended up doing when I got a Disney Visa a couple months ago.)

I think it will work out in favor of buying now... but we'll see.

 

[Groucho]

I didn't find any historic charts so I kind of "made up" some numbers and the results were interesting.

I tried to stack the numbers conservatively to make putting off buying look like a good idea. I assumed that dues and points would each go up only around 3% each year. I also assumed that there might be some kind of a deal and that I'd be able to get points for $100 in four years. (Hey, it could happen!)

So, option one, buy 160 pts at SSR now using the 15% discount:
+$1,568 - 10% down
+$15,580 - paying off remainder in 6 years at 9.75% - worst case scenario, aiming for 5
+$637 - 2006 dues
+$656 - 2007 dues (guess)
+$676 - 2008 dues (guess)
-$4,500 - renting 2005, 2006, 2007 pts (cutting off $100 each year in tax, I have no idea what it would be, but you'd also make a little by having the property deduction)
For a total outlay of $14,617.

If I wait four years and then buy 160 pts at SSR for $100 each (which is probably low), and will want to use points right away:
$3,200 - 20% down
$14,518 - remainder paid off in three years at 9.75%
Total outlay, $17,718.

There are lots of unknowns (interest rate, pt cost, etc), but it looks like if you're willing to rent pts for a few years, the savings can be pretty big - around $3,100 by this sloppy math, and realistically, points will probably cost more than $100 and the interest rate may be higher.

Even if you only rent for two years, that's still around a $1,600 savings, plus you have points sooner to use on a vacation.

This "Disney math" is complicated stuff, but I think my basic premise is sound? It looks like it makes sense to jump in now, as long as I'm not streching myself too thin for the next few years.

My guide (Kim) is on vacation until the 27th (where do DVC guides go for vacation???), so I have another week or so before I have to make a final decision. (His message indicates that he'll make sure that any promotions stay in effect long enough that you won't lose out because of him being gone.) I'll probably hem and haw some more but it certainly looks like buying now makes the most long-term sense.

 

[Shawn]

Hi Groucho,

Another option is to buy into DVC more slowly through resale of smaller 50, 75, or even 100 pt contracts. If you have home equity, you can tap into it and pay less APR than you will through Disney financing.

That is the route we are taking by-the-way. That is, for our family, I think we're going to want to have 300 points or so eventually. However, I didn't want to take on the Disney financing, so I saved money for over a year, and purchased a 100 point BWV resale through the timeshare store (this was last fall).

Hopefully, if we manage our finances well, we'll be in position to buy another 100 points (very likely at a different resort) in 18-24 months. And then the last 100 points 18 -24 months after that.

The ability to bank and borrow the points allows us to get by with the 100 points for now (taking a 200 point trip every two years), and in the future we can visit more often.

Also, for us I kinda like the idea of having 100 points at different resorts, since I can bank/borrow and have the home -resort advantage at a rotating resort each year. Hopefully, one year we will have 300 points and the 11 month window at BWV, and the next year we'll have 300 points and the 11 month window at BCV, and the next year we'll have 300 points and the 11 month window at the Contemporary or Animal Kingdom or Grand Californian. (The last bit is just me hoping like heck that they announce a new resort that I'm interested in before I buy our last 100 point contract -- if they don't I'll likely buy at least 100 points at SSR to get those extra 12 years for when I'm ancient).

-Shawn

 

[Plutofan]

The current incentive is definitly the best I have seen but you need to figure how much you are paying for the points, dues and the mortgage interest to see your true costs. You will probably be renting our points for less than your cost. Justifying DVC becomes a lot harder when you have to go with the Disney financing over a long period of time.

 

[lisaviolet]

Everyone one of us here wish we hadn't waited as long as we did (whatever length of time that may be). The points NEVER go down. We bought in about 5 years ago and it cost $67/point. That's a big increase for a few years!

I didn't wish that we hadn't waited as long as we did....

I just want to add that we didn't because we could have "bought" in at any time over the last ten years but I also knew that it would have become a financial burden. That would have taken all the fun out of it.

And to tell you the truth it was a nice feeling to dream and dream and dream and read the DVC threads and think "one day"....

I know...I know everyone wishes that the initial outlay cost them less but we didn't wish that we bought sooner. There is really something about delayed gratification.

I mean if you have the means to not make paying for DVC every year stressful ...go for it. Really...it's wonderful. No regrets here at all. Just giving the other side.

Good luck to you!!!

 

[lisaviolet]

Not me. I bought when the time was right for us. (Well, maybe one trip late). But the previous 8 years when I knew about DVC and didn't buy were a financial roller coaster with a divorce, marriage, a custom house being built, infertility treatments, adoption, and job switch after job switch. Had I bought DVC with my ex husband (and he really wanted to - huge Disney fan), I'd have had to sell it in the divorce. Had I bought it on my honeymoon with my second husband, it would have been an expense we couldn't afford during homebuying, infertility and adoption.

Buy when it makes sense for you. It is a huge financial investment, a large sunk cost - and added to that are the costs of the vacations you'll "need" to take (and yes, you can rent the points, but you'll discover yourself justifying vacation you'd never take if the hotel wasn't "paid for.")

OOOhh missed this post the first time around. Great points Crisi!!!!

We used to stay in mostly Value ...sometimes Moderate. Every trip...either we'd take in relatives or a booth CM would say/push go and see the new DVC even though we would say "we can't swing it right now". And my DVC guides both used to say to us every time "what are you doing down here AGAIN without buying DVC....it doesn't make sense since you come so often". We used to say "the maintenance ....just seems too much for us right now" But they had a faulty comparison. They used to ask us how much we spent on vacation. That's not the comparison to make. It's what did you spend on your Value resort. Sometimes we used to get the All Star for as low as $59. So a couple of hundred dollars does not compare to thousands initially and hundreds every year is not even near a financial savings when you can't afford it anyway. I mean who wouldn't want to stay in nicer resorts.....most people. But it really comes down to the best timing. Okay ...shutting up now.

 

[lisaviolet]

There's a flaw in your reasoning that I feel obligated to tell you. Once you purchase the points, you start thinking of all kinds of reasons to visit WDW. And once you start visiting more than 8 days per year, you start thinking what a great deal the annual pass discount is with DVC. And once you have AP's, you think "why shouldn't we sqeeze in another trip? After all, the room and park passes are already paid for . . ."

It's a slippery slope, my friend. But I'm definitley enjoying the ride. And we frequently say we should have joined when we first started looking and points were only $58. We've never looked back.

And we thought the current deal was so good we just added on.

Jenny

Oh boy. This is SO true. I took two last minute trips this fall. Of course because I had to ...had to use my annual pass....I mean the park entry is already there.....had to catch the SW Ding....I mean $49 from Buffalo...can't pass that up when I have DVC points.

It really is something!!!

 

[Luckytobedvc]

As a banker I can tell you that interest rates will not be going down. I can also state that DVC points will continue to rise. So basically, at this time, you will probably find that the cost to you will not be lower then now-plus the discount. If you have room in your budget to buy, now, DO IT! Practically speaking, you will find that you will adjust to this added expense through salary raises, bonuses, incentives etc. 3 years from now, the same concerns that you have now, you will have then. Your cost of living will go up-definitely. The only real question is, Do you or don't you-in your Heart, not your pocketbook? If your Heart says , Yes-Do it! There will never be a better time then now.
Lastly, if you want to buy you are talking to the wrong group because we all bought and none of us have regretted it!!!
Dom

 

[Groucho]

To update the thread... Kim, my DVC guide, gave us a call last night and we're in! 150 pts. (Should be plenty for our needs, and can always add on if there's another great deal in the future.) He did mention that points are going up to $102 on March 15th, and no promotions... and that the financing rate is usually higher, so this really was a great deal. I'm glad to have gotten in on it!

This should be quite a change as every previous trip, I've stayed in a value resort or off-property, except for one time camping at Ft Wilderness and one time at Contemporary - but that was when I was a little kid back in the '70s! Pop Century was nice when we stayed there a few weeks ago but I'm looking forward to staying at Saratoga next time!

 

[LeCras]

That's excellent news Groucho - congratulations and welcome home!!

Charlotte

 

[T.E. Yeary]

Congratulations & Welcome Home!

HAPPY "MAGICAL" VACATIONING,
Tom & Staff

 

[Plutofan]

Welcome Home Neighbor

 

[debbie in Seattle]

If you have to wonder if you can afford DVC (or anything else) then don't do it!
Sure the CM is going to tell you what a fantastic deal this is (and perhaps it is), but keep in mind that his/her salary and job is probably based on a commission and his/her job is to convince folks to buy. I think you need to look at all the numbers involved with DVC, not only the cost of the points, but the dues, the transportation to get to WDW and the other costs involved with your vacations. If you are truly enamored with DVC, take a few years and just rent the points and enjoy SSR until you can really afford to purchase. There is nothing worse than to own something but yet can't afford to enjoy it.

 

[Groucho]

Thanks all, I can't wait for my first trip home!