My argument against DVC

[Deb & Bill]

http://www.disboards.com/showthread.php?t=2137102

It is about saving money over the long run.

No, it's not about saving money in the long run. It's getting prepaid (partially other than dues) lodging for the next 30+ years. DVC will never save you money. You'll wind up spending a whole lot more money than you would without DVC just because you wouldn't go as often. You still have to pay for tickets, you still have to get there, you still have to eat.

 

[Tiger926]

No, it's not about saving money in the long run. It's getting prepaid (partially other than dues) lodging for the next 30+ years. DVC will never save you money. You'll wind up spending a whole lot more money than you would without DVC just because you wouldn't go as often. You still have to pay for tickets, you still have to get there, you still have to eat.

I think people are confusing what the saving money is. DVC is only accommodations - tickets, food, etc. is extra. You don't need to buy food, as you have a villa to prepare food (if staying in a studio, you can prepare a few things and store some drinks, so must compare to a moderate resort here) and you don't have to visit parks, so no tickets. Transportation is moot, as you must get transportation, regardless. You are buying accommodations with DVC only, so you must compare those costs to non-DVC Disney resorts.

In regards to the total cost of an entire vacation, this is also a moot point, as you can add a ton of extras into these figures, whether DVC or MYW - deluxe dining, recreation, golfing, etc., so again, these can't be counted into the figures.

When we did our comparison as I mentioned above, we knew that accommodations will be cheaper, but in times of heavy discounts, like now, we weren't sure, so we did our comparison. My costs were the same when I compared our DVC vacation costs for this July to a MYW package for less nights, smaller room, less days in parks with tickets and a month later, so MYW would be more for July, but free dining isn't available. But, because there is a huge promo of Free Dining, this year a MYW package would be cheaper for us, but we would have to fit in a vacation during a time we don't normally go. So, this was my overall vacation cost comparison. When I compared room only rates for our DVC vacation to moderate room only, moderate was more, and it included a summer room only rate! I didn't compare DVC cash rooms to our DVC vacation, as we never used to stay in these rooms, but if I had, I would be coming out so much more ahead!

Bottom line is that accommodations should be less over the long run (don't know about maintenance fees), and that is all that should be compared, as far as I'm concerned, when talking about whether it is worth it to purchase DVC or not. If you go 5x a year because you own DVC, then sure your overall expenses will be more, but I don't feel this is an accurate comparison. We compared to as close to the exact vacation of old that we could, and our DVC vacation is cheaper, period. It's actually a lot more cheaper since it's for 3 more nights, it's 1 beds deluxe rooms and more ticket days.

I think when discussing DVC worth there are several factors, and how many times one travels each year will always add to the overall cost, so sure, if DVC families start travelling more because they have extra points, then their overall vacation costs would be more, but this is a different conversation altogether. This exactly why we stopped multiple trips - we never took multiple trips before, so why start with DVC? This wasn't the way we used to travel, so now that we have changed it back to the way we used to travel, DVC is cheaper for us as compared to MYW.

Both conversations are important, but from a cost perspective of comparing accommodations only, DVC is cheaper as we have done the numbers and proved it!

Thanks, Tiger

 

[Sandisw]

I think people are confusing what the saving money is. DVC is only accommodations - tickets, food, etc. is extra. You don't need to buy food, as you have a villa to prepare food (if staying in a studio, you can prepare a few things and store some drinks, so must compare to a moderate resort here) and you don't have to visit parks, so no tickets. Transportation is moot, as you must get transportation, regardless. You are buying accommodations with DVC only, so you must compare those costs to non-DVC Disney resorts.

In regards to the total cost of an entire vacation, this is also a moot point, as you can add a ton of extras into these figures, whether DVC or MYW - deluxe dining, recreation, golfing, etc., so again, these can't be counted into the figures.

When we did our comparison as I mentioned above, we knew that accommodations will be cheaper, but in times of heavy discounts, like now, we weren't sure, so we did our comparison. My costs were the same when I compared our DVC vacation costs for this July to a MYW package for less nights, smaller room, less days in parks with tickets and a month later, so MYW would be more for July, but free dining isn't available. But, because there is a huge promo of Free Dining, this year a MYW package would be cheaper for us, but we would have to fit in a vacation during a time we don't normally go.

Bottom line is that accommodations should be less over the long run (don't know about maintenance fees), and that is all that should be compared, as far as I'm concerned, when talking about whether it is worth it to purchase DVC or not. If you go 5x a year because you own DVC, then sure your overall expenses will be more, but I don't feel this is an accurate comparison. We compared to as close to the exact vacation of old that we could, and our DVC vacation is cheaper, period. It's actually a lot more cheaper since it's for 3 more nights, it's 1 beds deluxe rooms and more ticket days.

I think when discussing DVC worth there are several factors, and this can't be included - how many times one travels each year will always add to the overall cost, so sure, if DVC families start travelling more because they have extra points, then their overall vacation costs would be more, but this is a different conversation altogether. This exactly why we stopped multiple trips - we never took multiple trips before, so why start with DVC? This wasn't the way we used to travel, so now that we have changed it back to the way we used to travel, DVC is cheaper for us.

Both conversations are important, but from a cost perspective of comparing accommodations only, DVC is cheaper as we have done the numbers and proved it!

Thanks, Tiger

That is what we did when looking at the savings for DVC. Right now, we travel to WDW once a year and plan to continue this, at least until we retire in 10 years (I am a teacher and only go in the summer--airfare from Syracuse around other breaks is outrageous).

I have been paying about $2000 per year for a room at CR and when I looked at buying in, with buy in cost and MF's, whether or not I would be more or less than that $2000.00.

What I found is that buying in to DVC would save me money over what I am outlaying on a yearly basis for my room costs. And, I will now be in a 1 bedroom vs. a hotel room so in reality, I am getting better accommodations for less.

It is about prepaid vacations and yes, there is more to a WDW vacation than rooms, so its not an investment in terms of getting our money back.

But, if you are someone who is already going to WDW on a regular or semi-regular basis and staying in deluxe accommodations, then in the long run, you will see a savings in this part of your vacation budget.

 

[crisi]

But even then, there are cheaper ways to do Disney - and still have the multi room units - there are a ton of off site timeshares that are rentable without the committment - often for a few hundred dollars a week - some of them VERY nice. You can buy a timeshare somewhere other than Orlando and trade into DVC (athough that is sometimes tough) or easily into Orlando for less than DVC. You can rent a home for less than DVC. You can stay at some REALLY nice hotels in Orlando for about what you can stay in a Disney moderate for - sometimes less - and the quality if far superior to a Disney Deluxe hotel. And, if you are patient and willing to take the risk, you can rent DVC points for not much more than buying DVC - and without the committment. And there are the cabins at Ft. Wilderness - and on occasion great deals at SSR and OKW for cash.

DVC is a good deal if you are onsite snobs (snob meant in the kindest fashion), like the Deluxe and perhaps the Moderate resorts - but don't mind things like limited mousekeeping and a pullout in a studio instead of a second Queen bed, go to Disney at least every other year, and/or want a unit bigger than a single hotel room. If you actually do use the kitchen, you can add more value.

It is harder to make a case for it if you are happy offsite, at the Values (including the Family Suites), really want the housekeeping, don't plan your trips months in advance (it doesn't have to be a year, but 'let's go to Disney next weekend' isn't a great DVC model). Its hard to make a case if you finance.

DVC is not a good deal if "saving" money on accomodations changes your patterns significantly - we've enjoyed treating family and friends to vacations - but I'm out of pocket $10k+ from doing it. Or if DVC plus annual passes means you squeeze in an extra trip during Food and Wine. Or if not having a room bill at checkout means that you go to Cirque or eat at the California Grill when otherwise those would be things you wouldn't do.

ETA: DVC can still be worthwhile, but if you go into it to save money - and do what many of us have done - go to Disney more often, treat friends, start eating at expensive restaurants - then you won't meet your primary objective for owning - you may discover you are just as content with what you did end up with.

 

[Tiger926]

But even then, there are cheaper ways to do Disney - and still have the multi room units - there are a ton of off site timeshares that are rentable without the committment - often for a few hundred dollars a week - some of them VERY nice. You can buy a timeshare somewhere other than Orlando and trade into DVC (athough that is sometimes tough) or easily into Orlando for less than DVC. You can rent a home for less than DVC. You can stay at some REALLY nice hotels in Orlando for about what you can stay in a Disney moderate for - sometimes less - and the quality if far superior to a Disney Deluxe hotel. And, if you are patient and willing to take the risk, you can rent DVC points for not much more than buying DVC - and without the committment. And there are the cabins at Ft. Wilderness - and on occasion great deals at SSR and OKW for cash.

DVC is a good deal if you are onsite snobs (snob meant in the kindest fashion), like the Deluxe and perhaps the Moderate resorts - but don't mind things like limited mousekeeping and a pullout in a studio instead of a second Queen bed, go to Disney at least every other year, and/or want a unit bigger than a single hotel room. If you actually do use the kitchen, you can add more value.

It is harder to make a case for it if you are happy offsite, at the Values (including the Family Suites), really want the housekeeping, don't plan your trips months in advance (it doesn't have to be a year, but 'let's go to Disney next weekend' isn't a great DVC model). Its hard to make a case if you finance.

DVC is not a good deal if "saving" money on accomodations changes your patterns significantly - we've enjoyed treating family and friends to vacations - but I'm out of pocket $10k+ from doing it. Or if DVC plus annual passes means you squeeze in an extra trip during Food and Wine. Or if not having a room bill at checkout means that you go to Cirque or eat at the California Grill when otherwise those would be things you wouldn't do.

ETA: DVC can still be worthwhile, but if you go into it to save money - and do what many of us have done - go to Disney more often, treat friends, start eating at expensive restaurants - then you won't meet your primary objective for owning - you may discover you are just as content with what you did end up with.

This is it! We changed our patterns for the first 2 years we owned, and quickly realized that it was costing us too much money. Money that we didn't usually spend on our yearly trips to WDW. So, we are now back to 1 DVC trip per year - 2 weeks in July (I'm also a teacher) in 1 beds, with a few studio nights thrown in here and there. In this respect, it is definitely saving us money.

We have stayed offsite when we used to do Sea World and Universal, and honestly, the hotel rooms were about the same price, or, perhaps a little cheaper than Disney, but there were transportation issues, travel time, gas, etc. to be considered.

In regards to your original point of cheaper offsite homes, timeshares, etc., this is probably true as well, but that is an onsite vs. offsite argument. People who buy DVC will only stay onsite, so I don't think that would be a fair comparison either. For long term overall costs though, it may well be a determining factor for some families to not buy DVC, if they can get deals at Marriott, Hilton or other similar timeshares, or, rent private homes, so that's a good point.

Good discussion, Tiger

 

[crisi]

We have stayed offsite when we used to do Sea World and Universal, and honestly, the hotel rooms were about the same price, or, perhaps a little cheaper than Disney, but there were transportation issues, travel time, gas, etc. to be considered.

I was an onsite snob for the longest time - and then had a few business trips in the Orlando area - we paid a LOT less for the Hilton, Hyatt, Rosen Center, Gaylord Palms, Peabody than we had for the Poly, AKL or WL - and each and every one of them was a far better hotel than any of the Disney Deluxes in terms of bedding, room quality, room upkeep.

I'm also a Disney transportation snob. We never rent a car - so many hassles. But I've been surprised at how quick and easy it was to get from these hotels to Disney (I did get stuck in traffic once, but then I've also had the 40 minute bus wait once or twice as well), park and get into the parks. Now, we still use Disney transportation - renting a car with my husband multiplies the hassle (he gripes all week about an affordable rental - he drives - and complains about my navigation skills - wonderful man, we are better off not renting a car on vacation). And I'm still an onsite snob - largely for the theming and the transportation. But I am paying for those conveniences.

And for the people who drive to Disney to start with - which is a lot of people - driving is even less of a deal. They already have their own car.

 

[littlestar]

People who buy DVC will only stay onsite, so I don't think that would be a fair comparison either. For long term overall costs though, it may well be a determining factor for some families to not buy DVC, if they can get deals at Marriott, Hilton or other similar timeshares, or, rent private homes, so that's a good point.

Good discussion, Tiger

We've changed somewhat since we first started investigating buying DVC back in 2001. Back then, we stayed only on Disney property in moderates or an occasional deluxe.

After a few years of owning DVC points and finding out how much we liked 1 bedrooms or larger and extra trips to Orlando, we did some offsite stays in larger units at the Marriott and Sheraton vacation club products in Orlando and were extremely pleasantly surprised at the quality.

We still own some DVC points for our onsite Disney theming fix, but we now also own with another major timeshare brand (bought resale) that gives us more trips in 2 bedrooms inexpensively.

As to the original poster, I would definitely not rule out buying some SSR points resale. Even a small amount of points could give you 5 nights in a studio or if you bank and borrow, a nice trip every few years in a larger unit. I think a DVC studio is a step-up on quality from a moderate - you have a mini kitchen.

 

[GuySmiley]

No, it's not about saving money in the long run. It's getting prepaid (partially other than dues) lodging for the next 30+ years. DVC will never save you money. You'll wind up spending a whole lot more money than you would without DVC just because you wouldn't go as often. You still have to pay for tickets, you still have to get there, you still have to eat.

Yeah, duh. If you don't go, you won't spend as much as if you do go. The OP is clearly going to WDW anyway, so its a fair comparison.

 

[crisi]

Yeah, duh. If you don't go, you won't spend as much as if you do go. The OP is clearly going to WDW anyway, so its a fair comparison.

I don't think it is a fair comparison. And there are two reasons:

Because DVC does act to change habits. There ARE people on this board who have been able to have the discipline to take trips in a similar fashion to the way that they used to use CRO - they stay in studios for the same number of nights. There are people who make good use of the kitchens and save that way. But if DVC didn't encourage MORE trips addonitis wouldn't be such a huge joke around here. If it didn't encourage different kinds of trips, we wouldn't talk about no longer commandoing because we know we will be back. If no one treated friends and family there wouldn't be the complete understanding from the "guest lament" threads.

And that leads to the second thing - DVC means making a commitment. I can say as a cash guest that I KNOW I'll be back - but if I lose my job, if my husband or kids get very ill, if my husband runs off with a 23 year old leggy redhead - cutting out Disney is as simple as not booking the trip - or canceling it. And we've seen all of those things happen to members here. Once I own DVC, changing my vacation habits because my life has changed becomes a much bigger deal - and might mean a financial loss at a time when that is not a good thing.

Which isn't to say that no one should buy DVC, but that it isn't as simple as taking the NPV of the cost of the contract, adding dues, and comparing it to the value of a CRO Deluxe or moderate room and saying that savings are universal.

 

[tjkraz]

I think I've answered your questions above, but we're wanting a 1BR now, and planning to need a 2BR in the future, both for at least a 7/8 night stay.

I'm probably just repeating others but the above illustrates the flaw in your logic. Your initial concern is that the DVC dues will cost as much as a moderate room, yet above you state that you want much MORE than a Moderate. A DVC (Deluxe) One Bedroom is quite an upgrade in accommodation vs. a Moderate.

Looking toward the future is all well and good, but understand that if you forego DVC now you're going to end up paying a lot more than $2k per year for cash accommodations that will come close to what a One or Two Bedroom villa has to offer.

 

[kerickson]

Also, until we have a need for all 400 points at WDW, we will probably use some at Hilton Head, if reservations are available. We live close enough that HHI is a short drive, and is a location that we would enjoying using up extra points.

Andrea
Another point, I understand HHI can be very difficult to book during peak times. If you think you'll travel there every year or every other year, you may want to do an add on (or separate resale contract) of HHI points. You could purchase a very small add on of 50pts and bank and borrow to use specifically at HHI when you want to travel there. You can then combine those points with your SSR points at the 7mo mark if you want to use them for a WDW stay. Should be easier to use your HHI pts any one of the WDW resorts at 7mo than HHI at 7mo with your SSR points.... so maybe an initial contract at SSR/BLT/AKV (either resale or direct from Disney) and then a small add on at HHI? If you do buy two resale contracts make sure you understand the pros and cons of different UYs and contract #s, there's an easy and a more difficult way to structure these... Smaller contracts are also more difficult to find via resale, and after higher p/pt prices and closing costs, buying an add on direct from Disney may be the better way to go...

And congrats on your upcoming family addition!

 

[MiaSRN62]

I never looked at DVC as a means to "saving money" either. Rather, we look at it as a way to vacation in a certain way.

Sure I can stay offsite in some of those very nice timeshares ---have done and do as we own an offsite timeshare. But DVC gives us the opportunity to stay in WDW and enjoy a more unique resort with themeing. Be able to use our car or not if it suits us. Have experienced many situations over the years of vacationing in WDW where I really came to realize how valuable wdw transportation is. I was recently able to send my college-aged daughter to WDW with her friend and they could stay in wdw without us. With disney doing the driving, the girls didn't have anything to worry about---and booked them in a dvc resort with points. So convenient. If they stayed offsite, I'd have alot more issues and cost to deal with. Just one recent example.

Most of the nice offsite timeshares all look and feel very similar. And nothing wrong with that, just prefer onsite themeing and amenities. And while I say I didn't buy to save, I can certainly say I feel I would never book a 2 bedroom villa cash at disney for $500-$1,000 /night. And the majority of the time we have a car. We never feel obligated to purchase the DDP and often venture offsite for meals. Some arguments I've read from the pro-offsite group, are that if you stay on property you'll miss going offsite to try other restaurants or visit other attractions. So not true. And I never got that side of their argument. Definitely cheaper offsite---no doubt---so there's always choices for whatever fits your vacationing needs.

So DVC for us, is an avenue to vacation on site, and with a kitchen/washer&dryer/jacuzzi etc. Add on themeing and onsite perks and this is why we purchased DVC.


Maria

 

[wtshirleydvc]

Yes the dues "may" go up each year, but hotel room rate will also increase with time. A night at the Contemporary was once $25...

If you want cost savings... here it goes. We bought 210 points at AKL last year. We added up the total rack rate cost of our vacations for 2009... And took that amount minus our dues for 2009... the total was just over 25% of the total 210 point contract. 25% in year one!!!!! Granted... you have to really study the point book and then use your points wisely... but DVC can be a tremendous savings over time.

 

[Deb & Bill]

Yes the dues "may" go up each year, but hotel room rate will also increase with time. A night at the Contemporary was once $25...

If you want cost savings... here it goes. We bought 210 points at AKL last year. We added up the total rack rate cost of our vacations for 2009... And took that amount minus our dues for 2009... the total was just over 25% of the total 210 point contract. 25% in year one!!!!! Granted... you have to really study the point book and then use your points wisely... but DVC can be a tremendous savings over time.

You can say you aren't going to Disney anymore with the price of hotels going up - until they offer you a "Buy 4 get 3 more free" price. But you still have to pay the dues whether you want to or not. Or you sell.

 

[Brian Noble]

And that's really the "crux of the biscuit."

A DVC purchase does get you your lodging at a nice discount. But, there's no free lunch. In return, Mickey gets your vacation time and attention for the next several decades---the DVC Membership is the ultimate in captive audiences. The risk of not owning is that rents will rise faster than you can afford. The risk of owning is that your vacation habits and preferences might change.

 

[RahRah573]

I am comparing DVC to a hotel room because that's all I know. When my DH and I have been there in the past, it was just the two of us, then two of us and our 13 month old in a pnp. A hotel room was cramped, but do-able. Next time we go, we will have 2 adults and 2 children. As our family grows, the more our need for space and amenities grows. We are looking at buying 400 points to accommodate a potential 2BR stay eventually.

Personally, I'd suggest looking for much a smaller contract(s) to start with - based on the number of points you need now, not later. As your requirements change over time, you can add-on smaller contracts as needed and/or you find smaller ones priced reasonably!

To hear that DVC is not about saving money is disappointing, I'll admit. But am I even breaking even? I realized I'm paying more and getting more, so it's just a matter of reconciling that in my mind.

For us, buying was definitely about saving money long-term. Intially you are fronting a good part of your cost buying the contract, but over time, while your "opportunity cost" (cost to buy the contract) remains fixed for the life of the contract, your only out-of-pocket is your maintenance fees.

Break-even point depends entirely upon how often you use your membership to stay somewhere that would cost you more to book directly through Disney or rent someone else's points. For us, BLT made sense since it's where we'll likely stay most often in the future.

Our first stay is coming up in December, 12/24 to 1/1 in a 2-bedroom LV...it's 570 points....if I rented, I'd be looking at no less than $12-14 a point given the season and demand, or no less than $6,840-$7,980....if I booked through Disney, I'm looking at $10,000+ ..... my MF's (at full-price, not pro-rated) plus opportunity cost (to buy the points) = about $3,100 - more than half off what I'd have to pay renting and a third what I'd pay to book through Disney. Anyone saying DVC isn't tied to saving money isn't staying at prime-time dates.

This is great advice. I don't think I'm interested in a studio at this point, but I may look into point values for a 1BR week and just start with that number of points. We can always add on. I think my only hesitation with doing that is that I recognize several good resale deals right now, and I hate to pay a ton more per point a few years down the road. That might be a risk we just have to take, though.

As difficult as it is to say as a new DVC member - time errodes price - that's historical for each and every DVC property to date. In time, the price per point in the resale market is unlikely to rise....and much more likely to fall as contract time remaining declines at each property. Now when DVC offers an extension, as they did with OKW - those contracts with the extension hold firmer for price than those with the earlier expiration....but both are still lower now than they were a year ago, two years ago and five years ago - in today's dollars no less!

A point being worth less tomorrow isn't necessarily a bad thing - it's part of the process of owning and depreciation.....if you're looking at SSR and/or OKW, you're looking at the resorts with the points costing the least amount right now. If you get SSR at $65 a point, say for 100 points....that cost you $6,500.....if in five years you're selling at $55 a point, it looks like a loss - but in reality, your cost to own is $1,000, or $200 a year + your maintenance fees. Not a bad deal IMO.

Now I wanted BLT and only BLT for now.....buying resale didn't fit for us and the price through Disney was better than it was resale....but I wouldn't worry that some time in the future you'll have to pay more......I'd buy what I need now and find what I need as things change later, in the future....enjoying what I need now and not having to "carry" the cost of something I may use later.

At this point, financing is the way we would go. After reading these posts, and talking more with my DH, I think we're going to hold off until the first of the year, when paying cash will be a likely option. Unless we find a screaming deal ($65/point at SSR), in which case we would probably buy now and pay the financing off after the first of the year.

Honestly - financing kills your break-even point unless you get a killer deal for interest.....just like I'd advise buying what you need now and buying more later, I'd also advise buying what you can afford now, for cash, rather than financining with the thought of paying it off sooner - with the economy the way it is, what you may think you'll pay off in a year may not happen....and for that reason, I suggest buying in cash if at all possible so you don't pay interest and increase your "opportunity cost" per point over the long-term.

There are some great, smaller point contracts out there, for both SSR and OKW to start with.....depending on the season you usually travel and your next planned vacation - start as small as possible for now.....even just 50-points if that's what you have cash for.....save a bit, buy another small contract (same UY if possible)....and so on, building your point portfolio over time. A big contract, long-term is MUCH HARDER to sell than smaller contracts.....even if a small contract costs $1-5 more per point, you'll have a much easier sell, if you need to sell, in the future!

 

[thelionqueen]

I wanted to weigh in here. While I TOTALLY agree that paying with cash is a much more of a value than financing, I'd guess the vast majority of people don't have an extra $20K+ laying around to do so. That does not mean that you cannot get exceptional value by financing DVC. For those that need it (me included) we could NEVER afford to buy the amount of points we need with cash, absolutely not feasible. My husband is a contractor, and we get paid in large amounts, but by no means on a regular basis. So, on our contract, we make our monthly payments which are COMPLETELY and TOTALLY within our budget (even if I were to quit my full time job we would still have plenty of income to afford all our bills and our DVC). So, when we do get paid a large amount, we will pay a thousand or 2 here or there. We WILL have it paid off in 3 years, but even if we did NOT pay it off until the full 10 years we financed, it would STILL be a huge value for the way we travel.

We go to Disney every single year, most times, twice a year, and we will use the vast majority of our ownership on DVC resorts (not including a week at Keystone, CO every couple years). This is money we would be spending ANYWAY. With or without DVC, we have and will continue going to Disney every year (I've gone to a Disney park every summer since I've been on this earth...including in the womb-seriously).

So if you put the money we would pay for accommodations towards our ownership, our "break even" point is (worst case scenario) 7 years. We will then have an additional 40+ years to enjoy our membership and accommodations for a fraction of what we would have paid.

So my response is that there is no "canned" response on how DVC does or does not give value to every family. Every family is different, vacation different, plan differently and have difference economic circumstances.

PLEASE don't listen to those on the DIS that preach "if you don't have the cash to pay for it, you shouldn't be buying it". Only YOU know your situation and what's right for you. According to that comment, I wouldn't have a home, car or a job for that matter.

 

[tjkraz]

I wanted to weigh in here. While I TOTALLY agree that paying with cash is a much more of a value than financing, I'd guess the vast majority of people don't have an extra $20K+ laying around to do so. That does not mean that you cannot get exceptional value by financing DVC.

That's a fair point.

While folks often talk about how financing adds interest to the purchase, what doesn't get much press is that even a cash purchase "costs" more in the form of lost interest. That $20K used to buy into DVC is undoubtedly sitting in some investment vehicle--be it a savings account earning 2%, CD earning 4%...whatever. Giving that money to DVC means that the buyer loses out on the interest that money would otherwise generate. So there really IS an additional cost to even paying cash for DVC.

We could have paid cash for our last add-on but financed it anyway. Better to keep ourselves liquid. We initially signed-up to finance thru DVC but are in the process of rolling it to a home equity line which has an interest rate half of Disney's and is still tax-deductible. The difference in the interest we earn on the money we chose NOT to use to buy DVC and the interest we will pay on the home equity line is negligible.

The key is really making sure that adding the DVC to the budget won't tighten things to the point that it's a struggle to pay for park tickets and airfare when the time comes.

 

[RahRah573]

That's a fair point.

While folks often talk about how financing adds interest to the purchase, what doesn't get much press is that even a cash purchase "costs" more in the form of lost interest. That $20K used to buy into DVC is undoubtedly sitting in some investment vehicle--be it a savings account earning 2%, CD earning 4%...whatever. Giving that money to DVC means that the buyer loses out on the interest that money would otherwise generate. So there really IS an additional cost to even paying cash for DVC.

While I agree the PP made some valid points, I'll say that on this point, at this point in time, I can't agree with the above assessment since inflation is eating any gains faster than gains are to be had. Will that change in the future? It might. But purchasing in cash today - let's use a round number, $50,000 - instead of putting into an interest bearing account (bank or other investment vehicle) with 2-4% return? Inflation will eat the $1,000 to $2,000 return at the end of the year.

We could have paid cash for our last add-on but financed it anyway. Better to keep ourselves liquid. We initially signed-up to finance thru DVC but are in the process of rolling it to a home equity line which has an interest rate half of Disney's and is still tax-deductible. The difference in the interest we earn on the money we chose NOT to use to buy DVC and the interest we will pay on the home equity line is negligible.

Hey, we financed some of our purchase on purpose too....namely to push off first payment until September, when we'll pay half the loan off.....and then pay three months with Disney's insane interest rate, to push off the other half into 2010 tax year. I didn't say financing is always bad - just that financing a large point contract, on points the OP doesn't even need yet (they'll need more points in the future, not now) may not be her best option - that buying what they need now is better IMO and add-on later as needed.

 

[HGD24]

I didn't read all of the responses, but wanted to add that we stayed in a 2BR at SSR last Oct for 145 points. We purchased 160 points in 2004 and have yet to use them all in one stay until this Fall when we'll be staying in a 1BR Savannah view at AKL. If we find that we're using more points as our family grows, we'll add on in the future, but for now, we're perfectly happy with our 160 points per year (= approx $600 in dues/year).