pay oop for room v DVC purchase

[mjp12831]

I'm the type of person who needs to see value in something before buying - also a disney nut who wants to go back every year.

So I keep looking at DVC, but it really doesn't seem to make financial sense to me - am I missing something important in my analaysis?

It basically takes 250 points to stay in the summer months for a week (because dw is a teacher, that's when we’d need to go)

Points go for between 70 and 80 per point on the resale market, and with closing costs it would cost about $19,000 for the 250 points

Then you pay annual maintenance fees of about $5 per point – 1,250 per year for 250 points – over 45 years (resale, so not the whole 50 you get from Disney) that’s another $56,250

So together it’s $75,250 for the room only over the 45 years – that’s $1,672 per year. Today it costs $1,450 for 7 nights at Riverside.

Prices go up, so I know one argument for DVC is that you have a guaranteed cost of the hotel per year in today's dollars, but then factor in that they have your $19,000 up front and you either are paying interest to finance it or don’t have it in your bank. Also, the $1,672 isn’t really "fixed" because the maintenance fees go up – they are $5 per point on the newer places but are now around $7 per point on the older ones – as the new places age the per point cost is going to go up too, and every $1 they go up adds $250 per year to your cost.

When you have to go in the summer, I don’t see how it’s worth it.

 

[vicki_c]

I'm the type of person who needs to see value in something before buying - also a disney nut who wants to go back every year.

So I keep looking at DVC, but it really doesn't seem to make financial sense to me - am I missing something important in my analaysis?

It basically takes 250 points to stay in the summer months for a week (because dw is a teacher, that's when we’d need to go)

Points go for between 70 and 80 per point on the resale market, and with closing costs it would cost about $19,000 for the 250 points

Then you pay annual maintenance fees of about $5 per point – 1,250 per year for 250 points – over 45 years (resale, so not the whole 50 you get from Disney) that’s another $56,250

So together it’s $75,250 for the room only over the 45 years – that’s $1,672 per year. Today it costs $1,450 for 7 nights at Riverside.

Prices go up, so I know one argument for DVC is that you have a guaranteed cost of the hotel per year in today's dollars, but then factor in that they have your $19,000 up front and you either are paying interest to finance it or don’t have it in your bank. Also, the $1,672 isn’t really "fixed" because the maintenance fees go up – they are $5 per point on the newer places but are now around $7 per point on the older ones – as the new places age the per point cost is going to go up too, and every $1 they go up adds $250 per year to your cost.

When you have to go in the summer, I don’t see how it’s worth it.

You might try your question on the DVC boards - this gets asked and debated every day there. Mousesavers has a good cost analysis on DVC as well.

Most people who don't finance actually break even in the 7-10 year time frame and after that, it's like going for the price of the maintenance fees. Also, you are comparing a moderate with a deluxe villa - not really a fair comparison. But if you're happy in a value or a mod, DVC is most likely not for you (mod, maybe) unless you're looking to upgrade your accommodations.

 

[lilclerk]

Well you can't compare the cost to a week at today's prices in a moderate. Price out a comparable room for what you'd get with those 250 points and look at that difference. Plus factor in the discounts on APs (around $100 a year right now?)

But don't get me wrong, I totally see where you're coming from. DVC makes sense if you're going to WDW at least one week a year and staying in deluxe resorts or villas. If you're only planning on staying in a value or moderate, the numbers don't make as much sense.

 

[Tara]

I echo what everyone else said - you just can't compare DVC costs to the going rate for a moderate resort. If that's what you want, then you might as well do studio accommodations, and they aren't 250 points a week during the summer, anyway.

Another thing to consider is that if you buy a newer resort, you're looking at a 50-year commitment. Many people fail to consider that their vacation styles will change as they age, children grow up, they retire, etc. So perhaps now you can only travel in the summer, but that won't always be the case. Even if you use your scenario of 45 years through resale, that's still going to be long enough for your life to change significantly.

There are a lot of ways to make DVC work for you. Maybe in your case it makes sense to buy 125 points, then use them every other year (through banking points) and stay at a moderate every other year (the non-DVC years). Then when your kids grow up or you retire, you'll travel in the fall or winter. You can also buy 250 points but split it up into smaller contracts that you can either pass on to each of your kids or sell off if you find you need fewer points in the future.

 

[MelissathePooh]

Where are dues $7 a point? Our dues work out to be $4.70 per point averaged out (own at BCV, VWL, AKV, BLT). Vero is higher and I'm sure Aulani will be given the location, but $7 isn't accurate for the majority of DVC resorts.

You aren't comparing apples to apples either. The 250 point summer average is for a 1 or 2 bedroom depending on what part of summer and which resort. POR does not equate to what you would pay for the villa or what you get in a villa.

Have you gotten actual numbers for DVC or just ballparking based on something you saw somewhere? It may not make sense for you, but it does make a lot of financial sense for others. We can use out points in a ton of ways at places we like to stay and it costs far less than if we paid Disney rack or even discounted rates for the rooms.

 

[spiceycat]

first of all you are comparing a moderate room to at least a 1-bedroom for 250 points that is a big different between 1-bedroom (if not a 2-bedroom) and a studio.

if you are comparing any WDW resort room you need to compare a studo not anything larger.

yes the maintence fee will go up but 5% at $5 compare to $150 moderate room - is not the same increase.

 

[mjp12831]

ok some good points made so far.

I understand it's not apples to apples. So what should I be using to price out (oop) to make a valid comparison?

We have a family of 5 so I used POR for comparison because it's one place we can stay. OOP isnt easy to even find places that you can stay on property. Understand POR might compare best to a studio but are you allowed to stay in a studio with a fam of 5? I see that a Saratoga Springs studio for 7 nights is only 108 points in July, so that would drastically alter my calculations.

 

[vicki_c]

OP - I just priced out a studio at VWL for summer - it's 127 points for a week in 2010.

So cut all your estimates in 1/2 really and then you might be making a fairer comparison to POR.

$9500 to purchase 125 points (using your estimates), plus $5 (pretend it's fixed) in dues which would be $625/year x 45 years or $28,125.
Now you are talking about $37,625 or $836/year for 45 years.

Some years there will be discounts for cash rooms (big ones or small ones), some years there might not be. So your estimate of a cash POR room in today's dollars is probably okay, given that some years you will pay full price and some years you will not. So even not factoring in that room rates will increase (for cash) and dues for DVC will increase - and room rates are going to be more significant in that calculation as someone else pointed out, even right now, you could do an "equivalent" DVC room for just over 1/2 the price of POR.

All very simplified and I'm sure someone could poke some holes in my simplifications, but it's still a good way to start looking at it w/o crunching real numbers and considering things like time value of money, etc.

 

[Lynne M]

The key when looking at DVC is to make sure you're comparing apples to apples.

In your case, you're comparing at minimum a 1 bedroom villa - full kitchen, living room, washer dryer, jacuzzi tub, separate bedroom with a king bed, 2 TVs, a balcony, and at some resorts, 2 bathrooms - to a motel room. Granted, it's a very nice motel room, but it only stands to reason that a villa is going to cost more.

Take a look at how much more you'd be paying for your lodging every year, and the decide whether the extra facilities are worth it to you. For some people, they're not. Some don't care about the kitchen, some don't need or want the extra space.

Many people are surprised when they realize DVC won't save them money over their value or moderate stays. It's not a discount program, and it's very far from the cheapest way to stay at WDW. When you compare the cost of DVC to the cost of staying in those same villa accommodations, it can be a substantial savings.

 

[mousefan1972]

A family of 5 can not stay in a studio, unless one of the children is under age 3.

You would need at least a 1 BR. Comparing a DVC resort 1 BR to a room at a moderate is not a fair comparison, as others have stated.

 

[DJFan88]

Agree w/you, OP- We had once figuered our breakeven point to be way to long to make that kind of a monetary commitment. I don't think you're missing anything.

 

[spiceycat]

well at one time a family of five could stay in BWV dedicated studio plus - but the demand was greater than the supply - so DVC did away with this option.

comparing a moderate to a 1-bedroom is just not fair. for OKW a studio is 106 but the 1-bedroom is 220 for a 1-bedroom.

a studio is bigger than a regular moderate room.

again sometimes Disney and their safety rules just don't make sense.

 

[lilclerk]

again sometimes Disney and their safety rules just don't make sense.

It's the fire code that limits how many people per room, not Disney's safety rules.

 

[spiceycat]

It's the fire code that limits how many people per room, not Disney's safety rules.

hey guess who directs the fire department - look it up - Lake buena vista was make for Disney.

they say everything is separated - but has anything Disney wanted been refused by LBV. NO

Disney controls LBV.

the only fair fire code would be a measure in feet. how much per person in feet. and that rule applies across the board.

of course that would probably make the values and moderates too small for a family of 4.

 

[mom of princessx2]

We did our comparision a bit differently. We bought 150 points on resale for less than $11,000. Last year we stayed at a SV studio at AKV. Because it was during value season, out of pocket would have been about $2600. This year we stayed at BCV during spring break. That would have cost us out of pocket about $3400. That totals $6000 for my rooms in 2 visits. I am already half way to breaking even in just 2 trips. I pay less then $55 per month for my dues which is totally worth it for me to stay in deluxe accomidations.

I didn't ever calculate pins or specials when considering DVC because then I would have to base my vacation around when my pin was good or if they were giving a special and I don't want to vacation like that.

 

[Pakey]

I would not look at rack rates when considering. Anyone can rent points from a member at about $8-$10 per point. So a week that takes 127 points, you could rent for $1270.

If I had known about rentals, I would have never purchased my DVC points.

 

[cvjw]

If you are happy with a moderate, stick to paying out of pocket with free dining or pincodes - it will save you money. We weren't happy staying in a regular disney room anymore - they were just too small for our family of 4. We were at the point of getting 2 rooms, or a villa thru Disney. We chose to buy DVC resale. We stayed in a 1 bedroom villa last Sept and fell in love - we could never go back to a regular Disney room anymore. We have since stayed in a 2 bedroom villa, and are questioning whether or not we will be able to go back to a 1 bedroom again. There is just no comparing a regular Disney room to a large villa. We loved our 2 bedroom savannah view at Kidani so much that it was hard making my boys leave the room to go to a park! DVC is a financial commitment - we love Disney, so it was a commitment that we happily made.

 

[mjp12831]

It's the fire code that limits how many people per room, not Disney's safety rules.

But you are allowed to have 5 in a room at POR, and the poster you answered said the studios were larger than the moderate rooms, so it seems like this would not be a code issue but a policy issue.

 

[sharadoc]

I agree with the OPs assessment, but for us, it's age. We won't use 50 years of vacations - we're too old! For us, we would need around 450 points to vacation the way we usually do. Plus maintenance fees, that costs more than we pay cash.

I know we can't count on a pin or even a general discount. I would hope we can usually count on a bounceback. If not, then a AAA discount on a 1BR villa is 20%.

So, the cost of the points plus maintenance will end up costing us more (by my calculations) than a cash vacation.

I think the younger people who pay cash get a great deal!

 

[MelissathePooh]

I would not look at rack rates when considering. Anyone can rent points from a member at about $8-$10 per point. So a week that takes 127 points, you could rent for $1270.

If I had known about rentals, I would have never purchased my DVC points.

We got tired of renting points and being limited to someone else's availability and reservations being in limbo so to speak - renting was what convinced us to buy. We wanted our 11 month window at certain places for certain times of year. I guess I don't share the faith that points are always available for renting.