Question about the value of DVC

[rockundergirl]

I'm heading to the world in a month , I'm going to do the tour and consider buying into the DVC. If i go to Disney once a year, and typically spend about 2000 for my package, is it worth it for me IYO?

 

[Maistre Gracey]

If you visit every year and stay and want to stay in the better accommodations, yes it's clearly worth it as long as your interest won't fade in two years.

MG

 

[disneynutz]

It may be worth it but you have a lot of homework to do. Buying resale is cheaper and should be considered.

You really need to find out which DVC resorts you like the best and buy where you love to stay. Booking at your favorite resort during certain times may be difficult so you really need the 11 month home resort advantage.

 

[hakepb]

make sure you are comparing just the lodging/accomodations portion of your bill. DVC is "just the room" and you still need to purchase tickets, dining, transportation to get there...

I think the general rule is DVC is more expensive (if you compare the time value of money/compound interest) than a Value, may or may not be better than a Moderate (depending on how well you hunt discount codes..) and DVC is most always cheaper than a Deluxe.

 

[Maistre Gracey]

Look at it this way... $100/pt over 50 years is $2/pt/year. Add your annual fees.. $5?, and the per point cost is around $7. Multiply that by the number of points for the room, and you get the actual cost per night.
Of course you must tweak the per point price, number of years, and annual fees to fit your specific situation. Now compare that to what you pay for a regular resort room. Remember to add tax to the resort room, but NOT to the DVC cost. In fact, some of the DVC cost may be tax deductible so it may even be less.
Don't let anyone tell you to figure opportunity costs. That is a bunch of hogwash, although many say to do so. At worst it would add about a buck per point to your cost.

MG

 

[crisi]

It really depends on a alot of things. You probably shouldn't buy from Disney - the minimum will be too many points for one week a year in a studio. You might do ok with a small resale contract - sometimes those are sold with fewer points attached. Remember that you are only getting your room - and if you are fond of Disney's promotions, those don't happen with "points" (Disney never says - use your points and we'll throw in dining or use your points for four nights and we'll give you and extra three nights - they really don't seem to care if we use our points or not).

Understand the program. Understand banking and borrowing, cancellation policies, room availability - what you are entitled to, what is currently offered in addition, what is likely temporary over the term of the contract.

Understand your travel patterns - do you need to stay onsite (offsite is usually cheaper, and sometimes both cheaper and nicer - but you give up onsite). Is your family going to grow or shrink. Are you likely to bring friends. Are you a big fan of hanging out on your balcony or hanging in your room - or is it a place to sleep and shower?

 

[Lost in Neverland]

I completely agree with PP. When you are on the tour at WDW the one thing they play down are the other costs involved in a membership. They breeze over the fact that you still have to buy park tickets , food and transportation down there. Also they leave out the fact you are not entitled to any promotions using your points.The tour IMHO is great to see what the accomadations are like.We waited until we returned home to make our final decision. That way some of the magic was out of the picture and our real lives were in front of us. In the end we bought resale due to the fact that we got a larger contract than we could afford through Disney plus we got a resort that was sold out.There are many options for purchasing into DVC the hard part is saying I need to wait and do my homework. The homework will payoff but it is just like any other major purchase you need to go in knowing all your options.

 

[logan115]

Don't let anyone tell you to figure opportunity costs. That is a bunch of hogwash, although many say to do so. At worst it would add about a buck per point to your cost.

MG

I'll be one of the people pushing the hogwash as it definitely needs to be included into the equation IMHO. It adds about 4-5 years to your hypothetical break-even (for us about 10-14 years based on different interest rate assumptions), although that didn't deter us from buying into DVC recently.

If you take money from a savings/brokerage account you are giving up the interest you would otherwise earn on that money when buying DVC - whether it is significant to you or not is another question, especially with rates as low as they are now as well as what rate of return you would otherwise be generating on this money.

There are multiple ways that people can/do model DVC and for my analysis I did factor in the time value of money, and I also placed a higher weighting on current points (next 10 years) as opposed to those I'll be using in 40 years (again factoring in the TVM and "discounting" points I won't be using for 30-40 years). I compared keeping the money in a savings/brokerage account, and using that money (and the interest/return it generates) to "rent" points for our trips. As mentioned above depending on various assumptions that money would be "gone" in about 10-14 years if we continued renting. If we were to buy, at the same point in time (10-14 years from now) we would still have our points, and if we could sell our points for roughly the same amount of money as the MFs we've paid over that time we'll come out ahead in the long-term.

I can't help it, I'm a numbers geek, I'm not saying my way is the best by any stretch. Also had trouble "modeling" or putting a price on countless memories that DVC will enable our family to enjoy

Chris

 

[YourEveryDayAdam]

Here is a link to a thread that I started a while ago that analyzes the numbers.

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

To sum up the thread:

If you go to Disney, and stay in a deluxe resort, every year then you WILL save money. LOTS.
If you go to Disney, and you stay in a moderate resort, every year then you will save money. SOME.
If you go to Disney, and you stay in a value resort, every year then you won't save money. But you will get deluxe accommodations for very close to the same price.

Everything really depends on your situation. The number of people you travel with, whether you stay in value, moderate or deluxe accommodations, how often you go, etc.

Basically:
You won't save any money now.
You will break even in about 5-15 years, depending on your situation. In most cases it's around 7-10.
Once you've broken even, you will be able to stay at Disney World for about 20% of the cost of a cash guest.
You'll develop the dreaded disease: DVC Addonitis. Once you've bought your points, you want to buy some add-on points so you can go more often.

All-in-all analyze your situation. If you want to go in to some specifics, let me know how many people you are traveling with, the time of year you like to go, and the typical room(s) you get.

 

[crisi]

And there is "opportunity cost" as in Time Value of Money calculations - certainly not hogwash - although since they are based on assumptions about interest rates, not more than a tool - and a pretty complicated one at that.

Then there is the more valuable and general idea of "opportunity cost" - what are you giving up when you own DVC.

And you do give up some things. You are tied into Disney or using points for vacation. It becomes hard to say 'this year its a staycation year' when you have points you could loose. You might be better served putting that money into a retirement fund. We've had people here who have bought DVC at the expense of having a reliable car - to me that's an unacceptable amount of opportunity cost - I need a reliable car.

DVC is a luxury purchase. It is one that MIGHT save you money on luxury purchases in the future. But any luxury purchase needs to be measured in opportunity costs against those unexciting necessities of life - those might vary from person to person, but things like setting aside money for emergencies and retirement, paying off consumer debt, making sure DVC payments are not going to mean an unacceptable cut in the grocery are on a lot of people's lists as unexciting necessities that should be taken care of before buying DVC - eating the vegetables before getting dessert.

 

[rentayenta]

Here is a link to a thread that I started a while ago that analyzes the numbers.

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

I love this thread!

 

[Maistre Gracey]

I will try to find time and a real computer later to explain my views on opportunity cost. I'm traveling, and typing on an iPhone st the moment.

MG

 

[rockundergirl]

You guys are great! so much info. ( some said they needed more detail for advice) I go once a year with myself, my 4 year old son, and a guest. I typically stay at moderates but it depends on the year, this year is akl , cuz i got a good deal. I would hazard a guess to say that my family will expand, most likely making my " guest" a more perm part of the family, and being 28 I expect to have at least one more child...

 

[HGD24]

DH and I bought DVC because:
1) we love to vacation at Disney
2) we love to stay in suites
3) we have many family & friends who love to vacation at Disney

We don't generally go to Disney every year. On the off years, we rent or give our points to family & friends or save them for the next year and take people with us. When we do go, even just the 2 of us, we stay in 1-bedroom villas because we like the space & the full kitchen. Last Fall, we had 4 family members join us on our trip and a few weeks later, friends of ours stayed for over a week using some of our points.

We still take part in some of Disney's promotions and stay at non-DVC resorts paying cash, but that's because some of the resorts hold special meaning for us and we still like to stay there every now and then.

The value of DVC is what you make it to be.

 

[Dean]

I'll be one of the people pushing the hogwash as it definitely needs to be included into the equation IMHO. It adds about 4-5 years to your hypothetical break-even (for us about 10-14 years based on different interest rate assumptions), although that didn't deter us from buying into DVC recently.

If you take money from a savings/brokerage account you are giving up the interest you would otherwise earn on that money when buying DVC - whether it is significant to you or not is another question, especially with rates as low as they are now as well as what rate of return you would otherwise be generating on this money.

There are multiple ways that people can/do model DVC and for my analysis I did factor in the time value of money, and I also placed a higher weighting on current points (next 10 years) as opposed to those I'll be using in 40 years (again factoring in the TVM and "discounting" points I won't be using for 30-40 years). I compared keeping the money in a savings/brokerage account, and using that money (and the interest/return it generates) to "rent" points for our trips. As mentioned above depending on various assumptions that money would be "gone" in about 10-14 years if we continued renting. If we were to buy, at the same point in time (10-14 years from now) we would still have our points, and if we could sell our points for roughly the same amount of money as the MFs we've paid over that time we'll come out ahead in the long-term.

I can't help it, I'm a numbers geek, I'm not saying my way is the best by any stretch. Also had trouble "modeling" or putting a price on countless memories that DVC will enable our family to enjoy

Chris

One should figure lost opportunity costs OR interest as a minimum. Of course it's not a simple calculation because you'd be using PART of those dollars for vacationing anyway. It's certainly not hogwash but it might or night no apply to everyone in the same way.

OP, it might be a good deal if you don't go heavy on weekends, only use points for DVC and value staying on property. You should go through the info as to how it fits into your situation and usage patterns and decide what's best for you.

 

[logan115]

One should figure lost opportunity costs OR interest as a minimum. Of course it's not a simple calculation because you'd be using PART of those dollars for vacationing anyway. It's certainly not hogwash but it might or night no apply to everyone in the same way.

OP, it might be a good deal if you don't go heavy on weekends, only use points for DVC and value staying on property. You should go through the info as to how it fits into your situation and usage patterns and decide what's best for you.

Dean -

I based this on money we'd be spending for WDW trips only - are you implying that people actually vacation somewhere other than WDW or DLR ?

Just kidding, in addition to my spreadsheets I perused many others, I basically just needed to know that buying DVC wasn't going to be a complete waste of money - and luckily that was the case. However there are so many variables that it's impossible to say "yes, DVC works for everyone." As always you laid out some great points about folks thinking hard about how they would like to use it as the results can vary significantly depending on how you use it.

Couldn't tell if you were agreeing with me or not to be honest. If you were - I'm thrilled, if you weren't I WAS OBVIOUSLY WRONG !!!

Chris

 

[Dean]

Dean -

I based this on money we'd be spending for WDW trips only - are you implying that people actually vacation somewhere other than WDW or DLR ?

Just kidding, in addition to my spreadsheets I perused many others, I basically just needed to know that buying DVC wasn't going to be a complete waste of money - and luckily that was the case. However there are so many variables that it's impossible to say "yes, DVC works for everyone." As always you laid out some great points about folks thinking hard about how they would like to use it as the results can vary significantly depending on how you use it.

Couldn't tell if you were agreeing with me or not to be honest. If you were - I'm thrilled, if you weren't I WAS OBVIOUSLY WRONG !!!

Chris

I was agreeing and adding some information as I see it.

 

[logan115]

I was agreeing and adding some information as I see it.

Thanks - you made my day I actually feel "smarter" knowing that you agreed with me

Over the past few years that I've been here on DIS I learned soooooo much, and without a doubt here is the most important thing I've learned :

When in doubt, I tend to value Dean's responses at the top of my list - as he will always provide an unbiased and extremely well thought out view that really helps put things in perspective.

Sometimes we may get answers that we don't "want" to hear but really "need" to hear in terms of decisions that we're contemplating and he does a great job of showing us the big picture. In addition I've really enjoyed some of the comparisions he's made between DVC and (dare I say) other TS systems.

Keep up the great work Dean, really appreciate all the incite you provide here on DIS (and TUG for that matter).


Chris

 

[Dean]

Thanks - you made my day I actually feel "smarter" knowing that you agreed with me

Over the past few years that I've been here on DIS I learned soooooo much, and without a doubt here is the most important thing I've learned :

When in doubt, I tend to value Dean's responses at the top of my list - as he will always provide an unbiased and extremely well thought out view that really helps put things in perspective.

Sometimes we may get answers that we don't "want" to hear but really "need" to hear in terms of decisions that we're contemplating and he does a great job of showing us the big picture. In addition I've really enjoyed some of the comparisions he's made between DVC and (dare I say) other TS systems.

Keep up the great work Dean, really appreciate all the incite you provide here on DIS (and TUG for that matter).


Chris

Those are kind words Chris, thank you.

 

[ToddyLu]

We 'do' Disney every year (since 2002), have always stayed value and only once at POFQ. DH has always said, "these are your points" since I was the one who wanted DVC. So it is my luxury of a lifetime....I don't care if I break even. We do not have children and would never be able to have a second vacation residence, although we have decent long term jobs. DH loves Disney like I do so it is a given that our love will continue through the years. Since purchasing DVC, he has talked about it almost daily out of excitement. His Mom and brother will be traveling to their own studio when we go in October. So we purchased emotionally...for me...because I wanted it. At 40 with good jobs it is my reward. So when I need a new car in 3 years it will be a Camry not the Infinity I get becasue of our purchase...knew that going in and pleased as punch. Could I be saving $300 a month and putting it toward retirement, sure? But I take care of sick people all day long and have learned life can change very quickly. We have retirement savings in place, a nice home and cars. So I want to enjoy things now while I can...jmo.