Resale Vs Direct buy

[adminjedi]

Direct

• Quick, easy, and certain
• In some cases (Aulani, for example) direct is the only game in town. There are no resale contracts yet for Aulani.
• You can't find a suitable contract in the resale market. (usually a problem only if you are looking for a very small contract.)
• You can't buy without financing, and the interest savings with Disney financing is more than the purchase price savings with resale.
• You're buying a very small contract, and by the time you factor in closing costs, the difference is not worth worrying about.
• The direct price is actually lower. That doesn't happen much these days, but it has happened in the past.

Resale

• SAVE BIG BUCKS. If you're not saving enough money to make it worthwhile, why bother?
• You might find a contract with banked points that would provide a legitimate benefit without some salesman telling you a fairy tale.

I also think both the speed of resale closings and much of the uncertainty have improved with resale. People seem to be closing pretty quickly now, compared to 5 years ago when we bought. And, these days, if you make a reasonable offer there is much less likelihood of getting ROFR'd.

Well said!

 

[JimMIA]

The thing is that a lot of the contracts in resale are not loaded - they are pretty much stripped of points until 2012. I have been doing a lot of looking at the resale markets so just make sure you get what you want. Buy DVC is a big investment but one I have never regretted [/FONT]

At any given time, there are hundreds of contracts on the resale market. Most buyers are only going to buy one, so if a percentage (and it's certainly NOT a majority) are stripped, that is irrelevant unless you choose to buy one.

In a resale, you have to look at the contract you are interested in buying. That's the only one that matters, and most people will be able to find exactly what they want in this resale market.

 

[mouseaider]

I agree with most everything said here.

We first looked at DVC in 2007 during our tour.... we wanted to buy, but we would NEVER finance this.

We started looking again after Disney announced Aulani and watched the resale market. I called our original guide who I think was wonderful and asked about buying at BCV or BWV and she had nothing to offer. We could have bought OKW for $90 per point, 100 min. 2057 exp., 2009 and 2010 points but we waited and watched.

We just were sent to ROFR on BWV, 100 points, 2009 and 2010 points coming December, 2010 and we couldn't be happier.

Do your homework. Watch the market and pull the trigger when you find something you like..... or pay more $$ to Disney for the quick purchase. Nothing is wrong with either.

 

[Petraman]

My wife and I are going to buy DVC. Thats already been decided. My question is: Are there any benefits to buying through Disney? The resale market seems to be so much cheaper. I feel like I'm missing something. Why would anyone buy direct when resale is about 30 dollars cheaper per point.

Advantages of buying direct:
1) There are no closing costs on addons (not sure about 1st time purchase) which for a 50 pt addon would work out to be about $8/ point cost

2) They will give you incentives... free cruise, extra points, free AP, etc

3) You can use a Disney credit card to finance it and you get 6 months no interest


These varying issues can really change the value comparison. Let me walk you through my recent addon purchase.

AKV 50pt addon with no points until Oct 2011 (so no 2010 points)

Used: $83/point plus closing costs (which works out be $8/point) = $91/point

New: $120/point $8/pt promo discount,2009 and2010 points included (could rent these points for $10/pt=$20/pt discount value). So actual comparable value was $120-$28=$92/pt....

As you can see, the actual "value" of the price is much closer than you might think, and varies depending on incentive offered and whether they are incentives you consider to be valuable to you.

I actually went with the resal, because the added points weren't a "value" to me because of how we are going to use our points

I hope that makes sense. It's important to do your homework when comparing prices

I adjusted my numbers based on input from adminjedi (thanks for that one. I actually had caught that one before I bought, but when I typed this up I couldn't remember why when I bought used it was cheaper, but these numbers said the opposite.... brain burp). I also got pm pointing out more accurate rental value to be $10, so I adjusted that. The main point of my post was to point out that actual value difference between buying new and used is much closer than it may seem

 

[adminjedi]

AKV 50pt addon with no points until Oct 2011 (so no 2010 points)

Used: $83/point plus closing costs (which works out be $8/point) = $91/point

New: $120/point $8/pt promo discount, No closing costs ($8/pt savings), 2009 and2010 points included (could rent these points for $9/pt=$18/pt discount value). So actual comparable value was $120-$34=$86

Math error in your example. You need to find the net on each scenario and then compare.
You do not reduce the "NEW" cost by $8/pt because there are no closing costs, you just don't add for closing costs. The actual formula is 120-8-18=94. Now compare this net to the "Resale" net of 91 where you paid closing costs.

When we make our comparisons with loaded contracts (previous use year points), we do not use "what we can rent it for", we use our actual amortized cost of current cash value formula. It is a more accurate perspective of our cost per point. If you pay $94/pt, amortized over the years, incl MFs, if the cash had been invested at 5%, = actual cost is $10.24/pt. So, in your above example, the extra point value is not $18, but rather $20.48 bringing the difference between resale and direct to $1/pt.

 

[cutakenta]

I guess I don't have to wait for 2 50 point resales for BLT. I just came back today and could have seen my guide yesterday. Even if I was able to find 2 contracts I would only save a few dollars a point after it was all said and done.