Resale vs Direct With Financing

[tatkins]

I’m not wishing to make this post about how irresponsible financing is. I’m just wanting to point something out that I find very interesting. Currently there’s a no money down promo for resale. If you take that deal on a 150pt Saratoga and finance for the 12yrs it will cost as much or more than buying direct at RIV. The interest rate is significantly higher and you have 2yrs of points to sell back and/or rent to get down payment back with direct. So long huge savings if financing.

 

[aceshigh73]

I’m not wishing to make this post about how irresponsible financing is. I’m just wanting to point something out that I find very interesting. Currently there’s a no money down promo for resale. If you take that deal on a 150pt Saratoga and finance for the 12yrs it will cost as much or more than buying direct at RIV. The interest rate is significantly higher and you have 2yrs of points to sell back and/or rent to get down payment back with direct. So long huge savings if financing.

The ResaleMarket no money down "Sign and Stay" is absurd. I cant fathom why people think its a good deal. The contracts are stripped and the financing is like 17%. Its a fools game. Yet they call it Sign and Stay, but you cant stay anywhere because the contracts are stripped.
As i said to my wife... anytime a salesperson tells you how "Incredible" an offer is, and how its for a limited-time, it shows you how bad of a deal really is for the buyer.

 

[tom1944]

I was surprised to see that between 35-40% of the deeds recorded in 2023 also had a mortgage loan.

 

[ak517]

While I agree that this is a marketing gimmick, you'll see most people on these boards who finance do not actually end up taking 12 years to pay off their DVC loan. From what most people have shared, it seems like that a large fraction of those financing pay off the loans in 1-2 years after closing. And, I have yet to meet a loan with a prepayment penalty. Or, they purchase with financing and do a balance transfer to a credit card with a 0% interest period. There are many creative ways to purchase DVC and they don't all require cash up front.

 

[aceshigh73]

While I agree that this is a marketing gimmick, you'll see most people on these boards who finance do not actually end up taking 12 years to pay off their DVC loan. From what most people have shared, it seems like that a large fraction of those financing pay off the loans in 1-2 years after closing. And, I have yet to meet a loan with a prepayment penalty. Or, they purchase with financing and do a balance transfer to a credit card with a 0% interest period. There are many creative ways to purchase DVC and they don't all require cash up front.

That last 2 sentences are just about the only scenario where I can see this working, but can you transfer a loan to a zero interest CC?

 

[ak517]

That last 2 sentences are just about the only scenario where I can see this working, but can you transfer a loan to a zero interest CC?

It would be a balance transfer so typically subject to a 3-5% fee of the total transfer, and then the payoff can happen over the 0% interest period, but altogether that’s decidedly less than 12%+ interest over 12 years!

 

[tatkins]

That last 2 sentences are just about the only scenario where I can see this working, but can you transfer a loan to a zero interest CC?

Some CC will let you write a check to yourself and then you write a check to pay off the loan(s) you want to.

 

[tatkins]

I realize most people on here say they pay off loans early. But I believe there’s probably a lot more people who don’t. Otherwise companies such as Monera would struggle to pay the bills with little to no interest being paid on loans.

 

[aceshigh73]

I realize most people on here say they pay off loans early. But I believe there’s probably a lot more people who don’t. Otherwise companies such as Monera would struggle to pay the bills with little to no interest being paid on loans.

Exact reasoning and debate on another forum that almost got me booted. People were saying "Pay it off early", wait for a tax return or a bonus". No way a vast majority would do that or probably qualify for that scenario.

 

[thelionqueen]

I realize most people on here say they pay off loans early. But I believe there’s probably a lot more people who don’t. Otherwise companies such as Monera would struggle to pay the bills with little to no interest being paid on loans.

I’d imagine it’s about 50/50. I’ve done financing on all my contracts over the years, and the longest duration was 3 years. It was only like $100 a month back then, so it was negligible and I was younger. But I’d venture to say that most sell them before they pay a 10 year loan.. so there’s that

 

[Unclelude]

Some CC will let you write a check to yourself and then you write a check to pay off the loan(s) you want to.

You can also do a 'poor mans' transfer...

Open a 0% intro card and charge your regular expenses on it, the pay off other (DVC) debt using $$ you would normally use to pay expenses ( plus hopefully extra so you don't dig a hole )

I wouldn't recommend this unless you are really disciplined... You can dig a hole if you don't have the cash flow to pay everything off once the intro period ends.

It's easy to get over 5% on high yield savings or t bills or whatever... We've been using zero percent promos for the last year or so getting plus 5%!!

Have fun!

 

[aceshigh73]

You can also do a 'poor mans' transfer...

Open a 0% intro card and charge your regular expenses on it, the pay off other (DVC) debt using $$ you would normally use to pay expenses ( plus hopefully extra so you don't dig a hole )

I wouldn't recommend this unless you are really disciplined... You can dig a hole if you don't have the cash flow to pay everything off once the intro period ends.

It's easy to get over 5% on high yield savings or t bills or whatever... We've been using zero percent promos for the last year or so getting plus 5%!!

Have fun!

Im trying to stomach something similar with our direct VGF purchase on a 6-month 0% Disney Premier Visa and the 15-month 0% Wells Fargo card. Being credit adverse and having paid all our CC balances in full for the better part of 15 years, its tough to feel comfort with such cc debt.. even at 0% alongside 5+% + in a MMMF or 4.3 % HY Savings. I know the math works, but the mental part doesnt...

 

[intamin]

The ResaleMarket no money down "Sign and Stay" is absurd. I cant fathom why people think its a good deal. The contracts are stripped and the financing is like 17%. Its a fools game. Yet they call it Sign and Stay, but you cant stay anywhere because the contracts are stripped.
As i said to my wife... anytime a salesperson tells you how "Incredible" an offer is, and how its for a limited-time, it shows you how bad of a deal really is for the buyer.

I love the shows they put out and wholeheartedly support DVC Fan and even DVC resale market because of how good their customer service is but god it seems each of their “deals” gets worse and worse (sorry Darth Vader) like Starting with Magic where you get 13-15 per point, obviously it varies but theres no way VGC/BWV/BCV points should go for that little. Then theres the trade in points for tickets, cruises etc. and now this sign and stay stuff? Financing at 10-12% is extremely difficult to argue for as is on a luxury expense. 17% is downright irresponsible.

 

[Cfabar1]

Yeah, I think overall financing resale ends up being cheaper than paying cash direct. Or can be. Depends on the contracts you want to pursue.

My view is prices will continue to go down, so no hurry. Maybe save up the cash and buy resale in cash, which will be the cheapest option. But yes, I think resale is a good way to go right now.

 

[tom1944]

Yeah, I think overall financing resale ends up being cheaper than paying cash direct. Or can be. Depends on the contracts you want to pursue.

My view is prices will continue to go down, so no hurry. Maybe save up the cash and buy resale in cash, which will be the cheapest option. But yes, I think resale is a good way to go right now.

That is my plan.

I will book a trip for August 2024 and use August 2024 and 2025 points.

That means if I want to take a 2025 trip I need another contract. The plan is to decide what types of vacation we like based on our 2023 and 2024 trips and buy enough points to take that kind of trip every year. We currently have 180 points. We will most likely need another 160 to 200. 340 to 380 points should be enough for 9 days in August or January. Sometimes a 1 bedroom sometimes a 2 bedroom. Sometimes a split stay.

I am retired but have a WFH make my own hours tax/bookkeeping business which is strictly for vacation costs.
The income should cover park costs, restaurants and travel costs etc with excess going to buy a second contract. By next September I should have enough in the account to cover the August vacation and purchase a second contract.

Currently we have zero debt and I would like to keep it that way.

 

[tatkins]

Yeah, I think overall financing resale ends up being cheaper than paying cash direct. Or can be. Depends on the contracts you want to pursue.

My view is prices will continue to go down, so no hurry. Maybe save up the cash and buy resale in cash, which will be the cheapest option. But yes, I think resale is a good way to go right now.

In this case you are wrong. This is why I made this post. Right now a Saratoga 162pt contract at $109/pt is 17,658. If you do the deal with no money down and no credit check that will cost you $42,844.32 if you just make the payments. You can finance 150pts direct with Disney for very close to the same maybe less and get 16yrs more of points.

 

[disneydreamer1980]

“Sign and stay” is ridiculous. Besides the insane financial part, as a pp said all of the contracts are so stripped that it would be more like “sign and stay in 2 years”

 

[Cfabar1]

In this case you are wrong. This is why I made this post. Right now a Saratoga 162pt contract at $109/pt is 17,658. If you do the deal with no money down and no credit check that will cost you $42,844.32 if you just make the payments. You can finance 150pts direct with Disney for very close to the same maybe less and get 16yrs more of points.

I think sign and stay is an extreme example. That’s not what I was referencing or not what I meant to be referencing anyways.

 

[CastAStone]

I’m not wishing to make this post about how irresponsible financing is. I’m just wanting to point something out that I find very interesting. Currently there’s a no money down promo for resale. If you take that deal on a 150pt Saratoga and finance for the 12yrs it will cost as much or more than buying direct at RIV. The interest rate is significantly higher and you have 2yrs of points to sell back and/or rent to get down payment back with direct. So long huge savings if financing.

Anyone who has to finance resale will surely have to finance direct as well, and my spot checks on the topic have shown Monera and Disney have very similar overall interest rates.

So I’m not sure I’m following.

Of course financing something makes it cost more.

 

[tatkins]

Anyone who has to finance resale will surely have to finance direct as well, and my spot checks on the topic have shown Monera and Disney have very similar overall interest rates.

So I’m not sure I’m following.

Of course financing something makes it cost more.

The current promo requires you take the no credit check option which is 17.9% vs direct at 9.9%. Monera has adjusted their rates like all the other banks I have looked at for all loan types. However, Disney has not changed the rates.