Stripped Contract - A few questions

[cpc430]

So in considering all the options for resale, Im looking at stripped contracts and want to make sure I understand it correctly. My family is traveling to WDW this summer and ideally, would like to travel to Hawaii next summer (June or July).

If I were to purchase a currently stripped contract (for example, 10 points coming on 4/1/14), would I be able to make a reservation (pending availability of course) for July 2014 using the current 10 points, plus points borrowed from 2015? If I wanted to book the Hawaii trip in the summer of 2015, I could then borrow my 2016 points? In 2016, we would take a break from DVC travel to get back to the current years points (so in 2017, we would be on track to use 2017 points).

Am I understanding how it works to borrow? Can I be the the negative two years in a row (borrowing, then borrowing again)? I've been paying the most attention to loaded contracts and those with the majority of the current use years points coming. Perhaps a stripped contract could work for our travel plans (because we are traveling this summer and want to travel next year too) and it would give me additional contract options to consider bidding on (for a lower price too).

Are there any other reasons that a stripped contract is less desirable (other than not having the current years points)?

Thanks!

 

[nalajms]

If I were to purchase a currently stripped contract (for example, 10 points coming on 4/1/14), would I be able to make a reservation (pending availability of course) for July 2014 using the current 10 points, plus points borrowed from 2015? If I wanted to book the Hawaii trip in the summer of 2015, I could then borrow my 2016 points?

For a June 2015 or later vacation, you'd need a UY before summer (Feb, Mar, Apr, June). You'd bank the '14 points, use '15 points, and can borrow '16 points.

If you had an Aug, Sept, Oct, Dec UY, you'd be borrowing 2015 points for next summer.

Good luck with the search!

 

[disneynutz]

Points need to be in your account at the time of your stay, not when you book the reservation.

Bill

 

[Dean]

So in considering all the options for resale, Im looking at stripped contracts and want to make sure I understand it correctly. My family is traveling to WDW this summer and ideally, would like to travel to Hawaii next summer (June or July).

If I were to purchase a currently stripped contract (for example, 10 points coming on 4/1/14), would I be able to make a reservation (pending availability of course) for July 2014 using the current 10 points, plus points borrowed from 2015? If I wanted to book the Hawaii trip in the summer of 2015, I could then borrow my 2016 points? In 2016, we would take a break from DVC travel to get back to the current years points (so in 2017, we would be on track to use 2017 points).

Am I understanding how it works to borrow? Can I be the the negative two years in a row (borrowing, then borrowing again)? I've been paying the most attention to loaded contracts and those with the majority of the current use years points coming. Perhaps a stripped contract could work for our travel plans (because we are traveling this summer and want to travel next year too) and it would give me additional contract options to consider bidding on (for a lower price too).

Are there any other reasons that a stripped contract is less desirable (other than not having the current years points)?

Thanks!

Realize that stripped contracts rarely come at the discount they should when you adjust for $11-13 a point (inc maint fees) for each one that's not present. You're generally better off getting a loaded contract that's a little smaller or renting out the points you can't use up front.

 

[cpc430]

Points need to be in your account at the time of your stay, not when you book the reservation.

Bill

So if making a reservation for July 2014, with a use year of April or June, I could borrow from my 2015 point allotment? Then for a reservation in July of 2015, I could borrow from the 2016 allotment? Since the contract is stripped, the points won't be there until I borrow them. I just want to make sure that's possible.

 

[cpc430]

Realize that stripped contracts rarely come at the discount they should when you adjust for $11-13 a point (inc maint fees) for each one that's not present. You're generally better off getting a loaded contract that's a little smaller or renting out the points you can't use up front.

Great point to consider. I prefer to find a loaded contract, but didn't want to take stripped contracts out of the mix if it could work for me.

 

[Dean]

Great point to consider. I prefer to find a loaded contract, but didn't want to take stripped contracts out of the mix if it could work for me.

It's actually pretty easy to compare a given contract based on points availability. All else the same (UY, # of points) it's simply the value you assign to each point which I'd say is around $11 a point currently but that includes the dues you're paying on those points. Don't forget to ignore value for any points you can't use such as points that will expire before you could complete the transfer and use the points. 2 Extreme examples assuming August UY and 100 points: Loaded at 100 banked 2012 points, all 2013 points and all 2014 points upcoming vs say no points until August 2015. If buying that contract retail you'd generally get 2013 and 2014 points and automatic banking even if past the deadline but 100 less points. Basically the stripped contract is worth around $2400 less with those assumptions. I arrived at that by deducting $5 per point for the current points and the banked points and $11 a point for the 2014 points. I also deducted $300 for the fees you'd pay in 2015 for the 7 months of the points you didn't get in 2014. That assumes no dues reimbursement for the 2013 points or banked points on the loaded contract which could further increase the difference. So in reality a stripped contract is worth about 75% of a fully loaded all else equal. You can use the same principles to compare different sized contracts and different UY. The prices are not 25% different on the resale market.