The "I financed DVC and am glad I did" club

[jodifla]

We financed and are glad we did. It's been paid off for more than 13 years now; we've owned for 18 years. We just used the cash we were already spending on Disney to pay off the DVC over the course of the loan.

If we'd waited until we had all the cash in hand, it would have been like the couple in the movie "Up" who never got to go anywhere or do anything because some big expense always came up. Also, we bought in at a fraction of the cost the units go for now. If we'd waited, the price would have been skyrocketing up at the same time we were trying to save. Also, we didn't spend all that cash on hotel rooms -- we funneled into DVC payments.

Who else is glad they bucked the traditional wisdom and financed? (And a bit sick of the endless "if you have to finance a luxury, you can't afford it" threads?)

 

[WilsonFlyer]

We did and we are.

I've actually torn into some tirades from the holier-than-thou types when these threads pop up and go on and on. You should do a search.

 

[WilsonFlyer]

Here:

http://www.disboards.com/showthread.php?t=2139697&highlight=financing+dvc&page=2

 

[heynowirv]

Our first contract was a resale that we had the money for because I sold my house when I moved into my wife's.We added on a 61 point contract direct and financed it ,paid it off in 5 years and have absolutely no regrets we did!

 

[davedmaine]

We did and we are. I've actually torn into some tirades from the holier-than-thou tyeps when these threads pop up and go on and on. You should do a search.

Not holier, but I don't think any financial planner would recommend financing a timeshare. For every 1 positive outcome, there are 25 negative ones

 

[tjkraz]

Not holier, but I don't think any financial planner would recommend financing a timeshare. For every 1 positive outcome, there are 25 negative ones

Given the high resale value DVC tends to sustain, probably not fair to lump DVC in with all other timeshares.

Even now, buying VGF at $165 isn't much of a risk. Taking into account the 10-20% down payment, the loan balance is within a stone's throw of today's $140 resale asking prices. Rent out a year's points and you'll recoup enough to cover commissions on the sale.

I'm quite sure there are people who have lost money on their DVC, encountering a financial crisis shortly after buying and discovering that their points don't hold much resale value. But it's nothing close to a 96% failure rate.

 

[jodifla]

Not holier, but I don't think any financial planner would recommend financing a timeshare. For every 1 positive outcome, there are 25 negative ones

That's the knee-jerk reaction. It worked perfectly for us.

 

[DisneyRegulars]

Not holier, but I don't think any financial planner would recommend financing a timeshare. For every 1 positive outcome, there are 25 negative ones

I think your numbers are a bit on the ridiculously high side. If for every 1 positive there were 25 negatives, the market would be flooded with resale contracts, and that's just not the case. I imagine the majority of buyers are financing too.

You can count me in on the happy to have financed camp. We got personal loans for resale contracts, both with five year terms. I wouldn't trade any of the amazing vacations we have had over the past 4 years for the thousand dollarsish we would have saved in interest if we had waited the 8-10 years to pay cash.

 

[crisi]

I think your numbers are a bit on the ridiculously high side. If for every 1 positive there were 25 negatives, the market would be flooded with resale contracts, and that's just not the case. I imagine the majority of buyers are financing too.

You can count me in on the happy to have financed camp. We got personal loans for resale contracts, both with five year terms. I wouldn't trade any of the amazing vacations we have had over the past 4 years for the thousand dollarsish we would have saved in interest if we had waited the 8-10 years to pay cash.

I think he's right on in terms of timeshares in general. DVC - as Tim says - has tended to have a high resale value and therefore fewer negative outcomes. That doesn't mean that there haven't been, and I think its really irresponsible to recommend to anyone else that they finance DVC. I still feel really bad about what happened to some fellow members in 2008-2009. It may have worked out great for you - but if someone else were to act on "it worked great for me" and it didn't work out for them - I'd feel culpable.

Then again, not only did I wait until I could afford DVC, I waited to have children until I could afford them. So at not yet 50, I have high school kids with fully funded college funds to private schools, and both my husband and I are semi retired. I started working my back end off at 16, and lived very frugally for a very long time, and got lucky.

 

[gzmtlock]

We just became members in June. Financed. We had the cash, but spending that much would have depleted our reserves too much for comfort. Other than our mortgage, this loan is our only debt. We will pay it off early, but in a way that also leaves us comfortable with our reserves.

To each his own.

 

[jodifla]

I think he's right on in terms of timeshares in general. DVC - as Tim says - has tended to have a high resale value and therefore fewer negative outcomes. That doesn't mean that there haven't been, and I think its really irresponsible to recommend to anyone else that they finance DVC. I still feel really bad about what happened to some fellow members in 2008-2009. It may have worked out great for you - but if someone else were to act on "it worked great for me" and it didn't work out for them - I'd feel culpable.

Then again, not only did I wait until I could afford DVC, I waited to have children until I could afford them. So at not yet 50, I have high school kids with fully funded college funds to private schools, and both my husband and I are semi retired. I started working my back end off at 16, and lived very frugally for a very long time, and got lucky.

Everybody has to assess their own financial situations to see if it makes sense. The problem is the blanket assertion that everyone who finances a timeshare is irresponsible and headed for financial disaster. That certainly hasn't been the case for us. We could sell our DVC now for what we paid for it, after almost 20 years of use, and we would then have just spend our dues on almost annual fabulous vacation stays.

 

[gonzalj1]

Everybody has to assess their own financial situations to see if it makes sense. The problem is the blanket assertion that everyone who finances a timeshare is irresponsible and headed for financial disaster. That certainly hasn't been the case for us. We could sell our DVC now for what we paid for it, after almost 20 years of use, and we would then have just spend our dues on almost annual fabulous vacation stays.

Exactly this. Whether or not to finance a purchase is a personal decision that relies on several variables that are unique to each situation. DW and I financed our purchase back in 2001 and are glad we did. Sure, we paid more than we would have had we purchased it outright but we feel we made the right decision for us.

To each his own. Everyone has their situation and makes the decision that is right for them. Of course, in hindsight, each decision looks right or wrong when viewed in the context of actual events over time. But many of these circumstances can not be foreseen and, therefore, are challenging to plan for.

 

[jakenjess]

We financed and are glad we did. It's been paid off for more than 13 years now; we've owned for 18 years. We just used the cash we were already spending on Disney to pay off the DVC over the course of the loan.

If we'd waited until we had all the cash in hand, it would have been like the couple in the movie "Up" who never got to go anywhere or do anything because some big expense always came up. Also, we bought in at a fraction of the cost the units go for now. If we'd waited, the price would have been skyrocketing up at the same time we were trying to save. Also, we didn't spend all that cash on hotel rooms -- we funneled into DVC payments.

Who else is glad they bucked the traditional wisdom and financed? (And a bit sick of the endless "if you have to finance a luxury, you can't afford it" threads?)

We are right there with ya! If we had waited, we wouldn't have had all those trips with our kids when they were growing up. Hard to put a price on that. The monthly payments weren't a stretch, and we could sell right now for a decent price (although we plan to enjoy our DVC for many years to come). There are some things worth a higher price.

 

[crisi]

Everybody has to assess their own financial situations to see if it makes sense. The problem is the blanket assertion that everyone who finances a timeshare is irresponsible and headed for financial disaster. That certainly hasn't been the case for us. We could sell our DVC now for what we paid for it, after almost 20 years of use, and we would then have just spend our dues on almost annual fabulous vacation stays.

I certainly agree with that! There are plenty of people who finance who are in good positions to finance. But there are also plenty of people who are looking for justification for a poor decision.

I think that one of the critical factors is if you need to finance, rather than you choose to finance. If you'd never get DVC without financing then you are speculating - hoping that your situation will work out as yours has - that while you have payments, you are able to afford the payments and that if you can no longer afford the payments due to job loss or illness or divorce or some other unforeseen situation, that you will not be underwater. Speculating can work out great - but you have to understand you are taking a risk, and be willing to take it. Being able to measure that risk is something we human beings are lousy at. And everyone has a different risk tolerance. The thing is - a lot of people are blind to their being risk at all. And they'll look at a case like yours and base future performance on past performance. But I don't think we will ever see a day again when you could buy DVC direct and five years later be able to sell it at a profit. We bought - you and I - during the golden days of DVC - like investing in the stock market in 1992. It was awesome - I could sell at a profit now as well - but it might never work that way again.

 

[tjkraz]

I certainly agree with that! There are plenty of people who finance who are in good positions to finance. But there are also plenty of people who are looking for justification for a poor decision.

I agree. It's not a black and white issue...there are many shades of gray.

I don't think many people recognize that they are just one layoff, traffic accident or flooded basement away from financial hardship. No matter the circumstances, many have been fortunate enough to avoid worst case scenarios. Others have not been so lucky.

 

[jodifla]

I certainly agree with that! There are plenty of people who finance who are in good positions to finance. But there are also plenty of people who are looking for justification for a poor decision.

I think that one of the critical factors is if you need to finance, rather than you choose to finance. If you'd never get DVC without financing then you are speculating - hoping that your situation will work out as yours has - that while you have payments, you are able to afford the payments and that if you can no longer afford the payments due to job loss or illness or divorce or some other unforeseen situation, that you will not be underwater. Speculating can work out great - but you have to understand you are taking a risk, and be willing to take it. Being able to measure that risk is something we human beings are lousy at. And everyone has a different risk tolerance. The thing is - a lot of people are blind to their being risk at all. And they'll look at a case like yours and base future performance on past performance. But I don't think we will ever see a day again when you could buy DVC direct and five years later be able to sell it at a profit. We bought - you and I - during the golden days of DVC - like investing in the stock market in 1992. It was awesome - I could sell at a profit now as well - but it might never work that way again.

Yes, I am not much of a speculator. I have a low risk tolerance. So when we parsed through the numbers of DVC back in 1996, it was easy to see that we would come out in almost all scenarios as "winners" -- ie, great vacation accommodations at affordable prices. We put off buying a car until the DVC was paid off, so again, that cash flow worked well for us.

The other thing about us is once we save money, we put it away. So we have retirement and college savings as well.

I do see people all the time that lament that they didn't buy back in 1996 or whenever they first looked. Instead, they waited; things came up through their lives that cost them money, then the DVC prices skyrocketed, they kept vacationing at Disney but not through DVC -- basically, they lost out. And now their children are grown, so that opportunity is gone for those kind of family vacations.

 

[hebbynan]

I am SO glad I found this thread. Hubby and I are looking to buy into DVC in the next 2 years (looking to buy resale at VWL). And we will need to finance the purchase after our down payment. I read thread after thread of people saying to pay with cash, but we want to start using the perks, not having to wait until we saved up the money (which we know we probably never would because something would inevitably keep coming up). Thank you to everyone who commented here...you've made me feel secure in our decision!

 

[crisi]

So hebbynan - here is the question - how are you going to pay for the things that inevitably come up if you have a DVC payment to make? If you can do both - then financing might not be perfect, but it might not be horrible. If suddenly the car needs $2000 worth of work and the furnace needs to be replaced - can you do that AND make the DVC payments? That's the risk.

Those things that inevitably come up - they'll come up when you have a DVC payment as well. Only now you have a DVC payment - and that means that its much harder to pull your trip back (stay offsite, go for fewer days) to pay for the furnace because "we have the points."

 

[tjkraz]

I'll just say this: We financed our first contract years ago (and paid it off long before the end date of the loan.) And when it was finally paid off, the reaction was not "see, all of those naysayers were wrong about the evils of financing."

In reality, the reaction was something to the effect of "whew...we were fortunate that none of the worst-case scenarios manifested before we got it paid off!"

There is a very real risk involved in financing a non-essential purchase like this. Buying the DVC points isn't the only expense...rather it's just the beginning. In addition to that mortgage you've got annual dues, theme park tickets, transportation and a whole host of expenses that go hand-in-hand with using the points.

We waited about 6 years from the time we first discovered DVC until we actually purchased. And yes, prices increased over that period. The knee-jerk response is to regret not buying sooner at the lower price. But over those 6 years we bought our first house (and put a lot of money into it) and had two children. We spent 6 years sacrificing things like vacations so that we could accomplish our bigger goals.

I shutter to think of the compromises we may have been forced to make if we'd have bought the DVC points 6 years sooner and been saddled with those additional financial burdens.

 

[jodifla]

I'll just say this: We financed our first contract years ago (and paid it off long before the end date of the loan.) And when it was finally paid off, the reaction was not "see, all of those naysayers were wrong about the evils of financing."

In reality, the reaction was something to the effect of "whew...we were fortunate that none of the worst-case scenarios manifested before we got it paid off!"

There is a very real risk involved in financing a non-essential purchase like this. Buying the DVC points isn't the only expense...rather it's just the beginning. In addition to that mortgage you've got annual dues, theme park tickets, transportation and a whole host of expenses that go hand-in-hand with using the points.

We waited about 6 years from the time we first discovered DVC until we actually purchased. And yes, prices increased over that period. The knee-jerk response is to regret not buying sooner at the lower price. But over those 6 years we bought our first house (and put a lot of money into it) and had two children. We spent 6 years sacrificing things like vacations so that we could accomplish our bigger goals.

I shutter to think of the compromises we may have been forced to make if we'd have bought the DVC points 6 years sooner and been saddled with those additional financial burdens.

Worst case scenario with our DVC points is we sell them. At no point have our points been worth much less than we paid for them. Again, not seeing the horror here.