wanting to buy in Direct

[DisneyMarv]

OK i have been wanting to buy points at the AKV for some time now i have never done the Tours but i have done some research here and there. How Much would my down payment be if i was to purchase a 160 Points contract.

 

[havertown]

DVC finances with 10% or 20% down?


You get a better interest rate if you put more $ down

 

[DisneyMarv]

ok thanks does any one know what the tour consist of is it worth doing ?

 

[BestDadEver]

Not sure about the better rate with more down I got the best rate with min down . You will get a cheaper payment . They base the rate on your credit . Its probably close to $2000 do on 160 points .

The tour is great cause they will have actual full size models of what your buying , but thats really it . You can see the theme and size . And they show you a video and obviously go over you pricing options .

 

[DisneyMarv]

i have heard that they compare the sale of the dvc close to buying a car, and thanks i will see if i get a chance to attend a tour maybe while i'm at Disney during MNSSHP in October.

 

[ELMC]

OK i have been wanting to buy points at the AKV for some time now i have never done the Tours but i have done some research here and there. How Much would my down payment be if i was to purchase a 160 Points contract.

It has been pointed out to me that at times I do not answer the question asked and instead go off on what seems to be a tangent (but actually isn't...agree to disagree I suppose). My position has been that it is our responsibility to not only answer the questions that are asked, but the questions that sometimes the OP does not know to ask. To that end, I have two different responses to your question. The first is a straight up answer. If you think you know everything you need to know except this one piece of information, then simply read this and close the browser. The second is a more in depth discussion of the path you are seeking to embark upon. If you want to learn more about what you're looking to get into and why, read response #2.

Response #1:

$2,320. Perhaps a little less depending on incentives.



Response #2:

It's interesting that the title of your thread is "want to buy in direct". There are really three separate issues there, and I'm not sure the previous responses identified two of them. First off, please know that you're not buying "in" anything, you are buying a timeshare. That means that you will have a substantial up front payment and rising annual maintenance fees for the life of the contract. If you choose to finance, you will also have a substantial monthly payment as well. That's what you're buying "into". Not much of a club if you ask me.

The second issue is why do you want to buy DVC? Are you asking for advice if it's a good fit for you or have you already made this decision? If you have, what have you based this decision on? Why do you want to buy 160 points? Have you tracked your historical vacation patterns and determined that this is the correct amount of points for you, or did you choose it because it is the antiquated and arbitrary point amount set by DVD?

The third issue is why are you so sure that you want to buy direct? Are you aware of the fact that you can get AKV points on the resale market for less than half of what you would pay direct. Did you know that if you finance a direct purchase that the alternative of buying resale is actually a third the cost of that option? Or, put another way, if you buy AKV direct and finance you will be stuck in that option essentially forever. The cash value of your contract will immediately shrink by half and your loan balance will make it impossible for you to sell the contract without having to come up with a large sum of money. To me that doesn't sound like a great position to be in.

Fast forward to my opinion on this situation, I think there are a few valid reasons to buy direct. Buying a small contract or a new resort are two of the main ones. In my opinion, there is absolutely nothing you can tell me that could convince me that buying AKV direct at today's prices is a good decision, financial or otherwise. You can double that if you decide to finance. That being said, people do it all the time, so maybe I'm the one who's wrong.

 

[rusafee1183]

I agree that we put the minumum amount down (10%) and got their lowest interest rate they offered. We also have a really high credit score, so obviously that helped us get the rate we did.

One more thing to add, and I obviously have no idea if this helped us or not - but I was not eager at all. I was actually very hesitant, and wanted to hear ALL the numbers backwards and forwards before I made the decision.

They are much less likely to give you a better deal or work the numbers to your advantage if you go in there and don't make them sell it to you. You know?

 

[ELMC]

i have heard that they compare the sale of the dvc close to buying a car, and thanks i will see if i get a chance to attend a tour maybe while i'm at Disney during MNSSHP in October.

Some might do that, but with all due respect it is a ridiculous comparison. A car is a mode of transportation that is necessary for many people to go from one place to another, including their jobs as well as to obtain other necessities (such as food). DVC is a timeshare, which is just one of many ways to go on vacation and if not done properly can be a more expensive or problematic way to do so. A car is a necessity, a timeshare is a luxury purchase. Although both are depreciating assets, a car only loses about 10% of its value each year. Depending on which resort you purchase, DVC could lose up to 60% of it's value starting 11 days after you sign the contract.

I would do yourself a favor and read as much as you can before you go on the tour. Arm yourself with knowledge, because your "guide" on the tour is actually a salesperson, and a good one at that. He's going to tell you everything he can to convince you to purchase, regardless of whether or not it's good for you. Without learning about all your options, you really don't stand a chance.

 

[DisneyMarv]

It has been pointed out to me that at times I do not answer the question asked and instead go off on what seems to be a tangent (but actually isn't...agree to disagree I suppose). My position has been that it is our responsibility to not only answer the questions that are asked, but the questions that sometimes the OP does not know to ask. To that end, I have two different responses to your question. The first is a straight up answer. If you think you know everything you need to know except this one piece of information, then simply read this and close the browser. The second is a more in depth discussion of the path you are seeking to embark upon. If you want to learn more about what you're looking to get into and why, read response #2.

Response #1:

$2,320. Perhaps a little less depending on incentives.



Response #2:

It's interesting that the title of your thread is "want to buy in direct". There are really three separate issues there, and I'm not sure the previous responses identified two of them. First off, please know that you're not buying "in" anything, you are buying a timeshare. That means that you will have a substantial up front payment and rising annual maintenance fees for the life of the contract. If you choose to finance, you will also have a substantial monthly payment as well. That's what you're buying "into". Not much of a club if you ask me.

The second issue is why do you want to buy DVC? Are you asking for advice if it's a good fit for you or have you already made this decision? If you have, what have you based this decision on? Why do you want to buy 160 points? Have you tracked your historical vacation patterns and determined that this is the correct amount of points for you, or did you choose it because it is the antiquated and arbitrary point amount set by DVD?

The third issue is why are you so sure that you want to buy direct? Are you aware of the fact that you can get AKV points on the resale market for less than half of what you would pay direct. Did you know that if you finance a direct purchase that the alternative of buying resale is actually a third the cost of that option? Or, put another way, if you buy AKV direct and finance you will be stuck in that option essentially forever. The cash value of your contract will immediately shrink by half and your loan balance will make it impossible for you to sell the contract without having to come up with a large sum of money. To me that doesn't sound like a great position to be in.

Fast forward to my opinion on this situation, I think there are a few valid reasons to buy direct. Buying a small contract or a new resort are two of the main ones. In my opinion, there is absolutely nothing you can tell me that could convince me that buying AKV direct at today's prices is a good decision, financial or otherwise. You can double that if you decide to finance. That being said, people do it all the time, so maybe I'm the one who's wrong.

pretty much on your second option of why i'm wanting to purchase is the reason i am a annual passholder so i see myself frequently going to Disney World More this year and taking more trips the following and pretty much what i have spend on resorts through out the year i can pretty much say i could of saved it for the Purchase of the Time Shares pretty much i have stayed in Deluxe Resorts spending more and more each year. So I came up with the Idea of why not go ahead and become a Member. And on your third issue i must say i have visited the site Fidelity and yeah i have done some exploring there and that's why i wanted insight from others as seeing also going in resale you get restrictions from what Direct Owners can do and enjoy but like you said. I will have to keep Doing my Homework to build my Knowledge on this

 

[BestDadEver]

i have heard that they compare the sale of the dvc close to buying a car, and thanks i will see if i get a chance to attend a tour maybe while i'm at Disney during MNSSHP in October.

I wouldn't say that the interest rate is much higher around 10% and they stretch the loan to 10 year if you want . You can do less years .

 

[Missyrose]

I wouldn't say that the interest rate is much higher around 10% and they stretch the loan to 10 year if you want . You can do less years .

Yes, but a car loan is often financed at around 5 percent and the loan length is usually five years. Paying for a direct contract over a 10-year period effectively doubles the price. Would you buy AKV for what amounts to $290 per point?

 

[Minniesgal]

I would warn you that disney interest rates are very very high. We financed as my savings were in a notice account so i didn't have instant access. once home i found i really didn't want to half my savings as I trusted myself more to pay down the loan quickly than replenish my savings so we have put every spare penny into the loan and will have paid it off next month after 9 months. The loan allows you to overpay by however much you want each month and it is nice to see the interest payments come right down as you overpay. I shudder at the thought of the cost over 10 years.

My happiness at alsmot having fully paid is only shadowed by my desire for a small add on at VGF

 

[BestDadEver]

Yes, but a car loan is often financed at around 5 percent and the loan length is usually five years. Paying for a direct contract over a 10-year period effectively doubles the price. Would you buy AKV for what amounts to $290 per point?

Read my post again . I said that I would not compare it to a car loan

 

[Nabas]

OK i have been wanting to buy points at the AKV for some time now i have never done the Tours but i have done some research here and there. How Much would my down payment be if i was to purchase a 160 Points contract.

Don't finance! If you cannot afford to pay cash, DVC is a poor use of your money.

Depending on how much you put down and your credit rating, Disney charges from around 10% to 17%. Those rates are crazy. The money you might save by joining DVC will be lost on financing. Disney often sells DVC as a way to save money on Deluxe Resort stays. However, if you finance, you could end up spending more than if you simply rented rooms from Disney with a (for example) 30% "Room Only" Deluxe Resort discount. In 2012 & 2013, Disney has offered "Room Only" discounts for most of the year with only a few peak days blacked out.

Alternatively, consider renting DVC points. Even at $14/point, it could take over 15 years to reach the break-even point compared to paying cash at $130/point. (About what AKV currently costs with incentives.)

Consider saving your money and buying a resale for half the price.

All you have do to is looking at the DVC resale sites and see the number of people asking crazy prices (that they'll never get) or watch the Orange County Comptroller website for the number of DVC foreclosures to realize that financing a DVC purchase is a bad idea.

I realize you might want to be a DVC member but don't let that desire override financial common sense.

 

[deploylinux]

Finance can make sense in some situations, but if possible -- pay it off quickly. There is no penalty to prepay and you can include a letter with your purchase documents stating that you wish your monthly payments recalculated to pay off in 30 months rather than the default 60/120 months. You can also put down more than the minimum w/o paying off the complete balance immediately. Basically, financing can work out and dvc is flexible....but you should really be careful about just paying the minimum and using the default terms offered by DVC.

 

[Imagineer2Be]

Finance can make sense in some situations, but if possible -- pay it off quickly. There is no penalty to prepay and you can include a letter with your purchase documents stating that you wish your monthly payments recalculated to pay off in 30 months rather than the default 60/120 months. You can also put down more than the minimum w/o paying off the complete balance immediately. Basically, financing can work out and dvc is flexible....but you should really be careful about just paying the minimum and using the default terms offered by DVC.

We financed because we had some uncertainty with moving coming in the next 6 months after purchasing. That said, now that we are stable, we should have it paid off within 8 months of buying it. Sometimes financing is the best option, but 10 years at 10% or more is not a good option. If you must finance, then pay more off than necessary a month. It will help you get ahead.

 

[JimMIA]

Did you know that if you finance a direct purchase that the alternative of buying resale is actually a third the cost of that option? Or, put another way, if you buy AKV direct and finance you will be stuck in that option essentially forever. The cash value of your contract will immediately shrink by half and your loan balance will make it impossible for you to sell the contract without having to come up with a large sum of money. To me that doesn't sound like a great position to be in.

I've never seen this presented quite this way, but it is worded beautifully and presents another aspect of buying/financing that prospective buyers definitely should look at -- how does this deal look if something happens and I HAVE to get out?

Nobody buys into DVC with the intention of getting out, but that is one part of the deal that we certainly should explore...especially if you are financing.

I believe the current direct price for 160 AKV points is $145-$10 = $135. The most recent reported 160-point AKV resale on the ROFR thread was $57 for a contract with no banked points. Other 160 point contracts are shown at $60 and $67 for a fully-loaded contract with the seller paying a lot of the costs. There are zero reported ROFRs of AKV, so I'd say prices haven't hit bottom yet, but I'd say a guesstimate of $60 is about right for an average AKV 160-point resale.

At that price, the value of your contract at the moment of closing is about 45% of what you just paid.

In dollars -- if something happens and you need to get out -- it looks like this:

Purchase price (160 X $135) = $21,600
Less 10% down payment ($2160)
Amount financed = $19,440

Over time, some of the balance will be paid down, but the resale prices will also decline. So, for the sake of discussion, let's assume minimal effect on both of those.

Here's how it looks if you have to sell:

Selling price (160 X $60) = $9,600
less 10% commission ($960)
Proceeds of sale = $8,640

Cash needed to close (from YOU, not the buyer):

$19,440 mortgage
- $8,640 proceeds
= $10,800

This is not a pretty picture, and it is not uncommon. Over the last several years, we have seen numerous situations here on the DIS where members have been forced to sell for various reasons -- illness, loss of job, business setbacks, divorce, bankruptcy, etc, etc, etc.

It happens, and it happens frequently enough that prospective buyers should look at that aspect of this luxury purchase.

 

[JimMIA]

also going in resale you get restrictions from what Direct Owners can do and enjoy

Research those restrictions very carefully before you take them seriously.

You will find that most of them carry VERY high points costs that make them bad options. In addition, all of those non-DVC uses of points are perks. They are not guaranteed to direct purchasers and can change, or go away entirely, at any time.

The best strategy, whether you buy direct or resale, is to only consider the value of using DVC points at DVC resorts. That's where the value is.

 

[DisneyMarv]

I've never seen this presented quite this way, but it is worded beautifully and presents another aspect of buying/financing that prospective buyers definitely should look at -- how does this deal look if something happens and I HAVE to get out?

Nobody buys into DVC with the intention of getting out, but that is one part of the deal that we certainly should explore...especially if you are financing.

I believe the current direct price for 160 AKV points is $145-$10 = $135. The most recent reported 160-point AKV resale on the ROFR thread was $57 for a contract with no banked points. Other 160 point contracts are shown at $60 and $67 for a fully-loaded contract with the seller paying a lot of the costs. There are zero reported ROFRs of AKV, so I'd say prices haven't hit bottom yet, but I'd say a guesstimate of $60 is about right for an average AKV 160-point resale.

At that price, the value of your contract at the moment of closing is about 45% of what you just paid.

In dollars -- if something happens and you need to get out -- it looks like this:

Purchase price (160 X $135) = $21,600
Less 10% down payment ($2160)
Amount financed = $19,440

Over time, some of the balance will be paid down, but the resale prices will also decline. So, for the sake of discussion, let's assume minimal effect on both of those.

Here's how it looks if you have to sell:

Selling price (160 X $60) = $9,600
less 10% commission ($960)
Proceeds of sale = $8,640

Cash needed to close (from YOU, not the buyer):

$19,440 mortgage
- $8,640 proceeds
= $10,800

This is not a pretty picture, and it is not uncommon. Over the last several years, we have seen numerous situations here on the DIS where members have been forced to sell for various reasons -- illness, loss of job, business setbacks, divorce, bankruptcy, etc, etc, etc.

It happens, and it happens frequently enough that prospective buyers should look at that aspect of this luxury purchase.

this is pretty much good information, I don't know maybe i just might look into resale since it looks like a good option my credit is also good at the moment so i have no problem in that area.

 

[staceymay00]

this is pretty much good information, I don't know maybe i just might look into resale since it looks like a good option my credit is also good at the moment so i have no problem in that area.

Definitely look at both options. This is not always the case, but there is a big spread between AKV direct and AKV resale. It is a resort that I am considering as an add on because we recently stayed there for the first time and enjoyed it. I am almost positive we would only buy resale, however, because the direct price is so mush higher than resale. The restrictions with resale, in my opinion, are not worth the large difference in price.

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