wanting to buy in Direct

[DougEMG]

Ok so for my reservation in December that I have right now... Two studios for three nights, online if I booked right now would cost me $4570. I have an annual pass so don't need tickets. I will drive there so no airfare. Pretty much no package options out there other than to pay cash.

How is buying not cheaper in the long run?

Eta make that 4950.

That's exactly the point I was making, we all buy DVC because we think it will save us money over paying cash. Everyone buys DVC because they want to save money over the long run, so I think we both agree on this.

 

[crisi]

Do you mean "people who buy direct"?

Yes, sorry. Morning lack of caffeine

 

[k3chantal]

I find it hard to believe that with inflation and the amount of time you can own DVC that if you finance it won't cost you less in the long run . It would just take longer .

Are you factoring in interest?

Or are you saying that just owning DVC makes staying at WDW less expensive than paying cash for a room?

 

[Nabas]

Ok so for my reservation in December that I have right now... Two studios for three nights, online if I booked right now would cost me $4570. I have an annual pass so don't need tickets. I will drive there so no airfare. Pretty much no package options out there other than to pay cash.

How is buying not cheaper in the long run?

Eta make that 4950.

Assuming you book 2 Studios at BCV for 3 nights during peak holiday season. Since Christmas is a Wednesday this year, I'll assume you begin the 26th (Thursday, Friday, and Saturday nights).

Cost of rooms from WDW
$597/night (BCV Studio) X 1.125 (tax) X 3 nights X 2 rooms = $4029.75
(Note this matches the rate I was quoted from disneyworld.com)

Cost of rooms in MF
Points required: 25/night weekday, 28/night weekend
2013 MF: $5.6458/point
(25 + 28 + 28) X 2 X $5.6458 = $914.62

Savings per year
$4029.75 - $914.62 = $3115.13

Current cost to purchase 162 points direct
162 X $130/point = $21,060

Number of years to reach break-even
$21,060 / $3155.13 = 6.67

The above numbers are simplistic, ignoring inflation, investment, and closing costs. I have a more sophisticated Excel spreadsheet that takes into account all factors. Putting in what I consider reasonable assumptions, this comes to 7 years; 9 years if I want to assume a strong investment.

If financing, the total cost of financing can simply be added to the purchase price.

If renting points at $14/point, the break-even point is at least 15 years, depending on what capital return is assumed. $14/point represents pretty much the peak rental rate today. It's often possible to rent points at $12/point or less.

Note that I did not calculate using a "Room Only" discount since these usually are not offered for the period in question.

Generally speaking, purchasing DVC is the least expensive way to stay at a WDW Deluxe Resort long-term but requires tying up investment capital and some risk. Renting points is the least-expensive low risk way to stay at a WDW Deluxe Resort. Renting directly from Disney is the most flexible since rooms are nearly always available on short notice. (DVC has a much higher occupancy rate.)

Which is "best" largely depends on how you weigh these options.

 

[DougEMG]

Generally speaking, purchasing DVC is the least expensive way to stay at a WDW Deluxe Resort long-term but requires tying up investment capital and some risk. Renting points is the least-expensive low risk way to stay at WDW. Renting directly from Disney is the most flexible since rooms are nearly always available on short notice. (DVC has a much higher occupancy rate.)

Which is "best" largely depends on how you weigh these options.

Well said

 

[BestDadEver]

Are you factoring in interest?

Or are you saying that just owning DVC makes staying at WDW less expensive than paying cash for a room?

Of course I did .

Are you taking into account inflation . the fact the a 30% discount on rooms 5 years down the road could still be higher then the room rate when you purchased your points . Plus I don't ever see anyone adding the 12% room tax when paying out of pocket .

Tell me the last time they dropped the price as a whole across the board for rooms , tickets ect . They don't they constantly raising prices almost every year.

Yes I compare to rack rate of the room I am actually staying in not the room I would if I paid out of pocket or renting points . This is the room I am in , this is regular price , this is what I paid.

 

[DizBub]

Plus I don't ever see anyone adding the 12% room tax when paying out of pocket .

Great point.

I thought I was the only one taking this into account.

 

[BestDadEver]

Great point.

I thought I was the only one taking this into account.

You are the first I have seen

 

[deploylinux]

I'm not sure why this needs to be a lengthy topic.

I would think that anyone considering financing DVC would know to google and run a loan amoritization calculator. You know the interest rate, down payment, and initial terms DVC is offering. Most loan calculators will show total interest paid over the life of the loan....is that number acceptable to the purchaser? If not, decrease the loan term and/or increase the down payment until the interest drops down to some reasonable target the buyer is willing to pay....

That's how we calculated that a 30 month term + additional $6K down payment worked for us...it kept the total interest for a 350pt purchase to ~$2,800 which was a premium acceptable to us to get started with DVC this year. We just had to include a letter with our purchase requesting that DVC increase the downpayment and monthly payments....DVC didn't have a problem with it.

 

[k3chantal]

Of course I did .

Are you taking into account inflation . the fact the a 30% discount on rooms 5 years down the road could still be higher then the room rate when you purchased your points . Plus I don't ever see anyone adding the 12% room tax when paying out of pocket .

Tell me the last time they dropped the price as a whole across the board for rooms , tickets ect . They don't they constantly raising prices almost every year.

Yes I compare to rack rate of the room I am actually staying in not the room I would if I paid out of pocket or renting points . This is the room I am in , this is regular price , this is what I paid.

Actually I am not a Crunch Every Number person and I asked you the question, not to be snotty (this word seems to keep coming up in this thread), but because I was genuinely confused by your previous post.

I don't know if you realized but I am a direct point buyer too. And one of the reasons we wanted to buy DVC was because the points (basically) stay the same where room rates will or should rise over time. So yes, I guess I did consider inflation.

Please don't consider every post written by people who believe in buying a luxury item with cash only to be completely 'against' you. We both bought the same product directly. How we came to this decision may be different but when I ask for clarification on a previous post, it should be taken seriously not as if I am making a judgement.

 

[BestDadEver]

Actually I am not a Crunch Every Number person and I asked you the question, not to be snotty (this word seems to keep coming up in this thread), but because I was genuinely confused by your previous post.

I don't know if you realized but I am a direct point buyer too. And one of the reasons we wanted to buy DVC was because the points (basically) stay the same where room rates will or should rise over time. So yes, I guess I did consider inflation.

Please don't consider every post written by people who believe in buying a luxury item with cash only to be completely 'against' you. We both bought the same product directly. How we came to this decision may be different but when I ask for clarification on a previous post, it should be taken seriously not as if I am making a judgement.

Sorry not that your being snooty I never said that but when on my 6th rebuttal post and the fact you are pointing out something so obvious makes me feel like you think I am an idiot .

My point was even when you dbl you purchase price by financing , IF you go full term I doubt many do . With the price of rooms and only going up and the high rate they are now you still save money at some point . The fact that people are stating you can't save money when financing is just wrong . It will just take you longer . I guess there is some debate on how you calculate that value .

 

[AmyB2006]

Sorry not that your being snooty I never said that but when on my 6th rebuttal post and the fact you are pointing out something so obvious makes me feel like you think I am an idiot .

My point was even when you dbl you purchase price by financing , IF you go full term I doubt many do . With the price of rooms and only going up and the high rate they are now you still save money at some point . The fact that people are stating you can't save money when financing is just wrong . It will just take you longer . I guess there is some debate on how you calculate that value .

This is exactly what I was trying to say.

Nabas... thank you for your analysis. I refuse to rent points, so yes I would be paying cash if I was staying at a deluxe resort, at whatever rate Disney is charging at the time.