wanting to buy in Direct

[ELMC]

And once again here you are telling people what to do. At least I tell people to do WHAT IS GOOD FOR THEM AND THEIR FAMILIES. Period. People do not come on these boards and tell you EVERYTHING in their financial portfolio. They come here, ask fairly simple questions, and move on. If they wanted all this commentary and a breakdown of their financial structure then they will call Susie Orman, or better yet, their accountant or banker.

You sound very angry, and I'm not sure why. I'll take a guess, though, and please feel free to correct me if I'm wrong. Oftentimes on here when the direct vs. resale debate comes up, people who have bought direct 5+ years ago think that we are talking about them and they become very defensive, as you have. What you need to understand is that the landscape has changed dramatically since that time, and the discussions we are having today reflect what is happening in today's market, not in 2003. Whether you choose to recognize it or not, direct prices have skyrocketed to the point where most of the value of DVC is priced out of the contract. Interest rates are being charged on sums of money that are double what they used to be, and resale has never been a more financially viable option than it is right now. So while I can see how you would take offense, it's really misplaced as nobody is talking about you specifically or even people in your situation. I'm sorry if you thought otherwise.

Continuing the conversation, though, I don't recall a single instance where I told anybody what to do, but would welcome your showing me one. But until you do, I take offense at the accusation. But I'll ask you this...why is it acceptable for you to tell people to do what is good for their families but it is not acceptable for someone else to tell people to do what is financially sound? The action is the same, telling someone else what to do, the only difference is the message. While we're on that topic, it is a little presumptuous for any of us to think that we know what is best for anybody or their family. Is suggesting that someone take on a substantial debt that they are instantly upside down on just for the purposes of going vacation really what is best for their family? Who's to say?

Regardless, I'm sorry that you feel that my commentary is delving too deep into the issues. In the future if you would prefer that I provide simple answers to simple questions that you ask, I will do my best. But for other threads, started by other OPs, I will continue to further the conversation instead of providing a two sentence response. The DIS has an "ignore user" function that you are free to use if you wish.

And BTW, I paid a TOTAL of $19,800 for my BCV 10 years ago. With all the vacations I have taken with it I have saved well over that amount of money. People can by resale if it works for them, but if they want to buy direct let them.

Are you sure? Have you actually run the numbers or are you speculating? I would suggest that had you rented points over those past ten years instead of purchasing that you would have actually spent less money.

As far as letting people buy direct, I have said dozens of times that people are free to do whatever they want and that I am not here to judge. But what I am here to do is point out the facts. And the fact is that buying direct and financing at today's prices is not the best option, financially speaking. I'm sorry if that statement does not sit well with you.

 

[BestDadEver]

I I would much prefer people such as Best Dad Ever to qualify his statements by saying something like "it worked for me for xxx reason, but it might not work for you" as opposed to suggesting that it will work for everyone because he and his family members have done it. With all due respect, he is in year one of his ownership and that contract that he owes $100+ per point on is only worth $65 on the resale market should he need to get out of that loan. Explain to me again how this is a good thing?

Well I feel that most people in position to buy a timeshare don't need to have there hand held so much . I also think that if your in this position . That you won't take into consideration your own situation and just follow one guy on the internets advice . I just state my opinion as you did . I am sure most take a little from everyone's post and make a decision of there own . It's not like if I post I bought direct that person will run out and do so soley on my advice .

I also refuse to live in fear of what could happen to me financialy in the future . I'd have a whole lot more things to worry about if I lost my job . The value of my timeshare purchase no has no meaning to me cause I don't plan on selling it .

To your point on brake even ill just say they that all depends on how you calculate the value . And in previous threads we determined that there are at least 3 diffrent ways people determine that value so there is really no right answer

 

[BestDadEver]

But I kind of think that goes without saying. Maybe I'm naive. We're all on here saying what we've done and experienced.

Why do his statements have to come with that qualifier but yours (or anyone for that matter) don't? Honestly asking though.

Am I to understand that you are saying unless you can pay cash outright for DVC, that you shouldn't be buying? In your opinion? I mean people finance things every day. Why should this be any different? Because its sole use is for vacationing?

Thank you . This is not understood here . Pretty much if you don't by resale your wrong . I agree so much . What is diffrent with financing this over anything else .

 

[ELMC]

Thank you . This is not understood here . Pretty much if you don't by resale your wrong . I agree so much what is diffrent with financing this over anything else .

I feel like we are repeating a cycle, but I'm ok with that I suppose. The history of our disagreements is not an objection to your position on buying direct, it's the fact that you continue to make false statements and present your opinions as fact. You just did it in your post. Nobody is saying that you're wrong if you don't buy resale. What I am saying is that your financial justifications for doing so are fundamentally flawed. You continue to take this position that people are against you and buying direct. But please know that's not the case. What I (and others) object to are some of your statements which are, with all due respect, not accurate.

With regards to your last sentence, I'm assuming that there should be a period between "much" and "what". If you honestly can't see the difference between financing a timeshare as opposed to a car or a house then that is a problem.

 

[Nabas]

Oftentimes on here when the direct vs. resale debate comes up, people who have bought direct 5+ years ago think that we are talking about them and they become very defensive, as you have. What you need to understand is that the landscape has changed dramatically since that time, and the discussions we are having today reflect what is happening in today's market, not in 2003. Whether you choose to recognize it or not, direct prices have skyrocketed to the point where most of the value of DVC is priced out of the contract.

For some perspective, the direct purchase price of BWV in 2002 was $67/point. Adjusted for inflation, that's $86.60/point today, an increase of 29%.

Current direct purchase price is $130/point, an increase of 94%.

 

[AmyB2006]

Not quoting cause I'm on the iPhone, but specifically regarding your suggestion to compare the price of renting points vs a direct buy and the money saved. I don't really think that's fair to throw out there for everyone.

What if I don't want to rent and never would? Why would I then compare my purchase to rented points? That would be futile because renting is not something I would ever want to do.

My points that I just added on at VGF are in the $11,000 range including all of the interest. Not including the dues. Now I can pay that off early and it will be a little less. But basically, if I were staying at Grand Floridian on whatever deal Disney has going once every other year, for the next 50 years, I think I will have more than exceeded that dollar amount if I paid out of pocket. Because if I were going to stay there that is how I would do it. I wouldn't rent someone else's points. But that's me.

So all this comparing of numbers I see getting thrown around is great and all but a little over analytical in my opinion. And also doesn't apply to everyone.

 

[BestDadEver]

I feel like we are repeating a cycle, but I'm ok with that I suppose. The history of our disagreements is not an objection to your position on buying direct, it's the fact that you continue to make false statements and present your opinions as fact. You just did it in your post. Nobody is saying that you're wrong if you don't buy resale. What I am saying is that your financial justifications for doing so are fundamentally flawed. You continue to take this position that people are against you and buying direct. But please know that's not the case. What I (and others) object to are some of your statements which are, with all due respect, not accurate.

With regards to your last sentence, I'm assuming that there should be a period between "much" and "what". If you honestly can't see the difference between financing a timeshare as opposed to a car or a house then that is a problem.

I don't seem to understand where you think I state facts . What you say to me is not accurate is the fact that your stating your opinion as fact . It's not a fact that resale is better for all people .

Lets put it this way if I would put vacations on a credit cars at 14.9 % or finance direct at 10 % how is that not better .

 

[BestDadEver]

Not quoting cause I'm on the iPhone, but specifically regarding your suggestion to compare the price of renting points vs a direct buy and the money saved. I don't really think that's fair to throw out there for everyone.

What if I don't want to rent and never would? Why would I then compare my purchase to rented points? That would be futile because renting is not something I would ever want to do.

My points that I just added on at VGF are in the $11,000 range including all of the interest. Not including the dues. Now I can pay that off early and it will be a little less. But basically, if I were staying at Grand Floridian on whatever deal Disney has going once every other year, for the next 50 years, I think I will have more than exceeded that dollar amount if I paid out of pocket. Because if I were going to stay there that is how I would do it. I wouldn't rent someone else's points. But that's me.

So all this comparing of numbers I see getting thrown around is great and all but a little over analytical in my opinion. And also doesn't apply to everyone.

Agreed . I can't see how anyone would want to rent and rely on strangers for a long term . I personally wouldn't want to do it even once .

 

[ELMC]

Not quoting cause I'm on the iPhone, but specifically regarding your suggestion to compare the price of renting points vs a direct buy and the money saved. I don't really think that's fair to throw out there for everyone.

What if I don't want to rent and never would? Why would I then compare my purchase to rented points? That would be futile because renting is not something I would ever want to do.

With regards to point rental, it is still fair to draw the comparison if only to put things into perspective. But if that is truly something you would not do then you can eliminate it as an option after the analysis. I don't think you can just ignore it without looking at the numbers. I would also suggest that renting points for VGF will not be an option for some time, so it might not be a valid option anyway.

The problem is, and we've seen it many times before, that people post on these boards information that is factually inaccurate in an effort to justify or reinforce the decisions they have made. While that's fine for them, others come on here and read that and potentially make decisions based on that information. The fuzzy math and twisted logic that can be found on here is no better than some of the misleading statements that timeshare salespeople make, and those are generally accepted to be manipulative at best. I've always said that if someone wants to speak up and say that they don't care what they spent or how efficient it was or how they could have done it better then I have no problem with that. But to draw false comparisons or twist numbers around simply to defend a position is going to get challenged, by me and others.

My points that I just added on at VGF are in the $11,000 range including all of the interest. Not including the dues. Now I can pay that off early and it will be a little less. But basically, if I were staying at Grand Floridian on whatever deal Disney has going once every other year, for the next 50 years, I think I will have more than exceeded that dollar amount if I paid out of pocket. Because if I were going to stay there that is how I would do it. I wouldn't rent someone else's points. But that's me.

So all this comparing of numbers I see getting thrown around is great and all but a little over analytical in my opinion. And also doesn't apply to everyone.

You're right in saying that only you can decide how much or how little the ideas shared on this board apply to you. To be clear, VGF is a game changer for so many reasons. The discussions we have been having on this thread pertain mostly to AKV, BLT and any of the classic resorts that people choose to buy direct. VGF is a different story due to the fact that it will most likely never be less expensive than it is now. It's safe to project that resales will follow the same trajectory as BLT and VGC so that in a few years one should be able to get most of their money back should they need to sell. That is a completely different situation than buying AKV or SSR direct right now, where you will suffer an immediate 50% loss in value. That being said, the high initial point cost does put it close to, if not squarely in the range where the value is being priced out of DVC.

With regards to your situation, are you speculating or did you actually do the math? Based on the numbers you provided, it looks like you are buying a 50 point contract. The average cost for a studio is 25 points, which means that you will get roughly 20 room nights over the next 10 years. So by using DVC to stay this way, you are paying $700 per night once you account for purchase price, finance charges and maintenance fees. Please explain to me how that is a value?

You weaken your position when you put forth statements that aren't true. Statements like "if I were staying at Grand Floridian on whatever deal Disney has going once every other year, for the next 50 years," don't further your argument. Are you expecting me to believe that Disney only offers room discounts once every other year? We both know that's not true. And while it might seem nice, can you honestly tell me that you plan on going to Disney and staying at the VGF 30, 40 or 50 years from now? That just doesn't make any sense, and it doesn't help your argument.

Say that you are happy buying VGF. Say that you don't care about the finance charges because the joy of ownership is priceless. Say anything along those lines, because that describes how you feel and nobody can take that from you. But don't tell me that buying direct and financing is a good deal, because it's not.

 

[k3chantal]

There are now probably several hundred threads on these subjects whether to buy direct vs resale and finance vs buy outright. Besides the people who quickly paid off their loans within months, has anyone paid when financing, the same amount as if they bought their points outright, the day they signed their papers?

The answer is no, you most definitely paid interest; thus, additional money. Plus, you have not finished purchasing the item so it can be easily taken away from you. So for those of us who are in the camp of not financing a luxury purchase this is the issue; we don't want to pay more for it and we want it to be ours; paid in full.

I would never suggest to someone that they should potentially risk their financial future by taking on a loan for a 'fun' purchase like this. I would rather my message be that they should be cautious. If a person doesn't have a plan to pay off their DVC loan quickly, do they have a plan to pay their maintenance fees EACH year?

I think some new potential DVC owners ask questions here seeking approval for 'risky' behavior. It's great if you have a story or experience that your own risky behavior worked out, however, if it does not work out for the new owner, they are stuck with bad credit and no 'fun' timeshare purchase.

 

[ELMC]

I don't seem to understand where you think I state facts . What you say to me is not accurate is the fact that your stating your opinion as fact . It's not a fact that resale is better for all people .

With all due respect, I don't understand what you are saying here. But if you think that my position is that resale is better for all people, then you've completely missed the point of just about everything I've said.

To be clear, my position is that resale is the most economical way to purchase DVC and carries very little risk, financial or otherwise with regards to use of the membership as it is intended-to stay at DVC resorts. Purchasing direct in order to maintain access to options that are over costed in comparison to the cash alternative, not guaranteed and of greatest use only to those owners with large amounts of points is, in my opinion, an unnecessary expenditure. Financing a DVC purchase, especially contracts where the resale value is significantly below direct prices, is inherently risky, significantly reduces your options, and in many cases makes DVC a more expensive option for the first 10 to 20 years of ownership depending on a number of variables.

Lets put it this way if I would put vacations on a credit cars at 14.9 % or finance direct at 10 % how is that not better .

If you are honestly drawing a comparison between charging a vacation on a credit card, financing a DVC purchase, and being fiscally responsible then I'm at a loss for a response.

 

[ELMC]

There are now probably several hundred threads on these subjects whether to buy direct vs resale and finance vs buy outright. Besides the people who quickly paid off their loans within months, has anyone paid when financing, the same amount as if they bought their points outright, the day they signed their papers?

The answer is no, you most definitely paid interest; thus, additional money. Plus, you have not finished purchasing the item so it can be easily taken away from you. So for those of us who are in the camp of not financing a luxury purchase this is the issue; we don't want to pay more for it and we want it to be ours; paid in full.

I would never suggest to someone that they should potentially risk their financial future by taking on a loan for a 'fun' purchase like this. I would rather my message be that they should be cautious. If a person doesn't have a plan to pay off their DVC loan quickly, do they have a plan to pay their maintenance fees EACH year?

I think some new potential DVC owners ask questions here seeking approval for 'risky' behavior. It's great if you have a story or experience that your own risky behavior worked out, however, if it does not work out for the new owner, they are stuck with bad credit and no 'fun' timeshare purchase.

If you read one post in this thread, this should be it. It so eloquently states everything that I tried to but was unsuccessful.

 

[AmyB2006]

With regards to point rental, it is still fair to draw the comparison if only to put things into perspective. But if that is truly something you would not do then you can eliminate it as an option after the analysis. I don't think you can just ignore it without looking at the numbers. I would also suggest that renting points for VGF will not be an option for some time, so it might not be a valid option anyway.

The problem is, and we've seen it many times before, that people post on these boards information that is factually inaccurate in an effort to justify or reinforce the decisions they have made. While that's fine for them, others come on here and read that and potentially make decisions based on that information.

Agreed that it's worth looking at, but for me, not even a consideration, so I remove it from the equation.

I'm not sure what factually inaccurate information you're talking about but I will say that if someone is making decisions solely based off of what they're reading on an internet chat board/bulletin board, well that is on them and shame on them. Anything I've ever gotten from these boards or the hundred others I frequent, I always double check or verify. I would never act on information presented here as if it was actual fact until I verified. Clearly you are the same, but if someone else isn't... well you can't be everybody's babysitter of information. Know what I mean?

With regards to your situation, are you speculating or did you actually do the math? Based on the numbers you provided, it looks like you are buying a 50 point contract. The average cost for a studio is 25 points, which means that you will get roughly 20 room nights over the next 10 years. So by using DVC to stay this way, you are paying $700 per night once you account for purchase price, finance charges and maintenance fees. Please explain to me how that is a value?

Sorry, I mis spoke about the numbers. They didn't sound right so I verified and I wasn't adding the down payment back in. We added on 70 points. So around $13,800 when you finance. Again not considering Dues. Also minus closing costs.

And again, your numbers don't qualify for me. The average point value for a studio is irrelevant to me because I know when I will stay and I will stay when it is 17 points, not 25. And again, if you're going to take the total dollar amount and compare it to ONLY a 10 year period, then yes, I would agree that it's probably not that "valuable". However, I will be using these points for well after 10 years.

You weaken your position when you put forth statements that aren't true. Statements like "if I were staying at Grand Floridian on whatever deal Disney has going once every other year, for the next 50 years," don't further your argument. Are you expecting me to believe that Disney only offers room discounts once every other year? We both know that's not true. And while it might seem nice, can you honestly tell me that you plan on going to Disney and staying at the VGF 30, 40 or 50 years from now? That just doesn't make any sense, and it doesn't help your argument.

I say this, because my plan is to stay every other year, at the VGF. I will do two studios for three nights every other year. I said this because if I didn't have DVC, I would call up Disney and book a room on "whatever special Disney was running" at that time. That's why I said that. Not sure how that got misinterpreted.

And why won't we be staying at VGF 30, 40, or 50 years from now? Do you know something I don't know? Will I be dead in 30 years? Will some natural disaster come along and wipe Disney off the map? Sure, both are possible LOL, but given that things stay the way they are, I don't see why I won't be coming there 30 years from now with my grandchildren. And when I die, I will leave it to my children, who will hopefully get just as much enjoyment out of it as I did. I'm not sure why that is an "argument" that doesn't make sense to you.

 

[AmyB2006]

There are now probably several hundred threads on these subjects whether to buy direct vs resale and finance vs buy outright. Besides the people who quickly paid off their loans within months, has anyone paid when financing, the same amount as if they bought their points outright, the day they signed their papers?

The answer is no, you most definitely paid interest; thus, additional money. Plus, you have not finished purchasing the item so it can be easily taken away from you. So for those of us who are in the camp of not financing a luxury purchase this is the issue; we don't want to pay more for it and we want it to be ours; paid in full.

I would never suggest to someone that they should potentially risk their financial future by taking on a loan for a 'fun' purchase like this. I would rather my message be that they should be cautious. If a person doesn't have a plan to pay off their DVC loan quickly, do they have a plan to pay their maintenance fees EACH year?

I think some new potential DVC owners ask questions here seeking approval for 'risky' behavior. It's great if you have a story or experience that your own risky behavior worked out, however, if it does not work out for the new owner, they are stuck with bad credit and no 'fun' timeshare purchase.

But you've also hit the crux of the issue with this statement. There are two different camps, neither one is more right than the other, although "your" camp definitely comes across as wanting to portray yourselves that way. Which is totally your prerogative. But it does come off as a little pushy and snotty. (Not saying you are, just saying that's how it comes across to others).

I think people come here seeking answers to questions. Not necessarily seeking approval for risky behavior. And again if someone gets information here and acts solely based off of that information, shame on them. It's not up to you (general) to lead everyone down your primrose path.

 

[BestDadEver]

With all due respect, I don't understand what you are saying here. But if you think that my position is that resale is better for all people, then you've completely missed the point of just about everything I've said.

.

Sorry that took me a few to figure out too lol . I was saying you present your statements about resale as fact .

I am comparing my room and brake even point with rack rates and even with 30% it's still brake even at 5-7 years My in laws stayed 4 days AKL when I was there , those 4 days cost $2500 . I stayed 6 days even if I use those numbers for them paying for a regular room for less days , vs my 1br villa , I brake even in 5 trips . I'd also tend to think the 1 br room cost significantly more money . I don't look at it any other way .

 

[Nabas]

Say that you are happy buying VGF. Say that you don't care about the finance charges because the joy of ownership is priceless. Say anything along those lines, because that describes how you feel and nobody can take that from you. But don't tell me that buying direct and financing is a good deal, because it's not.

I'm jumping in to offer support. My sister is a CPA who deals with clients buried in personal debt. The most egregious and avoidable examples are financed timeshares, vacations, and boats.

All you have to do is follow the OCC site to see the number of DVC foreclosures to realize a lot of people get in over their heads. Disney doesn't mind. They reclaim these points for a few dollars and sell them as "new" for $130/point. Thank you very much for your 10% or 20% down and paying MF for a few years.

Even for someone who buys resale at half of Disney's direct sale prices, it takes years to reach the breakeven point, especially since WDW has gotten into the habit of running 30% discounts on Deluxe Resorts for most of the year.

I "get" that some people don't like renting points. Great. However, even at $14/point, it will take approximately 15 years to reach the break-even point compared to Disney direct sale prices without financing. That's a 15-year investment before reaping any financial reward. With many financing options, the break-even point is never reached, not in 20, 30, 40, or 50 years. How sure are you that you're going to be vacationing at WDW in 15 years, never mind 50 years.

Buy DVC for whatever reason you want. However, don't suggest buying direct and financing together is a smart financial decision because, as EMLC indicates, it is not.

 

[DougEMG]

Thank you . This is not understood here . Pretty much if you don't by resale your wrong . I agree so much . What is diffrent with financing this over anything else .

Everyone is free to spend their money however they want, financing just makes one pay more for an item then if they paid cash. Borrowing to invest can be a good option, borrowing to pay for a luxary purchase probably not.

Simple example, you buy DVC at $100 per point, finance over 5 years at 10% interest. What you actually end up paying is $126 per point. If you decide that paying $126 per point still makes it worth while, go for it.

The main point that ELMC is making is that purchasers should be making INFORMED decision.

 

[agie65]

Here is my calculations, you can use it as you wish:
Buying direct:
AKV $145/pp, credit $10/pp, credit $1000.00 (145-10=135x160pts=21600-1000 developer credit = 20600), so total buying cost 20600.
assuming no down payment on both cases; at 9% APR thru Disney, 10 yr term $260.95/month. Total interest paid over 10 yr $10714.25 added to this option or you can say these 160 points cost $195.71/pp in ten years if you finance.

Byuing resale:
Assuming $65/pp (average)x160pts= $10400.00
again assuming no down payment; at 12.9% APR (taken from TSS) 10 yr term $154.67/mo. Total interest paid $8160.44 over ten years period. So total cost of 160 points will be $10400+8160.44= $18560.44 or $116.00/point if you finance.

or $128.75/point buying direct and $65.00/point resale.

did not consider closing cost on either scenario as it will be very close.

I am open for other input.

 

[Nabas]

assuming no down payment on both cases; at 9% APR thru Disney ...

I am open for other input.

According to dvcnews, financing rates are:

Premium, 10% down: 11.5%
Premium, 20% down: 9.0%

Preferred, 10% down: 14.5%
Preferred, 20% down: 10.5%

Standard, 10% down: 17.5%
Standard, 20% down: 12.5%

See:

http://dvcnews.com/index.php/dvc-program/financial/2226-direct-purchase-interest-rates

 

[AmyB2006]

The main point that ELMC is making is that purchasers should be making INFORMED decision.

Duh. This is a given. So offer your "side" of the information you have but don't make general blanket statements like "financing your purchase doesn't make sense". That is not a statement that you can back up with any qualifying information, because you don't know that person's financial situation.

People come on here asking questions. Give them an answer, elaborate and "sell your points" if you want, but do it without saying "if you finance this you're an idiot" kind of attitude. I don't care if you feel that way or not, it's rude and probably not true. (general you again, not directing this solely at you)

With many financing options, the break-even point is never reached, not in 20, 30, 40, or 50 years. How sure are you that you're going to be vacationing at WDW in 15 years, never mind 50 years.

I've been going there for 38 years. Again, do you know something I don't???? If Disney still exists, I will still be going there. Guaranteed. Until I physically can't do it anymore.


ETA... I don't know where you're getting those rates from.

Disney rates for adding on VGF points were 10% down, 10.5% interest. 20% down, 8% interest. Again for VGF.