wanting to buy in Direct

[agie65]

Ouch, whatever Disney provided I used, using these interest rate, picture can be worse.

 

[BestDadEver]

I am going t try and clear things up . I think that obviously buying cash would better option . I am not sure many have $10-15k just sitting there . I am not sure if I did have that much money to play with that I still wouldn't finance , cause something about having that money liquid would be nice .

I think if you don't see value in the other things offered like Disney collection and DCL then that is your opinion, and I think if it was my opinion I'd look at resale .

I my opinion I did see myself going to Disney a lot in the future . I figured hey why not do DVC if I am going to spend around $5k per vacation I could cut that number in half buy getting my rooms paid for up front at a discount . I didn't have cash money to do this, but it makes sense to me instead of going and spending $5k for years till I come up with the money to purchase DVC. I can just finance it now and take half the money and put it towards my DVC purchase and at some point(witch is debatable ) I'd brake even and half the cost of my vacations .

Kind of like renting vs buying a house . If your renting its kind of like throwing away the money you could be putting towards paying down a house . Kind of the same thing if I do a Disney trip without being DVC it would bother me that the money I paid for the room on that trip could have went towards a DVC purchase .

If you add the very high inflation of point prices IMO waiting till you have the cash even for a smaller resale contract just doesn't make sense to me . Unless your willing to not vacation till you get that money . Also something I am not willing to do .

I understand my way of thinking kind of put the country in an economic crisis with what mortgage holders were doing . So I understand you guys with your cause of concerns . But in my 15 years of paying bills I never miss a payment and always pay loans off early . I actually am a person that purchased my house with no money down I had money to put down but why bother with numbers being so high it didn't make sense to me to drop $20-30k to save $100-200 per month . I never even though of walking away from my house when the price dropped bellow what I owed . And was quite dumbfounded when I heard people were doing that .

 

[agie65]

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

Answer on these interest rate:
Premium 10% down: total financed $18540.00, $260.00/mo, $12739.67 total interest over 10 yr.
Premium 20% down: total financed $16480.00, $208.76/mo, $8571.40 total interest over 10 yr.

Preferred 10% down: total financed $18540.00, $293.46/mo, $16675.64 total interest over 10 yr.
Preferred 20% down: total financed $16480.00, $222.37/mo, $10204.74 total interest over 10 yr.

Standard 10% down: total financed $18540.00, $328.12/mo, $20834.23 total interest over 10 yr.
Standard 20% down: total financed $16480.00, $241.23/mo, $12467.35 total interest over 10 yr.

 

[Nabas]

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.

I've only been going for 35 years.

Don't think I'll make another 35 though. Just hoping I live long enough to seem some of my DVC properties expire in 2042.

 

[ELMC]

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.

I did misinterpret what you said, sorry about that. You were clearly referring to the fact that you would stay once every other year and I thought you were suggesting that Disney only ran specials every other year. My mistake.

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.

Clearly I hope you won't be dead in 30 years, and I hope that Disney will still be there in 30 years. But I do think it's a little naive to think that you will still be vacationing in the same place 30 years from now. The average amount of time people stay in a home is 11 years. The divorce rate is over 50%. If there's one thing we know, it's that change is inevitable.

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.

With all due respect, you've only been on the DIS for less than three months. Do you really think that you are qualified to make sweeping generalizations like the ones above?

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

That's because they are. When I use hard numbers, I speak in fact. When I talk about options, I speak in opinions. I think I've been clear about that much.

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)

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.

I believe my exact quote was "financing a direct DVC purchase does not make financial sense". And when you compare it to the myriad of other options (including not staying in Deluxes) then I don't see how you can come to any other conclusion. The numbers put you in the red for decades.

 

[AmyB2006]

I did misinterpret what you said, sorry about that. You were clearly referring to the fact that you would stay once every other year and I thought you were suggesting that Disney only ran specials every other year. My mistake.



Clearly I hope you won't be dead in 30 years, and I hope that Disney will still be there in 30 years. But I do think it's a little naive to think that you will still be vacationing in the same place 30 years from now. The average amount of time people stay in a home is 11 years. The divorce rate is over 50%. If there's one thing we know, it's that change is inevitable.

Change is inevitable. But if Disney still exists, I will still be here. And I don't think that's that far of a stretch.

Well I'm glad you don't wish death on me. LOL My parents have been coming to Disney since it opened, and they will be 69 this year. They will continue to come until they can't come anymore. They love it. I don't understand how this is looked at as naive. But so be it.

I have grown up coming to Disney several times a year. Maybe I'm spoiled, who knows. But it's a part of my life and I will continue to come here either until I can't or it doesn't exist.

And if in a few years we decide to go skiing in CO, which I truly hope, I've already got the resort picked out that I can use points for.

All I'm seeing is that sometimes the numbers are skewed to what "averages" are or how you (general) think people will be using their points. And it's not always that way.

But, I have thoroughly enjoyed our discussion this evening Honestly I have. I look forward to many more



Sorry, didn't realize you were still adding.

With all due respect, you've only been on the DIS for less than three months. Do you really think that you are qualified to make sweeping generalizations like the ones above?

And yes. It doesn't take long to see. Although the time has only been 3 months, my posts per day tend to be higher. You're a numbers guy, so what does that tell you?

 

[ELMC]

I am going t try and clear things up . I think that obviously buying cash would better option . I am not sure many have $10-15k just sitting there . I am not sure if I did have that much money to play with that I still wouldn't finance , cause something about having that money liquid would be nice .

One might argue that if you don't have that money sitting there, then DVC might not be the best way for you to visit Disney. Constantly putting yourself in a situation of borrowing means that you will be destined to repeat that pattern. That's all I'm saying.

I think if you don't see value in the other things offered like Disney collection and DCL then that is your opinion, and I think if it was my opinion I'd look at resale .

And my point is, with a 100 point contract, how far do you think you can get with those options?

I my opinion I did see myself going to Disney a lot in the future . I figured hey why not do DVC if I am going to spend around $5k per vacation I could cut that number in half buy getting my rooms paid for up front at a discount . I didn't have cash money to do this, but it makes sense to me instead of going and spending $5k for years till I come up with the money to purchase DVC. I can just finance it now and take half the money and put it towards my DVC purchase and at some point(witch is debatable ) I'd brake even and half the cost of my vacations .

And my point to you has always been that at the time you purchased, you could have bought a 100 point SSR resale for that very same $5,000. At that point you would have owned it, with zero monthly payments.

Kind of like renting vs buying a house . If your renting its kind of like throwing away the money you could be putting towards paying down a house . Kind of the same thing if I do a Disney trip without being DVC it would bother me that the money I paid for the room on that trip could have went towards a DVC purchase .

This is nothing like renting or buying a house. You need to have a house, and renting or buying are your only two options. If you don't have the down payment, you are forced to rent. With DVC, if you can't afford it, you have the option of not purchasing at all (and/or not visiting Disney) until you do have the money saved up. But when you operate with a "gotta have it now" mentality you severely limit your options.

If you add the very high inflation of point prices IMO waiting till you have the cash even for a smaller resale contract just doesn't make sense to me . Unless your willing to not vacation till you get that money . Also something I am not willing to do .

I understand my way of thinking kind of put the country in an economic crisis with what mortgage holders were doing . So I understand you guys with your cause of concerns . But in my 15 years of paying bills I never miss a payment and always pay loans off early . I actually am a person that purchased my house with no money down I had money to put down but why bother with numbers being so high it didn't make sense to me to drop $20-30k to save $100-200 per month . I never even though of walking away from my house when the price dropped bellow what I owed . And was quite dumbfounded when I heard people were doing that .

I totally get what you're saying and you seem to be a stand up guy. I have no doubt that you're telling the truth here. But go back a second and read what you just wrote...you've had loans and payments for 15 years. Don't you envision any point in the future where you would like to be debt free? THAT's the point I'm trying to make when I advocate for making financially safe decisions when it comes to DVC. I have no doubt that I can come up with the down payment and make the monthly payments for a gigantic VGF contract, and take some pretty killer vacations. But why would I want to do that to myself? At some point you've got to put aside immediate gratification and make the long term play.

 

[ELMC]

With all due respect, you've only been on the DIS for less than three months. Do you really think that you are qualified to make sweeping generalizations like the ones above?

And yes. It doesn't take long to see. Although the time has only been 3 months, my posts per day tend to be higher. You're a numbers guy, so what does that tell you?

That you talk more than you listen?

 

[AmyB2006]

That you talk more than you listen?

Touché! Or however it's spelled. LOL I do love getting involved into discussions. But I do have to hit the hay as I have to get up at 5:30 am and I need my beauty sleep. LOTS of it.

 

[JWG]

Well... this is getting interesting...

As to purchase vs. finance and value of the purchase. We didn't think of it as a financial investment or purchase. Purely fun. We didn't do any math to know when we'd "break even" or gain back our investment.

We were investing in our vacation future and time together with family and friends. Forced vacations if you will.

We did not Finance, but we also pay off our credit cards every month, don't carry any debt other than our mortgage and one last pesky student loan. It's all personal preference and choice.

I don't begrudge anyone who chooses to finance if they can make the payments. There choice to pay a premium to likely buy in ahead of when they could otherwise. It's a gamble that the earlier purchase with financing will be less than the future cost at the point the cash purchase could be made combined with what they'll spend on trips until that time.

Frankly, as I sit and watch and wait for the right BLT add on, someone defaulting on a financed DVC may be just what I need...

 

[DisneyMarv]

Sorry i haven't been posting as well i've been very busy at work but as i see i think i might have sparked a debate,couple of arguments. we are all learning from each other and everyone's thoughts towards the famous Direct Vs Resale. I do have some knowledge but as i see there are some smart folks on here.

 

[BestDadEver]

One might argue that if you don't have that money sitting there, then DVC might not be the best way for you to visit Disney. Constantly putting yourself in a situation of borrowing means that you will be destined to repeat that pattern. That's all I'm saying.

My point is I am going anyway this makes it cheaper . I agree with you though . If that makes any sense .

And my point is, with a 100 point contract, how far do you think you can get with those options?

True . But as I stated before who knows what else could be coming down the line for resale buyers .

And my point to you has always been that at the time you purchased, you could have bought a 100 point SSR resale for that very same $5,000. At that point you would have owned it, with zero monthly payments.

Your right but spending $5K cash wasn't an option at that point . I looked into resale . I knew about it before I purchased . To big things that deterred me were ROFR , and the restrictions .

This is nothing like renting or buying a house. You need to have a house, and renting or buying are your only two options. If you don't have the down payment, you are forced to rent. With DVC, if you can't afford it, you have the option of not purchasing at all (and/or not visiting Disney) until you do have the money saved up. But when you operate with a "gotta have it now" mentality you severely limit your options.


I knew this was going to get misinterpreted . I was only talking about the payment part of it . I guess to make equal comparison assume you could afford a home and are renting .


I totally get what you're saying and you seem to be a stand up guy. I have no doubt that you're telling the truth here. But go back a second and read what you just wrote...you've had loans and payments for 15 years. Don't you envision any point in the future where you would like to be debt free? THAT's the point I'm trying to make when I advocate for making financially safe decisions when it comes to DVC. I have no doubt that I can come up with the down payment and make the monthly payments for a gigantic VGF contract, and take some pretty killer vacations. But why would I want to do that to myself? At some point you've got to put aside immediate gratification and make the long term play.

Of course I would like to be debit free . I just don't really see that happening , being I have a 30 year mortgage . Ill probably always have at least 1 car payment . Unless your talking way long term like close to retirement . Really I just want to be credit card debt free .

 

[k3chantal]

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.

I am pretty comfortable on my 'primrose' path and really have no interest in leading anyone anywhere. It is however, leading me to a very comfortable lifestyle.
It is interesting that good conservative "advise" is being called 'a little pushy and snotty'. But, hey, I am all for people making more daring decisions since it will most likely keep the resale market thriving.......and I will be in the position to purchase it outright. Now that's snotty!

 

[Minniesgal]

I think the key argument against financing is that the whole point of buying DVC is to save on accommodation costs over the long term. Interest rates are so high that the amount paid in interest if you take it over ten years wipes out those savings and then some which defeats the purpose of buying in in e first place so it makes no sense. Financing as a bridge and paying off quickly as many people do is a viable option. Financing over ten years is something else.

It scares me when people say the only way they can afford to buy DVC is by financing because to me that is not a good definition of affordability. The big crash in 2008 ruined many people's lives perhaps forever yet collectively we seem to have learned nothing about living within our means. Personally and I am talking about personally I believe if I cannot afford to pay cash for something I cannot afford it and therefore should not be buying it. I financed my house, I would finance a car if it was essential to my life but anything else I make sure I have the case to settle in full before putting something on a credit card or loan. This is what the crash taught me.

 

[k3chantal]

I think the key argument against financing is that the whole point of buying DVC is to save on accommodation costs over the long term. Interest rates are so high that the amount paid in interest if you take it over ten years wipes out those savings and then some which defeats the purpose of buying in in e first place so it makes no sense. Financing as a bridge and paying off quickly as many people do is a viable option. Financing over ten years is something else.

It scares me when people say the only way they can afford to buy DVC is by financing because to me that is not a good definition of affordability. The big crash in 2008 ruined many people's lives perhaps forever yet collectively we seem to have learned nothing about living within our means. Personally and I am talking about personally I believe if I cannot afford to pay cash for something I cannot afford it and therefore should not be buying it. I financed my house, I would finance a car if it was essential to my life but anything else I make sure I have the case to settle in full before putting something on a credit card or loan. This is what the crash taught me.

Well written and expresses my thoughts too.

 

[AmyB2006]

I am pretty comfortable on my 'primrose' path and really have no interest in leading anyone anywhere. It is however, leading me to a very comfortable lifestyle.
It is interesting that good conservative "advise" is being called 'a little pushy and snotty'. But, hey, I am all for people making more daring decisions since it will most likely keep the resale market thriving.......and I will be in the position to purchase it outright. Now that's snotty!

It's not the "advice" that's pushy and snotty, it's the attitude that some people present it with, that's pushy and snotty. I'm all for soaking up people's advice, but when it's presented in an 'all or nothing' way or a 'if you don't do it this way you're stupid' attitude, it loses its message I think.

I think the key argument against financing is that the whole point of buying DVC is to save on accommodation costs over the long term. Interest rates are so high that the amount paid in interest if you take it over ten years wipes out those savings and then some which defeats the purpose of buying in in e first place so it makes no sense. Financing as a bridge and paying off quickly as many people do is a viable option. Financing over ten years is something else.

It scares me when people say the only way they can afford to buy DVC is by financing because to me that is not a good definition of affordability. The big crash in 2008 ruined many people's lives perhaps forever yet collectively we seem to have learned nothing about living within our means. Personally and I am talking about personally I believe if I cannot afford to pay cash for something I cannot afford it and therefore should not be buying it. I financed my house, I would finance a car if it was essential to my life but anything else I make sure I have the case to settle in full before putting something on a credit card or loan. This is what the crash taught me.

Again, clearly everyone uses a different comparison model or way to compare their numbers. How is any savings at all "wiped out"?

Are you only comparing using the timeshare for 10 years? Because that's not accurate in my opinion. I realize I am paying more than the person next to me that paid outright. Clearly they will have more a savings than me. But to say that I will have no savings on my future vacations, my children/grandchildren etc, is just not accurate. So I guess it's all that "this is fact" presentation of numbers that throws me off. Everyone compares differently.

The crash of 2008... yes was bad for a lot of people. Most people that were affected by that were not living within their means already, like living off of credit cards, not paying them off, had no savings. If you believe that if you can't pay cash for something that you can't afford it then that's fine for you. However I have a savings, we don't live off of our credit cards and if I want to finance DVC and have a $130 a month payment instead of paying outright, I can. And, I can still put money in our savings account each month.

I guess all I'm trying to say is just because you (general) wouldn't do something a certain way, doesn't mean that somebody else can't or shouldn't.

 

[crisi]

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.

Well, me.

We financed via a home equity loan for about two months. During those two months we made more in dividends than we paid in interest. Then cash came our way (that we knew was coming) and we paid it off. I love that, its like someone gives me free money.

But I'm atypical. I think in the VAST majority of cases:

1. People who buy resale are getting a bad deal. But I'm a Disney stockholder - PLEASE continue to have more money than sense. I've made quite a bit off people being suckered into the "Magic" over the years. There are exceptions, for some people buying direct does make sense.

2. People who finance are doing so because they can't really afford this much outlay at one time - not because they are choosing not to make this much outlay at one time.

My issue is that there seem to be a lot of people who are making a bad deal that they can't afford to make. They are buying direct AND they are financing not for float, but because they can't come up with the money right now, nor in the near future. If you can afford to burn money in your fireplace that's your business - but I don't think most people buying direct and financing are doing it because they are wealthy and want the float.

Here is the thing, only the person reading a post can measure that post against their own financial and personal situation. I tend to write assuming that most people asking for advice are middle class without large investment portfolios. I also tend to assume that most people would like to increase their financial security - while increasing the value they get for their money (it isn't any fun unless you spend it once in a while).

(Five years ago the delta between resale and direct was low enough that direct made a lot more sense for a lot more people - and it may be heading that way again. People who bought BCV direct in 2006 off a waitlist probably made a good decision.).

 

[ELMC]

1. People who buy resale are getting a bad deal. But I'm a Disney stockholder - PLEASE continue to have more money than sense. I've made quite a bit off people being suckered into the "Magic" over the years. There are exceptions, for some people buying direct does make sense.

Do you mean "people who buy direct"?

 

[k3chantal]

It's not the "advice" that's pushy and snotty, it's the attitude that some people present it with, that's pushy and snotty. I'm all for soaking up people's advice, but when it's presented in an 'all or nothing' way or a 'if you don't do it this way you're stupid' attitude, it loses its message I think.

Please read my original message, it was not pushy or snotty. The 'primrose' post was in jest....to demonstrate the difference between a real pushy or snotty reply against a real concern I have about people using credit to purchase a timeshare. I was trying to make light of the adjectives you are using for me.

 

[Airb330]

Answer on these interest rate:
Premium 10% down: total financed $18540.00, $260.00/mo, $12739.67 total interest over 10 yr.
Premium 20% down: total financed $16480.00, $208.76/mo, $8571.40 total interest over 10 yr.

Wow! Doesn't that put it in perspective? I'm curious, how many points is this for? I know Disney pushes the '160' number.

That is why some of us strongly advise not to finance this luxury purchase. I have an 800+ credit score, so I assume I would be in this bracket. Yet the rates of 9-11% are nearly just as bad as mile/point credit cards. I would never throw down $18,000 on a credit card, so I cannot imagine financing over 10 years.

I suppose it is one thing to finance and pay it off within 1-2 years. The $500-1,000 in interest charges could be tolerable. When someone is paying $12,000 in interest though, I do think that wipes out most of the savings for a long time, and makes the break-even point for DVC that much in the future...by then one could be sick of WDW and need to sell, and thus, never "come out ahead."


Some want to turn this into an emotional argument, but from a financial standpoint, it is a terrible idea to borrow money at those rates for a luxury purchase. I'm paying 0.9% on my car. Something I actually need and I am only paying $300 in interest over 66 months. Why would someone give $12,000 in interest to Disney?