When do you start to save money?

[evnted]

Generally right after I return from another trip (unless it's like a long weekend trip I just save through those for a bigger trip.) This gives me a good amount for souvenirs, too .

 

[Deb & Bill]

Based on what I've read on the DIS over that past upteen years, very few people actually save money buying DVC. That's because they do not travel the way they anticipated when they ran the numbers (if they ran numbers, lol).

After DVC, they go more often, stay longer, stay in larger villas than originally planned, cruise or stay at non-DVC resorts, and invite family and friends to accompany them without charging for the lodging. None of those things are bad, but they are not a recipe for saving money!

Exactly. Had we not bought into DVC, we wouldn't have gone 30 times since 1997. We might have gone a few times and spent more time at the beach or the mountains instead. Which we do anyway. And if we add up all the money we've spent at Disney since that first trip, it would be a bundle. Probably enough to send our son to an excellent private or out of state college instead of state college if that is what he wanted to do.

DVC is not a way to save money. It's a way to increase the money you give to Disney and they make you happy to give them all that money.

 

[Dean]

For my family it was 5 trips over ten years. We made some assumptions in our calculations...

1) Hotel rates were not going up
2) Annual dues would not change
3) We didn't consider the future value of money
4) We were certain to take the following trips
a) Animal Kingdon
b) VGC (x2)
C) Aulani (x2)
Based on all specials and booking the trips today for springbreak/ summertime these five trips were our breakeven.

I'm wondering if you used the DVC rates for the Villa's you reserved or what you would have spent without owning DVC. I'm guessing the former which is not a true representation unless that's what you would have paid cash for anyway.

 

[yitbos96bb]

One of the things to think about with the one bedroom is that if you have little kids, it allows you to put them to bed and still be able to have the adults stay awake, watch tv, eat, etc. without disturbing them. We typically book 1BR suites no matter where we stay, DVC or otherwise.

Did you just put them to sleep in the Master bedroom and move them out? Or did everyone end up in there?

 

[Goofgoof]

Did you just put them to sleep in the Master bedroom and move them out? Or did everyone end up in there?

We did the opposite. We put them to bed in the living room and then hung out in the MBR and on the balcony. Someone just had to sneak back in to the kitchen to grab seconds on beer. On our next trip we plan to do the opposite since it will be 2 couples with 4 kids. We will put the kids down in the bedrooms and then hang in the living room and kitchen. We will probably then transfer them to the LR from the MBR when we go to bed.

 

[AJA]

Dang .... I'd love to know what bank you're using!! 0.25% - 1.5% is about the best you're going get.

I remember earning 8%-12%. This was savings and money market accounts, no risk, 1980's to early 1990 ish, not that long ago lol.

Especially for those that have another 48 years on their contracts I bet the economy will pass through another whole cycle. When you're making calculations (I know, I know, none of us have a crystal ball and DVC's worth is not all in the bottom line) it would be a good idea to include missed interest sometime over the next 30-48 years.

 

[crisi]

One of the things to think about with the one bedroom is that if you have little kids, it allows you to put them to bed and still be able to have the adults stay awake, watch tv, eat, etc. without disturbing them. We typically book 1BR suites no matter where we stay, DVC or otherwise.

We call it the "nookie perk" - or the most expensive sex you'll ever have. But its worth it.

 

[debloco]

We go every year, NEVER paid rack,

We have got free dining all but 2 trips.

Sorry, but both of these statements cannot be true. The only way to get "Free" Dining is to pay rack rate for the room.

To the OP:
Lots of previous posters have made excellent points and observations. Run your numbers based on how you and your family like to vacation (realizing that it will more than likely change over time) and try to factor in the value of the "intangible" things that matter to you and your family.

Since we go for Christmas every year now, DVC is a darn good value for us staying in a studio vs. paying holiday rates at a Deluxe Resort for a regular room.

 

[ELMC]

Exactly. Had we not bought into DVC, we wouldn't have gone 30 times since 1997. We might have gone a few times and spent more time at the beach or the mountains instead. Which we do anyway. And if we add up all the money we've spent at Disney since that first trip, it would be a bundle. Probably enough to send our son to an excellent private or out of state college instead of state college if that is what he wanted to do.

DVC is not a way to save money. It's a way to increase the money you give to Disney and they make you happy to give them all that money.

This is a very negative take on owning DVC, wouldn't you say? After all, you did have a choice as to whether or not you went to Disney. I understand the statement that owning DVC makes it more convenient and therefore more likely to go to Disney more, because it's true. But if you have the ability to resist these temptations and use the DVC ownership as a substitute for your lodging accommodations that you typically book, then it's not the Fastpass for your money into Disney's coffers as you would suggest.

DVC can be a way to save money over the long term if you traditionally book Deluxe accommodations and if you do not change your vacation habits because of it. But that requires discipline. If owning DVC creates a situation where one visits Disney more frequently than they would otherwise, then that could very well be a function of the owner and not necessarily DVC.

 

[Deb & Bill]

This is a very negative take on owning DVC, wouldn't you say? ....

Nah, just realistic.

 

[ELMC]

I love reading your posts.

 

[Dean]

This is a very negative take on owning DVC, wouldn't you say? After all, you did have a choice as to whether or not you went to Disney. I understand the statement that owning DVC makes it more convenient and therefore more likely to go to Disney more, because it's true. But if you have the ability to resist these temptations and use the DVC ownership as a substitute for your lodging accommodations that you typically book, then it's not the Fastpass for your money into Disney's coffers as you would suggest.

DVC can be a way to save money over the long term if you traditionally book Deluxe accommodations and if you do not change your vacation habits because of it. But that requires discipline. If owning DVC creates a situation where one visits Disney more frequently than they would otherwise, then that could very well be a function of the owner and not necessarily DVC.

I doubt there are many people that actually save money with DVC and this includes most of the people who talk about all the money they have saved. It does give you the chance to have certain nice vacations at a controlled cost and with fringe benefits. It does drive your vacation choices often times, esp if you buy too many points.

 

[joelp]

Here's another way of looking at how much DVC "costs":

I did some relatively simple calculations for the 100 pt AKV contract we're in the process of purchasing, with no financing, and assuming a 3.4% increase in MF per year ...

The current DVC rental rate is about $13 a point ... so I increased that by 3.4% per year ...

By 2017, my average cost per point for the total number of points accumulated so far (800 - it's a loaded contract ...) will be $14.62 ...

The rental cost per point, accounting for inflation, would be $15.37 ...

So from around 2018 onwards, I could be "saving money" vs renting DVC points ...

Looking down the road:

In 2030 - my cost per point is down to $10.64, while it could cost $23.73 to rent each DVC point ...

In 2040, my cost is only $11.08, while the rental cost could be $33.15 ...


Another example: over the life of my contract, a point will cost on average about $14.14, assuming 3.4% inflation ...

Assuming 20 points per night for an AKV Savannah Studio, that totals about $283 per night ...

The average rack rate cost for an AKL Savannah Room over the next 45 years (3.4% inflation) could be about $893 ...

 

[Missyrose]

Here's another way of looking at how much DVC "costs":

I did some relatively simple calculations for the 100 pt AKV contract we're in the process of purchasing, with no financing, and assuming a 3.4% increase in MF per year ...

The current DVC rental rate is about $13 a point ... so I increased that by 3.4% per year ...

By 2017, my average cost per point for the total number of points accumulated so far (800 - it's a loaded contract ...) will be $14.62 ...

The rental cost per point, accounting for inflation, would be $15.37 ...

So from around 2018 onwards, I could be "saving money" vs renting DVC points ...

Looking down the road:

In 2030 - my cost per point is down to $10.64, while it could cost $23.73 to rent each DVC point ...

In 2040, my cost is only $11.08, while the rental cost could be $33.15 ...

Another example: over the life of my contract, a point will cost on average about $14.14, assuming 3.4% inflation ...

Assuming 20 points per night for an AKV Savannah Studio, that totals about $283 per night ...

The average rack rate cost for an AKL Savannah Room over the next 45 years (3.4% inflation) could be about $893 ...

Rental rates are definitely NOT rising as fast as MFs, most individuals rent their points for $10-12 per point. The rental brokers charge $13. That would probably change your calculations significantly.

Dean is right, owning DVC is typically more about improved value of vacations than hard and fast savings.

 

[crisi]

When I joined this board a decade ago, the current DVC rental rate was between $10-12 a point. Its now - ten years later - between $10-$13 a point - and the $13 is when you go through a broker. I wouldn't depend on rental rates increasing as any justification.

Dues, on the other hand - when I joined my dues were under $4, now they are over $5.

 

[Brian Noble]

We typically book 1BR suites no matter where we stay, DVC or otherwise.

Our family of four considers a 1BR an unnecessary sacrifice. We generally stay in 2BR units no matter where we go.

And, as with most other folks, I am spending much more on vacations overall now that I am a timeshare owner, rather than less. The lodging is, relatively speaking, a good deal, but the other costs add up fast.

 

[Goofgoof]

I doubt there are many people that actually save money with DVC and this includes most of the people who talk about all the money they have saved. It does give you the chance to have certain nice vacations at a controlled cost and with fringe benefits. It does drive your vacation choices often times, esp if you buy too many points.

The best way to save money is to not go to Disney World at all. If you are going to go your next best bet is to stay at the motel 6 on International Drive for $49 a night. If you have to stay on property you can save money by staying at a value resort. If you are going to go every year and stay at a deluxe resort the best way to save money is DVC. The numbers don't lie. If that is your exact travel patern even with either free dining or a 25% room rate discount there is still savings for a studio each year. If people choose to go more often you should compare the cost of a hotel room for the extra days vs the DVC points. It still works out to a savings on your lodging even though you are now spending more overall since you are taking more trips.

The original poster asked when the savings starts. It is very individual based on your travel needs. For me it was not really about saving money. I bought in since I plan on going every other year for the next 15 to 20 years. With DVC I can stay at a 1 or 2 bedroom villa for those 7 to 10 trips for around the same price as a room at the contemporary with a 25% discount. When my breakeven point hits (15 years) any trips I take after that are just gravy since I am going for just the maintence fees. My other option will be to sell and cash out.

 

[crisi]

The best way to save money is to not go to Disney World at all. If you are going to go your next best bet is to stay at the motel 6 on International Drive for $49 a night. If you have to stay on property you can save money by staying at a value resort. If you are going to go every year and stay at a deluxe resort the best way to save money is DVC. The numbers don't lie. If that is your exact travel patern even with either free dining or a 25% room rate discount there is still savings for a studio each year. If people choose to go more often you should compare the cost of a hotel room for the extra days vs the DVC points. It still works out to a savings on your lodging even though you are now spending more overall since you are taking more trips.

The original poster asked when the savings starts. It is very individual based on your travel needs. For me it was not really about saving money. I bought in since I plan on going every other year for the next 15 to 20 years. With DVC I can stay at a 1 or 2 bedroom villa for those 7 to 10 trips for around the same price as a room at the contemporary with a 25% discount. When my breakeven point hits (15 years) any trips I take after that are just gravy since I am going for just the maintence fees. My other option will be to sell and cash out.

Well, they do lie. Because you need to make assumptions and those assumptions may or may not pan out.

First DVC is not a Deluxe resort any more than a Deluxe is a Moderate or a room out on I-Drive is on property. The best way to go to Disney and stay in a Deluxe resort is to book a Deluxe resort - the cheapest way to do that is to take advantage of the deals offered - when the deals are good, they beat a DVC membership if you are doing a Studio to hotel room comparison. DVC is nice, but it is - in Disney's own parlance - a different class of resort than Deluxe.

Secondly, no one's crystal ball is perfect. DVC is very likely to cost you more because MOST of us will have SOME event over the decades that means we wouldn't have gone to Disney without DVC. Maybe its a pregnancy or new baby. Maybe its an illness in the family. Maybe its a tight money situation. Maybe its kids who want to go skiing this year instead. You don't know for sure what the future will hold, and once its the past - no one who has owned for twenty years can say definitively what the past would have been had they not owned (or owned). Maybe its the opportunistic trip that adds value - but does cost money - taking an extra trip (with extra travel costs) to squeeze in Food and Wine or Christmas decorations or treating friends and family to a room - worth every penny...but pennies you wouldn't have spent.

Third, if you don't mind a little risk, and aren't picky about your onsite resort and can be flexible on times, buying a good trader for cheap on the resale market will get you into DVC more often than not for less in buy in and cheaper dues - and when it doesn't, there are Orlando timeshares aplenty. My sister is four for four on staying in a DVC resort - including a stay at the BCVs. They are skipping next year for Kauai.

DVC can be a good value - for some people its an excellent value - but no one should buy it to "save money."

 

[Goofgoof]

Well, they do lie. Because you need to make assumptions and those assumptions may or may not pan out.

First DVC is not a Deluxe resort any more than a Deluxe is a Moderate or a room out on I-Drive is on property. The best way to go to Disney and stay in a Deluxe resort is to book a Deluxe resort - the cheapest way to do that is to take advantage of the deals offered - when the deals are good, they beat a DVC membership if you are doing a Studio to hotel room comparison. DVC is nice, but it is - in Disney's own parlance - a different class of resort than Deluxe.

Secondly, no one's crystal ball is perfect. DVC is very likely to cost you more because MOST of us will have SOME event over the decades that means we wouldn't have gone to Disney without DVC. Maybe its a pregnancy or new baby. Maybe its an illness in the family. Maybe its a tight money situation. Maybe its kids who want to go skiing this year instead. You don't know for sure what the future will hold, and once its the past - no one who has owned for twenty years can say definitively what the past would have been had they not owned (or owned). Maybe its the opportunistic trip that adds value - but does cost money - taking an extra trip (with extra travel costs) to squeeze in Food and Wine or Christmas decorations or treating friends and family to a room - worth every penny...but pennies you wouldn't have spent.

Third, if you don't mind a little risk, and aren't picky about your onsite resort and can be flexible on times, buying a good trader for cheap on the resale market will get you into DVC more often than not for less in buy in and cheaper dues - and when it doesn't, there are Orlando timeshares aplenty. My sister is four for four on staying in a DVC resort - including a stay at the BCVs. They are skipping next year for Kauai.

DVC can be a good value - for some people its an excellent value - but no one should buy it to "save money."

Of course you have to use assumptions in the analysis. The original poster asked when the savings would kick in. I posted a very specific example of when the savings would start. When I said the numbers don't lie I was referring to my original post. QUOTE=Goofgoof;45333550]The break even point can be calculated. I set up a spreadsheet. I was buying into BLT for 160 points at $94 on the resale market. Total "investment" of $15,540 after closing costs. I assumed the maint fees would go up 3.2% per year (which is the historic average for all DVC resorts). I also assumed room rates would go up the same 3.2% per year. In order to calculate the break even I assumed that if I put the $15,540 in the bank and earned 5% interest then paid cash for my WDW vacations how long would it take for that $15,540 to reach $0. For the cash rate I took the rack room rate for 1 week in a lake view tower room at the contemporary during regular season plus the 12.5% tax less a 25% discount assuming you could get either a room discount or free dining. Based on that I got to $2,989 for the week for that room. The breakeven point is 7 years. This means after your 7th trip you start saving money. If you compare it to a garden wing contemporary room during value season with 25% discount (cheapest room rate at the resort) it takes 12 years. Comparing to rack room rates at Caribbean Beach it's about 22 years. There is no break even for the value resorts Here is an example. Each year I add the maintenance fees plus the interest to my initial investment and then subtract the cash price to get to my investment balance.

Year Dues Cash Price Investment Balance
2012. 675.20. 2,989. 13,226
2013. 696.81. 3,085. 11,534
2014. 719.10. 3,183. 9,683
2015. 742.12. 3,285. 7,661
2016. 765.86. 3,390. 5,457
2017. 790.37. 3,499. 3,061
2018. 815.66. 3,611. 499

If you are planning on going to WDW every year and staying at a deluxe resort it is a good "investment". I actually plan on using mine every other year. Compared to the tower room at the Contemporary at a 25% discount my break even is 15 years. With 320 points to play with every other year I will be staying in 1br or 2br villas most stays and/or adding extra nights so it is well worth the 15 year break even for the upgraded rooms. When I hit my breakeven there will be over 30 years left on my contract. Most resorts with 30 years left (2042 expire dates) sell resale for in the $60+ per point range. Assuming I decided to sell then for around $60 a point I would clear close to $9,000 after paying a sales commission. So I got to stay at upgraded accommodations for the same price as a studio for 15 years and then I get $9,000 back at the end. That seems like a pretty good investment to me and that is not including any other discounts or perks of membership.[/QUOTE]

Assuming you go for 7 years the savings start in year 8. If you assume that you will have some circumstance that prevents you from going over that period then you would have to alter the model to take that into account. I am not saying that everyone who buys in saves money. If your plans fit this exact pattern you will after 7 years. I assumed a 25% room discount figuring that you would either take a straight discount or free dining. On a $4,000 room the 25% is $1,000 which is roughly the cost of a dining plan for a family of 4. If you know you can get room discounts of 40%, 50% or more that would alter the analysis. I used 25% to approximate discounts at different times of year. Maybe September is higher but Spring break is lower.

In reference to DVC being a lesser class of room than the deluxe resorts I don't agree with that. You don't get your bed made or fresh towels every day, but there are a lot of extras that you do get. I think they pretty much wash out at worst. I always reuse towels in hotels anyway and usually pull the comforter off the bed to sleep. Again my specific example is BLT. You have all of the same amenities as the CR plus a separate pool, rooftop lounge to see fireworks and all of the kids activities offered by BLT. The afternoon pool party is just 1 example. To me it is a little better, but is at a minimum equivalent.

Renting points is a great option too. You can get a great deal vs paying cash for a room. The breakeven point for renting points vs buying is much longer (15 years in my model) and there are even more assumptions you have to make. The one downside is you are always dealing with a new contact each year vs just reserving and you can't switch as easily. Not a big deal for me, but some people like the flexibility and don't want to deal with extra paperwork.

As far as nondisney timeshares they are an option too if that is your preference. We had 2 trips to the Hilton Grand Vacation Club next to Sea World before we bought at BLT The place was great and you could walk to Sea World. We stayed on points gifted to us by my wife's uncle so the price was right too. We looked at buying there vs DVC but ultimately decided we wanted to be on property if we were going to do it at all. Not that I plan on doing it at this point but you can trade in your DVC points through RCI and go skiing or to some other spot. We have used RCI trade ins from my wife's uncle to go to St Martin, Hawaii, SD, and Scotsdale. All of the places were great.

Sorry for the long post. I am not trying to sell anyone on DVC or say you are making a mistake for not buying in. It is a highly personal decision that is not for everyone and everyone needs to crunch their own numbers to see if it fits them. My whole point is there are ways to save money with DVC for some people.

 

[daraweb]

We just closed about 2 weeks ago on our first DVC contract (resale). We have been evaluating in financially for a while but were never serious about it...more like a pipe-dream.

This past trip changed all that. I think this will be a new perspective. Our 9 year old daughter has celiac disease. This is an auto-immune disease where she can not digest anything that has gluten in it or has touched gluten (wheat, rye, malt, barley, oats). Travel is difficult because eating out is a real challenge and we carry food and cook wherever we go. That is until this past March.

This past March was our first trip to WDW since she was diagnosed. I can not put into words how amazing Disney was in handling her food limitations. She was on cloud 9 for a week and I got to relax and enjoy my family instead of cooking and packaging meals.

The value in DVC for us is not tangible. It is the peace of mind knowing that 1 week each year she will get to feel that thril of being able to order in a restaurant. We are making a commitment by buying into DVC and therefore we won't have to (or be able to) hem-and-haw about taking another trip to the world.

On the financial side...we have always stayed in 2BR with my parents usually at VWL and usually with a discount. I am a teacher and can only travel during the peak times and the discounts have completely dried up for when we travel. Because of this, our last trip was in a regular hotel room and we missed the space and quality of vacation. It really feels luxurious to have that extra spcae.

We struggled to come-up with an exact break-even point because we would NEVER spend $10,000 for a 2BR during spring break at BLT...& yes, that is actually what it would have cost this past year. I do think we will save money because we are in that group that goes every year, stays in Deluxe Villas, and bought resale. But I am not positive.

Like I said it a quality of life and vacation that has pushed us to make this decision.