When do you start to save money?

[artemis908]

Lots of interesting perspectives. I guess what I was looking at was well for one, I don't want to go to Disney every year. So the idea of trading the points appealed to me so I could go to other places. When I am traveling, for the most part, I do like doing the more "deluxe" resorts, though I have my own definition of deluxe. (ie. we stayed at an amazing B&B in Rome in May with a lovely view and awesome innkeeper). We don't have kids yet, but I imagine when we do our vacationing might be a little more limited to places like Disney World, Disneyland, and the Disney Cruise Line. So that's the thought process I had--I love to travel, I love Disney but I also love trying new places, I tend to vacation every year and if there was a way for me to do that in an easier, less expensive, or better way I would jump on it.

 

[Deb & Bill]

Lots of interesting perspectives. I guess what I was looking at was well for one, I don't want to go to Disney every year. So the idea of trading the points appealed to me so I could go to other places. When I am traveling, for the most part, I do like doing the more "deluxe" resorts, though I have my own definition of deluxe. (ie. we stayed at an amazing B&B in Rome in May with a lovely view and awesome innkeeper). We don't have kids yet, but I imagine when we do our vacationing might be a little more limited to places like Disney World, Disneyland, and the Disney Cruise Line. So that's the thought process I had--I love to travel, I love Disney but I also love trying new places, I tend to vacation every year and if there was a way for me to do that in an easier, less expensive, or better way I would jump on it.

Unfortunately, less expensive and Disney do not go together. Easier, yes. Better, yes. Less expensive, no.

 

[ELMC]

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

I love this statement. The fact of the matter is that over the life of the contract, purchasing DVC for your annual stay will most likely cost less than paying cash with a discount or renting points from a member. However, as others have mentioned, your vacation habits may change to the point that you are actually spending more money over the long run than had you not purchased DVC.

Plus, you are forking over a TON of cash on day one. I think the biggest mistake that people make when buying DVC is to say that they are saving money in year one because they are paying less for their upcoming vacation than they would have if they paid cash. But they say this without any regard to the purchase price, which clearly needs to be factored in.

I've said it before, but we purchased DVC (BLT and BWV) because we want to be able to walk to as many of the parks as possible. We didn't buy DVC to save money, to own a piece of the Magic, or to become members in any "club". Those things may have value to people, and I can respect that. But for us it's not about that. We bought resale and know that long term, lodging expenses will be less than if we booked with cash or rented points. So in that narrow respect, we will be saving money on our lodging. But money aside, we will be staying exactly where we want to stay, and that's worth paying for.

Where I think the decision making process becomes more difficult is when people are happy staying in other locations, whether they be values, mods or offsite accommodations. Then there is a whole different analysis that needs to be performed. And that can be tricky.

 

[Goofgoof]

The assumptions that I was least comfortable with in estimating breakeven were increases in cash room rates and cost to rent points. I used 3.2% for both in my analysis. There seem to be a lot of travel industry experts and other knowledgeable people on here. Does anyone have some solid numbers on room rate increases over the last 10 years? Specifically deluxe resorts (contemporary). I found limited info on line. I found a site that listed a Yacht Club room during regular season in 1998 as $280. Based on rack room rates a garden view room during regular season at the Yacht Club is $420 for 2012. That is around 3% annual increase. I have no clue if the 1998 rate is accurate. For point rentals I found some old posts that showed the cost to rent points was $11 in 2007 and the current going rate at one of the bigger name renters is $13 so that works out to about a 3.5 % annual increase. Does anyone know if these numbers are close or are they way off?

 

[Deb & Bill]

The assumptions that I was least comfortable with in estimating breakeven were increases in cash room rates and cost to rent points. I used 3.2% for both in my analysis. There seem to be a lot of travel industry experts and other knowledgeable people on here. Does anyone have some solid numbers on room rate increases over the last 10 years? Specifically deluxe resorts (contemporary). I found limited info on line. I found a site that listed a Yacht Club room during regular season in 1998 as $280. Based on rack room rates a garden view room during regular season at the Yacht Club is $420 for 2012. That is around 3% annual increase. I have no clue if the 1998 rate is accurate. For point rentals I found some old posts that showed the cost to rent points was $11 in 2007 and the current going rate at one of the bigger name renters is $13 so that works out to about a 3.5 % annual increase. Does anyone know if these numbers are close or are they way off?

Not too many people book Disney resorts for rack rate. Most people get some sort of discount.

Points rentals has been pretty much stuck at $10 since I joined the DIS some 36,000+ posts ago. And it's about the same way on other sites, too.

 

[ELMC]

Lots of interesting perspectives. I guess what I was looking at was well for one, I don't want to go to Disney every year. So the idea of trading the points appealed to me so I could go to other places. When I am traveling, for the most part, I do like doing the more "deluxe" resorts, though I have my own definition of deluxe. (ie. we stayed at an amazing B&B in Rome in May with a lovely view and awesome innkeeper). We don't have kids yet, but I imagine when we do our vacationing might be a little more limited to places like Disney World, Disneyland, and the Disney Cruise Line. So that's the thought process I had--I love to travel, I love Disney but I also love trying new places, I tend to vacation every year and if there was a way for me to do that in an easier, less expensive, or better way I would jump on it.

When you think about it, you've answered your own question about whether or not DVC is right for you. Traditionally with timeshares, the further away you get from the core of that timeshare's business model, the less value you get for your "investment". Disney is one of the most expensive vacation destinations out there, so in most cases you will be trading down when you exchange through RCI. A lot of times it can be the equivalent of renting a full size car, paying for a full size car, but ending up with a compact. If you're ok with that, then that's fine. I just feel it's important that people know what they will be getting when they purchase DVC to make frequent trades through RCI. Another thing to consider, as others have mentioned, owning DVC only gives you access to roughly 500 of the 4,000 destinations available through RCI. Now that's not to say that you won't have success using DVC to trade through RCI or that others haven't taken wonderful vacations at other destinations by doing so. It just may not be as easy or as flexible as you might think.

Personally, my family owns two timeshares. We bought DVC for our Disney vacations, and we own Marriott Vacation Club for when we want to go anywhere else. We generally use both each year, and so far that system has worked wonderfully. Good luck figuring out what will work best for you!

 

[SpaceMountain77]

Honestly, one can calculate numerous scenarios across countless Excel files and get a different outcome every time. As a quantitative psychologist, with a Ph.D. and extensive research experience in statistics, I can assure you that variables can easily be manipulated to result in desired outcomes. One can easily show gains or losses over time, it just depends on the variables being manipulated.

From a purely psychological standpoint, I suspect many people run the numbers hoping to find a DVC advantage so that they can take comfort in their purchase.

My advice to people is not to become a DVC member with the hope of saving a lot of money and accumulating gains over time. Join because you truly enjoy making regular visits to the parks and resorts and want a lifetime of Disney memories.

 

[Goofgoof]

Not too many people book Disney resorts for rack rate. Most people get some sort of discount.

Points rentals has been pretty much stuck at $10 since I joined the DIS some 36,000+ posts ago. And it's about the same way on other sites, too.

I am factoring in a 25% discount to rack rates. Since rack rates are published it is easier to compare rack rate from the past to now to come up with an annual rate of increase and then apply the discount.

I am not at all familiar with renting points. I checked David's Vacation Club rentals which lists the rate as $13 per point. I found a few others for $12 but haven't seen any for less. Where do you go to rent for $10.

 

[Goofgoof]

I am pretty new to this board. What is the rent/trade plan thing all about? I have seen several people with that under their names.

 

[Dean]

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.

Savings would be in the following order as it relates to Disney options and assuming a week:

1. No vacation
2. Of property timeshare
3. DVC by exchange
4. cheap hotel
5. for on property, value resort and so on.

I usual average a real cost of around $400 a week for 1 & 2 BR units at DVC but I've positioned myself to be able to enjoy those savings.

I think you missed my point. You're making assumptions that all else would be the same including number and length of trips plus other spending, however, there is a psychology to DVC (Timeshares in general). You tend to go more, longer and spend the money on other things related to the trip. There may still be value but it is not savings.

 

[crisi]

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.

See, and I'm agreeing with Dean. I think that MOST people are going to end up spending more. They may get more VALUE, but they won't save money. If you are making the decision based off of "saving money" then I think that over time, you will either have 1) made a mistake or more likely 2) realize you spend more, but be fine with that because you believe you are getting more value. I think that "over time" however, from what I've seen here, often takes a decade or longer for people to do the cognitive switch from "I save money" to "I get a better value."

Its sort of like when you can't pass up shoes that are half off on the clearance rack - you saved 50% on the shoes - but you would have never owned red pumps if you hadn't seen them on sale. DVC makes it easy to buy lots of shoes you'll never need, but are really cute and you do want

 

[disneynutz]

I am factoring in a 25% discount to rack rates. Since rack rates are published it is easier to compare rack rate from the past to now to come up with an annual rate of increase and then apply the discount.

I am not at all familiar with renting points. I checked David's Vacation Club rentals which lists the rate as $13 per point. I found a few others for $12 but haven't seen any for less. Where do you go to rent for $10.

Here in the DISboards Rent/Trade section. (you need to be signed in to see it)

Bill

 

[Dean]

Lots of interesting perspectives. I guess what I was looking at was well for one, I don't want to go to Disney every year. So the idea of trading the points appealed to me so I could go to other places. When I am traveling, for the most part, I do like doing the more "deluxe" resorts, though I have my own definition of deluxe. (ie. we stayed at an amazing B&B in Rome in May with a lovely view and awesome innkeeper). We don't have kids yet, but I imagine when we do our vacationing might be a little more limited to places like Disney World, Disneyland, and the Disney Cruise Line. So that's the thought process I had--I love to travel, I love Disney but I also love trying new places, I tend to vacation every year and if there was a way for me to do that in an easier, less expensive, or better way I would jump on it.

DVC is a horrible and expensive tool for non DVC options. One should only buy DVC to use for DVC resorts. It is clearly not worth buying retail just for those options.

 

[disneynutz]

I am pretty new to this board. What is the rent/trade plan thing all about? I have seen several people with that under their names.

Sign in and check out the stickies at the top of the rent/trade board.

Bill

 

[artemis908]

DVC is a horrible and expensive tool for non DVC options. One should only buy DVC to use for DVC resorts. It is clearly not worth buying retail just for those options.

That's good to know. When we took a tour of the DVC resorts the DVC rep really played up the fact you could go just about anywhere. I definitely don't want to be tied down to going only to Disney for the rest of my life, even though I do love it. Thanks!

 

[Goofgoof]

Sign in and check out the stickies at the top of the rent/trade board.

Bill

Thanks. That makes a lot of sense. The board is individuals looking to buy/sell points vs going through a 3rd party company. I will have to keep that in mind if I need to add some extra points some year.

 

[Dean]

That's good to know. When we took a tour of the DVC resorts the DVC rep really played up the fact you could go just about anywhere. I definitely don't want to be tied down to going only to Disney for the rest of my life, even though I do love it. Thanks!

Think of how they generate the cash equivalent option. They take the points and reserve a unit (usually not the best unit to rent out) then they rent it out paying CRO a fee of around 50%. That provides 2 locations to bleed off value, the units not rented AND the fees to CRO. They then pay a discounted rack rate for the cash item, generally more than you would have paid if using cash. The easiest way to compare is likely DCL. Look at what a couple of different cruises would cost on points compared to cash, normally it's in the $6-6.75 a point range. Also consider what you paid up front, yearly fees, extra $95 reservation fee and the risk including that you may not get what you want or that if you have to make changes, you've lost your points or have a further reduced value.

 

[Missyrose]

That's good to know. When we took a tour of the DVC resorts the DVC rep really played up the fact you could go just about anywhere. I definitely don't want to be tied down to going only to Disney for the rest of my life, even though I do love it. Thanks!

That's what salespeople are paid to do -- paint you a warm and fuzzy picture of all the magical options your points can offer you. When, in fact, many of those options are either difficult to come by or are very poor values for your points. If you think you want the visit Disney every year or every other year, DVC could work for you. If you decide against going to Disney one year, you could rent your points out and use the cash to pay for a different trip. But if Disney isn't your primary destination, DVC probably isn't the best choice for you.

 

[Goofgoof]

Savings would be in the following order as it relates to Disney options and assuming a week:

1. No vacation
2. Of property timeshare
3. DVC by exchange
4. cheap hotel
5. for on property, value resort and so on.

I usual average a real cost of around $400 a week for 1 & 2 BR units at DVC but I've positioned myself to be able to enjoy those savings.

I think you missed my point. You're making assumptions that all else would be the same including number and length of trips plus other spending, however, there is a psychology to DVC (Timeshares in general). You tend to go more, longer and spend the money on other things related to the trip. There may still be value but it is not savings.

I get your point. There is a way to save money but most people won't because they will go longer or stay in larger rooms. I am in that category myself. On paper there is a way to save money, but few will realize it.

 

[Dean]

I get your point. There is a way to save money but most people won't because they will go longer or stay in larger rooms. I am in that category myself. On paper there is a way to save money, but few will realize it.

Exactly. Also, don't forget there are many other options besides just owning DVC. The off property timeshare options is actually a better choice for many, including many that would never consider it.