Why buy from Disney?

[MargaretMary]

Could someone outline the pros and cons of buying from Disney vs. a resale?

Thanks!

Margaret Mary

 

[carlos1117]

A far as I can see there are only a few pros for Disney;

1. If you want SSR (and the additional 12 years), however SSR is already showing up on the resale market.
2. A little easier closing


Pros for resale;

1. Substantial savings 10-12 dollars per point
2. Other DVC properties available,i.e., OKW, BWV, BCV, VWL

 

[Granny]

There are a couple of pros for buying through Disney:

1. SSR, as mentioned, is pretty much only available there. And you have the option of their incentives.

2. You get to choose exactly how many points you want to buy (minimum 150 for starters). With resale, you get what is out there.

3. You get to choose your Use Year. If you have a specific vacationing pattern, this can be helpful. It's not a big deal, but it is a benefit of buying through Disney.

4. No closing costs.

5. No risk, no seller backing out, no haggling, no commissions, no waiting for a sale to clear Disney's right of first refusal.

6. Financing through Disney is, as many have reported, very easy even if credit history is not perfect.


Advantage of buying through resale:

1. You can buy where you want to stay the most, even if it is a resort that has been sold out.

2. Money savings. Can be substantial. I don't know why I didn't list it as number one, except saving money is meaningless if you aren't buying what you want.

Those are off the top of my head, I'm sure there are more pros and cons.

 

[ricksje]

I just recently bought from Disney and this was my main reasoning:

Disney is currently offering a $10 per point discount on SSR Phase 2 without forfeiting any points, so you figure with that savings you're paying $85 per point, which compared to the resales + closing costs is a pretty good deal for an extra 12 years of use.

 

[WDW LOVR]

I agree with your comments. We took the extra points instead of the $10/point off as we were planning 2 trips next year anyway and thought staying in a one bedroom at OKW for 10/point was pretty cheap.

The two other pluses of buying through Disney was the extra 12 years and not having to make a payment until next June.

 

[SoCalKDG]

Disney is currently offering a $10 per point discount on SSR Phase 2 without forfeiting any points, so you figure with that savings you're paying $85 per point, which compared to the resales + closing costs is a pretty good deal for an extra 12 years of use.

For comparisons, here is what my final contract is looking like(signing all paperwork this weekend). 150 points, I paid closing and MF's, ended up being $78 per point. I do have 110 points for 2004, which I could rent out(similar to forfeiting above) which would net $1100 thus bringing my cost down to $71 per point.

Thus we are comparing $71 to $85, with SSR getting 12 extra years(but costing $2100 xtra). Then again, I really wanted BWV, thus that is what I chose.

If you want SSR, go with Disney, otherwise bid $73-$74 for BWV, VWL, or BCV(or $72 for OKW) and get a resale.

My opinion, of course.

 

[carlos1117]

SoCal is right. It's not just a couple of extra dollars. On a 210 point contract it's at least 2000 dollars. I just payed 72 per point plus 500 closing, which comes out to 2.38 per point. My total was 74.38 per point. Disney's lowest price is 85.

Remenber, you're paying that extra money for something you won't use for 38 years!

 

[ricksje]

Remenber, you're paying that extra money for something you won't use for 38 years!

But isn't part of the point of DVC to save money over a long period of time while others are paying inflating room rates?

At an extra $1500, which is my difference since I got 150 points (when you're paying as much as you are how much will financing an extra $1500 really cost?) It's a pretty good investment.

For $1500 where are you going to be able to vacation for 12 years 38 years from now? That's only an extra $125 per year and at that time I'd be surprised if you can stay anywhere for $125 per trip.

 

[carlos1117]

Rick,

If you use the "Rule of Seven", as commom investment tool, you're money is suppose to double every 7 years, so if you took that 1500 in seven years it would be 3000, in fourteen 6000, in twenty-one 12,000, in twenty-eight 24,000, in thirty-five, 48,000.

So now take 48000 and divide by 12years = 4000.00 per vacation for accomodations. So, all in all, it may not be a bad deal, but you still have to wait 38 years to benefit.

 

[mydogdrew]

Originally posted by carlos1117
Rick,

If you use the "Rule of Seven", as commom investment tool, you're money is suppose to double every 7 years, so if you took that 1500 in seven years it would be 3000, in fourteen 6000, in twenty-one 12,000, in twenty-eight 24,000, in thirty-five, 48,000.

So now take 48000 and divide by 12years = 4000.00 per vacation for accomodations. So, all in all, it may not be a bad deal, but you still have to wait 38 years to benefit.

That's right and don't forget to add the MF on top of the $4,000. Doesn't make much sense does it. We just bought a resale with 2002-2004 points intact. We are renting these and will use begining with 2005. After taking into account closing, MF and purchase (we paid $76), our net cost comes out to around $52 and we get BWV which is ahat we want. If you discount the 12 year issue (which I do), there really isn't a big advantage to SSR since, as the largest resort, there won't be any real 11 month advantage there. Buy what you like and be patient.

 

[RuthnPaul]

Originally posted by mydogdrew
We just bought a resale with 2002-2004 points intact. We are renting these and will use begining with 2005.

MyDogDrew, having a lot of banked points with the contracts we purchased was a BIG selling factor for us as well! That's something you will NEVER get when buying through Disney. We are going to WDW twice later this year (2 BR in Oct, 1 BR in December, weekends included), almost all on banked points. Since I will be too old to care much about what happens in 2042, I'd rather have that "instant gratification" of "free" vacations!!

 

[LIFERBABE]

If you use the "Rule of Seven", as commom investment tool, you're money is suppose to double every 7 years, so if you took that 1500 in seven years it would be 3000, in fourteen 6000, in twenty-one 12,000, in twenty-eight 24,000, in thirty-five, 48,000.

I disagree,
If we were worried about the rule of 7, we wouldnt be investing any money into DVC at all! Matter of fact, In financial circles, timeshares do not make much sense at all, as your money could definitely work harder for you elsewhere. DVC is a choice, a decision to put your money into something fun for you or your family. That's what makes sense.
Those 12 years are very tangible and if one decides to purchase SSR as opposed to the other resorts, whether they are young, want to leave it to family or just because, they won't be anymore of a liability than the first 38 years!

MyDogDrew, having a lot of banked points with the contracts we purchased was a BIG selling factor for us as well! That's something you will NEVER get when buying through Disney.

Yes this would be a benefit, but having checked the resalers daily for the past 8 months, I can say that these contracts are not easy to find. There are more stripped (Some to 2006!) then loaded contracts for sale.

 

[jel0511]

I agree that if you can find a contract that meets your needs AND had all current points, as well as some banked points, resale is the way to go. We had made an offer on a resale at BWV. Including closing costs, it worked out to be $75 per point, but was a stripped contract, meaning no points until 05. We didn't care, since we had just returned from 2 weeks, and have no plans to return to WDW until next summer. Well, then the new waitlist from DVC came out, and as a back-up plan, but our name on the list. Well of course DVC came through in less than a week, and we could still get out of our resale contract. With all 04 points intact, and we've already rented them, our per point cost came down to $79. So, that $4 per point was worth it to me to get the same use year (resale wasn't) and to get the points now. I was able to secure BW view ressies for next summer and didn't have to wait of ROFR, which might have failed based on current reports. We bought 150 points, so the extra money was only $450 (resale was for 152 points, we bought 150 from Disney) so definately worth it to us. We also will get 2% back from our CC company for being able to charge it, so the difference really comes down to about $200, really not much. It really depends on your situation, and what you're getting on the resale market. Lately, they've been a lot of stripped contracts and not many loaded contracts. If my resale contract had been loaded, I definately would have stayed with it, since it would have been a significant savings.

 

[DrTomorrow]

Originally posted by carlos1117
Rick,

If you use the "Rule of Seven", as commom investment tool, you're money is suppose to double every 7 years, [...]

Funny, I did a Google search, and didn't find a "Rule of Seven", and as an MBA, I'd never heard of it.... (I did find Seven of Nine, but that's a different forum )

I did find the tried.and.true "Rule of 72", which says "72 divided by the Interest Percentage is the number of years it takes to double." So roughly speaking, to double your money every 7 years you'd need a rate of return a little over 10%. Carlos, if you can get a guaranteed ROR of over 10% per year for the next 38 years, you should be writing a financial newsletter.

I find it very odd that people are buying a long-term vacation plan but saying that a longer-term plan isn't worth it.

 

[tjkraz]

Also consider that your annual dues will end up representing a lot more of your total cost than the initial purchase. Right now, OKW dues are 15% lower than BWV.

IMO, the decision-making process is pretty simple:

1. If you want to stay at one particular resort the majority of the time, buy points at that resort.

2a. If you have no strong resort preference, need the DVC financing and/or want the extra 12 years of ownership, buy SSR from DVC. And don't feel that you need to justify the desire to have the extra 12 years to anyone but yourself.

2b. If you have no strong resort preference, can finance the purchase yourself and/or don't care about the extra 12 years, buy a resale at Old Key West (cheapest on-site resale, lowest dues.)

 

[SoCalKDG]

I agree with tjkraz.

 

[DrTomorrow]

I agree with SoCalKDG's agreement with tjkraz.

 

[erikthewise]

One advantage of buying with Disney is that you can use your new points almost instantly to make a reservation, whereas with resales you have to wait until closing. Depending on the timing of your first stay, this could make a significant difference in your first-year experience. For many people a minor consideration, but in our case it was important.

The "12 more years" factor should be viewed through the lens of a present-value calculation. Just as getting a million dollars in 2042 is not the same as getting a million dollars today, 12 years starting in 2042 is only worth 2-4 years right now.

 

[TiggerFreak]

Originally posted by carlos1117
Rick,

If you use the "Rule of Seven", as commom investment tool, you're money is suppose to double every 7 years, so if you took that 1500 in seven years it would be 3000, in fourteen 6000, in twenty-one 12,000, in twenty-eight 24,000, in thirty-five, 48,000.

So now take 48000 and divide by 12years = 4000.00 per vacation for accomodations. So, all in all, it may not be a bad deal, but you still have to wait 38 years to benefit.

I'm not an accountant, but I do seem to remember the average new car in 1965 was about $2000 and now it's around $25000. Wouldn't inflation erode the buying power of that $4000 and increase the room rack rates accordingly? Making our prepaying for DVC look even better!

 

[DrTomorrow]

Originally posted by erikthewise
The "12 more years" factor should be viewed through the lens of a present-value calculation. Just as getting a million dollars in 2042 is not the same as getting a million dollars today, 12 years starting in 2042 is only worth 2-4 years right now.

Yeah, I had to do all that "Net Present Value" and "Discounted Cash Flow" stuff. But I still can't totally convince myself that present-value applies here; I mean, what's the NPV of a "Disney Vacation Experience" in the future when I'm at SSR with my wife, DS & DDIL and the grandchildren? And if it does apply, we need to remember that a DVC unit is something that will appreciate in value over time - unless you think that a 1 BR at SSR will still cost only $400 in 2048. Finally, remember that this is more along the lines of insurance - a "Guaranteed Vacation Asset" - instead of an investment.

But I guess I've got different priorities:

Cost of 300 points at SSR: over $22,000
Cost of (current) annual MF at SSR: $1,200
Taking family and friends on a DVC vacation: Priceless