Actual Re-sale Savings

[thanxfornoticin]

But you're not being handed $45. There is a remaining cost.

I have widgets for sale! I'll sell you this pristine brand new widget for full price. Or I'll sell you this scuffed up used widget for $45 off!

Doesn't the full price inform your decision... or all that matters is you save $45 buying the scuffed up used widget?!

I understand and appreciate the comparison, but with DVC points aren't direct points and resale points for the same widget? One just comes out of a nice, new shiny Disney box, and the other comes out of the generic white box? Either way, you get the same room at the resort.....

The OPs question is one we've seen before and is often simplistically complex, depending on how people intend to use DVC points. The comments above are quite interesting and thought-provoking, and we've been DVC members for 30 years!!

 

[havoc315]

I understand and appreciate the comparison, but with DVC points aren't direct points and resale points for the same widget? One just comes out of a nice, new shiny Disney box, and the other comes out of the generic white box? Either way, you get the same room at the resort.....

Nope, they are different widgets. If they were the same, then only a fool would buy direct.

They are very different:

That re-sale GFV widget can't be used at Riviera, Disneyland Tower, or other future resorts. 20 years from now, the direct widget may be used at 15-20+ Disney DVC resorts, while that re-sale widget may be limited to 7 of the oldest WDW resorts.
That re-sale widget is a 2-6 month purchase process of lots of uncertainty, the direct widget.. you walk into the showroom and drive away with your widget right away.
That direct widget comes with perks like dining discounts, AP discounts, access to membership extras like Moonlight Magic, access to the Top of the World Lounge... that's excluded from the re-sale widget.

It's like comparing a First Class airline ticket versus a Coach ticket. They both get you to the same destination in the same amount of time. Bu they aren't the same thing.

The OPs question is one we've seen before and is often simplistically complex, depending on how people intend to use DVC points. The comments above are quite interesting and thought-provoking, and we've been DVC members for 30 years!!

 

[thanxfornoticin]

Agreed - there are a couple differences. I know the blue card perks are important for many folks - although the AP perk is up in the air right now. I'm a little short-sighted because we're not interested in the newer resorts with the changed use restrictions - but that's a valid point. So yes, with the newer resorts and future resorts, there is a big difference. We've bought a number of resale contracts over the years, and really haven't minded the wait to save a lot of money. Again, that's our situation, not everyones. I do enjoy your analogies, though!!

 

[Brian Noble]

But you're not being handed $45. There is a remaining cost.

Doesn't matter, because you're paying the remaining costs (dues on the contract) whether you buy it retail or resale. In one case, you start with those remaining costs with $45-$90/pt in your pocket if you buy it resale. In the other case, you don't start with that extra money.

If the brand new widget is $50, and you can reduce that price to $5 by purchasing the scuffed up used widget, that's a very different situation than if the brand new widget is $1 million, and it is $9,999,955 for the scuffed up used widget.

This is a different question, namely: What's the value of qualified points and a qualified membership, as compared to unqualified points and a white card membership? And, that's a fine conversation to have. But it doesn't change the fact that saving ten or twenty grand on the purchase is non-trivial for most purchasers.

On the other hand, if ten or twenty grand is trivial to you, then great! Don't think twice and just buy the dang thing.

 

[havoc315]

Agreed - there are a couple differences. I know the blue card perks are important for many folks - although the AP perk is up in the air right now. I'm a little short-sighted because we're not interested in the newer resorts with the changed use restrictions - but that's a valid point. So yes, with the newer resorts and future resorts, there is a big difference. We've bought a number of resale contracts over the years, and really haven't minded the wait to save a lot of money. Again, that's our situation, not everyones. I do enjoy your analogies, though!!

You go back a few years, the difference between Direct and re-sale was much smaller. Re-sale used to get the same perks.

As the resale market has grown, Disney has looked for ways of curtailing it and pushing new buyers towards direct.

But imagine if I told you that your re-sale contract was only good for stays at SSR, OKW, BLT and AKV.
But your direct points were good at the 4 above plus GFV, RIV, Poly, CCV, and non-WDW DVCs...

That's going to be what DVC looks like in 20 years. Where re-sale is limited to handful of the older resorts, while all the newer resorts will be tradeable only to direct buyers.

 

[Brian Noble]

@havoc315, from where I sit you are conflating at least three different things.

1. Resale and developer prices are different.
2. The marginal utility of a dollar changes based on one's resources.
3. Qualified and unqualified points/accounts are different.

But you are trying to frame all of those as "you aren't saving as much money as you think," and I think that's just wrong. If you are saving $1, you are saving $1. The question is (a) how much do you care about $1, and (b) are the differences worth that $1 to you?

In other words, this is Just Another Version of the resale vs. developer argument, where everyone seems to want to convince everyone else that the decision they made is the right one for everyone. It isn't, and it won't be, because factors (2) and (3) are situational---they are different for different people.

But factor (1) is just straightforward second grade math, and that doesn't change no matter one's circumstances.

 

[havoc315]

Doesn't matter, because you're paying the remaining costs (dues on the contract) whether you buy it retail or resale.

The remaining cost isn't just the dues -- it's the remaining initial points cost.

Again, the savings off the entire cost becomes very relevant in decision making.

This is a different question, namely: What's the value of qualified points and a qualified membership, as compared to unqualified points and a white card membership? And, that's a fine conversation to have. But it doesn't change the fact that saving high-four- to low-five-figures on the purchase is non-trivial.

Never suggested it was trivial. I certainly don't believe a 20% savings was trivial. And this is exactly what we are doing. To determine whether it's worth it to pay more for "qualified points and a qualified membership, as compared to unqualified points and a white card membership," the relative cost is critical to know.

If I told you that a First Class airline ticket was 1% more than a coach ticket, your thinking would be very different than if I told you that a First class airline ticket was 400% more than a coach ticket.

Is it worth it to pay an extra $16,000 for qualified points and white card membership? For me, the relative costs are critical. If you told me it was $1 for unqualified points and $16,001 for qualified points... I'd jump on the unqualified points! If it was $1,000,000 for unqualified points and $1,016,000 for qualified points -- I'd pay the extra difference for the qualified points (assuming I was willing to pay a million for DVC at all).
Maybe not for you -- But my decision is totally affected by the relative cost difference, not just the absolute cost difference.

 

[havoc315]

Doesn't matter, because you're paying the remaining costs (dues on the contract) whether you buy it retail or resale.

The remaining cost isn't just the dues -- it's the remaining initial points cost.

Again, the savings off the entire cost becomes very relevant in decision making.

This is a different question, namely: What's the value of qualified points and a qualified membership, as compared to unqualified points and a white card membership? And, that's a fine conversation to have. But it doesn't change the fact that saving high-four- to low-five-figures on the purchase is non-trivial.

Never suggested it was trivial. I certainly don't believe a 20% savings was trivial. And this is exactly what we are doing. To determine whether it's worth it to pay more for "qualified points and a qualified membership, as compared to unqualified points and a white card membership," the relative cost is critical to know.

If I told you that a First Class airline ticket was 1% more than a coach ticket, your thinking would be very different than if I told you that a First class airline ticket was 400% more than a coach ticket.

Is it worth it to pay an extra $16,000 for qualified points and white card membership? For me, the relative costs are critical. If you told me it was $1 for unqualified points and $16,001 for qualified points... I'd jump on the unqualified points! If it was $1,000,000 for unqualified points and $1,016,000 for qualified points -- I'd pay the extra difference for the qualified points (assuming I was willing to pay a million for DVC at all).
Maybe not for you -- But my decision is totally affected by the relative cost difference, not just the absolute cost difference.

@havoc315, from where I sit you are conflating at least three different things.

1. Resale and developer prices are different.
2. The marginal utility of a dollar changes based on one's resources.
3. Qualified and unqualified points/accounts are different.

But you are trying to frame all of those as "you aren't saving as much money as you think," and I think that's just wrong. If you are saving $1, you are saving $1. The question is (a) how much do you care about $1, and (b) are the differences worth that $1 to you?

In other words, this is Just Another Version of the resale vs. developer argument, where everyone seems to want to convince everyone else that the decision they made is the right one for everyone. It isn't, and it won't be, because factors (2) and (3) are situational---they are different for different people.

But factor (1) is just straightforward second grade math, and that doesn't change no matter one's circumstances.

You're confusing what I'm saying. I'm not saying any of those things.
All I'm saying is simply, "relatively speaking, this is how much you're actually saving."

That's it. And then, it's for each person to look at those relative savings and determine the value of those savings versus the costs.

You seem to be suggesting that relative dollars are irrelevant, that only absolute dollars matter. With that I disagree --- RELATIVE cost is absolutely critical to my decision making, not just absolute cost. (It's not JUST relative cost -- Both relative and absolute dollars factor in).

Going back to First class airfare example -- Would I pay an extra $300 for a first class ticket as opposed to a coach ticket? The relative cost is absolutely critical to my decision.
If it was a $300 coach airfare, I probably wouldn't pay an extra $300 for the first class ticket. If it was a $2,000 coach ticket, I'd be more likely to pay the extra $300 for the first class upgrade.

Maybe the relative costs mean nothing to you. But for me (and I assume I'm not alone), the relative costs become a major part of the equation.

 

[Brian Noble]

the relative cost is critical to know.

But you are arguing about the perception of savings, not the actual fact of savings. And yes perceptions vary, and you can add factors to further swing those perceptions, because people are human and therefore make decisions based on factors other than "rational thought" in the sense that Economists use the term.

This reminds me of my favorite Economics joke, having to do with Mankiw's Third Principle. The Stand-Up Economist does it better justice than I can though, so I'll let him have my last word on this thread.

 

[havoc315]

But you are arguing about the perception of savings, not the actual fact of savings. And yes perceptions vary, and you can add factors to further swing those perceptions, because people are human and therefore make decisions based on factors other than "rational thought" in the sense that Economists use the term.

Proportion is factual too. Proportion of savings is a fact. Absolute dollars is also factual. They are both facts. You seem to concentrate on only one.

It's like asking, "how's the weather?" My answer, "it's warm and it's rainy."
You are yelling at me, "Stop saying it's rainy! The only answer is that it's warm!"

A 30% savings is a fact. A $16,000 savings is also a fact. Perception of those facts will vary based on a lot of factors.
If I'm making a decision, I want to know both. I want to know the absolute dollars. I also want to know proportionally, how much additional/saved is the difference. Both facts are critical to my decision making.

"Save $16,000!" Is that a lot or a little? Well, a factual analysis of relatively helps to determine if it's a lot or a little.

This reminds me of my favorite Economics joke, having to do with Mankiw's Third Principle. The Stand-Up Economist does it better justice than I can though, so I'll let him have my last word on this thread.

 

[skippytx]

I've always found these exercises amusing. The words "savings" "cheaper" being used in the context of owning a Disney timeshare, and taking Disney vacations. The mental gymnastics people have used over the years to convince themselves they're getting a "deal" or "saving money" is just laughable. This is a discretionary ( I won't call it luxury, because honestly there is nothing luxury about DVC) product sold to people that can afford it.


I don't care if Riviera is the smartest choice. I don't want to stay there. People gladly pay the premium for Beach Club, or Poly, or wherever they like to stay. I paid a premium to buy at BLT. It doesn't matter to me that OKW and SSR are better deals long term. A WDW vacation costs me over 10,000 dollars on average when I consider airfare, tickets, food for 8 or 9 days, and everything else.

The blue card discounts are almost worthless right now. I have one, and it used to save me a fair bit of money. Decent discount on hard ticket events, Gold AP's for like 600 bucks. Now if you're lucky you can save 10 bucks on a MNSSHP ticket. I do admit I saved a little bit on some merch the last trip, maybe about 80 bucks all together across my entire party.

Everyone's situation is different though. I only care about booking rooms at BLT at the 11 month mark. I don't care about the blue card, the epcot lounge, or buying annual passes. Others here have major FOMO about not having the blue card and happily spend the extra money to buy direct points.

 

[BeachClub2014]

I've always found these exercises amusing. The words "savings" "cheaper" being used in the context of owning a Disney timeshare, and taking Disney vacations. The mental gymnastics people have used over the years to convince themselves they're getting a "deal" or "saving money" is just laughable. This is a discretionary ( I won't call it luxury, because honestly there is nothing luxury about DVC) product sold to people that can afford it.


I don't care if Riviera is the smartest choice. I don't want to stay there. People gladly pay the premium for Beach Club, or Poly, or wherever they like to stay. I paid a premium to buy at BLT. It doesn't matter to me that OKW and SSR are better deals long term. A WDW vacation costs me over 10,000 dollars on average when I consider airfare, tickets, food for 8 or 9 days, and everything else.

The blue card discounts are almost worthless right now. I have one, and it used to save me a fair bit of money. Decent discount on hard ticket events, Gold AP's for like 600 bucks. Now if you're lucky you can save 10 bucks on a MNSSHP ticket. I do admit I saved a little bit on some merch the last trip, maybe about 80 bucks all together across my entire party.

Everyone's situation is different though. I only care about booking rooms at BLT at the 11 month mark. I don't care about the blue card, the epcot lounge, or buying annual passes. Others here have major FOMO about not having the blue card and happily spend the extra money to buy direct points.

But if we didn't incessantly debate whose math is correct, which resort is best, which mode of transportation is the easiest and most reliable, whether direct makes more sense than resale, or whether blue card perks are worth it then what would we talk about?

That's what makes the DIS so awesome.

 

[RamblinWreck]

I've always found these exercises amusing. The words "savings" "cheaper" being used in the context of owning a Disney timeshare, and taking Disney vacations. The mental gymnastics people have used over the years to convince themselves they're getting a "deal" or "saving money" is just laughable. This is a discretionary ( I won't call it luxury, because honestly there is nothing luxury about DVC) product sold to people that can afford it.


I don't care if Riviera is the smartest choice. I don't want to stay there. People gladly pay the premium for Beach Club, or Poly, or wherever they like to stay. I paid a premium to buy at BLT. It doesn't matter to me that OKW and SSR are better deals long term. A WDW vacation costs me over 10,000 dollars on average when I consider airfare, tickets, food for 8 or 9 days, and everything else.

The blue card discounts are almost worthless right now. I have one, and it used to save me a fair bit of money. Decent discount on hard ticket events, Gold AP's for like 600 bucks. Now if you're lucky you can save 10 bucks on a MNSSHP ticket. I do admit I saved a little bit on some merch the last trip, maybe about 80 bucks all together across my entire party.

Everyone's situation is different though. I only care about booking rooms at BLT at the 11 month mark. I don't care about the blue card, the epcot lounge, or buying annual passes. Others here have major FOMO about not having the blue card and happily spend the extra money to buy direct points.

Personally, I think it’s a lot healthier to try to figure out what makes the most sense for you financially, even when making discretionary purchases (maybe even especially when making discretionary purchases) than it is to just say “well I already know it’s expensive, so I don’t really care how expensive it is!”

From my angle I see someone doing some impressive mental gymnastics, but it isn’t the people you are criticizing.

I’m sure some people who have that mindset are just really, really rich, but I always assume (because it’s much more likely) that people with that attitude are in a lot of financial trouble.

 

[havoc315]

As others have alluded to you ignored the opportunity cost of the $$ saved day one which is material - nearly as material as the upfront savings.

Using Poly as the example, you save $16k upfront. Instead of investing that $16k in DVC at a 0% return (since you assume you sell for the same amount) if you invested it at a 5% real return (adj for inflation) that $16k is worth $42k at the end of 20 years. That would imply the savings is more like $26k (in today's $), not $16k. Now the savings are 56%. You can argue the rate of return, for me I feel confident I can get a 5% real return over 20 years.

The opportunity cost absolutely should be factored in for the most accurate appraisal. And that does increase the savings.
But a 5% return, after inflation, is very very optimistic.
A very conservative investment barely matches inflation.
A conservative investment (bonds, etc) can basically match inflation to a 1% return after inflation.
A balanced approach may get you about 3% better than inflation -- This is the number I use when calculating lost opportunity cost.
5% would require an aggressive approach -- Which could be much higher than 5%, but also much much lower. My aggressive investment account is down nearly 13% this year. (but over 10 years, has been getting an annual return of about 7%... so even my aggressive accounts are only about 3-4% better than inflation currently.
Then you have to take taxes out of that income growth.

Now, most people aren't aggressively investing their savings. They may not invest it at all. Of course, even if they go and spend the savings on a $16,000 bottle of wine that they drink on New Year's Eve, proper economics still requires calculation of lost opportunity cost.

Running my own calculations, I'd put the opportunity cost/savings on that $16k as about $4,500k. Admittedly, that does increase the re-sale savings on Poly to about 40%. Bumps Riviera up to 26%. Bumps Beach Club up to 27%.
So revised numbers -- Poly, 40%, Beach Club 27%, Riviera 26%.
That's now accounting for the lost opportunity cost of buying direct.
And now comparing Riviera direct to Beach Club resale: Riviera direct is 26% cheaper than Beach Club resale.

 

[Paul Stupin]

I've always found these exercises amusing. The words "savings" "cheaper" being used in the context of owning a Disney timeshare, and taking Disney vacations. The mental gymnastics people have used over the years to convince themselves they're getting a "deal" or "saving money" is just laughable. This is a discretionary ( I won't call it luxury, because honestly there is nothing luxury about DVC) product sold to people that can afford it.


I don't care if Riviera is the smartest choice. I don't want to stay there. People gladly pay the premium for Beach Club, or Poly, or wherever they like to stay. I paid a premium to buy at BLT. It doesn't matter to me that OKW and SSR are better deals long term. A WDW vacation costs me over 10,000 dollars on average when I consider airfare, tickets, food for 8 or 9 days, and everything else.

The blue card discounts are almost worthless right now. I have one, and it used to save me a fair bit of money. Decent discount on hard ticket events, Gold AP's for like 600 bucks. Now if you're lucky you can save 10 bucks on a MNSSHP ticket. I do admit I saved a little bit on some merch the last trip, maybe about 80 bucks all together across my entire party.

Everyone's situation is different though. I only care about booking rooms at BLT at the 11 month mark. I don't care about the blue card, the epcot lounge, or buying annual passes. Others here have major FOMO about not having the blue card and happily spend the extra money to buy direct points.

Not sure why you regard this discussion as merely “amusing.” I actually think it’s pretty interesting, with smart thoughts from well informed people.

 

[MickeyMice]

I suspect BC will depreciate significantly in 10 years, but we really don't know. You'd be taking a big risk. I'm guessing that in 2032, BCV re-sale will be at about $80-$110 per point.

i can probably get ~$25/pt renting out 11 month BCV points on the open market, and that market doesn't care about 2042 - just about BCV desirability and DVC rental discount vs. cash rates. and cash rates are only going up, so i can see those points renting out for more and more.

so i'm not really seeing how BCV contract prices will plummet that much if the rental demand is still going strong. in 2037, i'm unlikely to sell my BCV contract for less than the present day value of 5 years of rental income (less taxes, dues, aggravation of course).

 

[CaptainAmerica]

Buying a incentivized resort direct is significantly cheaper than buying a 2042 resort re-sale..

I don't think I've ever seen anyone suggest buying a 2042 resort as a way to save money. Ever. People buy 2042 resorts because they're obsessed with Beach Club. And Beach Club resale is much cheaper than Beach Club direct at sold out prices.

 

[mustinjourney]

The remaining cost isn't just the dues -- it's the remaining initial points cost.

Again, the savings off the entire cost becomes very relevant in decision making.





Never suggested it was trivial. I certainly don't believe a 20% savings was trivial. And this is exactly what we are doing. To determine whether it's worth it to pay more for "qualified points and a qualified membership, as compared to unqualified points and a white card membership," the relative cost is critical to know.

If I told you that a First Class airline ticket was 1% more than a coach ticket, your thinking would be very different than if I told you that a First class airline ticket was 400% more than a coach ticket.

Is it worth it to pay an extra $16,000 for qualified points and white card membership? For me, the relative costs are critical. If you told me it was $1 for unqualified points and $16,001 for qualified points... I'd jump on the unqualified points! If it was $1,000,000 for unqualified points and $1,016,000 for qualified points -- I'd pay the extra difference for the qualified points (assuming I was willing to pay a million for DVC at all).
Maybe not for you -- But my decision is totally affected by the relative cost difference, not just the absolute cost difference.

and this example is the difference between an economist and a behavioral psychologist.

 

[DL1WDW2]

I've always found these exercises amusing. The words "savings" "cheaper" being used in the context of owning a Disney timeshare, and taking Disney vacations. The mental gymnastics people have used over the years to convince themselves they're getting a "deal" or "saving money" is just laughable. This is a discretionary ( I won't call it luxury, because honestly there is nothing luxury about DVC) product sold to people that can afford it.


I don't care if Riviera is the smartest choice. I don't want to stay there. People gladly pay the premium for Beach Club, or Poly, or wherever they like to stay. I paid a premium to buy at BLT. It doesn't matter to me that OKW and SSR are better deals long term. A WDW vacation costs me over 10,000 dollars on average when I consider airfare, tickets, food for 8 or 9 days, and everything else.

The blue card discounts are almost worthless right now. I have one, and it used to save me a fair bit of money. Decent discount on hard ticket events, Gold AP's for like 600 bucks. Now if you're lucky you can save 10 bucks on a MNSSHP ticket. I do admit I saved a little bit on some merch the last trip, maybe about 80 bucks all together across my entire party.

Everyone's situation is different though. I only care about booking rooms at BLT at the 11 month mark. I don't care about the blue card, the epcot lounge, or buying annual passes. Others here have major FOMO about not having the blue card and happily spend the extra money to buy direct points.

I agree about BLT ! So glad I purchased 100 points in 2010 .
Probably should have listened to the DLGuide to purchase at Grand Californian ! But love BLT so much!


Basically the most important is to consider the maintenance & points per night in all calculations.

 

[havoc315]

i can probably get ~$25/pt renting out 11 month BCV points on the open market, and that market doesn't care about 2042 - just about BCV desirability and DVC rental discount vs. cash rates. and cash rates are only going up, so i can see those points renting out for more and more.

so i'm not really seeing how BCV contract prices will plummet that much if the rental demand is still going strong. in 2037, i'm unlikely to sell my BCV contract for less than the present day value of 5 years of rental income (less taxes, dues, aggravation of course).

What we know is that you can fairly easily get $18 per point:
https://dvcrequest.com/

You also have to pay rental income on that.
https://dvcfan.com/2022/01/21/do-i-have-to-pay-taxes-when-renting-my-dvc-points/
You're paying dues of almost $8 per point.

In the end, maybe you're clearing $7 to $8 per point by renting out.
So 10 years left in the contract -- If you rented out your points every year, maybe you'd clear $70 to $80.
Beach Club is currently $150 to $160 per point on the resale market.
So yeah, prices will plummet over the next 10 years at some point.
If you bought Beach Club right now, and rented out your points every year, then you'd break even at best.