Does DVC really save you money?

[ImSoSarah]

As titled, does buying DVC really save you money? I did a calculation and my breakeven point is 2035 if I buy in now.... that's 15 years later.
This is what my calculation is based upon.

Resale contract 150 points at BWV at $125/point.
Current maintenance fee $7.17 with 3% increase.
Type of DVC room that I would want to book with my point = 2 BR Vacation home for 5 days

My family usually goes to WDW every other year. We would stay at club level for 5 days in early August.
If we pay cash, the standard CL at BWI would be $510 per night in 2019 with summer discount.
If I factor a 3% increase on room cost, my breakeven would be year 2035 within the assumption that I go every other year and I would bank and borrow my points to get a 2 BR unit at BWI for 5 days.

Did I do something wrong with my calculation? 15 years is a long time.... Even if I pay rack rate at $700 per night Standard club level, it would take me 10 years to break even.

We have found we will break even pretty quickly - but it’s bevause of how we do it. I would never “waste” my points on the 2 bedrooms because it doesn’t seem like as great of a deal and I’m not cooking on vacation. So for us we get the studio and have been fine and do some trips without even going to the park and just more relaxing. We buy the discounted annual pass (direct buy needed I think) and plan book end trips on it as well as a quick long weekend so we get 14-18 days minimum - way cheaper than park tickets and parking, etc.

It’s like the dining plan - it’s all how you use it . We have com out ahead $500+ Before and we have broke even. DVC is no different

 

[stuartsong]

I did not read through everyones comments, but I will give my opinion for the original OP question.

You do not save money with DVC. You will spend more money at Disney because you have the DVC ownership. You will though have lot more memories, which I feel is more important. We have never regretted any of our DVC purchases.

 

[CanadaDisney05]

Exactly.
You don't think that that is misleading?

And my point was the marketing material says VACATIONS, and the PP said "But this is supposed to be 50% off accommodations not the entire vacation. "

How do you feel DVC saves you money personally? Share your personal experience with people so we can all get different points of view, and people trying to grasp this can see both sides.

Not suggesting that it's not misleading...I agree it is.

Edit: I did find the quote on the Disney website...

Save up to 50% on future accommodations** at Disney Vacation Club Resorts over the life of the Membership**

A little less misleading

 

[pogopossum]

Since buying our initial points in '98, I have found that we have certainly saved money on vacations since. We have even done the dastardly deed of staying non - Disney several times plus 6 cruises on points. Prior to buying we stayed at the trailers in Ft. Wilderness and the townhouses at the Institute. So we are not the typical studio value owners. I had a guide at WL tell me consider it cost me $5.00 a point for my vacations over the life of my membership. Had a hard time wrapping my head around that for a while, but one day, about seven years in, while noodling around I got my first "AHA" moment. Based on the number of points used for our vacations up to that time versus the cash outlayed (including purchase price, dues, and booking fees paid), our vacations* cost had gone about a $1 a year each year of ownership. *not cost per vacation per year, but cost of all those vacations had gone down about a $1 pet year. Understanding that it would never reach $0, I now knew that our vacation accommodations cost would indeed bottom out around $5 per point add have been totally ok with that since. In these terms even doing a cruise on points turns out to be a good value for those that do that.

The second "AHA" moment for me came on a 5 night vacation to HHI, when we thought we would go a day early, and called ahead to the resort to see about getting the room, remember the days when MS wasn't available in the evenings as weekends?, I was nearly floored when I found out how much our 2br would cost for the night, and the cost of 1br or studio was just as jarring. It was close to a third of our yearly dues for one night. The topper was that we were going to WDW during the holidays later that year on the points we had left over for the year.

Now the disclaimer: I realize that we are not a typical DVC, i.e. we own a shipload of points compared to most, and we rent different than most, (1br, minimum), and therefore, our results may not be indicative of everyone's future results.

But speaking from our perspective the cost of DVC ownership has been a very good value. We have been allowed to get vacation accommodations better than we would have gotten without it.

 

[crisi]

We've spent far more with DVC than we would have otherwise - AND to some extent, we've downgraded out accommodations. I like having my room cleaned every day. I like the more frequent refresh cycles of the hotels - but I've also enjoyed having space in the room for the kids in a separate room. I've enjoyed being able to treat family and friends. And I'm happy that I'm not chasing discounts or codes and that we have an easy to plan vacation . We've spent far more money at Disney than we would have without DVC.

 

[Craig Williams]

The difficult part of comparing to rack rates is that so few people are paying rack. I think the better comparison isnto renting the same point from a broker (or whomever).

Here's the best way, imo, to calculate break even.

Dont look at how many points you need, just look a single point. For argument we'll look at a Poly resale for $145/point. There are 47 years remaining. $145/47 --> $3.09 per point per year. 2019 maintenance fees are $6.76/point. 2019 value is $3.09+$6.76 = $10.85.

TTS rents at $17.

$17-$10.85 = $6.15 savings over renting the same point.

Maintenance fees and rental fees will both increase annually, at least close enough that we will likely see the savings be approximately the same per year. Hopefully this assumption is wrong though, if savings increase break even year decreases.

Divide what you paid by the savings under rental to estimate . Here's that's $145/$6.15 = 23.5 years.

Of course, doing this math with direct numbers doesnt include savings from any other discounts like APs, tables in wonderland access, etc. It also doesnt place a monetary value on ability that you control your reservation, it's not just rented and nonrefundable. It's inexact but should get people close to a breakeven.

Another discussion is to determine the value of one point at a home resort. For example, boardwalk standard costs fewer points per night AND costs less to purchase that a week at beach club standard costs about 30% more than standard boardwalk over the life of the contract. I'm currently working to put this into a chart forum for the board.

Lots of good stuff here.

I agree that renting points is cheaper than cash price from Disney. When considering investing in DVC the most important question to answer is which resort to purchase as your home resort, ie which is the most economical DVC resort to own? Depending on which you buy and what price will determine your break even year based on the analysis above. For example, based on the math above my break even on my most recent AUL purchase of 230 points @ $80pp vs renting @ $17 pp is about 10 years (which to me means I’ll enjoy 32 more years of my AUL DVC contract for the cost of my annual MF).

I started another thread discussing this very issue and contrary to popular opinion, the Aulani is maybe the most economical to own if you can get one in the $80’s ppp. So I don’t get to off topic, you can check out that thread here for more:

https://www.disboards.com/threads/aulani-economical-resort-ranking.3757259/

 

[yaya74]

OP here..... wow, I never would have thought that my silly little post would make a three-page thread.

BIG THANKS TO EACH AND EVERYONE OF YOU who took the time to read my post and share your experience and knowledge on DVC.

I have read ALL of the posts and enjoyed reading every single word. I have learned a lot about DVC, too!! It is true that DVC is NOT for everyone and Disney has a goal to get our hard-earned money with everything that it does. DVC is definitely one of them.

What @MumziMom wrote in post #40 hit the bullseye. My kids are still young, 11 and 7. Staying at CL, although is expensive, fits the current need of my family. DH and I enjoyed the convenience, the offerings and the space of the CL lounge. My family enjoy trips to Disney. But I don't know how my kids would feel 10 years later..

I know comparing CL to a 2 BR DVC room is comparing orange to apple. I am just comparing what I would normally pay out of pocket to what I would do with DVC points. If 1BR unit has a third bed, I would definitely put more serious thoughts into getting a DVC.

Anyways, thank you for giving me the chance to explore how DVC would work for my family!!

 

[Fred M]

I can't remember where I read it when I was first looking at DVC, but one of the websites had a helpful tool. They listed the people who shouldn't buy DVC, and the list was something like this: (1) people who don't want to be locked in going to a Disney resort; (2) people who stay primarily at Value or Moderate resorts when they stay on property; (3) people who stay less than 10-11 nights a year when they did stay on property; (4) people who don't plan to visit a lot of Disney resorts more than 10 years out; and (5) people who think DVC is an investment rather than pre-paid lodging. That list is pretty accurate. We own at both Copper Creek and Aulani and I can't disagree with that general advice.

If you're used to club level, I think you wouldn't be happy with DVC because DVC is really condo living rather than hotel or club level living.

That being said, you need to look at how much you spend (or might spend) when you go to a Disney resort, compare that to the cost of your DVC points and maintenance fees, and see which one works best for you.

For my wife and I, we love DVC because when we retire, we will be doing a lot of trips to Disney properties but may not settle in Florida. Until then, we're having fun with our points. But if you really wanted to retire in Orlando, I'd buy a townhome, condo, or house rather than buy DVC.

Everyone has different motivations for why they love or loathe DVC. You need to see what's best for you. Good luck!

 

[Deb & Bill]

Lots of good stuff here.

I agree that renting points is cheaper than cash price from Disney. When considering investing in DVC the most important question to answer is which resort to purchase as your home resort, ie which is the most economical DVC resort to own? Depending on which you buy and what price will determine your break even year based on the analysis above. For example, based on the math above my break even on my most recent AUL purchase of 230 points @ $80pp vs renting @ $17 pp is about 10 years (which to me means I’ll enjoy 32 more years of my AUL DVC contract for the cost of my annual MF).

I started another thread discussing this very issue and contrary to popular opinion, the Aulani is maybe the most economical to own if you can get one in the $80’s ppp. So I don’t get to off topic, you can check out that thread here for more:

https://www.disboards.com/threads/aulani-economical-resort-ranking.3757259/

I'd never buy Aulani unless I was planning to go there a lot.

 

[WebmasterPete]

In most cases, no it does not save you money. That's because even if the pre-purchase analysis shows it does, hardly anyone actually travels post-purchase the way they did pre-purchase (the way they did the analysis)

Members tend to go more often, stay longer, invite friends and family to be our guests, and try out larger villas. In other words, we END UP SPENDING MORE MONEY ON DISNEY VACATIONS than we ever imagined that we would.

FWIW, if you stay club level, you will probably be disappointed in the DVC accommodations. I love the BWV and almost always stay there in a 1 bedroom with my DH, but the rooms are not kept up to the same standard as the club level and of course, there is no food or special service involved.

DVC may work for you - just know that there will be trade offs for the extra space compared to Club level.

Carol, I have to disagree with you on club level accommodations. I almost always stay club level, and haven't missed it doing DVC at all. The lounge access is nice, but I much prefer a private kitchen and the space afforded with a 1BR over what I would pay for a 1BR suite in concierge.

 

[ArtieRyder]

Sorry - I havent read all of the posts, but I will just suggest that you base your calculation on what you could pay for renting points.

I was considering it, even buying resale and it seemed to come out pretty close. But then I based the comparable on the price you pay when you rent points and the numbers didn't make sense any more.

We just rent now, its a bit of a hassle but its a big saver.

 

[Ben E N]

I can't remember where I read it when I was first looking at DVC, but one of the websites had a helpful tool. They listed the people who shouldn't buy DVC, and the list was something like this: (1) people who don't want to be locked in going to a Disney resort; (2) people who stay primarily at Value or Moderate resorts when they stay on property; (3) people who stay less than 10-11 nights a year when they did stay on property; (4) people who don't plan to visit a lot of Disney resorts more than 10 years out; and (5) people who think DVC is an investment rather than pre-paid lodging. That list is pretty accurate.

Everybody is different, but point 2 caught me a little there. People who primarily stay in the cheaper resorts may be doing it because they offer a better value, not because they can't afford to spend the extra money needed for deluxe accommodations.
Before trying, and eventually buying into, DVC, I had visited 9 times prior, staying on property for 8 them, and only one of those trips had even been in a moderate.
That sort of visitor, as long as they can afford to pay for DVC, is a great candidate because then it is not all about saving money on future vacations, but is more about paying to upgrade them without paying the deluxe hotel prices they never would have paid otherwise.
In just 2 years of DVC ownership, it has cost me a lot more than beforehand, but I have gotten a much different and more pleasant experience on my vacations than I had gotten before as well.

 

[CarolMN]

Carol, I have to disagree with you on club level accommodations. I almost always stay club level, and haven't missed it doing DVC at all. The lounge access is nice, but I much prefer a private kitchen and the space afforded with a 1BR over what I would pay for a 1BR suite in concierge.

I personally prefer DVC over club level, also. But there is a difference in service levels and refurb/refresh frequency that should be considered if club level is what you're used to doing.

Per her post (#47), OK seems to prefer club level, at least for now.

 

[karen4546]

we bought direct May 2019. 100 points AKV. $176/point. cash purchase. we got 100 points for 2018 and 2019. We have 2 studios booked for SEptember at BCV- I would value those at $350/night. so $3500. WE are going to stay at Jambo House on points in May 2020 and i have booked value studio for 5 night and trying to complete a 4 night in club level studio plus a standard studio for one night. I value those at $1250 for the studio and $1800 for the other 5 nights. These are my calculations using AP prices on standard hotel rooms. We will be borrowing from our 2020 points. We paid for our prorated dues at closing. But so far the "value" we have gotten is over $6500 in accommodations. We are Platinum AP holders and we will probably get the Gold Pass so that is an extra value for us saving a couple of hundred dollars also. Jambo is our favorite resort and CL rooms cost $450 ish with AP discount. so if we can score a few nights a year in CL and the rest in a studio then we are going to be happy.

We have stayed in a couple of moderate resorts and they were okay and we have not stayed at any value resorts, but we like staying at AKV Jambo house, BCV and BWV so it was really a no brainer for us.

We are going to buy 150 more points resale but I wanted our first purchase to be direct. We are happy with our purchase. We go to Disney at least once a year but usually twice. We went December 2018, April 2019 and are going September 2019 so are APs were a good move in December. We both just turned 50 and we have 6 grandchildren and we hopefully have many many years of Disney vacations.

 

[pogopossum]

In comparing owning versus renting, the $17 versus $10 works in the short run. In our case, when I did the calculations at the 6-7 year mark of ownership, (just past our break even point), our cost per point for vacations was just over $10 and falling. As i said, I was told that at the end of our contract to figure it cost about $5 per point used. So in the long run owning points versus renting favors owning. Looking at where renting points costs have gone in just the last 5 years, it makes even more sense because that gap has grown. I think renting points favors occasional or one-timers more than frequent, long timers.

 

[Superman1011]

Unfortunately you are going to get a different answer from whoever you ask. The real question is “which DVC contract will save me money in like for like accommodations”. There are many factors that impact the calculations so I will list off a few below and the value DVC has over cash. But the caveat is everyone travels differently. We bought DVC to have easy access to go back to WDW more often than we do now and to have that money pre-paid vs having to find the best deals each trip. We also NEED kitchenettes as we bring most of our own food: Healthier and cheaper! Most hotels don’t have kitchenettes so that’s another simple cost consideration. Anyways...

The longer the length of the contract, the more value you get. BWV expires the earliest of DVC, in 2042. There are other resales, Copper creek for instance that cost a bit more upfront. But give you 26 more years of “free” ownership.

Inflation is a killer - what are those rooms going to cost 5-10 years from now. Fees notwithstanding, you will save money on like for like accommodations.

What other fees will Disney implement? Parking is what, $25 a night now? If you drive, that adds up very quickly. What is next, a resort fee? Everyone else in Orlando charges both, DVC let’s you avoid that.

Time value if money - are you paying cash? What else could you use that cash for? My baseline case is it could earn 6% annually via AT&T stock. Compounding may be the only thing more magical than Disney!!!

These are only a few examples...but in the long run, your ability to stay on property at a high end resort will be cheaper via DVC...but like everyone else said, that extra trip during high season, or splurging on a bigger room, etc all cost you more of your points.

Good luck!

 

[Novakm]

People often talk about when the payback is, and how much money will DVC save. Lots of discussion about time value of money. To me, that’s treating it like an investment, which it’s not.

I think it’s more appropriate way of evaluating DVC is to look at it like a luxury purchase. If you were buying a Ferrari, you wouldn’t ask about break even. You would ask about what it costs today, and compare renting, leasing, and buying.

The hard part about DVC is what do this years points cost. For BWV, with 23 years you can’t just divide $125 by 23 years. A point you can’t use for 23 years is worth much less than a point you can use today.
It’s easy to see that by comparing the resale price of regular OKW to extended OKW. Those extra years only cost about $8.

Based on OKW, I come up with points are worth 6% less for each year you have to wait to use them. So for BWV at $125, that’s about $10 for this years points. Plus dues, you are at $17.

For a 2br std view at BWV tonight, if it was available would be 48 points.

So the DVC cost for that room today is $816 if you buy resale. How does that compare to renting points, or for regular room?

Just like the Ferrari, once it’s paid for you only have to maintain it. And the last year you own it costs you the least.

 

[Superman1011]

People often talk about when the payback is, and how much money will DVC save. Lots of discussion about time value of money. To me, that’s treating it like an investment, which it’s not.

I think it’s more appropriate way of evaluating DVC is to look at it like a luxury purchase. If you were buying a Ferrari, you wouldn’t ask about break even. You would ask about what it costs today, and compare renting, leasing, and buying.

The hard part about DVC is what do this years points cost. For BWV, with 23 years you can’t just divide $125 by 23 years. A point you can’t use for 23 years is worth much less than a point you can use today.
It’s easy to see that by comparing the resale price of regular OKW to extended OKW. Those extra years only cost about $8.

Based on OKW, I come up with points are worth 6% less for each year you have to wait to use them. So for BWV at $125, that’s about $10 for this years points. Plus dues, you are at $17.

For a 2br std view at BWV tonight, if it was available would be 48 points.

So the DVC cost for that room today is $816 if you buy resale. How does that compare to renting points, or for regular room?

Just like the Ferrari, once it’s paid for you only have to maintain it. And the last year you own it costs you the least.

In that frame of mind all vacations are luxuries, not just DVC. If DVC is being considered it’s fair to question if it’s “worth it” as I believe the goal is to get the most vacation value for your dollar. While not an investment, time value of money is a critical factor in deciding worth and saving money and I believe DVC should be looked at logically not emotionally.

Personally, I expect a certain level of accommodation when traveling and I expect to take and enjoy my vacations annually. I will never visit Disney and stay at the local holiday inn. Knowing my expectations for my travel I’m going to attempt to do it in the most cost effective manner possible.

Each persons travel style will be the biggest factor above all else, aside from the time value of money.

 

[Fred M]

Everybody is different, but point 2 caught me a little there. People who primarily stay in the cheaper resorts may be doing it because they offer a better value, not because they can't afford to spend the extra money needed for deluxe accommodations.

It wasn’t written from the point of view that guests at Values or Moderates couldn’t afford DVC. It’s the point you brought up—the Values and Moderates offer such a great value** that you may not save any money with DVC. Since studios get snapped up quickly, if you’re in a 1 bedroom, you’re generally looking at 210-250 points for a week. And let’s say you have 150 points. So year 1 you don’t go and probably pay $1,000 for maintenance fees and $560 per year for buying the points spread over the life of the contract with no financing charge because you bought your points with cash. Year 2 is your week at WDW. Still have to pay another $1,560 for that year. You’re looking at $445 per night with DVC, rolling over 50-80 points a year, which works out to “free lodging” once every 4-5 years. A Value or Moderate will almost always be cheaper than that.

**Given the price points at Disney these days, it’s hard to say that the Values and Moderates are great value when you can stay off property for so much cheaper

 

[Pluto 32]

There’s probably 100 different ways you can calculate the question of “Does DVC really save you money” based on the type of room you are staying in and how long you are staying for.

My question is this, is it worth it when the inflation of the points go up? What used to be 10 points per night 15 years ago is not 10 points per night anymore. The dollar amount per point has more than doubled, the annual dues will continue to increase and the amount of points it takes to stay at a resort has increased. I’m not a mathematician but I would be curious to see the calculations based off of this perspective.