Is now the right time for ME to join DVC?

[Frederic Civish]

If the economy is down (and it's due for a correction eventually), the rental market may collapse as people have less money to spend on vacations.

Or, a down economy could INCREASE rentals, as people get even more serious about saving money, and using rentals to make their Disney trips at a discount.

 

[Shanti]

I've been doing some research on the boards and various other places for a DVC purchase. I've been thinking about it for awhile, but got cold feet, missed the lower rates that were available last year, and now, my resort of the choice (PVB) is "sold out". I know that there is a chance to buy direct from Disney still, which is what my wife wants to do. She wants to have the option to take advantage of any perks and incidentals buying direct.

Our situation is this. We want to do a Mexican Disney Cruise next year. We live in California and visit DL often. Just completed our first trip to WDW in 10 years and the little one loved it! We want to go back to WDW again in a few years. I ended up renting DVC points on this trip and was amazed by the value in renting, but we want to be part of ownership.

As I said, we are interest in a cruise for 2019 and then maybe Aulani in 2020. Meanwhile, we will visit DL on occasion, but not as often as we used to (just getting too busy, crowded and we've done it so much). I just found out that you can sell your DVC points to Davids and convert those into cash for a DCL sailing. Plus, I can add cash if needed or if I don't want to sell all my points.

We just put solar on our home and are expecting money back in taxes next year. My plan was to use that money on the cruise ($3500 ish), but now I'm considering using the money as a down payment on a 100 pt DVC owner ship at the Poly (if I can secure directly through Disney).

Does that sound crazy? I just feel like that $3500 can go towards so much more in DVC for the years to come. I planned to use my first 100-200 points towards the cruise (via the selling for cash to David's) and then pay the rest I would need (about $1000) out of pocket.

Help me out here. I know resale is a better value, but the wife really wants the "perks" and I'm having a difficult time talking her out of it lol.

Please be kind. Thank you

It sounds like you're both operating from an emotional rather than a financial perspective. The desire to "be part of ownership" is really about your desire to feel part of Disney, rather than what you will actually get for your money.

I recommend putting emotion to the side & listing the costs & benefits of each possibility (buying direct, buying indirect, continuing to rent DVCs, etc.) on paper, then discussing the pros and cons of each option.

The more rational you are with your spending, the more money you'll have available for more future trips.

 

[Bing Showei]

Or, a down economy could INCREASE rentals, as people get even more serious about saving money, and using rentals to make their a Disney trips at a discount.

Right. Because in a down economy spending thousands of dollars to go see a fake castle is up there with paying the mortgage, saving for retirement, and dealing with the rainy day because the economy starts hemorrhaging jobs.

In a good economy, financing a luxury purchase is ill-advised. In a down economy, needing that luxury purchase to generate income is inviting trouble.

 

[rg35]

So not many people are financing the cost of their DVC? I understand the finance rate to be around 10-12%, is that correct?

Actually, no. I actually read somewhere (I can't recall or find the source) that the majority of DVC contracts are financed. It's just not something that people here recommend, because financing a luxury purchase at 10-12% is just a bad idea from a financial perspective.

 

[_auroraborealis_]

Actually, no. I actually read somewhere (I can't recall or find the source) that the majority of DVC contracts are financed. It's just not something that people here recommend, because financing a luxury purchase at 10-12% is just a bad idea from a financial perspective.

And, beyond that, if you are trying to justify the purchase based on savings, that 10-12% needs to be factored in to your ROI. It extends it by years.

 

[CraigInPA]

Going every other year, maybe doing a cruise using rental of points, no need for annual passes, unlikely to be at WDW when there is a moonlight event, and needing to finance the purchase, all point to the conclusion that a direct purchase isn't your best option. You might be able to make a resale contract work for you, especially with the difference between resale and retail pricing of Poly. However, even a resale contract where you need to finance probably isn't the best option financially. I suggest you continue to rent points until you save enough to buy a resale contract.

 

[siren0119]

Actually, no. I actually read somewhere (I can't recall or find the source) that the majority of DVC contracts are financed. It's just not something that people here recommend, because financing a luxury purchase at 10-12% is just a bad idea from a financial perspective.

I suspect that most DVC are financed BECAUSE the sellers are banking on it being an emotional purchase that people justify being upside-down in for a long period of time. Or don't think about the fact that they'll be upside-down for a while. It might be common but doesn't mean it makes good sound financial sense.

 

[KAT4DISNEY]

I suspect that most DVC are financed BECAUSE the sellers are banking on it being an emotional purchase that people justify being upside-down in for a long period of time. Or don't think about the fact that they'll be upside-down for a while. It might be common but doesn't mean it makes good sound financial sense.

I'd also think that to be likely. DVC sells to those who are there and take the tours. Often spur of the moment. All their material is prepped to show a low monthly cost you'll pay to keep the Magic flowing.

 

[Frederic Civish]

I bought 5 Poly contracts, direct. Paid cash for 3 of them, and put 20% on two of them and financed those two at 10%. Then I paid off both contracts over 1 year, which was my intention from the beginning. I am thinking of doing the same with Riviera. And I have also bought 3 contracts at resale, and did not finance, but I know people who do, and it was right for them.

I do not encourage financing or debt. It is a poor choice, most of the time. BUT (there are always buts) it can be a reasonably useful tool, if done correctly. Let’s say you don’t finance, and it goes up by 10% per year, every year. How much will you save then, by waiting 5 years to buy , when you have cash. I bought Poly at around $170. What is it now, $225? If I hadn’t financed, I’d be on the outside, looking in.

I still regret not buying into BLT at the beginning. I remember being on the monorail and looking at it being built as I passed by, and thinking, “What a bunch of garbage, and what a waste of money for those who buy.” But I was wrong. And I corrected it later, at a higher price, having already lost the chance to use it for several years. Yes, there is a financial cost, but there is also an opportunity cost.

 

[Gryhndmom]

I bought 5 Poly contracts, direct. Paid cash for 3 of them, and put 20% on two of them and financed those two at 10%. Then I paid off both contracts over 1 year, which was my intention from the beginning. I am thinking of doing the same with Riviera. And I have also bought 3 contracts at resale, and did not finance, but I know people who do, and it was right for them.

I do not encourage financing or debt. It is a poor choice, most of the time. BUT (there are always buts) it can be a reasonably useful tool, if done correctly. Let’s say you don’t finance, and it goes up by 10% per year, every year. How much will you save then, by waiting 5 years to buy , when you have cash. I bought Poly at around $170. What is it now, $225? If I hadn’t financed, I’d be on the outside, looking in.

I still regret not buying into BLT at the beginning. I remember being on the monorail and looking at it being built as I passed by, and thinking, “What a bunch of garbage, and what a waste of money for those who buy.” But I was wrong. And I corrected it later, at a higher price, having already lost the chance to use it for several years. Yes, there is a financial cost, but there is also an opportunity cost.

Well said! For years we stayed at shades of green and wish we had bought dvc years ago. We love having the extra room and amenities. Timeshares aren’t for everybody and for us it is perfect.

 

[Dean]

It doesn't sound like a good choice for you. In DVC's history it's always been a poor choice to buy with the intent of using points for a cruise and it doesn't sound like you have a formal plan to go to WDW routinely. I wouldn't buy unless every 2 years or so or less for most situations.

You do have to pay taxes on rental income, FWIW. The David's program doesn't create a tax situation, but renting and getting the cash to pay does.

You can also rent resale points for the same cost per point in fee. Only, they cost YOU $50pp less in capital outlay.

At the pace of intended visit, there is not value in direct purchase for you.

Technically you still owe the money, you just don't get a 1099 from them since they're in Canada.

Actually, no. I actually read somewhere (I can't recall or find the source) that the majority of DVC contracts are financed. It's just not something that people here recommend, because financing a luxury purchase at 10-12% is just a bad idea from a financial perspective.

I suspect most do just like most finance cars and make poor choices in general. But IMO, financing a luxury purchase at those rates is the definition of insanity.

 

[rg35]

I suspect that most DVC are financed BECAUSE the sellers are banking on it being an emotional purchase that people justify being upside-down in for a long period of time. Or don't think about the fact that they'll be upside-down for a while. It might be common but doesn't mean it makes good sound financial sense.

I suspect most do just like most finance cars and make poor choices in general. But IMO, financing a luxury purchase at those rates is the definition of insanity.

I mean, if you really think about it, the only reason our economy even seems to function/grow anymore is because of easy credit and people buying things they can't afford. Numbers vary depending on the source, but something like half of American families have no retirement savings at all. DVC prices are climbing like gangbusters, but it's not like income has been going up...so how else could most people "afford" to buy DVC if not for financing?

There's a "debt busters" thread on the Budget Board, and reading it kind of bums me out. And I guess it might come off as judgmental but there are certain people in certain situations and I have no idea why they are even thinking about taking Disney trips given their situations. FWIW, growing up we didn't have a ton of leftover money so we didn't go on vacations - my mom was a coupon cutter, only paid for things in cash, etc. We actually didn't take a family trip on an airplane together until I was in high school in the mid 90's, and only then it was b/c my grandparents had bought DVC and were letting us use their points. I'm glad I at least have that context to keep things in perspective. I tell my kids (who are young) all the time that they need to appreciate how fortunate they are to be able to take these trips to WDW every year.

Anyway, I've kind of gone off on a tangent but whenever I think about the state of most people's personal finances in this country it bums me out.

 

[we"reofftoneverland]

I bought 5 Poly contracts, direct. Paid cash for 3 of them, and put 20% on two of them and financed those two at 10%. Then I paid off both contracts over 1 year, which was my intention from the beginning. I am thinking of doing the same with Riviera. And I have also bought 3 contracts at resale, and did not finance, but I know people who do, and it was right for them.

I do not encourage financing or debt. It is a poor choice, most of the time. BUT (there are always buts) it can be a reasonably useful tool, if done correctly. Let’s say you don’t finance, and it goes up by 10% per year, every year. How much will you save then, by waiting 5 years to buy , when you have cash. I bought Poly at around $170. What is it now, $225? If I hadn’t financed, I’d be on the outside, looking in.

I still regret not buying into BLT at the beginning. I remember being on the monorail and looking at it being built as I passed by, and thinking, “What a bunch of garbage, and what a waste of money for those who buy.” But I was wrong. And I corrected it later, at a higher price, having already lost the chance to use it for several years. Yes, there is a financial cost, but there is also an opportunity cost.

But can't you buy poly right now for around $150 per point resale?

 

[kboo]

2 of my 3 resale contracts were from distressed sellers (who had purchased direct and financed). The 3rd was also from original (purchased direct) owners who it looked just aged out of the system.

 

[we"reofftoneverland]

I've been doing some research on the boards and various other places for a DVC purchase. I've been thinking about it for awhile, but got cold feet, missed the lower rates that were available last year, and now, my resort of the choice (PVB) is "sold out". I know that there is a chance to buy direct from Disney still, which is what my wife wants to do. She wants to have the option to take advantage of any perks and incidentals buying direct.

Our situation is this. We want to do a Mexican Disney Cruise next year. We live in California and visit DL often. Just completed our first trip to WDW in 10 years and the little one loved it! We want to go back to WDW again in a few years. I ended up renting DVC points on this trip and was amazed by the value in renting, but we want to be part of ownership.

As I said, we are interest in a cruise for 2019 and then maybe Aulani in 2020. Meanwhile, we will visit DL on occasion, but not as often as we used to (just getting too busy, crowded and we've done it so much). I just found out that you can sell your DVC points to Davids and convert those into cash for a DCL sailing. Plus, I can add cash if needed or if I don't want to sell all my points.

We just put solar on our home and are expecting money back in taxes next year. My plan was to use that money on the cruise ($3500 ish), but now I'm considering using the money as a down payment on a 100 pt DVC owner ship at the Poly (if I can secure directly through Disney).

Does that sound crazy? I just feel like that $3500 can go towards so much more in DVC for the years to come. I planned to use my first 100-200 points towards the cruise (via the selling for cash to David's) and then pay the rest I would need (about $1000) out of pocket.

Help me out here. I know resale is a better value, but the wife really wants the "perks" and I'm having a difficult time talking her out of it lol.

Please be kind. Thank you

This is our experience:
At first we were going to buy direct. And if our dvc "guide" had followed up with us, we would have. We walked out of the sales meeting last September empty handed and DH told me, "let's do it now." I was surprised by his reaction and said, "Let's keep walking (down the hall at Copper Creek lol) and buy when the DVC guide calls us tomorrow." But he didn't call. And we enjoyed our last 2 days at wdw. And we talked about it more when we got home and we were ready to buy... but the guide still didn't contact us after we got home. I realize we could have contacted him, but for some reason, we thought he would follow up. For us, the fact that he didn't follow up was ultimately a bit off-putting. I know it is silly or maybe old fashioned to feel that way, but that's how we feel. Regardless of whether or not dvc is low pressure sales, we really think it is very impolite for the guide not to even shoot an email saying something like, "It was great meeting you yesterday. Let me know if I can be of further assistance." So, after a week or so after our vacation, I started to read more on disboards and realized we could get so much more with resale. At first DH was skeptical. He wanted to go direct because he was worried about doing that kind of a transaction basically over the internet. He wasn't as concerned about the perks. Our teen was interested in the Epcot lounge, but once we realized we as members would have to accompany him there, it did not seem like such a great benefit. Once I showed Dh the point charts and showed him that we could get substantially more points resale, after a couple of weeks of research and talking, he was in. Right now we are in ROFR waiting for Disney to take our contract lol. I wasn't against going direct and if dh had still wanted direct in the end we would have gone that way. It is hard when spouses have different opinions but I find if you keep talking, one or the other will come around.

If you do not have a lot of money to put towards this, and since you live in California, I would look seriously at Aulani resale. I was shocked to find Aulani reselling for $90 a point. Nuts considering that Disney is still selling it direct for $182 a point!! You can still rent resale points to put the cash towards a cruise, if that is something in which you are interested. I would not do this because it seems like a hassle, but that is just me. I also am not big on financing this kind of thing, but everyone has a different take on that. The nice thing about dvc is if you want to get out, or get in over your head, you can resell. But you could potentially get 100 Aulani points for 10k with closing costs. Not such a large amount to finance. Good luck with your decision!

 

[Henwen88]

The only 'financing' that I would recommend, would be putting a direct purchase on your Disney Visa and paying it off interest free within 6 months.

If you want CCV, buy direct. Anything else, look resale. Also, be careful about closing costs - I recently read a thread where direct costs have gone up considerably ($195 doc fee on all purchases), so those 25 pointers will start to increase price per point dramatically.

What everyone told me is the same as I'll tell you - I only wish I could have bought in sooner. But, I'm very, very glad I didn't until I had the extra cash on hand to purchase. Rental is always a sound option, and if I didn't own, I'd definitely rent.

 

[bumbershoot]

So not many people are financing the cost of their DVC?

Plenty of people finance. I did. It’s the only way we could do it at the time, and my then-husband really wanted it. (It’s now been quit claimed to me...go figure)

But even I have realized that it’s not the best way to go.

DVD (the Developer side of the house) has offered APs as a direct sale incentive from time to time. Not unheard of (gladly). We still have one saved away from our 2007 add-on.

We bought in 2009 and I don’t remember it being offered since we became members. So it’s been a long time...

My neighbor often talks about how great the Moonlite parties are, yet she's never gone.

If she’s never gone she doesn’t get to say if it’s good or not.

I went in 2017 and it was fine. That’s it. Fine. A free few hours in a park. With a free Uncrustable.

I would go again if it was offered when I’m there; I don’t turn down free lol. But it’s not some be all end all thing.

...the sellers are banking on it being an emotional purchase...

Absolutely.

Despite the fact that then-husband balked at every vacation I planned after about 2011, whenever we were on a dcl cruise he had to be held back from adding on points. The emotional response is nothing to downplay.

 

[Lynne M]

So not many people are financing the cost of their DVC? I understand the finance rate to be around 10-12%, is that correct?

Oh, I'm sure lots of people finance the cost. But you just stated the reason that it's a bad idea: the high finance rate. Simply put, if you finance, you're going to be paying significantly more for your membership than people who don't finance. To the point where it really cuts into the savings you get from owning DVC. Some people finance and then pay it off within a year or so, and that's not awful. But if you're thinking of financing over several years, be sure to work out what you'll be paying in interest, and figure that into your calculation of whether or not DVC makes financial sense for you.

 

[Dean]

I mean, if you really think about it, the only reason our economy even seems to function/grow anymore is because of easy credit and people buying things they can't afford. Numbers vary depending on the source, but something like half of American families have no retirement savings at all. DVC prices are climbing like gangbusters, but it's not like income has been going up...so how else could most people "afford" to buy DVC if not for financing?

There's a "debt busters" thread on the Budget Board, and reading it kind of bums me out. And I guess it might come off as judgmental but there are certain people in certain situations and I have no idea why they are even thinking about taking Disney trips given their situations. FWIW, growing up we didn't have a ton of leftover money so we didn't go on vacations - my mom was a coupon cutter, only paid for things in cash, etc. We actually didn't take a family trip on an airplane together until I was in high school in the mid 90's, and only then it was b/c my grandparents had bought DVC and were letting us use their points. I'm glad I at least have that context to keep things in perspective. I tell my kids (who are young) all the time that they need to appreciate how fortunate they are to be able to take these trips to WDW every year.

Anyway, I've kind of gone off on a tangent but whenever I think about the state of most people's personal finances in this country it bums me out.

I'm not sure our economy is propped up like that but you're right on the end point. My view is that it's more the inability to delay gratification and other similar bad choices like student loans and auto financing though it's a combination of things.

The only 'financing' that I would recommend, would be putting a direct purchase on your Disney Visa and paying it off interest free within 6 months.

If you want CCV, buy direct. Anything else, look resale. Also, be careful about closing costs - I recently read a thread where direct costs have gone up considerably ($195 doc fee on all purchases), so those 25 pointers will start to increase price per point dramatically.

What everyone told me is the same as I'll tell you - I only wish I could have bought in sooner. But, I'm very, very glad I didn't until I had the extra cash on hand to purchase. Rental is always a sound option, and if I didn't own, I'd definitely rent.

While some choices may be worse than others and I used to give exceptions like you paid it off in a few months or you had a windfall coming but I no longer believe those exceptions are valid. The reasons are many but ultimately the majority of people don't follow through on their intentions and they rationalize purchases they really can't afford at the time. Now some may chose to put it on a CC when they could pay cash and I disagree with that thinking as well, but it's certainly not nearly as bad as some other situations.

 

[ElizabethG]

I will share my experience. We financed our original point purchase; 200 points direct at BLT in 2009. I do agree that financing a luxury purchase is not ideal. We looked very hard at the numbers before hand. Here are my numbers in retrospect (I say that because it is possible for it to have gone poorly). We bought for $97/pp with the specials at the time. We didn't pay it off for close to 7 years. With the amount we paid for the contract and interest, we really paid $144/pp. So, that is pretty close to resale prices today, but we got the advantage of using it since 2009. Overall, the amount paid out for contract, interest, and dues gives us an average room cost per night (staying on points) of $430 through 2018 (staying in studios, 1 and 2 bedrooms). That amount will continue to go down over time. It takes longer to recoup the cost, but I wouldn't trade my vacation memories for that interest back.

We just added on 300 points at CCV (that we purchased on a cruise) which we did not finance. I am glad I was able to do that, but I can understand why people finance.