Resisting the urge to buy...convince me to walk away.....or pull the trigger

[2TxAgs]

At the end of the day we all use finance for stuff we don't really need, it's how the world works. We don't NEED the new SUV we don't NEED the house 5x our yearly salary on a 25 year mortgage. But we feel we can afford it so we sign on the dotted line.

There is obviously a big market for DVC on finance otherwise there wouldn't be several companies that specialise in financing DVC. So this board is either not representative of the average DVC owner or a few people are not telling the exact truth.

The average Joe doesn't usually have 10 - 20 grand lying around to drop on DVC.

If you have a stable job and think you can afford the payments who am I to stop you.

OF COURSE there are several companies that will finance DVC or almost any other purchase people want to make!! They're happy to have you spend money you shouldn't. A young average joe probably does NOT have 10-20 grand lying around, and that's why a young average joe, with young children and other obligations, shouldn't be buying a luxury timeshare. The OP asked to be convinced to walk away, and I'm doing my best

 

[dulyon]

I like watching the DIS show that talks about the people who shouldn't buy into DVC. I might not agree with all of it but it's food for thought. We don't have to live with your decision, you do. Also, this is not a now or never decision, it can wait. Now looks to be more attractive with the current pricing, I am adding on despite the state of uncertainty in the world. But we aren't taking a 10 year loan for it. The interest you pay on it, totally not worth it. If you pay it sooner, it might be worth doing, like 2-3 yrs.

 

[sethschroeder]

Why not just skip Disney in 2020/2021/2022 and take all of that money, stick it in a interest earning back account, then take it all out in 2023 to buy your DVC. Maybe you splurge early in 2022 if the market tanked and you know its bottomed out.

Your kids will not remember missing that Disney trip when they are 3 or 4 but they will remember you not being able to afford something else because you have a TimeShare payment when they are 10 years old.

Understand the draw but if there is any time to wait to buy resale now is the time as the resale prices likely are going to continue to go down.

 

[RoseGold]

Financing messes up all the math. I can't think of a situation I would advise someone to buy while financing, unless you're just waiting on the inheritance to go through the court or something?

My last Disney trip literally cost as much as a trip to Europe, and that is what I have locked my family into. This is an EXPENSIVE luxury item.

There is nothing wrong with a Finding Nemo suite at the Art of Animation, or just RENT some Saratoga points. You can sure rent point cheaply right now... If you are staying at value, I have trouble making the math work for DVC at all, even without financing.

 

[pinkxray]

Can you purchase a smaller contract first? Maybe skip a year? 2020 isn’t a great year to be traveling anyway. I have wanted to buy DVC for years but refused to do so until I had cash. We spend around 24,000 a year on daycare so I didn‘t want anymore more of my paycheck not going to me.
We cancelled our 2020 Disney cruise so I took the cash from that and the savings from our kids being out of daycare for the last few months and just paid cash for 100pt contract at SSR.
Our son starts kindergarten this fall so we will add on over time now that we don’t have such large daycare cost.

 

[fumanchu2488]

We were in almost the same boat. I’m the Disney freak, wife likes it but doesn’t love it. Had a 18 month old and one on the way. We bought last year direct. When I ran the numbers on a 100 point contract, if I financed thru Disney @9.9% for the whole term the total cost of the contract would have been just about equal to paying cash for 5 nights a year. I had enough cash for the purchase but I didn’t want to take too much out of our rainy day savings.

We ended up buying direct with a large down payment. The process was just so much easier direct. I had a month of paying another large chunk of the loan before I opened my Disney CC. Then paid the remainder with the CC which gives 6 months no financing on Disney purchases (DVC included). Paid that off so I essentially paid no interest (other than the one month). I would look and see if that works for you.

I personally wouldn’t finance for the full period. the cost at that point with maintenance is only slightly less than cash rack rates. You would get better deals booking cash with offers that you don’t get with DVC (ie free dining).

 

[Miffy]

Someone upthread mentioned the purchases of a house and car. Even if said house and car cost more than a less-expensive but still useful version would have cost, still, a person needs a place to live and a way to get around. So the analogy to a DVC purchase is lost.

No one needs a vacation to WDW--although I admit that I feel like I need to!--but even if vacationing at WDW is an emotional necessity, no one needs to finance a purchase of DVC in order to fulfill that need.

OP, perhaps you have an iron-clad guaranteed job/livelihood/business and income. If that's the case only you could know how much this will all cost you and if you're comfortable with the payments.

But if you're just asking what anyone may think about this idea--I think it's a terrible idea to finance a luxury purchase, which buying DVC is. Sure, maybe over the very long term you might pay less for staying at WDW than you would have if you stayed at a certain level of resort, but you could always stay at a Value or Mod or off-site. And maybe you'd have a year when you had unexpected personal expenses and you don't go to WDW at all. If you don't own DVC, you just don't go and don't spend the money. But if you own DVC, you still have MFs to pay and even if you could rent your points, that's just another hassle for you.

Also, you mention that your wife isn't a big Disney fan. She may get tired of going to WDW every year after a certain point. Non-Disneyholics are willing to put up with only so much.

In short, no. Do not pull the trigger. There's no trigger to pull. No situation exists right now that's forcing you to make a decision and buy or not buy DVC. You don't have the funds for it. Don't do it. The next time something costly in your house needs to be replaced or one of your kids needs something expensive, you'll be happy you don't have yet another monthly payment to make for a vacation you might not even be able to take in the near future.

 

[pineapplepalms]

Are you local? I just do not see the perks of buying direct. I live a plane ride away and the only perk right now is the future DVC resorts you could stay at if you purchase thru Disney vs. resale

Direct can make sense especially if you're interested in buying the newest resort they're selling with incentives.

As for buying DVC with a 10 year loan... my recommendation would be to wait until you can afford to pay in cash or take on a much shorter loan (or like some have done with Disney Visa and 0% interest). It's not just the cost of the initial purchase, it's also the annual MFs and the cost of all those Disney trips with park tickets, airfare, dining, etc. It all adds up and kids come with many more expenses. We have two little ones and another on the way and as they grow, they will cost a lot more on all these Disney trips than they do now. I get the desire to own DVC... we jumped in and haven't regretted it due to the spacious rooms that work so well for our family. But only you know how big of a financial burden it may be to take on a timeshare purchase with a 10 year loan and additional annual expenses as well.

 

[Deb & Bill]

DVC is an expensive vacation. It's not only the cost of the points initially, but the annual fees. Throw in transportation costs, park admission costs, food costs, gotta buy the kids those shiny objects. Add in finance costs and you've paid a bundle.

 

[Starport Seven-Five]

It somewhat depends on what your typical Disney trip looks like but it's unlikely that DVC at 10% interest will come anywhere close to breaking even. The only people that save money buying DVC are those that typically stay deluxe and would have paid cash for the rooms instead of using their DVC contracts. DVC at the cheapest resorts (OKW/SSR) is still more expensive than a value resort once you amortize the purchase price in and that gap only grows with financing.

Run the numbers and see how it is for your situation but I have a tough time believing it'll work out (10 years of 9.9% interest would increase your total transaction cost by 58%).

At the end of the day we all use finance for stuff we don't really need, it's how the world works. We don't NEED the new SUV we don't NEED the house 5x our yearly salary on a 25 year mortgage. But we feel we can afford it so we sign on the dotted line.

There is obviously a big market for DVC on finance otherwise there wouldn't be several companies that specialise in financing DVC. So this board is either not representative of the average DVC owner or a few people are not telling the exact truth.

The average Joe doesn't usually have 10 - 20 grand lying around to drop on DVC.

If you have a stable job and think you can afford the payments who am I to stop you.

60% of America can't come up with $1,000 for an emergency either. You should aspire to be different than the "average Joe"

 

[michelleiada]

I think that DVC can sometimes be a highly emotional purchase. It was for me. I wanted DVC for many years before we finally bought. We rented points a few times. I considered taking a loan to purchase but I could not justify a high interest loan for a luxury vacation. So, I put money away every week for several years until I had a enough cash to pay for my first contract. And then four years later, I was in a better financial situation and purchased a second contract, paying cash again. I would love to purchase a 3rd contract right now. But, we just paid for a big wedding, and are still paying off both our daughter’s college tuition. The bottom line is, you need to do what is right for you and your family. Do what feels like the right thing for you. Perhaps you consider renting points until you can afford to purchase your own contract, or stay at value resorts until then. Remember, it isn’t just the loan payment you have to make. You also need to pay the annual dues, which go up every year. And, then you need park tickets and food. Its definitely a luxury buy. Think long and hard before you decide so you are happy with the decision that you make. Good luck.

 

[glamdring269]

Keeping the message short and sweet! I have been reviewing/researching DVC purchases (direct and resale) for the last 2 years.

I would have to finance, so you are looking at a 10-year loan. Between 220-275 points

I grew up going, and now have a 2-year old, a 4-month old, and likely 1 more in the future. Wife is not a crazy Disney fan but enjoys going and only has stayed at DVC resorts. Since my 2-year old was born we have gone once/twice a year (staying with my family who are DVC members at SSR)

Pull the trigger or not?

A few things here in the 'walk away' category.

1) I would never finance DVC.

2) What's the rush? Your kids are super young. Wait a few years, establish a safe financial position where you won't have to finance, and then go for it. I would expand this to add the fact that you need to consider that WDW may not be the same that you know today. Take advantage of your risk free position during this uncertain time as a way to save money to solve #1 while also better understanding how Covid-19 is going to shape future park policy.

3) Still planning to go to WDW in the meantime? Rent some DVC points. You still have the same booking options without the ownership risk.