Is DVC worth it if I already get 40% off rack?

[BUZZCRUSH]

I figure someone out there has done the math. We have been getting 40% off the deluxe rack rate the last few years. This year we are going the week before christmas [just before holiday season kicks in]. So while we love dvc we are not inclined to buy as long as we get 40% off. What are your thoughts?

 

[s&k'smom]

What a great question, we struggle with it too as we usually get an amazing airline discount and my girlfriend's husband works for disney so we buy our passes through him. But every year when we get back from a trip we wonder if we should buy.

 

[dreamfinder]

A whole lot of depends. Do you want to know within a few % what your trip will cost? Or would you rather hope to get a discount. Does daily housekeeping matter? Would you gain extra savings through having the in room kitchen for meals/snacks? Would you want the extra space/rooms? Etc etc. We had always stayed mod, and I used a 30% discount on mod when figuring our break even point, and I think it was 7 years in. So we definitely come out ahead under our current habits. But some people want deluxe for daily housekeeping, eat out every meal, etc so it may not have the same value.

 

[captainkidd]

If you were to always get that discount, then no, it wouldn't be worth it. Problem is, you can't guarantee it. That being said, I haven't gotten any less than 20% off rack rate in 15 years. Most of the time it's been closer to 30-40%.

I still feel if you can take the time and do the homework, renting DVC points makes more sense, financially, than anything.

 

[BUZZCRUSH]

You're right the struggle I have is there are too many "what ifs". I've tried doing the math a few times and there are so many variables I make assumptions about that I could work it either way. [i.e. assumptions about usage period, mx fee increases, buying resale vs direct, what resort etc.]

I think for the moment as long as we keep getting a discount we'll just rent. I like the idea of being able to rent at whichever resort and have never had an issue getting the week I wanted. I also like the idea of being to cancel last minute. That came in handy recently due to a medical issue in the family. Plus I figure if I want to spend that much $ , I'll spend a little more and get an RV and stay at Wilderness camp ground.

 

[captainkidd]

Look at it this way:

DVC is like getting married.
Renting points is like dating randomly.

Sure, it might cost you a bit more, but it's a hell of a lot more flexible and there are no strings attached.

 

[Phonedave]

Some points

1) In good times 40% discounts are not as common. A few years back people were all complaining about "when is Disney going to release their discounts"

2) Even if somehow you were always able to get 40% off, the rack rate is going to go up, so the amount you pay will go up. Sure my dues will go up as well, but not at the same rate as room rates will.

3) Depending on your situation, you may not be able to take advantage of discounts. My wife is a teacher, so there are only certain times she can travel.

If you want price stability, plan on going to WDW for many years to come, and you can pay most or all of your purchase up front, then DVC could very well work for you. Captainkidd has what I think is the most cost effective and flexible way to go to WDW - renting DVC points. It does work out cheaper than buying DVC and offers just as much flexibility with no commitment IF you do your homework, make sure you know who you are renting from, and search out the deals. DVC may not be as cost effective, but it is close, and in my opinion a lot easier.

To extend his dating analogy

DVC is like getting married.
Renting points is like dating randomly.
Marrige might cost you more (marrige tax and all) and there is a committment

but

While dating may be cheaper and more flexible, if you are not careful you may end up having somone cook your rabbit or needing a trip to the free clinic.


-dave

 

[GoofGoof]

Some points

1) In good times 40% discounts are not as common. A few years back people were all complaining about "when is Disney going to release their discounts"

2) Even if somehow you were always able to get 40% off, the rack rate is going to go up, so the amount you pay will go up. Sure my dues will go up as well, but not at the same rate as room rates will.

3) Depending on your situation, you may not be able to take advantage of discounts. My wife is a teacher, so there are only certain times she can travel.

If you want price stability, plan on going to WDW for many years to come, and you can pay most or all of your purchase up front, then DVC could very well work for you. Captainkidd has what I think is the most cost effective and flexible way to go to WDW - renting DVC points. It does work out cheaper than buying DVC and offers just as much flexibility with no commitment IF you do your homework, make sure you know who you are renting from, and search out the deals. DVC may not be as cost effective, but it is close, and in my opinion a lot easier.

To extend his dating analogy

DVC is like getting married.
Renting points is like dating randomly.
Marrige might cost you more (marrige tax and all) and there is a committment

but

While dating may be cheaper and more flexible, if you are not careful you may end up having somone cook your rabbit or needing a trip to the free clinic.


-dave

I agree with all of this. The end made me laugh.

To the original poster, if you always get 40% discounts for when you want to go to WDW your breakeven point for DVC is probably pretty long (especially if you would have to finance). You are probably better off sticking with your discounts. If the discount well dries up at some point in the future you can always buy DVC then.

 

[BUZZCRUSH]

Thanks all good points as well as humorous, and I needed a laugh right now. I think the dating analogy puts it best. I guess I'm just not ready for a commitment. As much as we love Disney right now. I can see tiring of it when the kids are older. We would love to visit the west and go to Europe which we can easily do without DVC. No one can predict the future and we might kick ourselves in 20 years but I'm fine with that. I like the flexibility and it's worth paying a little more as long as we keep getting the discount.

 

[Phonedave]

Thanks all good points as well as humorous, and I needed a laugh right now. I think the dating analogy puts it best. I guess I'm just not ready for a commitment. As much as we love Disney right now. I can see tiring of it when the kids are older. We would love to visit the west and go to Europe which we can easily do without DVC. No one can predict the future and we might kick ourselves in 20 years but I'm fine with that. I like the flexibility and it's worth paying a little more as long as we keep getting the discount.

That is the thing that sold me on DVC asa opposed to other time shares. I never bought a time share because I did not want to get stuck with it if my plans or situation changes. DVC has a roboust resale market as a well as a point rental market. It made me more confident buying in knowing that if somehting happend there is a good chance I will not be totally stuck with this contract.


-dave

 

[MaxsDad]

A point and a question:

To my knowledge, WDTC has never offered a room discount on a 2/3 bedroom villa. Suites are excluded from discounts in the fine print I have read.

To those who say that renting points cost less than buying: Do you believe that people are renting points at a loss?

 

[Phonedave]

A point and a question:

To my knowledge, WDTC has never offered a room discount on a 2/3 bedroom villa. Suites are excluded from discounts in the fine print I have read.

To those who say that renting points cost less than buying: Do you believe that people are renting points at a loss?

Yes, some people do.

Some people rent points to just cover the dues - that is a loss. Somtimes plans change and people have to rent points at the last minute, in order to do so, they off them at a cut rate. Renting 200 points at say $100 under the cost of your dues because you had to cancel a vacation is a lot better than letting those points expire and getting nothing for them at all.

Some people do rent at a slight profit- nobody is getting rich off of it. DVC point rental is a pretty open market, the price will come down to just above the cost of dues in most cases. Some will be lower becaue of emergencies, or people just looking to unload them. Others will be higer because of added "features" such as a brokerage and/or escrow accounts.


-dave

 

[MaxsDad]

I guess my question was somewhat retorical.

The rental rates I have seen on line have never been below $10 per point, but I will admit I have never really had a reason to dig deep and look for a steal.

For example, our dues were 5.43 per point this year. For roughly $17000, I purchased 8500 points (170 per year for 50 years), a cost of about $2 per point. So total cost per point about 6.50.

Are people renting for less than 6.50 per point. If so can you point me in that direction?

 

[Phonedave]

I guess my question was somewhat retorical.

The rental rates I have seen on line have never been below $10 per point, but I will admit I have never really had a reason to dig deep and look for a steal.

For example, our dues were 5.43 per point this year. For roughly $17000, I purchased 8500 points (170 per year for 50 years), a cost of about $2 per point. So total cost per point about 6.50.

Are people renting for less than 6.50 per point. If so can you point me in that direction?

You cannot just take the $17,000 you spend today and divide it by the total number of points. You must account for the time value of money. $17k today is not $17k 50 years from now.

-dave

 

[WWWD]

I don't know about 50 years, but if I put 17K in stocks 5 years ago, it would be worth less today.

 

[dlhvac]

i don't know it'll be our fifth trip thurs 29 this year could not afford it any other way

 

[Phonedave]

I don't know about 50 years, but if I put 17K in stocks 5 years ago, it would be worth less today.

My 401(k) feels your pain as well.


-dave

 

[Murphketeer]

There's a pretty good discount for a premium season pass right now for DVC members. Not sure how to factor that as well as the merchandise and food discounts.

 

[LuvtheGoof]

You cannot just take the $17,000 you spend today and divide it by the total number of points. You must account for the time value of money. $17k today is not $17k 50 years from now.

-dave

Dave,

I have to respectfully disagree. If you pay cash for your points (as you should), then it does not matter what the "value" of that $17k is in 50 years (and would be impossible to predict), since you have already spent the money. What matters is the dues that you pay each year. For us, we own 360 points, and adding in the 3-4 percent average yearly increase in dues ( we own at SSR, and ours are only going up 1.73 percent this year!), with the initial cost, we came up with an approx. cost of $6.35 per point over the life of our ownership. Well below the normal rental price. Even if dues go up more a few years from now, we will still be below the average $10 rental price now, and that is destined to go up over time as well. It will not stay the same over the next 20 years either.

You can "what if" the purchase to death, but the fact is, it is a luxury purchase (like buying a boat or a sports car that you don't really need) that is up to each individual to decide on. If you prefer sailing on the open seas, a luxury boat makes more sense. If you enjoy going to Disney as much as we do, it can be a big money saver.

For us, we go multiple times per year, and it is worth every penny we spend on it. We have already gone well past the break even point (even taking 40 percent discounts into account), and we are saving a ton. We are taking 2 trips in the next 3 months that would have cost us over $5000 (even with a 30 percent discount) for our rooms, and yet we are paying less than $1700! Add in the $300 PAP savings each - $600 total, and you can see why we love DVC!!! Our savings on rooms and park tickets these 2 trips alone is almost $4000, and we will book at least one more trip for next year to use our passes on, adding even more room savings as well.

Anyway, DVC, I will absolutely agree, is not for everyone. All situations are different, and it just works for us. It will NOT work for everyone.

Kevin

 

[Phonedave]

Dave,

I have to respectfully disagree. If you pay cash for your points (as you should), then it does not matter what the "value" of that $17k is in 50 years (and would be impossible to predict), since you have already spent the money. What matters is the dues that you pay each year. For us, we own 360 points, and adding in the 3-4 percent average yearly increase in dues ( we own at SSR, and ours are only going up 1.73 percent this year!), with the initial cost, we came up with an approx. cost of $6.35 per point over the life of our ownership. Well below the normal rental price. Even if dues go up more a few years from now, we will still be below the average $10 rental price now, and that is destined to go up over time as well. It will not stay the same over the next 20 years either.

You can "what if" the purchase to death, but the fact is, it is a luxury purchase (like buying a boat or a sports car that you don't really need) that is up to each individual to decide on. If you prefer sailing on the open seas, a luxury boat makes more sense. If you enjoy going to Disney as much as we do, it can be a big money saver.

For us, we go multiple times per year, and it is worth every penny we spend on it. We have already gone well past the break even point (even taking 40 percent discounts into account), and we are saving a ton. We are taking 2 trips in the next 3 months that would have cost us over $5000 (even with a 30 percent discount) for our rooms, and yet we are paying less than $1700! Add in the $300 PAP savings each - $600 total, and you can see why we love DVC!!! Our savings on rooms and park tickets these 2 trips alone is almost $4000, and we will book at least one more trip for next year to use our passes on, adding even more room savings as well.

Anyway, DVC, I will absolutely agree, is not for everyone. All situations are different, and it just works for us. It will NOT work for everyone.

Kevin

LuvtheGoof,

That may be how you choose to look at it, but any entry level course in economics, budgeting, or finanacial planning will tell you that $15,000 spent today is NOT the same as $15,000 spent 15 years from now, which is also not the same as spending $1,000 a year for the next 15 years. Money has a time value associated with it, along with the deterimental impacts of inflation. I would hazard to say that I could get a 10% return on that $15,000 over 15 years fairly safely. $15,000 deposited today, with 10% annual interest compounded monthly comes out to $66,800 after 15 years.

Are you going to tell somone who is 15 years away from retirement that $15,000 spent today is the same as $15,000 when they retire because "you already spent it". When in fact if they did not spend it, they would have almost $67,000 to retire with? Economics do not work that way. It may be easier not to look at it that way, but if you are doing any sort of sound financial planning for your future, you NEED to look at it that way (or hire somone who will)

-dave