Looking for some info

[mattdenine]

Hey guys I just got back from WDW and while waiting to get into HS we spoke with a family who told my wife and I about DVC. After speaking with them for 15-20 minutes we decided it was something we would be interested, after going around the park for a while we stopped by a DVC kiosk they gave us a basic information and told us we should sign up to go visit a few sites and get more information, we couldn't because we were leaving the next morning.

It sounds really good $15000-$25000 for 50 years of vacations with no black out dates. However is there any information we should know before we purchase?

 

[GoofGoof]

If you do a quick search here there are a few good threads in the recent past with info on how DVC works. A couple of things that I would consider:

1. Are you planning on going to WDW at least every other year and staying at a deluxe hotel for at least the next 10 years? If not it may not be the best idea. DVC can have a breakeven point of 7 to 10 years vs staying in a deluxe hotel room depending on what assumptions you make. DVC will not save you money vs staying at a moderate or a deluxe.
2. Do you have the upfront money to buy in? If you have to finance the interest rates are steep. Double digit, credit card steep. A lot of the money you save will be lost to interest expense. Your break even point will be much longer than 7 years.
3. Are there any life changing events coming up in your near future? Marriage, buying a home, kids in the near future. DVC dues have to be paid every year even if you don't use it and it is a long term decision. You could rent the points out or give them away.

One other thing to consider. The resale market for DVC is a lot cheaper than buying points directly from Disney. For example Disney is currently selling DVC points at Animal Kingdom for $155 a point. It is possible to get those same points resale for in the $70s. Let's assume $75. If you buy 200 points it would cost $31,000 direct from Disney but only $15,000 resale. The points you buy resale work exactly the same as points bought direct from Disney with the exception of some trade-in options. You can't trade-in points bought resale for non-DVC rooms at Disney hotels or on Disney cruises. Resale points are still eligible to be used at any DVC resort or for trade-in through RCI for locations around the world. You can buy a lot of Disney cruises for the $16,000 you are saving

 

[GoofGoof]

This is a good overview of the program:
http://www.mousesavers.com/other-disney-vacations/disney-vacation-club/

Try this older thread. Some good advice:

http://forums.wdwmagic.com/threads/is-dvc-really-worth-the-cost.861708/

 

[EOD K9]

I will make one counter point to @Trotsky and this is nothing personal......if the only way to buy in is to finance, then you certainly can. I financed when I was younger and paid it off early. Keep in mind though, financing will cost you a lot more money due to interest. The upside, you may be eligible to deduct it from your taxes. I've done it with no negative effects. Paying cash is better by far, but you can always finance if you so choose.

 

[Disneydreamer23]

For me It wouldn't be some thing good for my family for the reason the dues are around 1000 a year ( depending on where you are) I go for 2 weeks a year and stay at a Moderate and get the free dining and spend with dining and tickets and room 2500.00 I don't care about a nicer resort I love the moderates. I think it depends on you and your family. Maybe call DVC and ask any questions you have.

 

[GoofGoof]

EOD K9 is dead right - depending on your tax bracket, and ability to get that debt albatross off your neck? Could work. I would STILL try to find an alternate channel for financing though - as the Disney "Interest Rate" will prompt a re-reading of the Merchant of Venice .

Here are the rates as of last year:

For those of you thinking about purchasing points in the Disney Vacation Club (DVC) directly from Disney and were planning to finance, Disney just announced new (mostly higher) interest rates:

"Premium" credit with 20% down: 9.99% (was 9.0%)
"Premium" credit with 10% down: 12.0% (was 11.5%)
"Preferred" credit with 20% down: 12.0% (was 10.5%)
"Preferred" credit with 10% down: 14.5% (unchanged)
"Standard" credit with 20% down: 14.5% (was 12.5%)
"Standard" credit with 10% down: 17.5% (unchanged)
Current DVC member with 20% down: 8.99% (new category)
Current DVC member with 10% down: 11.0% (new category)

Disney is actively marketing Aulani (Hawaii), Animal Kingdom Villas (AKV), and Villas at the Grand Floridian (VGF), with sales at a strongly rumored DVC at the Polynesian (Disney's worst kept secret) likely to start in 2-to-3 years. In addition, all other DVC properties are available for purchase directly from Disney.

Or you could buy resale and save a bundle.

 

[mattdenine]

Thanks for all of the info everyone. I think I will try buying resale for our next trip and see how we like it and go from there.

 

[slappy magoo]

Thanks for all of the info everyone. I think I will try buying resale for our next trip and see how we like it and go from there.

Do you mean you will try buying resale points and then see if you want or need more? Because once you buy them, they're yours for the duration of the deed. You may want to consider, for your next trip, renting points from a DVC member, either directly or through a website that negotiates those sorts of transactions between DVC members and prospective renters. Then if you like it, consider buying resale or direct from Disney. The only downside to such an approach is that the money you've paid renting the points is not something that could be applied to buying them later,* but you'd at least be in a better situation to know if being a member works for you.

*I suppose there's a possible alternative - that a DVC member looking to sell his or her points is willing to rent them to you under the provisions that, if you like the DVC approach to vacationing at WDW, you could apply the cost of your rental towards your purchase, and if you decide it's not for you at least he or she got the rental out of it. But I don't know how often DVC members are willing to do this.

 

[tjkraz]

In addition to the high interest cost for a financed purchase, there's a greater degree of risk involved since DVC contracts do lose some value after purchase. That's most evident when buying direct from Disney due to the high prices. Disney will charge $140-160 per point for most resorts. If you have to sell within a few years of buying, you may struggle to get $100 per point in return.

That's actually an impressive resale value for a timeshare, but realistically you'll be "under water" on the mortgage for a number of years if you finance.

Even buying resale, you face having to pay broker commission on any transaction. And future resale values are unpredictable. If you buy for $100 per point and sell for $95, after broker commission you'll only pocket around $80. If you happen to owe more than that on the mortgage, you'll have to write a check at closing just to get rid of the contract.

At a minimum, make sure that your finances are relatively secure for approx 5 years. Make sure you have a good savings buffer available in the event of job loss or other unexpected hardship. Even if you CAN finance a DVC purchase, don't do it if you're living virtually paycheck-to-paycheck. Take into account any anticipated changes in your family budget: income / expense changes if starting a family, adult going back to school, career change, child going to college or private school, etc.

My wife and I bought DVC in 2003. We COULD have done it sooner--particularly with the financing options available. But looking back, buying DVC would have meant THOUSANDS of dollars each year going toward the DVC mortgage, dues and all other Disney vacation expenses. That's money we WOULD NOT have had available to buy and update our first house. It could have left us in a position where my wife could not have afforded to take time off work to care for our newborn children.

DVC is often an emotional purchase. Sure it's a great way to save money--but nobody really NEEDS annual trips to Walt Disney World. Heck, you can stay off-site and/or in cheaper hotels and still pay less for Disney stays.

Don't trade 51 weeks of stress and strain brought on by an overtaxed budget for one week of vacation bliss.

 

[dreamfinder]

As pointed out, run the numbers. Look at when you think you would be likely to stay, see how many points you would need, and what that would cost you. Then compare to what those same stays would cost you based on where you would otherwise stay. If you normally stay at a value then it will be much harder to break even than if you always stay at the GF. NEVER compare to cash rates for the DVC rooms unless you would otherwise pay those to stay there as they, I still swear they inflate them a bit to make DVC look better. "Look, by owning you can stay for $200 a night instead of $600."

 

[BigTxEars]

Do the math for sure but if it something burning in the back of your mind (WDW can do that!) you will end up getting it anyways

We bought cash on the secondary market. Only 100 pts at SSR but total out of pocket was right at $8000 and dues will be under $500 per year. That 100 pts is just enough to get a room for a week at a DVC resort in the majority of the year. If we need more we can buy one time use points from Disney for $15 per point, up to 24 points I think per year. With that we can get a room any week of the year, for an additional max of $360 per trip. Still a savings. My math has us breaking even in 7-8 years of trips.

But saving money was only a part and I am not even sure it was the main part to us buying DVC. We just wanted to belong to DVC and know Disney trip were in our future. Silly no doubt but it was worth it to us.

 

[BigTxEars]

For me It wouldn't be some thing good for my family for the reason the dues are around 1000 a year ( depending on where you are) I go for 2 weeks a year and stay at a Moderate and get the free dining and spend with dining and tickets and room 2500.00 I don't care about a nicer resort I love the moderates. I think it depends on you and your family. Maybe call DVC and ask any questions you have.

We love the mods as well, in fact a "lower" DVC for the mods would be awesome. I know it will not happen for a huge number of reasons I would opt in if it did is all

POR of course!

 

[BigTxEars]

As pointed out, run the numbers. Look at when you think you would be likely to stay, see how many points you would need, and what that would cost you. Then compare to what those same stays would cost you based on where you would otherwise stay. If you normally stay at a value then it will be much harder to break even than if you always stay at the GF. NEVER compare to cash rates for the DVC rooms unless you would otherwise pay those to stay there as they, I still swear they inflate them a bit to make DVC look better. "Look, by owning you can stay for $200 a night instead of $600."

When I crunched my numbers I used 30% off rate for the room cost OOP, that seems to be the normal discount. I agree using full price rooms will not give a accurate number.