Why are DVC resales almost never cheaper when buying “bulk” points?

[GoofGoof]

Just some quick math on my post above:

2010:

• OKW $60 per point MF $4.98 per point
• BLT $90 per point MF 3.89 per point
• On a 200 point contract BLT was $6,000 more up front
• Assuming MFs increased at 3.5% over the next 32 years the OKW MFs would have been $12K higher than BLT
• At 2042 BLT would have 18 years left so if you assume a terminal value of $50 per point (what I could sell the points for in 2042) that's another $10K

 

[correcaminos]

Just some quick math on my post above:

2010:

• OKW $60 per point MF $4.98 per point
• BLT $90 per point MF 3.89 per point
• On a 200 point contract BLT was $6,000 more up front
• Assuming MFs increased at 3.5% over the next 32 years the OKW MFs would have been $12K higher than BLT
• At 2042 BLT would have 18 years left so if you assume a terminal value of $50 per point (what I could sell the points for in 2042) that's another $10K

As an OKW owner, be happy you didn't buy there. For many years it was the cheapest. Now it's not at all.

I think honestly the end result is that you have to be okay with your purchase and how you do it. Some people don't care where they own and think the bottom line is the only thing that matters. Others don't agree. Neither is really right or wrong as a whole, but what is right or wrong for the person. If we have the cash to spend on our purchases (which we do) then I will spend it on how I see fit and am happy about doing so. That's all that really matters.

 

[HansGruber]

If you think about it purely from an initial cost perspective you'd be better off buying a non-DVC timeshare and trading in via RCI. There are a bunch of other reasons that plan may not work for you which is probably a topic for another thread but the point is if you only consider initial price per point no DVC purchase makes economic sense.

Well, that goes without saying: DVC is a pre-paid vacation plan; not really an investment. This discussion is strictly about DVC contracts with an implied assumption that ALL DVC members will "lose" money over the course of the contract. Money is put up-front in order to get a cheaper experience later.

 

[HansGruber]

Nobody could predict that BLT would have much larger MF increases than the others. It's now on par with SSR but still cheaper than OKW.

IMO, that's the problem. You can't predict what will happen, but you DO know what the price-per-point will be.

And BLT for $90 per point makes me sick. I wish I didn't read that! I'll probably never purchase a DVC now, knowing I'm paying 60% more than what I could have gotten it for.

 

[correcaminos]

IMO, that's the problem. You can't predict what will happen, but you DO know what the price-per-point will be.

And BLT for $90 per point makes me sick. I wish I didn't read that! I'll probably never purchase a DVC now, knowing I'm paying 60% more than what I could have gotten it for.

Prices fluctuate - just wait for the next downturn in economy and prices will drop. Of course by then who knows how many years will be left on each resort.

 

[GoofGoof]

Well, that goes without saying: DVC is a pre-paid vacation plan; not really an investment. This discussion is strictly about DVC contracts with an implied assumption that ALL DVC members will "lose" money over the course of the contract. Money is put up-front in order to get a cheaper experience later.

I don't disagree with any of this. I wasn't looking at DVC as an investment but rather the much cheaper upfront costs associated with non-DVC timeshares which can be traded in via RCI for a DVC room. If you remove all of the other variables and only look at upfront costs even OKW at $60 was expensive comparatively. There are a whole bunch of factors besides up front costs that make DVC a better option IMHO.

 

[Phonedave]

Resale for some resorts are the only ways to buy (VGF and VGC for example) so there is that as an option for those with resale. If we didn't have our credit card rewards (can't use cc on resale) it would have made it closer. We also got 6 months interest free if we wanted LOL. I know I could have picked another cheaper resort, but we wanted where wanted for a reason (fear the difficulty of booking at 7months and we'd want 2 rooms).

Most resale is a great deal! I always tell my friends to look there first when buying in. I've done both myself (direct after resale actually) and see good to both.

You can buy direct for any reasort. DVC will try and tell you that it is not available, but push hard enough and they will put you on a wait list. As soon as a resale contract for that resort comes on the market, they will exercise ROFR and then "flip" it to you. They would much rather you buy the new points, but they are also more than happy to make a quick buck by flipping a re-sale.

You can use a CC for resale, depending on where you buy, but usually there is a fee involved, so that usually negates any points you get.

One other thing that you have to factor in (or try to factor in) is maintenance fees.

You really have to run the numbers comparing resale and direct, and then factor in things such as if a particular resort matters to you. We went back and forth between adding on 50 points at BWV or at SSR. SSR matches our current contract, so it makes booking those family vacations. But BWV is where we really like to stay when my wife and I go for a food and wine weekend.

 

[Phonedave]

If you think about it purely from an initial cost perspective you'd be better off buying a non-DVC timeshare and trading in via RCI. There are a bunch of other reasons that plan may not work for you which is probably a topic for another thread but the point is if you only consider initial price per point no DVC purchase makes economic sense.

Except that apparently while you CAN use RCI for DVC units, actualy doing so is a bit of a crap shoot. Rooms come up few and far between and are snapped up very quickly.

-dave

 

[GoofGoof]

IMO, that's the problem. You can't predict what will happen, but you DO know what the price-per-point will be.

And BLT for $90 per point makes me sick. I wish I didn't read that! I'll probably never purchase a DVC now, knowing I'm paying 60% more than what I could have gotten it for.

You can't predict the exact future maintenance fees but you can get a decent ballpark estimate. MFs have to factor into your decision of whether to buy and where. At the end of the contract you most likely will have paid more in fees than upfront point cost.

It's been a while now since BLT points went for under $100 resale. I saw a few slip into the high $80s when we were looking at buying. Especially larger contracts. The industry took a big hit after the credit markets collapsed and the great recession began. I hope we don't see an economic downturn like that again in my lifetime but if we do grab some BLT points on the cheap.

 

[GoofGoof]

Except that apparently while you CAN use RCI for DVC units, actualy doing so is a bit of a crap shoot. Rooms come up few and far between and are snapped up very quickly.

-dave

Agreed. We had access to a non-DVC timeshare for a few years before we bought in to DVC. Each time we tried to trade in we couldn't get a room. Due to my work schedule I couldn't be very flexible so that didn't help. We stayed twice at the Hilton timeshare right next to Sea World. It's a very nice resort but we got jealous of the people walking back to BLT while we waited for the parking tram and eventually bought in.

It's also expensive to trade in to DVC. I want to say it's around $400 now in total fees since there is a trade in fee plus a resort fee.

 

[Phonedave]

Agreed. We had access to a non-DVC timeshare for a few years before we bought in to DVC. Each time we tried to trade in we couldn't get a room. Due to my work schedule I couldn't be very flexible so that didn't help. We stayed twice at the Hilton timeshare right next to Sea World. It's a very nice resort but we got jealous of the people walking back to BLT while we waited for the parking tram and eventually bought in.

It's also expensive to trade in to DVC. I want to say it's around $400 now in total fees since there is a trade in fee plus a resort fee.

That is an other factor to consider (oh so many factors). I owned at SSR before I met my wife, but my wife is a teacher, which greatly curtails the dates that we can take a vacation. That also influenced our decision to purchase an add on at SSR. We know that when we go as a family, we are going basically in late June / early July - no tying to get a resort around the holidays for us.

-dave

 

[correcaminos]

You can buy direct for any reasort. DVC will try and tell you that it is not available, but push hard enough and they will put you on a wait list. As soon as a resale contract for that resort comes on the market, they will exercise ROFR and then "flip" it to you. They would much rather you buy the new points, but they are also more than happy to make a quick buck by flipping a re-sale.

You can use a CC for resale, depending on where you buy, but usually there is a fee involved, so that usually negates any points you get.

One other thing that you have to factor in (or try to factor in) is maintenance fees.

You really have to run the numbers comparing resale and direct, and then factor in things such as if a particular resort matters to you. We went back and forth between adding on 50 points at BWV or at SSR. SSR matches our current contract, so it makes booking those family vacations. But BWV is where we really like to stay when my wife and I go for a food and wine weekend.

I agree with this! Some guides will do the wait list so to speak while others don't. Mine was willing if I had wanted but I changed my mind about BCV and went with one we already had. Sometimes I think about BWV too over BC, but at the moment I am concerned about the gondolas and the affects of it all in the area so we will hold off on that for a while. For F&WF I would buy a small contract there so I could get the standard views and be a sure thing for that time of year. Even the MK area resorts are booking up fast during that time of year. I will say that time of year is getting harder to book IMO.

With the MFs I just look and see a starting point and realize it can change. However when the fees are significantly higher than the rest (like CCVC, HHI and VBR) I kind of shy away from that. The rest seem close enough. Like I said my OKW points were bought when OKW was IIRC the lowest, but a new pool and some other things and they now are higher than my new resort.

I hadn't run across the companies that would take CC, but you are right, the fees you get charged (usually 3% is what we are charged where I work) is totally negated by the rewards. Disney doesn't charge for CCs so that was just money I made/save on the deal. As you said, run numbers always

 

[HansGruber]

You can buy direct for any reasort. DVC will try and tell you that it is not available, but push hard enough and they will put you on a wait list. As soon as a resale contract for that resort comes on the market, they will exercise ROFR and then "flip" it to you. They would much rather you buy the new points, but they are also more than happy to make a quick buck by flipping a re-sale.

Wait, this is a thing?! I didn't know that.
What does their "quick buck" involve?
Are they exercising ROFR and then jacking up the price?

Do you stipulate the resort, desired points per year and desired price-per-point?

I always knew Disney offered contracts on older resorts, but didn't realize they would sell for resale pricing.

 

[GoofGoof]

Wait, this is a thing?! I didn't know that.
What does their "quick buck" involve?
Are they exercising ROFR and then jacking up the price?

Do you stipulate the resort, desired points per year and desired price-per-point?

I always knew Disney offered contracts on older resorts, but didn't realize they would sell for resale pricing.

You still pay the direct price. They will exercise ROFR on someone trying to sell resale and buy the points from them at the lower resale price than flip it to you for the direct price. They pocket the profit. It's still not as lucrative as selling you a new construction contract but if you really want an older resort they will likely attempt to accommodate you.

 

[HansGruber]

You still pay the direct price. They will exercise ROFR on someone trying to sell resale and buy the points from them at the lower resale price than flip it to you for the direct price. They pocket the profit. It's still not as lucrative as selling you a new construction contract but if you really want an older resort they will likely attempt to accommodate you.

Oh, got it. Yeah, I knew about that already. I didn't realize there was a waiting list though.

What's the benefit to doing this though? Why pay Disney the retail price when you can get it MUCH less...or pay the same price for a brand new DVC resort?

 

[nickys]

Oh, got it. Yeah, I knew about that already. I didn't realize there was a waiting list though.

What's the benefit to doing this though? Why pay Disney the retail price when you can get it MUCH less...or pay the same price for a brand new DVC resort?

Buying a small number of points direct gets you all the perks. You can currently buy as few as 25 points direct if you are adding-on, sometimes it's a minimum of 50. And by doing it resale first, then direct means you can match your use year to your existing points.

 

[correcaminos]

Oh, got it. Yeah, I knew about that already. I didn't realize there was a waiting list though.

What's the benefit to doing this though? Why pay Disney the retail price when you can get it MUCH less...or pay the same price for a brand new DVC resort?

Not all guides are willing to do this and depending you have to be forceful but it is a thing. If you are going for a smaller contract that is impossible to find in the resale market then that would be a reason. Ones like VGF and VGC are really hit or miss if you can get your guide to do it and they are well sought after on resale markets especially in lower points. Ones like BCV or BWV are easier and just make you have a small wait. The latter of the two wouldn't be worth it price wise to do direct though unless you want to match your UY and it's harder to get. If you are resale and you want to be a full member, this isn't a bad way to do it.

 

[CaptainAmerica]

Can someone help me understand why the price per point varies so dramatically from resort to resort? Is the seven month availability really so bad that people are willing to pay these huge premiums for a specific home resort?

 

[nickys]

Can someone help me understand why the price per point varies so dramatically from resort to resort? Is the seven month availability really so bad that people are willing to pay these huge premiums for a specific home resort?

At certain resorts for certain times of the year, yes.

The Epcot resorts during Food & Wine, for example are really hard to get. Anywhere at New Year.

Sometimes it's the number of rooms at different categories that is the issue. GF is very small, so it can be very hard to get in at 7 months. AKL value villas are always sought after, you need to be online at the dot of the 11 month mark I believe to get them usually. Standard view at BWV and BLT, especially for studios go very quickly.

Studios tend to go first, then 2 beds, then 1 beds. Not sure on grand villas but there are very few of them anyway.

I would always recommend to buy where you would be happy to stay. Especially if you can only go at certain times.

 

[correcaminos]

Can someone help me understand why the price per point varies so dramatically from resort to resort? Is the seven month availability really so bad that people are willing to pay these huge premiums for a specific home resort?

In addition to what @nickys said, end date will affect some prices too. Resorts during certain times of the year are harder to book as said. After Epcot the monorail resorts book fast during Food & wine fest. You cannot get some of those inside of 9 or 10 months.

SSR is large and easy to book. It seems to be the last to book now with regular rooms at AKL and OKW next due to their sizes. OKW mostly has a 2042 expiration so that keeps that price down as well.

So lots of factors go into it. I agree with the buy where you want to stay most. We do stay all over, but if we could only do OKW at the HH area ad PVB, we'd be thrilled