How do you make DVC make financial sense?

[aoconnor]

Not necessarily...it depends on when you go and where you stay...

Here's my real-world example:

I bought 100 points at AKV in 2008, receiving all 2008 points. That means I received 49 years worth of points (4900 points total, assuming for now that I plan to keep the contract until it expires) and I paid a total of $9200, or roughly $1.88/point. This was paid in cash and not financed.

Last week, I stayed in a value studio at AKV for 5 nights at a "cost" of 45 points. These were all 2017 points and the maintenance fees on those points were $6.59/pt. So, my stay "cost" $381.15, or $76.23 per night. If you were able to score a room anywhere on property for less than $80/night, I'd like to hear about it. Even if you argue that you could rent for that, I would again challenge anyone to find an owner willing to rent for less than $9/point.

Well yes, if you stay in the cheapest room in all of DVC in the cheapest season and only on weekdays it will work out like that . But 5 nights there in a standard studio during a moderate season would be 84 points, so more like $142/ night using your example. And if you left the $9,200 in a regular savings account paying 1.2% interest you'd get $110/ year, so now you're at $164 per night.

That's all using a buy in cost of $98 per point (aka resale); if you did the same math at direct pricing for CCV it would jump to $238 a night. Which is obviously still a great deal compared to the cost of a regular hotel room there! Just sayin'

 

[Cyberc1978]

Well yes, if you stay in the cheapest room in all of DVC in the cheapest season and only on weekdays it will work out like that . But 5 nights there in a standard studio during a moderate season would be 84 points, so more like $142/ night using your example. And if you left the $9,200 in a regular savings account paying 1.2% interest you'd get $110/ year, so now you're at $164 per night.

That's all using a buy in cost of $98 per point (aka resale); if you did the same math at direct pricing for CCV it would jump to $238 a night. Which is obviously still a great deal compared to the cost of a regular hotel room there! Just sayin'

In my country we get zero percent interest on our accounts. But if you do count on getting 1.2% you need to take tax and inflation into account also.

 

[aoconnor]

In my country we get zero percent interest on our accounts. But if you do count on getting 1.2% you need to take tax and inflation into account also.

It's readily available in the US with online accounts at Goldman Sachs, etc. Not sure inflation is relevant since the dues also inflate every year, plus inflation would mean you get even more interest income. But fair point about taxes on the interest.

 

[CraigInPA]

We're actually renting points and staying at the Poly in January, so we'll experience DVC. I'm guessing if we ever do it that it'll be an emotional purchase. I love WDW and plan to go often, I would love to stay deluxe and this trip may ruin us to ever go back to value.

Once you've experienced the convenience of a monorail resort, and especially the Poly with a quick walk to the Epcot monorail at TTC and a quick walk to the MK monorail in the grand ceremonial house, you will never want to stay at a value resort again.

DVC will not save you money if you are ok with a value resort. If you demand a moderate, you'll find DVC about the same price (after factoring in maintenance fees, time value of money, buying it resale, etc...) to be about the same price. If, after staying at the Poly, you come to the realization that deluxe resorts with their amenities and easy transportation options are the only way to experience Disney, then you likely save money over time even if you buy at full retail price.

 

[CraigInPA]

However, I see reports showing that hotels outside of Disney are going to be offering 60 day fastpass+ reservations, for $76 a night

Those reports are unsubstantiated at the present time.

 

[cedricandsophie]

We have over 1400 points at 7 resorts, half bought on the after market. It in no way saves money. Nor was it an investment. We pay over 10000 in maintenance every year. And I don’t even consider the money we paid for all the points as anything other than a one time outlay that we will never get back. My goal is to make sure we get value for our maintenance fees. Our reasons for purchase had nothing to do with anything financial it was all emotional. We love Disney. Go a couple times a year. We don’t do parks much because we love the resorts. We always stay for a week or more. We always stay in a one or two bedroom. We give points to friends and family. We own at aulani and have been there every year for last five years. I figure our maintenance fees across all our points is what we would pay for a one bedroom ocean view at aulani for the 10 days we are there so any where else we stay during the year is gravy. Obviously We are lucky that we could pay cash, that we love the ambiance of the resorts and that we don’t have to worry financially about the maintenance fees. If we were the types that did flow charts and financial analysis before purchase we never would have done it. So for those who do you may find it doesn’t make financial sense.

 

[Ben E N]

Those reports are unsubstantiated at the present time.

Yes. Could come true, could not. Just drives home the point that you should not make this purchase just to get the lowest price, as there are factors that are out of your control.

 

[jlwhitney]

DVC has definitely saved us money. We aren't value resort people , much prefer the deluxe and some mod. DVC has allowed us to afford deluxe that we wouldn't have else wise. We paid cash too. DH ran all the numbers in many ways and we save. Now if we only wanted values no it wouldn't save us any.

We also save in that we bring a lot of food with us too and spend much less on dining. We also live where we can drive, it didn't make sense to us when we lived further and had to rely on airfare.

 

[Greg36]

We just recently purchased so we shall see if it saves money or not. It was definitely a combination of emotional and financial reasons for the purchase (more emotional then financial!). We love Disney and we tend to go once a year for 14 nights. We like to go in the fall. We were really into the free dining and for a while we could get 14 nights with the DDP, a moderate resort, and our park tickets/MM for somewhere between 5-5.5k. We felt like this was good value. By the time you added on exchange rates, plane tickets, and cash for tips and souvenirs it was around 10K Canadian. This year though the free dining deal was really scaled back and the costs have gone up. I think the cost of the FD for a moderate (upgrading to the DDP) would be closer to $6400 and that is even if you can get the deal. It has become much more difficult. We are doing AKL with FD this Dec and I think the cost was closer to $7500. We figured that a switch to DVC would also involve a switch in how we buy tickets and how we buy food (as part of how we hope to make it save us money). We bought 160 AKL points for around 14K (cash buy) and this has dues of around $1,054. We plan to purchase an AP and use it for two annual trips (cost around $1659 per trip) and we plan to budget around $2000 for food per trip. This brings our cost for our 14 nights to around $4713. You could certainly add in something for tying up the 14K buy in, but honestly, we were not doing anything with that money. It had been sitting for years accumulating 0%. At this point (as a very new member), my thinking is keeping your point total close to what you need to replace what you are currently doing for cash purchase is an important part of making DVC save you money. Using banking and borrowing (and planning) seems to be key for this. I doubt very much that we will save much with DVC, but it has been really fun so far and added to our Disney experience. At the end of the day, there is value in that.

 

[4luv2cdisney]

You're not the only one who really wishes she could be convinced that DVC made more financial sense. From an emotional standpoint, I really want to be a DVC member. Unfortunately, we can't make the math work out...no matter how many hoops I try to jump through. We're just not the right demographic...husband and wife, no kids, don't need a bigger room. But we love staying at deluxes. So instead, we rent points.

I think there are people out there who DVC does benefit and it's a great choice for them. I wish I was one of them!

I would actually think your numbers would work more than a lot of other peoples because:
1) you need a smaller # of points if you only want a studio
2) you are already staying deluxe
3) deals like free dining - which are (were?) huge money savers for families were never the best deal for you

Where it usually doesn't work is people decide they want to buy enough points for a 1br or larger and are trying to compare it to what they currently pay for mods. That's not apples to apples.

I just bought a small contract direct with the intention of only using it for studios and we are ahead of the game after a handful of trips when comparing to our mod stays. So the benefit would have to be even greater for deluxe.

We did buy such a small number of points that we will not be able to stay at the higher point requirements resorts like Poly or VGF. We will probably only have enough points for stays at BWV (home resort), OKW, AKV and SSR . I plan on buying OTU points if we want to stay at CCV, ,BRV, BLT, and BCV. Obviously having a minimum amount of points will require flexibility on travel dates based on availability.

I agree there is very little difference between renting points and buying in right now, but I think there is still a slight edge to owning. I think rental rates are due to rise. It is too good of a deal right now and that will change.

 

[ScubaCat]

Some of the discussion reminds me of this quote

“A luxury, once enjoyed, becomes a necessity.”

― C Northcote Parkinson

That quote hits home with lately. I used to not care about hotel rooms, now I'm willing to spend a more for a nicer room. I used to only wear cheap sunglasses until I got my first really nice pair, now I couldn't go back. The list goes on and on, but yeah.

I calculated the cost of DVC vs. the cost of a therapist for what DW would put me through if I didn't agree to buy, and decided DVC was cheaper (and slightly less stressful, too).

It's all about the math...

 

[rer1972]

Some of the discussion reminds me of this quote

“A luxury, once enjoyed, becomes a necessity.”

― C Northcote Parkinson

That quote hits home with lately. I used to not care about hotel rooms, now I'm willing to spend a more for a nicer room. I used to only wear cheap sunglasses until I got my first really nice pair, now I couldn't go back. The list goes on and on, but yeah.

I did some quick back of the napkin math, staying at BLT "costs" me about 1200 bucks for 7 nights in a standard studio during Texas spring break (139 pts). The least expensive room at the Contemporary is has a rack rate of $515 a night, but I would never pay that. We can stay in a studio at BLT for 7 nights for about the cost of a standard room at Pop.

With the way WDW hotel prices have been climbing the last couple of years, we felt it was a good time to buy DVC. Our 2015 trip in an AoA Family suite was around 350 a night I think. Same room goes for 500 a night right now. Dues will go up of course, but not at that sort of rate.

This is how I feel about DVC. As a single adult I had always stayed off-site or value with friends and family, but always wanted to stay in a Deluxe. I used to visit the Deluxe resorts, and really enjoyed the "atmosphere". Anytime I planned a WDW trip I would always look at the rates for Deluxe resorts and cringe. Reading through the Disboards at the time I found out about DVC resales. After doing the math I purchased a small resale contract VWL (now BRV). I was visiting 1-2 times a year with family (got to take my parents and they loved it), and the points worked perfectly for me. So, I was able to meet my want for staying in Deluxe resorts through DVC resale. Now I have a wife and kids, and I've recently added another small contract at AKL. WDW trips now happen every 2 years or so, but that works out points/room wise.

I do feel I have gotten the most value out of my purchases (they aren't investments), and feel I will continue to get very good value for some time. You definitely cannot go into DVC thinking of it as an investment; it's seems better to look at the value (or non-value in some cases) it gives your WDW vacation.


Just thought I would share our experience.

 

[ScubaCat]

I would always look at the rates for Deluxe resorts and cringe

I was more impressed with the audacity to charge that much, but I guess they know what they can get! Disney resorts are all WAY overpriced for what they offer. At least a third to half the cost is just for being on property.

I do feel I have gotten the most value out of my purchases (they aren't investments)

That is the key right there. It's an "investment in vacations" and experiences, memories, etc. It's not a financial investment by any means.

 

[disneynutz]

We have over 1400 points at 7 resorts, half bought on the after market. It in no way saves money. Nor was it an investment. We pay over 10000 in maintenance every year. And I don’t even consider the money we paid for all the points as anything other than a one time outlay that we will never get back. My goal is to make sure we get value for our maintenance fees. Our reasons for purchase had nothing to do with anything financial it was all emotional. We love Disney. Go a couple times a year. We don’t do parks much because we love the resorts. We always stay for a week or more. We always stay in a one or two bedroom. We give points to friends and family. We own at aulani and have been there every year for last five years. I figure our maintenance fees across all our points is what we would pay for a one bedroom ocean view at aulani for the 10 days we are there so any where else we stay during the year is gravy. Obviously We are lucky that we could pay cash, that we love the ambiance of the resorts and that we don’t have to worry financially about the maintenance fees. If we were the types that did flow charts and financial analysis before purchase we never would have done it. So for those who do you may find it doesn’t make financial sense.

Almost a complete match to our story.

Bill

 

[ELMC]

For us it was all about the math, and the analyses of DVC ownership vs. renting vs. central reservations have been played out on here a million times. But as we use our DVC more and more, there are little benefits that we didn't anticipate that also have value to us. We all love going to Disney, that's why we're here on these boards. What I've noticed is that now, as DVC owners, the barrier to entry for a Disney stay is much smaller. The DVC booking tools have improved greatly over the past five years, and my experience is that the booking process for DVC is much more intuitive and easier (and less expensive) than booking through CRO. That means that the process of initiating a Disney vacation is easier, and so I'm more likely to do it.

 

[Minniesgal]

So, it's not something you do to save money, really? That's not the right way to look at it?

Heck no it's not something you to do save money. It's something you do to upgrade your accommodations and to make sure you go. We now go more often stay in larger more comfortable accommodation. The only thing that has changed is we do less and less park time. Never saved a buck never expected to but have taken many a trip we wouldn't have without DVC

 

[SarahC97]

Heck no it's not something you to do save money. It's something you do to upgrade your accommodations and to make sure you go. We now go more often stay in larger more comfortable accommodation. The only thing that has changed is we do less and less park time. Never saved a buck never expected to but have taken many a trip we wouldn't have without DVC

This is exactly why I want to buy in. I feel like it will help to ease some of the Disney depression after each trip if I know for certain I'm back. I can definitely see us doing more resort time and less park time as the years go on.

 

[mousehockey37]

Hi all!

My husband and I are going to WDW in January and plan on doing the DVC tour. My husband has been very interested in it, but after doing some research he's decided that even though we'd pay cash for it, it's not really a wise investment.

We go to Disney about every other year with our two kids and want to continue to do that, but we don't do deluxe, mostly value (sometimes moderate). He's just not convinced it makes financial sense for us.

Any owners that have a similar travel style to us that have found it does make sense to buy in? I really want to try and come up with some counterpoints to his argument, so I'm just wondering if there's anything I'm overlooking that others have found to be an advantage of buying DVC. Thanks!

If your husband did the research and doesn't feel it's a worthwhile thing to pursue, then it probably isn't. I'd still take the tour and see what they have to say. It'd be something nice to have but with something like DVC, you don't look short-term. Would you be vacationing the same way when your kids are grown and gone? There's a lot of questions you have to ask yourself. Again, he's done some of that asking/answering.

 

[Dean]

Hi all!

My husband and I are going to WDW in January and plan on doing the DVC tour. My husband has been very interested in it, but after doing some research he's decided that even though we'd pay cash for it, it's not really a wise investment.

We go to Disney about every other year with our two kids and want to continue to do that, but we don't do deluxe, mostly value (sometimes moderate). He's just not convinced it makes financial sense for us.

Any owners that have a similar travel style to us that have found it does make sense to buy in? I really want to try and come up with some counterpoints to his argument, so I'm just wondering if there's anything I'm overlooking that others have found to be an advantage of buying DVC. Thanks!

In your situation it won't save money but it might be a reasonable upgrade for around the same money. You'd roughly break even for SSR resale compared to your usual trips. You'd be paying cash. If you can plan 7 months or more out and mostly at AKV/SSR and are OK with the long term commitment and compromises of a timeshare, it could be a reasonable option if you only buy the points you'd use at WDW though a 20% buffer would be a good idea. Unless you're going premier (Xmas/Easter) you'd need around 75 points to do EOY, 100 or so if you'd do the higher time. Maybe an extra amount still to 100 or 125 if you wanted to try to get the higher level resorts part of the time. For this situation a 25 pt retail add on would likely not be worth it.

 

[Bonnie Cole]

Thanks! This is very helpful information. We aren't there yet, but hope to be one day!

DVC is basically a luxury purchase. I agree that we have enjoyed being DVC members, but we are probably spending 2 to 3 times what we were before. But we are also enjoying Disney more.

Rather than focus on cost savings, I would make sure everything else is in good shape before considering DVC.
1) You can pay cash.
2) You are on track to have a fully funded retirement.
3) You are on track to pay for college for the kiddies.
4) You have paid down all consumer debt except possibly your mortgage.
5) If you were to lose your job or have a financial setback, you have an emergency fund.

If you can answer yes to all this, then DVC is something you should consider as an alternative to buying a boat, a house in the mountains, or other luxury purchases that may interest you.

If you come every year and stay at deluxes, then there is some cost savings. If you only come every other year, the cost savings diminishes because of the time value of money. If you like mods or values, then there may be no cost savings for you.

Thanks