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Thread: Financing vs. Purchasing Outright

  1. #1
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    Default Financing vs. Purchasing Outright

    Financing vs. Purchasing Outright

    Hello! I’m currently progressing towards making a decision on DVC membership! (YAY) (“when” not “if”)

    As an MBA, I know that without including any variables, financing with the added interest will always cost more vs purchasing something outright or upfront. When looking at purchasing DVC points, which bring a substantial initial upfront cost, do you think financing with the benefit/value of receiving the points immediately outweigh the benefit/value of saving a few years to purchase the points outright?

    Some variables you might consider in your thoughts ie. Will the resort “sell out” while saving to purchase outright (direct purchase)?
    Can you “make back” your interest by renting unused points?

    Interested to hear everyone’s thoughts on how they might handle this or how you went through your purchase of DVC points!


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    They will not permanently sell-out any time soon, though direct purchase will be slower if you need to be at a specific resort with a specific number if points.

    With ROFR, Disney should be able to find you the points you are looking for, you'll just probably pay more. But there are advantages from buying directly so you may want to wait it out.

    I guess you could rent your points to pay off financing, but if you're going to do a Disney vacation anyway it will feel odd paying for a hotel when you own points.

    Just don't finance through Disney, and if you finance through your bank, pay it off as fast as possible. (Spoonful of sugar...)

  3. #3
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    Financially, there's no way that taking a loan to purchase DVC makes sense. That's the way, however, I originally bought into the club because we didn't have tens of thousands of dollars lying around yet we wanted the benefits of membership right away. So we financed through Disney at 9.9%, but then paid it off a couple of years later when we had the means.

    There will be those who say things like "never buy direct--you're throwing money away by not buying resale" or "if you can't afford to buy your points then you shouldn't waste money on a luxury like DVC at all". I'm not one of those people, obviously.

  4. #4
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    we purchased back in 2011 while on a Disney cruise. We attended one of the DVC meetings for the free drink and we were sold on the presentation. Because we were on a cruise ship we financed from Disney to complete the sale and then transferred it to a bank loan at a much reduced interest cost when we got home. Then buckled down and paid it off as soon as we could.

    The question of financing vs buying outright has come up before and there is a school of thought that a purchase like this should never be financed. If you can't pay cash for it then you shouldn't be buying it kind of deal.

    I have no issues with financing as I don't believe financing and interest cause debt problems it is all money management. Financing has a time and place and the cost of interest is just a factor of how much the purchase is worth to you. For example if you your buy in cost is 30 000 and the interest will cost you 5000 then you need to decide if the product you are buying is worth $35000.

    Our situation is unique (almost a perfect storm) but when we bought there were several incentives for purchasing on the cruise. We ended up paying roughly 99$ a point for BLT. At the time the Canadian dollar was also the highest it had ever been (I believe 1.06 or close to it). The total cost for our 220 points was roughly 22000; however, slightly less for us due to the strong Canadian dollar.

    For us to buy the same 220points now, direct, for BLT (based on current pricing of 191$ pt for BLT) it would cost us roughly $55000 with the weak exchange rate.

    Using an online loan calculator as reference, at the time we purchased, I could have taken the Disney loan of 10% over 10 years and still be about $20 000 ahead of buying direct now. But more importantly we've been able to use our points in the meantime. We bought before we had kids and now they are 6 and 4. We've taken many trips with them and have experienced so much. We've done 3 stays at Aulani and before DVC we had never even considered a trip to Hawaii. Now it is one of our favorite places. To us Disney is priceless at such a young age and I'm happy we were able to take advantage of that. Had we waited and tried to save to pay cash we would paying so much more and we would have missed out on so much.

    Again, our situation was a little different but financing the purchase was the best thing we could have done at the time.
    WDW - POFQ, CS, ASM, BLT, OKW, VWL, AKL - (9 trips)
    DL - 4 trips
    DCL - 2 cruises
    Aulani - 3 trips




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  6. #5
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    Quote Originally Posted by Mkeef View Post
    we purchased back in 2011 while on a Disney cruise. We attended one of the DVC meetings for the free drink and we were sold on the presentation. Because we were on a cruise ship we financed from Disney to complete the sale and then transferred it to a bank loan at a much reduced interest cost when we got home. Then buckled down and paid it off as soon as we could.

    The question of financing vs buying outright has come up before and there is a school of thought that a purchase like this should never be financed. If you can't pay cash for it then you shouldn't be buying it kind of deal.

    I have no issues with financing as I don't believe financing and interest cause debt problems it is all money management. Financing has a time and place and the cost of interest is just a factor of how much the purchase is worth to you. For example if you your buy in cost is 30 000 and the interest will cost you 5000 then you need to decide if the product you are buying is worth $35000.

    Our situation is unique (almost a perfect storm) but when we bought there were several incentives for purchasing on the cruise. We ended up paying roughly 99$ a point for BLT. At the time the Canadian dollar was also the highest it had ever been (I believe 1.06 or close to it). The total cost for our 220 points was roughly 22000; however, slightly less for us due to the strong Canadian dollar.

    For us to buy the same 220points now, direct, for BLT (based on current pricing of 191$ pt for BLT) it would cost us roughly $55000 with the weak exchange rate.

    Using an online loan calculator as reference, at the time we purchased, I could have taken the Disney loan of 10% over 10 years and still be about $20 000 ahead of buying direct now. But more importantly we've been able to use our points in the meantime. We bought before we had kids and now they are 6 and 4. We've taken many trips with them and have experienced so much. We've done 3 stays at Aulani and before DVC we had never even considered a trip to Hawaii. Now it is one of our favorite places. To us Disney is priceless at such a young age and I'm happy we were able to take advantage of that. Had we waited and tried to save to pay cash we would paying so much more and we would have missed out on so much.

    Again, our situation was a little different but financing the purchase was the best thing we could have done at the time.
    Thanks for the response! The few people I have seen/talked to that have financed did so when the market was much better for purchasing DVC points, obviously it has changed drastically since then. In your case, financing doesn't seem like a bad option given the incentives to purchase at that moment. I believe now it would be a much tougher road than saving a few years to pay cash upfront for the purchase. However, you never know how the market will change from year to year! I'm glad your perfect storm worked out for your family!
    Walt Disney World Annual Passholder - Disneyland Paris Annual Passholder - Former Walt Disney World Cast Member - Disney Parks Photography - runDisney
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    Upcoming Trips - Disneyland Paris 10/04-10/08 , Disneyland Paris (Disneyland Hotel) 11/21-11/25, Walt Disney World (Ft. Wilderness) 12/20-1/02

  7. #6
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    I have to put in my 2 cents worth. Borrowing for a vacation does not make sense. Vacations are not a need but a want. It is just an easy way to go into debt. We purchased with cash that we saved for a number of years before buying our DVC contracts. To me since you are out of the county this is the perfect time for you to save your money and then buy DVC when you return home to the U.S.A. You might want to consider purchasing resale to save thousands of dollars.
    --Denise

    Scheduled upcoming Disney trips:

    11/27-12/14/18 AKV Kidani Village
    2/19-2/22/19 - Bay Lake Tower
    3/10-3/14/19 - AKV Jambo House


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