Resale Purchases - Pay In Full or Finance?

[kanerf]

If you can afford to pay cash, do so. I did that on some of my smaller contracts. I did finance the larger ones. You have to consider is the roughly 40% discount over cash bookings worth the cost of financing your purchase.

 

[take36]

I am the opposite of you guys, I only bought when I had 2x the amount saved up in “fun money.” Dvc is great and saves money but it doesn’t pay the bills nor tuition if I need it down the line! I had enough for some riviera but losing my job during Covid really put some perspective and I decided to up my emergency funds and also after a few stays at riviera I was disappointed. But with VDH and poly2 I am again saving every paycheck!

 

[Sandisw]

I am the opposite of you guys, I only bought when I had 2x the amount saved up in “fun money.” Dvc is great and saves money but it doesn’t pay the bills nor tuition if I need it down the line! I had enough for some riviera but losing my job during Covid really put some perspective and I decided to up my emergency funds and also after a few stays at riviera I was disappointed. But with VDH and poly2 I am again saving every paycheck!

Which is why we had decided that financing would be okay because we felt the vacation budget we were funding with cash, was Going to be spent at Disney regardless….of course, it would change the break even point because the interest had to be considered.

But, we didn’t touch the other savings we had because that was earmarked for emergencies. That is why the decision is personal and each situation is different.

 

[take36]

But, we didn’t touch the other savings we had because that was earmarked for emergencies. That is why the decision is personal and each situation is different.

Exactly. I didn't have the luxury of a guaranteed yearly vacation so much less a budget for it lol! Having a 1k+ bill monthly (dues+payment) is something that would affect my family greatly if I had to cut back or lost my job.

 

[J-Dog]

Exactly. I didn't have the luxury of a guaranteed yearly vacation so much less a budget for it lol! Having a 1k+ bill monthly (dues+payment) is something that would affect my family greatly if I had to cut back or lost my job.

I agree with you in principle, but I would expect that most middle class people will have to budget for dues +/- financed costs, no matter who they are. Or, at least I do, and it would be a hardship to pay the dues if I lost my job, even without financing. Same with my car payment, kids' daycare costs, etc.

I always wonder when these threads come up about the possible financial background of the posters giving opinions. In other words, are many of the posters who say "DVC should never be financed" just that much better with managing money than I am, or are they upper class (i.e rich) people who simply don't have to worry about that kind of stuff?

 

[thelionqueen]

I agree with you in principle, but I would expect that most middle class people will have to budget for dues +/- financed costs, no matter who they are. Or, at least I do, and it would be a hardship to pay the dues if I lost my job, even without financing. Same with my car payment, kids' daycare costs, etc.

I always wonder when these threads come up about the possible financial background of the posters giving opinions. In other words, are many of the posters who say "DVC should never be financed" just that much better with managing money than I am, or are they upper class (i.e rich) people who simply don't have to worry about that kind of stuff?

I don't think those who can pay cash or advocate for "never financing DVC" are more educated, wealthy, financially savvy, or overall "better than" others who don't finance. They simply have boundaries in their financial stake that they don't want to pay interest on a DVC purchase, which, of course is a great idea mathematically, but doesn't apply universally.

What I have issue with is those folks who advocate that paying cash is the "only" way, and if you don't, you're somehow not as good as those who can. Imo, they view those who finance as "strapped" or can't afford DVC if it has to be financed, which is generally not the case. I advocate for "do what is best for you" that simple.

 

[J-Dog]

I don't think those who can pay cash or advocate for "never financing DVC" are more educated, wealthy, financially savvy, or overall "better than" others who don't finance. They simply have boundaries in their financial stake that they don't want to pay interest on a DVC purchase, which, of course is a great idea mathematically, but doesn't apply universally.

What I have issue with is those folks who advocate that paying cash is the "only" way, and if you don't, you're somehow not as good as those who can. Imo, they view those who finance as "strapped" or can't afford DVC if it has to be financed, which is generally not the case. I advocate for "do what is best for you" that simple.

I couldn't agree more.

 

[Ashlotte]

I agree with you in principle, but I would expect that most middle class people will have to budget for dues +/- financed costs, no matter who they are. Or, at least I do, and it would be a hardship to pay the dues if I lost my job, even without financing. Same with my car payment, kids' daycare costs, etc.

I always wonder when these threads come up about the possible financial background of the posters giving opinions. In other words, are many of the posters who say "DVC should never be financed" just that much better with managing money than I am, or are they upper class (i.e rich) people who simply don't have to worry about that kind of stuff?

We have two resale contracts with a total of 403 and have used cash. I really, really hate the feeling and principle of being in debt and we do everything we can to avoid it.

We aren’t rich, but we don’t follow the norm with money compared to a lot of people. For example, we’ve never had a car loan because we’ve always paid cash for cars, even when we were young and poor and just starting out, driving $1500 cars and working our way up. We’ve been content to drive 15 year old cars if it meant no car payments. When we go out to eat, it likely involves a coupon and almost always involves splitting an entree and getting water instead of a drink. When we go to Disney, we eat breakfast in our room, pack a lunch into the park, and snack on granola bars or whatnot until we get back to the room or occasionally share an inexpensive meal. I’d rather cut some splurges off the trip and go twice as often than go all out on every vacation.

Most people understandably don’t want to live this way. People have to consider what brings them joy. My husband would happily never spend a cent on anything and that would bring him the most joy. I am a little more open to spending, but I need to feel like I’m getting value or a good deal for it to bring me joy, which I wouldn’t feel if I was financing. My (resale) contracts brought me a lot of joy because I felt like I was getting a “deal.” The first one is subsidized and the second was $83 per point.

This is not to say that we do it right and others do it wrong. We could die tomorrow and then what would have been the point of delaying the gratification of DVC? My kids are college aged now, and we just bought in last year after many years of wanting to. How priceless would it have been to be DVC owners when they were smaller? Looking back, I wish we would have been able to loosen the purse strings a bit and jump in earlier, even if financing was involved (and I would have loved to hop in before the resale restrictions or when you could just buy 25 points to get direct status). The money we spend or earn in our lives is finite, but so is every heartbeat and every minute with those we love. Do what brings YOU joy.

 

[HyperspaceMountainPilot]

We have two resale contracts with a total of 403 and have used cash. I really, really hate the feeling and principle of being in debt and we do everything we can to avoid it.

We aren’t rich, but we don’t follow the norm with money compared to a lot of people. For example, we’ve never had a car loan because we’ve always paid cash for cars, even when we were young and poor and just starting out, driving $1500 cars and working our way up. We’ve been content to drive 15 year old cars if it meant no car payments. When we go out to eat, it likely involves a coupon and almost always involves splitting an entree and getting water instead of a drink. When we go to Disney, we eat breakfast in our room, pack a lunch into the park, and snack on granola bars or whatnot until we get back to the room or occasionally share an inexpensive meal. I’d rather cut some splurges off the trip and go twice as often than go all out on every vacation.

Most people understandably don’t want to live this way. People have to consider what brings them joy. My husband would happily never spend a cent on anything and that would bring him the most joy. I am a little more open to spending, but I need to feel like I’m getting value or a good deal for it to bring me joy, which I wouldn’t feel if I was financing. My (resale) contracts brought me a lot of joy because I felt like I was getting a “deal.” The first one is subsidized and the second was $83 per point.

This is not to say that we do it right and others do it wrong. We could die tomorrow and then what would have been the point of delaying the gratification of DVC? My kids are college aged now, and we just bought in last year after many years of wanting to. How priceless would it have been to be DVC owners when they were smaller? Looking back, I wish we would have been able to loosen the purse strings a bit and jump in earlier, even if financing was involved (and I would have loved to hop in before the resale restrictions or when you could just buy 25 points to get direct status). The money we spend or earn in our lives is finite, but so is every heartbeat and every minute with those we love. Do what brings YOU joy.

This was a really beautiful post— something we have been thinking about lately after a cancer scare—we already blow a lot of our discretionary income at Disney parks (and cruises)—but as two parents with very demanding jobs, more generally trying to reflect “are we prioritizing our lives/time in a way we’ll feel good about when our kids are out the door.”

My grandmother, who was quite wealthy, often said “nobody counts anybody else’s money”— I understood it to mean that we shouldn’t assume anyone was rich or poor based on how they chose to spend money and we shouldn’t judge others’ financial decisions without knowing the totality of their circumstances.

I can only speak for myself, but I suspect most of us who are vigorously “never finance” types have at least one parent (or close family member) who got into financial trouble with debt and so we are extremely cautious as a result. While I’m sure that the people who financed VGC in 1999 did significantly better than those who “saved their money” and put it in the stock market, it makes me uneasy to see people suggesting that DVC is a good investment (for anything other than 20+ years of saving money on trips), especially as Disney has made several recent changes that decrease resale values…might still be a better long run bet than the stock market though.

 

[J-Dog]

In my mind, DVC should be thought of as an "investment" in the sense that buying an RV/motor home or a boat is an investment.

i.e. you might get lucky and be able to sell it for a small profit, but it's bought to be used, not bought to "hope" to make money someday.

Having said that, I know tons of people who financed their RV or boat...

 

[Ashlotte]

This was a really beautiful post— something we have been thinking about lately after a cancer scare—we already blow a lot of our discretionary income at Disney parks (and cruises)—but as two parents with very demanding jobs, more generally trying to reflect “are we prioritizing our lives/time in a way we’ll feel good about when our kids are out the door.”

Thank you. Both mine and my husband's parents died young (ranging from 33-58), so we try to balance enjoying now, while we are here and healthy, with being financially responsible. Sometimes its easy to slip too far on one side.

 

[Cfabar1]

Thank you. Both mine and my husband's parents died young (ranging from 33-58), so we try to balance enjoying now, while we are here and healthy, with being financially responsible. Sometimes its easy to slip too far on one side.

This is so true…. You need to worry about tomorrow, but also enjoy today.

 

[KalamityJane]

Thank you. Both mine and my husband's parents died young (ranging from 33-58), so we try to balance enjoying now, while we are here and healthy, with being financially responsible. Sometimes its easy to slip too far on one side.

This!! My FIL passed at 62 and it completely changed our mindset. We are trying to retire early, but I’d rather make memories while we can because no one knows if we have tomorrow or if we will physically be able to enjoy it. If it takes us a few years longer to retire, then so be it.

 

[NY Pirate Princess]

I paid cash for my RV. Used it until we used it up and the cost of repair was more than it was worth. Sold it for one sixth of what we paid for it. Car loans always and paid off early, driven until annual repair is more expensive then value. I need a car for work and play. RV was just for play and not worth fretting over.

DVC will be cash, too. And I hope to not sell it ever since my sights are set on a 2042 resort. Unless, of course, the prices get lower. Who knows what I will do then!

DVC is an investment. Not a financial one, but an investment in me and mine, in fun, in my hope for a pandemic free sunshine filled future. It might be silly, but it gets me through the grey days and helps me pile cash. If I ever make it, it will be worth the wait!

 

[babesboo99]

This!! My FIL passed at 62 and it completely changed our mindset. We are trying to retire early, but I’d rather make memories while we can because no one knows if we have tomorrow or if we will physically be able to enjoy it. If it takes us a few years longer to retire, then so be it.

Thats what happened to me. My father passed and the money he had didn't go with him so I am buying at VGF and we are financing at first. We already own at BCV paid in full but I want VGF and I learned enjoy today because tomorrow is not promised.

 

[robinb]

I always wonder when these threads come up about the possible financial background of the posters giving opinions. In other words, are many of the posters who say "DVC should never be financed" just that much better with managing money than I am, or are they upper class (i.e rich) people who simply don't have to worry about that kind of stuff?

Disney isn't a cheap vacation. I would propose that the majority of DVC owners who can afford yearly trips are, in fact, "upper class" even if they don't identify as such. At the very least, they are on the upper end of the middle class. The expensive buy in, the ongoing dues and the additional yearly cost to vacation at WDW/DL are too expensive for lower class or most middle-middle class people. It's simply too much of a percentage of their yearly salary.

For instance, I have 200 BWV points. Buy-ins right now for 200 BWV points are about $26,000 and then another $1700 per year in dues. I calculated my own upcoming vacation to be $6900 a few pages back, but it's actually more if I add on $1433 for the dues I paid to be able to stay at BWV for 8 nights. My total is about $8333.

A family of 4, considered middle class in 2016, made between $52,187 and $156,560.

https://www.hellawealth.com/blog/money/what-is-middle-class-in-every-state/

$8333 is 16% of the lower middle class income, 8% of the averaged middle class income and 6% of the upper middle class income. The upper middle class folks can afford an expensive vacation while the lower middle class folks would struggle. The people in the middle would still need to work a full month to afford an 8-day vacation.

Yeah, yeah. I know that there are always people who do indeed manage to make it work from the lower and middle middle class and good on them! However, I still think the vast majority of DVC owners are among the higher wage earners.

 

[TheLyinKing]

Personally the only way I could justify buying DVC (even resale) would be to pay it outright in full with money I already had put aside. I did grab a CC that had 0% interest for like 21 months to spread out the cost of other expenses in the meantime. But I always had the cash flow to pay everything up front (both expenses that I put on the card and the resale contracts I bought). I did quite a bit of research though before deciding to purchase. This was definitely a calculated decision.

 

[take36]

Disney isn't a cheap vacation. I would propose that the majority of DVC owners who can afford yearly trips are, in fact, "upper class" even if they don't identify as such. At the very least, they are on the upper end of the middle class. The expensive buy in, the ongoing dues and the additional yearly cost to vacation at WDW/DL are too expensive for lower class or most middle-middle class people. It's simply too much of a percentage of their yearly salary.

For instance, I have 200 BWV points. Buy-ins right now for 200 BWV points are about $26,000 and then another $1700 per year in dues. I calculated my own upcoming vacation to be $6900 a few pages back, but it's actually more if I add on $1433 for the dues I paid to be able to stay at BWV for 8 nights. My total is about $8333.

A family of 4, considered middle class in 2016, made between $52,187 and $156,560.

https://www.hellawealth.com/blog/money/what-is-middle-class-in-every-state/

$8333 is 16% of the lower middle class income, 8% of the averaged middle class income and 6% of the upper middle class income. The upper middle class folks can afford an expensive vacation while the lower middle class folks would struggle. The people in the middle would still need to work a full month to afford an 8-day vacation.

Yeah, yeah. I know that there are always people who do indeed manage to make it work from the lower and middle middle class and good on them! However, I still think the vast majority of DVC owners are among the higher wage earners.

Just making it to Disney cost a lot of money! Forget dvc members, a WDW vacation is a luxury that most of America simply cannot afford. The prices are so high and getting higher, now with plane tickets spiking and even groceries that we order to the resort touched by inflation, it’s easy to spend 5-10k for a family of four just getting there and eating the basic meals. For someone that makes 100k that 10 percent of their income!

Some offsite hotels like the new Drury and others that provide at least one meal is becoming more and more appealing for families. There is an inconvenience with transportation but ride shares are the equalizer when even accounting for Uber costs you are saving hundreds a day, thousands per vacation.

 

[BamaGuy44]

Just making it to Disney cost a lot of money! Forget dvc members, a WDW vacation is a luxury that most of America simply cannot afford. The prices are so high and getting higher, now with plane tickets spiking and even groceries that we order to the resort touched by inflation, it’s easy to spend 5-10k for a family of four just getting there and eating the basic meals. For someone that makes 100k that 10 percent of their income!

Some offsite hotels like the new Drury and others that provide at least one meal is becoming more and more appealing for families. There is an inconvenience with transportation but ride shares are the equalizer when even accounting for Uber costs you are saving hundreds a day, thousands per vacation.

It’s human nature to define “rich” or “upper class” as people who have some amount of money or income than they do. I get it, it can seem immodest or prideful or whatever to think of yourself that way I guess. I’m guilty of it myself.

But you are objectively correct. Anyone taking yearly or semi yearly vacations to WDW are doing something the vast majority of Americans couldn’t dream of, even staying off site and packing PB &J for lunch. Does that mean we’re “rich”? If you define rich as having more money to spend on frivolous things like WDW than most people, then yeah. But everyone has their own definition.

And in any case there are many levels of rich. I always joke I’m “just DVC rich, not Golden Oak rich” (But only with people who would get the context of that joke, like my pals here on the DVC board )

 

[BamaGuy44]

Just making it to Disney cost a lot of money! Forget dvc members, a WDW vacation is a luxury that most of America simply cannot afford. The prices are so high and getting higher, now with plane tickets spiking and even groceries that we order to the resort touched by inflation, it’s easy to spend 5-10k for a family of four just getting there and eating the basic meals. For someone that makes 100k that 10 percent of their income!

Some offsite hotels like the new Drury and others that provide at least one meal is becoming more and more appealing for families. There is an inconvenience with transportation but ride shares are the equalizer when even accounting for Uber costs you are saving hundreds a day, thousands per vacation.

Also I agree on the Uber thing. It’s a real game changer for WDW IMO. Even if you paid to Uber everywhere you went from the Drury you’re still WAY ahead. We use it even staying at DVC resorts. Not all the time but if I can spend $100 over a week to save a bunch of bus/monorail rides, it’s money we’ll spent to me. Negligible in the overall cost of a trip.

I believe it’s the main reason DME went away. There used to be great value for Disney in giving people a reason not to rent a car. It was inconvenient and expensive to get out of the bubble and spend elsewhere without one. Now not so much. Doesn’t work great for families that need car seats or scooters, but it’s awesome for us.