Resale vs Direct (Again!)

[ELMC]

Originally Posted by bakerworld

There is always a lot of derisive advice towards purchasing any other way than cash on resale. Hence those of us who purchase direct (horrors!) and FINANCE the purchase become defensive.

The reality is no one knows everyone's economic platform. We drive 10 yo cars and our CC's are zeroed out every month so we're not wasteful in the short term. Frankly, after putting multiple progeny thru College we decided that we don't like being cash poor (first due to college but also jerk-ward FP's that have us investing 15% of our gross into retirement savings) so we leave our bank account alone by financing large purchases. I won't live on my CC any longer because I have no cash in the bank when the heater goes or put my pet down because I don't have the responsible ability to afford the cost of care. I hope someday to enjoy my 15% but I don't expect to because all doctors will tell you that generics are a diagnostic tool that works.

We're chubby - not fat.

I think you bring up two great points (and I would like to add another). I am one of the vocal people that advocates buying resales with cash based on two reasons. First, when I was in my early 20s I was in a LOT of debt due to some poor financial choices I made (I bought things on credit that I simply couldn't afford). It took me years to get out of that hole. So I try to pay it forward a little by advising that people not buy something that they can't afford to pay for in the short term. That being said, my position on that is purely financial. As we have seen with all things, but especially Disney and DVC, it is an emotional purchase. I try not to tell people what to do or how to live their lives, so I can't comment on whether or not someone should buy and finance for other reasons. It may be a great decision for one personally. However, from strictly a financial position it is a risky move (especially with today's direct prices) and that's why I advise against it.

Where I sometimes get frustrated (and unfortunately I do think it shows in my posts sometimes ) is when people use the most convoluted math to try to justify their decisions. We've seen people over inflate the real costs of staying at Deluxes; ignore maintenance fees in their calculations; use how much they pay for a 7 night stay in a 2BR and comparing it to a 160 point purchase (enough for 3-4 nights, not 7); and the best of all, take how much they spend on an entire Disney vacation (including lodging, transportation, tickets, food, etc.) and using that to say that they would save money by buying DVC because they would've spent that in X years anyway. They are free to think whatever they like, but what worries me is that readers of that post who are researching DVC might read that information, take it as accurate and act on it. Quite frankly, I have a lot of respect for your position (not that what I think should matter to you ) because you're not altering facts to justify your decision. You simply said that you live every other aspect of your financial life responsibly, and you want to have a little fun and finance the purchase. Although I disagree with the decision, I can respect it, and I think that's what healthy debate is all about.

The second point you made that is so true is that we don't know each other's financial situations. So at best our advice is a generalization that may or may not apply. Someone in their early 20s comes on asking whether or not they should buy DVC and we give our opinions. Well really we don't know if they're just out of college and making a humble living or a few years out of college and working on Wall Street making $150,000 a year. Clearly their situations are different. The median annual income in the United States is $46,236 a year. That means that there are people here on the DIS that could make that, a little more, or a little less. The point is we don't know. The author of a post who talks about buying 200 points direct at BLT might be making $400,000 a year. In that case it's a much less risky move than someone buying 200 BLT direct and financing because they have to stretch to make the monthly payment. We simply don't know. So I think you're right, we need to give a little more consideration to financial background when giving advice. And since we don't know that, it's difficult to do.

The point I'd like to add is that the whole "resale vs. direct" debate really only fueled up in the past year or so when DVC prices became outrageously high in comparison to previous prices. So I think that the "resale" people (like myself) should be clearer in stating that their opinions refer to $140 a point AKV purchases and not preconstruction AKV purchases. Similarly, the line gets a lot blurrier when you are talking about the sold out resorts priced in the $100-$115 range. And I think "direct" people need to realize that "resale" people might not be talking about you specifically when they are talking about potentially financially unsound direct purchases. I would've LOVED to be you if you bought BWV direct for $65 or BCV direct for $75 or even BLT direct at opening for $107. But I wasn't that smart, so now in order for it to make financial sense for me, I bought resale.

Great discussion baker, glad you brought it up.

[thptrek]

ELMC, great post. While our kids were growing up we went to disney many times always staying at GF, Contemporary or Poly. We just were not in a position to buy DVC although when I think about how much we spent on those vacations (even with PIN codes) I know that DVC would have been a better option. Now, I am in the ROFR process even though our kids are older. As you stated we should all respect each other and everyone's financial picture is different.

BTW, I did resale because I could not personally justify going with $160/pt.

[Goofy DVC]

Originally Posted by ELMC

I think you bring up two great points (and I would like to add another). I am one of the vocal people that advocates buying resales with cash based on two reasons. First, when I was in my early 20s I was in a LOT of debt due to some poor financial choices I made (I bought things on credit that I simply couldn't afford). It took me years to get out of that hole. So I try to pay it forward a little by advising that people not buy something that they can't afford to pay for in the short term. That being said, my position on that is purely financial. As we have seen with all things, but especially Disney and DVC, it is an emotional purchase. I try not to tell people what to do or how to live their lives, so I can't comment on whether or not someone should buy and finance for other reasons. It may be a great decision for one personally. However, from strictly a financial position it is a risky move (especially with today's direct prices) and that's why I advise against it.

Where I sometimes get frustrated (and unfortunately I do think it shows in my posts sometimes ) is when people use the most convoluted math to try to justify their decisions. We've seen people over inflate the real costs of staying at Deluxes; ignore maintenance fees in their calculations; use how much they pay for a 7 night stay in a 2BR and comparing it to a 160 point purchase (enough for 3-4 nights, not 7); and the best of all, take how much they spend on an entire Disney vacation (including lodging, transportation, tickets, food, etc.) and using that to say that they would save money by buying DVC because they would've spent that in X years anyway. They are free to think whatever they like, but what worries me is that readers of that post who are researching DVC might read that information, take it as accurate and act on it. Quite frankly, I have a lot of respect for your position (not that what I think should matter to you ) because you're not altering facts to justify your decision. You simply said that you live every other aspect of your financial life responsibly, and you want to have a little fun and finance the purchase. Although I disagree with the decision, I can respect it, and I think that's what healthy debate is all about.

The second point you made that is so true is that we don't know each other's financial situations. So at best our advice is a generalization that may or may not apply. Someone in their early 20s comes on asking whether or not they should buy DVC and we give our opinions. Well really we don't know if they're just out of college and making a humble living or a few years out of college and working on Wall Street making $150,000 a year. Clearly their situations are different. The median annual income in the United States is $46,236 a year. That means that there are people here on the DIS that could make that, a little more, or a little less. The point is we don't know. The author of a post who talks about buying 200 points direct at BLT might be making $400,000 a year. In that case it's a much less risky move than someone buying 200 BLT direct and financing because they have to stretch to make the monthly payment. We simply don't know. So I think you're right, we need to give a little more consideration to financial background when giving advice. And since we don't know that, it's difficult to do.

The point I'd like to add is that the whole "resale vs. direct" debate really only fueled up in the past year or so when DVC prices became outrageously high in comparison to previous prices. So I think that the "resale" people (like myself) should be clearer in stating that their opinions refer to $140 a point AKV purchases and not preconstruction AKV purchases. Similarly, the line gets a lot blurrier when you are talking about the sold out resorts priced in the $100-$115 range. And I think "direct" people need to realize that "resale" people might not be talking about you specifically when they are talking about potentially financially unsound direct purchases. I would've LOVED to be you if you bought BWV direct for $65 or BCV direct for $75 or even BLT direct at opening for $107. But I wasn't that smart, so now in order for it to make financial sense for me, I bought resale.

Great discussion baker, glad you brought it up.

Very well said!

[disbound09]

At the end of the day this forum is great for giving the reasons to become a DVC member or not. The best decisions often come after much thought and research. If you read both sides of the whatever discussions presented you will arrive at the right option for you. Isn't that what is best? The right situation for you may not be the right decision for them. Making an informed decision is always the best decision. Getting both sides of the equation is powerful in making the best choice for you, whether you agree with them or not. Great debates and discussion's are essential. IMHO

[Airb330]

Originally Posted by Dean

3. But you could have bought less points, had the dollars for other trips, had less yearly fees, MORE future options and less risk.

I agree with almost everything Dean and ELMC said; I think what I quoted is key. It seems like a lot of people buy too many points "just in case". Then, they justify the amount of points by saying they can use it on a cruise, rent out, etc. I know I'll stretch 100 points, and if I need to borrow points, I can. I know I will most likely always want to travel to Disney, but there will be random years it doesn't happen. I try to travel as much as possible, and I'd rather have cash in my bank account to do it & not pay hundreds in maintenance fees a month.

DVC is a big purchase people should spend some time really decided how many points you need!

OP, welcome to DVC, and I am glad you are happy with your purchase.

[Dean]

Originally Posted by Airb330

I agree with almost everything Dean and ELMC said; I think what I quoted is key. It seems like a lot of people buy too many points "just in case". Then, they justify the amount of points by saying they can use it on a cruise, rent out, etc. I know I'll stretch 100 points, and if I need to borrow points, I can. I know I will most likely always want to travel to Disney, but there will be random years it doesn't happen. I try to travel as much as possible, and I'd rather have cash in my bank account to do it & not pay hundreds in maintenance fees a month.

DVC is a big purchase people should spend some time really decided how many points you need!

OP, welcome to DVC, and I am glad you are happy with your purchase.

I think everyone's situation is a little different. In general, and assuming we're looking at DVC stays ONLY, for those looking at smaller purchases, it's almost always a good idea to buy a cushion of 10-20%. OTOH, those looking at larger units, esp 2 BR Magic or above, it doesn't make sense to do the same and if anything, undercutting it a little can be a good idea. Those that need less now and expect to need more later are the most difficult situations to plan for. I think this group frequently either underbuys or overbuys. As a rule, I think those that truly need less now and know they'll need more in a few years should go in between the numbers they would need now and what they calculate they need for later. In addition, it's frequently a good idea to get the contract size up to 150-160 if feasible to have more contract choices and get a cheaper pp buy in. One has to take all these factors and many others and fit them together to make the best decision. Even then emotions or fear often take over and many people either clearly underbuy or overbuy.

[TotallyADiz]

I think a lot of positive points have been made here. I think ELMC touched on a number of them.

It really all is about education. There are so many moving parts, such as how many points to buy, where to buy, etc, etc, that if you change any of the variables then the entire equation changes. I think what is great about this site is that you have a lot of veterans here. People who have bought direct, resale, both, at various resorts at various times over the years, paid in cash, financed, sold, etc. So for someone new coming into DVC there is so much information here. I think what we all need to do is keep perspective when evaluating our decision and apply it to our own individual circumstances......but we can't be blind to the numbers....the numbers are what they are. After we've properly evaluated them and then applied it to our own set of circumstances, then we should just enjoy!

Thanks to everyone here for the great feedback!

[DougEMG]

Originally Posted by ELMC

I think you bring up two great points (and I would like to add another). I am one of the vocal people that advocates buying resales with cash based on two reasons. First, when I was in my early 20s I was in a LOT of debt due to some poor financial choices I made (I bought things on credit that I simply couldn't afford). It took me years to get out of that hole. So I try to pay it forward a little by advising that people not buy something that they can't afford to pay for in the short term. That being said, my position on that is purely financial. As we have seen with all things, but especially Disney and DVC, it is an emotional purchase. I try not to tell people what to do or how to live their lives, so I can't comment on whether or not someone should buy and finance for other reasons. It may be a great decision for one personally. However, from strictly a financial position it is a risky move (especially with today's direct prices) and that's why I advise against it.

Where I sometimes get frustrated (and unfortunately I do think it shows in my posts sometimes ) is when people use the most convoluted math to try to justify their decisions. We've seen people over inflate the real costs of staying at Deluxes; ignore maintenance fees in their calculations; use how much they pay for a 7 night stay in a 2BR and comparing it to a 160 point purchase (enough for 3-4 nights, not 7); and the best of all, take how much they spend on an entire Disney vacation (including lodging, transportation, tickets, food, etc.) and using that to say that they would save money by buying DVC because they would've spent that in X years anyway. They are free to think whatever they like, but what worries me is that readers of that post who are researching DVC might read that information, take it as accurate and act on it. Quite frankly, I have a lot of respect for your position (not that what I think should matter to you ) because you're not altering facts to justify your decision. You simply said that you live every other aspect of your financial life responsibly, and you want to have a little fun and finance the purchase. Although I disagree with the decision, I can respect it, and I think that's what healthy debate is all about.

The second point you made that is so true is that we don't know each other's financial situations. So at best our advice is a generalization that may or may not apply. Someone in their early 20s comes on asking whether or not they should buy DVC and we give our opinions. Well really we don't know if they're just out of college and making a humble living or a few years out of college and working on Wall Street making $150,000 a year. Clearly their situations are different. The median annual income in the United States is $46,236 a year. That means that there are people here on the DIS that could make that, a little more, or a little less. The point is we don't know. The author of a post who talks about buying 200 points direct at BLT might be making $400,000 a year. In that case it's a much less risky move than someone buying 200 BLT direct and financing because they have to stretch to make the monthly payment. We simply don't know. So I think you're right, we need to give a little more consideration to financial background when giving advice. And since we don't know that, it's difficult to do.

The point I'd like to add is that the whole "resale vs. direct" debate really only fueled up in the past year or so when DVC prices became outrageously high in comparison to previous prices. So I think that the "resale" people (like myself) should be clearer in stating that their opinions refer to $140 a point AKV purchases and not preconstruction AKV purchases. Similarly, the line gets a lot blurrier when you are talking about the sold out resorts priced in the $100-$115 range. And I think "direct" people need to realize that "resale" people might not be talking about you specifically when they are talking about potentially financially unsound direct purchases. I would've LOVED to be you if you bought BWV direct for $65 or BCV direct for $75 or even BLT direct at opening for $107. But I wasn't that smart, so now in order for it to make financial sense for me, I bought resale.

Great discussion baker, glad you brought it up.

Good one

This boards was where I got all my information when I was looking to buy.

[Dean]

Originally Posted by TotallyADiz

I think a lot of positive points have been made here. I think ELMC touched on a number of them.

It really all is about education. There are so many moving parts, such as how many points to buy, where to buy, etc, etc, that if you change any of the variables then the entire equation changes. I think what is great about this site is that you have a lot of veterans here. People who have bought direct, resale, both, at various resorts at various times over the years, paid in cash, financed, sold, etc. So for someone new coming into DVC there is so much information here. I think what we all need to do is keep perspective when evaluating our decision and apply it to our own individual circumstances......but we can't be blind to the numbers....the numbers are what they are. After we've properly evaluated them and then applied it to our own set of circumstances, then we should just enjoy!

Thanks to everyone here for the great feedback!

One of my normal caveat's is the dollars must make sense for the rest to matter. One needs to see a real savings or a fairly significant upgrade for a similar price to justify the purchase. If not, none of the rest matters, IMO.

[tripgoerNS]

Thanks for the great discussion and opinions.

We have just gotten the $145pp sheet for AKV last week (which currently their offer is a $3pp reduction as well as 4, 5-day park hopper non-expiration tickets)

I had NO idea how different the prices were for resales. I did know they existed but the difference in prices is hard to ignore. I came on here searching fro differences in resale and direct and there is tons of info!

We truly thought that DVC was the was to go for us and still do but now we obviously have more to consider.

[Dean]

Originally Posted by tripgoerNS

Thanks for the great discussion and opinions.

We have just gotten the $145pp sheet for AKV last week (which currently their offer is a $3pp reduction as well as 4, 5-day park hopper non-expiration tickets)

I had NO idea how different the prices were for resales. I did know they existed but the difference in prices is hard to ignore. I came on here searching fro differences in resale and direct and there is tons of info!

We truly thought that DVC was the was to go for us and still do but now we obviously have more to consider.

For this BBS and the members here, this is a two edged sword. Retail sales are the life blood of any timeshare system and to push people away from that options is damaging to all current members. That creates a dilemma for all of us but for me, I have to try to help the individual over the system where they are far different as they are with retail vs resale.