If you have to finance it, you can't afford it. That is the TRUTH. If they can't afford to buy DVC, then rent points. Its cheap and you have no obligation. DVC is a luxury, not a necessity like somewhere to live and transportation.
Thanks for the video. I was told by a dvc salesperson at Disney a couple of years ago that their finance dept does report to credit bureau. I'll call today to confirm.
It’s a total financial picture on whether you can afford DVC. It’s not just the actual DVC point purchase, it’s the yearly fees, and if you can afford to buy transportation, tickets, food, merch etc to come to Disney often enough. We financed directly through Disney based on what we could afford to pay and also the fact we can only afford to come about every 3 years.
It is most definitely a full picture like you outlined. That's where a lot of people who buy emotionally fail to add up the real costs. I'm with my original 150 since 2006 simply because of these factors, especially dues and flights.
Bottom line for me: people should do what they want with their own money or credit. Then they should be responsible whether their decision works out or doesn’t. If you want to finance, go ahead. If you lose money because you can’t make your payments or the bottom falls out on DVC, that’s on you.
‘You can finance a 30 point contract at 15% interest PLUS a couple hundred dollars in fees’. This episode sounded like an add for a cash advance business. “Borrow $200 for two weeks at only $30.”
I'm having a seizure just thinking about 15% interest on a hotel room you will use 1 week a year. I love taking my family to Disney, but financing at those rates eat into your vacation. Just save up and have an even better vacation.
@@DexterTheDuck That really hangs over your head during a vacation... I went to Disney a few years ago after losing my job and the whole time I was depressed thinking about all the money I was spending. I'm back working again and am financially secure... and last time I was at Disney I was so much at peace. There really is something to say about paying for everything in cash and not having finances hanging over your head
@@BobAntelton I totally cool with using credit, but use it responsibly. My last Disney trip I used my Disney CC the DCC is only used for the Disney vacation. Everything went on that card so I knew exactly what it cost me. When I got home I paid off the card. Now I know not everyone has that ability which means they should be even more careful. IMHO paying 15% for a vacation is not smart at all.
6.5% to 15% are not good interest rates 😬 Your comparisons, car and mortgage, are financed at 1% to 5%. And you’d be surprised how many people don’t put their vacation on a credit card.
my credit card - USAA - has 2.5% cash back on everything so I use it to pay for Disney trips and when I get home, I pay it off (like I do for anything I purchase). It is a win win. I have enough cash back right now that will pay for my 6 day trip in January! I have been a Disney Visa holder since Day 1 and sadly it is a joke now - no benefits at all anymore.
We aren't wealthy by any stretch, but to Pete's question about 5-6 minutes in my family does all our vacations 100% cash. Credit card never leaves the pocket. We save throughout the year and take vacations that we can pay with cash only.
I save all of the money for my vacation, before my vacation. I then pay for the entire vacation with a reward credit card and pay the card off the day I get home.
Instead of explaining why some people are opposed to financing, which could've been just a 30 second warning or something, Pete just shut down that whole line of discussion and proceeded as if borrowing is always a good idea. That rather predictably led to all the comments being about how you shouldn't finance. Interest racks up, and there is no guarantee that there will be someone who will refinance your debt. There is also no guarantee that the price for your points will go up. They have never gone down, but you don't know for sure. You do know that people get sick, and houses and cars need maintenance, and so on. Are you ready for those things? If not, you may have to sell Riviera for $100 a point before it even opened. We know that happened to somebody. Is that a risk you want to take to have a prepaid hotel room?
Indont know why everyone is beating up on financing so much. 9% isn't THAT outrageous. My inlaws back in their day were paying 22% on a mortgage and that was the norm. Yes the house cost less than today but they got paid less as well. Disney contracts increase in value.
Why would you use that as your point of reference rather than what a fair and easy to get mortgage rate is (currently about 3%?) It seems strange to justify a bad rate on the basis of a long in the past worse rate.
pete... this isn't an investment like a house or property. i don't know if you're either trying to a) justify your recent DVC purchases or b) drive people to your affiliates but this is really bad advice
The reason the interest starts at near 10% is because the risk of defaulting is high. That shouldn’t be ignored. Overall, bad advice was given in this episode.
I am confused as to why anyone would think 9% is a good rate for a loan when mortgate rates are around 3%. I also do not understand the analogies to home ownership and car purchases. A home is well worth financing because it goes up in value, has tax benefits and gives you equity and an asset, rather than giving money to a landlord. It is a time-honored way to create a healthy financial picture and generational wealth. Financing a car is OK as long as you are not buying more car than you need. If you're financing an Hyundai or other mainstream car because you need to drive to work, cool. If you're financing an Audi because you just want an Audi, that's a bad idea. As for DVC, no way is financing a good idea for most people. If you just need a 6-month boost before you get a raise, ok but remember the various closing costs your haste will cost you. If you're counting on holding the loan for a long time, remember that financing will cut into any savings you think DVC will bring you. That sweet break even point will be way later than you think. That said, if you have an unusual circumstance such as a life threatening illness and you want to take fabulous vacations right now, do what you want to do. Otherwise, anyone buying DVC with or without financing who doesn't have their financial life in order should really think before buying.
I'm disappointed that this wasn't more on both sides of the issue. I think this would have been much better for pros and cons for both sides of this issue. Instead of just one sided and attacking anyone that might be against financing. This just felt like an attack against those that are pro paying all up front/ not taking out a loan. I don't feel strongly one way or the other, but I came to this video to a fuller picture on what financing DVC could mean. It just makes this video come off as just an advertisement for the sponsors, and I never get that feeling when watching any of the other DVC videos. So strange.
I come to the Dis for Disney related info-tainment. For financial advice, um...not so much. To each their own, but sorry, we're not financing vacations.
Do the math and factor everything in including your future trips vs buying with financing. One downside with the new tax laws, HELOCs are not deductible unless it is specifically for home improvements.
I always enjoy your show Pete, but I respectfully disagree with you. If you have to pay 9.9% interest for 3 or more years, it's financially irresponsible to purchase DVC. However, a HELOC is a very good alternative.
No, No, No, are you crazy? Why would you be so stupid as to finance a timeshare with a Secured Home Equity Loan. In the State of Florida, your Homestead is a Protected Asset: do not take out a home equity line of credit, to finance a Timeshare purchase! Only finance with the DVC Points as the collateral asset. Better yet, pay cash in the secondary market.
This episode did a poor job of explaining/even talking to the considerations you have to make when financing. When Disney gives their spiel to sell DVC part of it is how your vacations become "free" over time. How long it takes for you to come out ahead, and how much you come out ahead is directly impacted by whether you finance or not. People should just be aware of the how financing lengthens that time horizon, which was never even discussed.
That’s because the price is anywhere from $110-$285 a point and the points vary from 25-10000 points. It’s hard to be specific when generalizing. 🤷🏻♀️
Paying for it flat out is beneficial just because the interest rates are crazy high. But if interest isn’t something you have a problem with then finance!! Im the biggest Disney fan in my family so Im the one researching everything and for us I think the interest isn’t worth it. Eventually we may become members of DVC when we can just pay for it flat out, but for now we will just do regular vacations (which we also pay for flat out. No credit cards used).
Another great video. I bought my first contract financed it using Disney, used CC to get miles then went-back to NY and used my HELOC to pay Disney off as there is no prepayment and I had 3.2% Pete S. Is right that not only inflation in PPP is likely if you wait - I will add that missed vacations are a soft cost + non DVC vacations a hard cost if you didn’t choose to Finance. The car 🚗 analogy is great. I’d add some people but new ever few years. That a lifestyle choice just like phones, etc. I don’t care what someone else does with their 💰. I like many love the DVC lifestyle and for us financing makes it available to more people. I bought my 2 other contacts cash so I did it both ways and would finance again for the right deal.
@@toms6538 Yes I did back in 2002. At 3.2% way lower then 10% DVD charged back then. Was still able to deduct the mortgage interest. I'd do it again in a heartbeat. If DVC isn't WORTH it to you don't do it. I won't tell you how to spend your money and please don't tell me how to spend mine.
Brian Telesh not telling you how to spend your money but you doing this all in 2002 makes sense - it’s a bit different in 2019. A lot of what’s being tossed around in this video is ugh... “interesting”. Lol especially the rent vs mortgage comment 😳
Enjoy the shows. I look forward to them even if I will never be a DVC member. Yes, it is ok to finance within reason.
If you have to finance it, you can't afford it. That is the TRUTH. If they can't afford to buy DVC, then rent points. Its cheap and you have no obligation. DVC is a luxury, not a necessity like somewhere to live and transportation.
ohplezz yup, same for home, car or college education.
Only buy with cash.
Thanks for the video. I was told by a dvc salesperson at Disney a couple of years ago that their finance dept does report to credit bureau. I'll call today to confirm.
They don’t .
It’s a total financial picture on whether you can afford DVC. It’s not just the actual DVC point purchase, it’s the yearly fees, and if you can afford to buy transportation, tickets, food, merch etc to come to Disney often enough. We financed directly through Disney based on what we could afford to pay and also the fact we can only afford to come about every 3 years.
It is most definitely a full picture like you outlined. That's where a lot of people who buy emotionally fail to add up the real costs. I'm with my original 150 since 2006 simply because of these factors, especially dues and flights.
Bottom line for me: people should do what they want with their own money or credit. Then they should be responsible whether their decision works out or doesn’t. If you want to finance, go ahead. If you lose money because you can’t make your payments or the bottom falls out on DVC, that’s on you.
You can't compare a glorified timeshare to renting vs owning a home. What a terrible investment.
‘You can finance a 30 point contract at 15% interest PLUS a couple hundred dollars in fees’.
This episode sounded like an add for a cash advance business. “Borrow $200 for two weeks at only $30.”
"People don't pay cash for a car" 4:55
It's at this point that most people should have realized how sound the financial advice being given is.
Dave Ramsey would go into a violent seizure listening to this episode
I was thinking the same thing.
I'm having a seizure just thinking about 15% interest on a hotel room you will use 1 week a year. I love taking my family to Disney, but financing at those rates eat into your vacation. Just save up and have an even better vacation.
@@DexterTheDuck That really hangs over your head during a vacation... I went to Disney a few years ago after losing my job and the whole time I was depressed thinking about all the money I was spending.
I'm back working again and am financially secure... and last time I was at Disney I was so much at peace. There really is something to say about paying for everything in cash and not having finances hanging over your head
@@BobAntelton I totally cool with using credit, but use it responsibly. My last Disney trip I used my Disney CC the DCC is only used for the Disney vacation. Everything went on that card so I knew exactly what it cost me. When I got home I paid off the card.
Now I know not everyone has that ability which means they should be even more careful. IMHO paying 15% for a vacation is not smart at all.
Thinking the same thing the whole episode.
I know this is a couple years old but does anyone know about minimum credit score requirements for financing directly through Disney?
6.5% to 15% are not good interest rates 😬 Your comparisons, car and mortgage, are financed at 1% to 5%. And you’d be surprised how many people don’t put their vacation on a credit card.
my credit card - USAA - has 2.5% cash back on everything so I use it to pay for Disney trips and when I get home, I pay it off (like I do for anything I purchase). It is a win win. I have enough cash back right now that will pay for my 6 day trip in January! I have been a Disney Visa holder since Day 1 and sadly it is a joke now - no benefits at all anymore.
We aren't wealthy by any stretch, but to Pete's question about 5-6 minutes in my family does all our vacations 100% cash. Credit card never leaves the pocket. We save throughout the year and take vacations that we can pay with cash only.
and , if God forbid, you need the cash.... you have the cash
Agreed. We sometimes use a cc to pay or reserve but it is immediately paid in full. Our purchases in the park are paid with cash.
I save all of the money for my vacation, before my vacation. I then pay for the entire vacation with a reward credit card and pay the card off the day I get home.
Instead of explaining why some people are opposed to financing, which could've been just a 30 second warning or something, Pete just shut down that whole line of discussion and proceeded as if borrowing is always a good idea. That rather predictably led to all the comments being about how you shouldn't finance.
Interest racks up, and there is no guarantee that there will be someone who will refinance your debt. There is also no guarantee that the price for your points will go up. They have never gone down, but you don't know for sure.
You do know that people get sick, and houses and cars need maintenance, and so on. Are you ready for those things? If not, you may have to sell Riviera for $100 a point before it even opened. We know that happened to somebody. Is that a risk you want to take to have a prepaid hotel room?
Indont know why everyone is beating up on financing so much. 9% isn't THAT outrageous. My inlaws back in their day were paying 22% on a mortgage and that was the norm. Yes the house cost less than today but they got paid less as well. Disney contracts increase in value.
Why would you use that as your point of reference rather than what a fair and easy to get mortgage rate is (currently about 3%?) It seems strange to justify a bad rate on the basis of a long in the past worse rate.
At 10%, in 7 years, the payback is double the original amount financed..... and yes, we paid cash every time...
pete... this isn't an investment like a house or property. i don't know if you're either trying to a) justify your recent DVC purchases or b) drive people to your affiliates but this is really bad advice
The reason the interest starts at near 10% is because the risk of defaulting is high. That shouldn’t be ignored. Overall, bad advice was given in this episode.
I am confused as to why anyone would think 9% is a good rate for a loan when mortgate rates are around 3%. I also do not understand the analogies to home ownership and car purchases. A home is well worth financing because it goes up in value, has tax benefits and gives you equity and an asset, rather than giving money to a landlord. It is a time-honored way to create a healthy financial picture and generational wealth. Financing a car is OK as long as you are not buying more car than you need. If you're financing an Hyundai or other mainstream car because you need to drive to work, cool. If you're financing an Audi because you just want an Audi, that's a bad idea. As for DVC, no way is financing a good idea for most people. If you just need a 6-month boost before you get a raise, ok but remember the various closing costs your haste will cost you. If you're counting on holding the loan for a long time, remember that financing will cut into any savings you think DVC will bring you. That sweet break even point will be way later than you think. That said, if you have an unusual circumstance such as a life threatening illness and you want to take fabulous vacations right now, do what you want to do. Otherwise, anyone buying DVC with or without financing who doesn't have their financial life in order should really think before buying.
I'm disappointed that this wasn't more on both sides of the issue. I think this would have been much better for pros and cons for both sides of this issue. Instead of just one sided and attacking anyone that might be against financing. This just felt like an attack against those that are pro paying all up front/ not taking out a loan. I don't feel strongly one way or the other, but I came to this video to a fuller picture on what financing DVC could mean. It just makes this video come off as just an advertisement for the sponsors, and I never get that feeling when watching any of the other DVC videos. So strange.
Those interest rates are insane. That is why people say not to finance your DVC.
I come to the Dis for Disney related info-tainment. For financial advice, um...not so much. To each their own, but sorry, we're not financing vacations.
Why are comments turned off for the 10/8 episode?
Do the math and factor everything in including your future trips vs buying with financing. One downside with the new tax laws, HELOCs are not deductible unless it is specifically for home improvements.
again Pete knows it all the financing is ridiculous
Cash vacations only for me - personal preference.
I always enjoy your show Pete, but I respectfully disagree with you. If you have to pay 9.9% interest for 3 or more years, it's financially irresponsible to purchase DVC. However, a HELOC is a very good alternative.
You had me until that last sentence
No, No, No, are you crazy? Why would you be so stupid as to finance a timeshare with a Secured Home Equity Loan. In the State of Florida, your Homestead is a Protected Asset: do not take out a home equity line of credit, to finance a Timeshare purchase! Only finance with the DVC Points as the collateral asset. Better yet, pay cash in the secondary market.
Horrible idea to finance a timeshare.
Not if you pay off in 6 months
9% interest?!!.....no thanks
This episode did a poor job of explaining/even talking to the considerations you have to make when financing. When Disney gives their spiel to sell DVC part of it is how your vacations become "free" over time. How long it takes for you to come out ahead, and how much you come out ahead is directly impacted by whether you finance or not. People should just be aware of the how financing lengthens that time horizon, which was never even discussed.
That’s because the price is anywhere from $110-$285 a point and the points vary from 25-10000 points. It’s hard to be specific when generalizing. 🤷🏻♀️
Reckless and absurd.
What is?
Thanks for the information; I appreciate knowing my options.
Came back to this video just for a laugh. Absolutely ridiculous financial advice, I just hope to God nobody follows this.
Monera also just released a credit check option that can lower interest rates related to financing a resale purchase a little further.
What was the company that doesn't do the credit check?? I don't see in the show notes
Paying for it flat out is beneficial just because the interest rates are crazy high. But if interest isn’t something you have a problem with then finance!! Im the biggest Disney fan in my family so Im the one researching everything and for us I think the interest isn’t worth it. Eventually we may become members of DVC when we can just pay for it flat out, but for now we will just do regular vacations (which we also pay for flat out. No credit cards used).
Good information! Thanks!
Best DVC show yet !!!
Thanks guys! I financed through Disney as it doesn’t show in my credit. Trying to pay it as fast as possible due to the high interest.
Another great video.
I bought my first contract financed it using Disney, used CC to get miles then went-back to NY and used my HELOC to pay Disney off as there is no prepayment and I had 3.2%
Pete S. Is right that not only inflation in PPP is likely if you wait - I will add that missed vacations are a soft cost + non DVC vacations a hard cost if you didn’t choose to Finance.
The car 🚗 analogy is great. I’d add some people but new ever few years. That a lifestyle choice just like phones, etc. I don’t care what someone else does with their 💰. I like many love the DVC lifestyle and for us financing makes it available to more people.
I bought my 2 other contacts cash so I did it both ways and would finance again for the right deal.
Omg you used a HELOC to pay for this?!!!?!??
@@toms6538
Yes I did back in 2002. At 3.2% way lower then 10% DVD charged back then.
Was still able to deduct the mortgage interest.
I'd do it again in a heartbeat. If DVC isn't WORTH it to you don't do it.
I won't tell you how to spend your money and please don't tell me how to spend mine.
Brian Telesh not telling you how to spend your money but you doing this all in 2002 makes sense - it’s a bit different in 2019. A lot of what’s being tossed around in this video is ugh... “interesting”. Lol especially the rent vs mortgage comment 😳