Disney Vacation Club – Buy Direct, Resale, or not at all?

There was a week of panic in the DVC Resale community recently as Disney will now be treating buyers of DVC on the secondary market differently than those who have already purchased DVC, direct or resale, or buy directly from Disney in the future. Although the panic was about when these changes came into effect, the rule is now established that if you buy points in DVC on the resale market you will not be eligible to take part in the perks that are generally offered by Disney Vacation Club.

As of now, purchasing on the secondary market should be looked at as only buying points for a room at one of the many DVC properties on site or those DVC properties not connected with one of the Disney parks. Although the same rules apply for booking a room, you will not be able to participate in the discounts and special events offered to previous purchasers or those who buy direct from Disney. That being said, there can still be big savings buying on the secondary market despite the lack of perks. You should consider:

1. How often you go to (or would go to) Disney.
2. What kind of accommodations you tend to stay in (or would like to).
3. Projecting the cost of the rooms in future stays compared to the costs associated with buying DVC.
4. How far in advance do you plan your Disney trips.
5. Other factors specific to your needs including cash flow, length of the DVC contract you are buying into, and other factors that might impact your ability to pay for and use the DVC properties.

The question you should ask yourself first is “Should we buy DVC at all?” If you generally stay, and enjoy, the value resorts or only go to Disney World every few years or so, then like many other timeshares you will be spending money for a property you do not use.

Although DVC has more flexibility than many timeshares, there are limitations as to when you can use your DVC points. With DVC you purchase a set amount of annual points that can be used during that year, the year before (borrowed points) or the year after (banked points) and then they expire. In addition you usually, but not always, need to reserve your vacation 11 to 7 months ahead of time to guarantee you get the type of room you really want. If you schedule your trips last minute or a few months before, you might not be able to book a room or get a room that you desire. Avoiding the emotional reaction and asking the question “will I use this” is no different than any time you are sitting in that timeshare sales pitch at the Poconos in Pennsylvania or on the beach in Aruba, if you don’t use it you are wasting your money. If you are on the fence about buying, you should try renting DVC points for a visit. You can check out the property and see if it’s a good fit for you before you commit.

If you come to the conclusion that you want to buy DVC, then the question becomes if you should buy direct from Disney or buy through the resale market. I have purchased both, albeit one contract direct and one contract resale. The experience can be different in the purchasing process and now the value of what you buy.

The process is different if you buy direct as you have a set price and you will not be delayed up to 30 days for Disney’s right of first refusal period to expire, something that is required when buying resale. When you buy resale, the listed price is not always the price that you purchase the contract for. You can negotiate with the buyer like you would if you were buying a house or car. Once you establish the price you are purchasing the contract for and you agree who will pay the closing costs and dues owed at that time, then the whole sale is submitted to Disney. As part of the DVC agreement, Disney has 30 days from when a contract is submitted to them to determine if they want to buy the contract from the seller at the price you had agreed to buy it. This is called a right of first refusal and sometimes referred to as the estoppel period. At any time during this 30-day period Disney can swoop down and take the deal away from you and you would have to find another contract to negotiate and then submit that one to Disney. If you couldn’t imagine waiting 30 days not knowing if you were going to be able to buy the contract or hate the negotiation process, then resale is not for you. That being said, the contracts sold on resale are much less expensive than what Disney sells them for.

The value of what you buy is now different depending on if you buy direct or resale. As mentioned above, resale contracts are no longer eligible for the perks. These perks range from discounts on merchandise and food, discounts on annual passes and tickets, and special events. I’ve never been to a special event but I’ve heard they are hit or miss. If you like the feeling of attending something more exclusive, then you would be missing out on this. I personally wouldn’t make a decision just based on being able to attend a special event. When it comes to money, it’s an easier comparison and it will affect people differently. The one perk that I find most useful is the ability to buy annual passes at a discount. You could save up to $100 per annual pass. Think about those savings for a family each year over many years. That can add up. If you wouldn’t buy annual passes, then that discount may not mean as much to you. In addition it depends how much less expensive the resale contract is compared to buying direct from Disney. As an example, if the resale contract is $10 less per point and you buy 100 points, which is a savings of $1000 on the contract and you buy 2 annual passes a year, saving $200 per year, then it would take 5 years to make up the difference. If you buy a larger contract and have the same number of annual passes, then it will take longer to recoup your money. In addition, there is no guarantee that Disney will always offer a discount on annual passes. This is a perk that Disney can always take away from DVC members. You have to determine what perks you would use, or if you get similar perks from another means such as the Disney Visa Credit Card. Then determine how much those perks are worth to you.

The main thing to take away is that you should never let anyone tell you what is the best thing for you to do. You have to take a look at your lifestyle and project what that lifestyle will be like in the next 20, 30 or even 50 years. DVC may be the right choice for you. If it is, crunch the numbers and see if resale or direct purchase is best. Once you decide, sit back and enjoy the magic.