Buying DVC Directly v. Resale: Math & Benefits
If you’re in the market to purchase Disney Vacation Club, you might have heard about recent resale restrictions. Now, DVC resale contracts purchased for the original 14 resorts at Walt Disney World, Disneyland, and 3 stand-alone locations will only be able to use their points at those 14 existing resorts.
In other words, resale buyers who purchase today will not be able to use their points at at Disney’s Riviera Resort, Disneyland Hotel Villas, and whatever else is built after that. Moreover, buyers who purchase points for those upcoming resorts via the resale market will not be able to use their points anywhere else. This is just the latest restriction in a series made to discourage resale purchases and encourage prospective buyers to purchase directly from Disney.
A couple of years ago, Disney Vacation Club announced another rule change that new DVC Members who do not purchase their ownership interest directly will not have access to “Membership Extras,” such as exclusive Member experiences and discounts.
At that time, Disney’s explanation for the move was that it’d be a “very positive step to ensure that, going forward, our Members who purchase directly from Disney Vacation Club receive a premium advantage — in addition to all the magic that Disney has to offer.” From Disney’s perspective, this move makes sense.
However, let’s call it what it is: a protectionist attempt to reverse the trend of declining direct sales. It is motivated by the desire to offer a “premium advantage” to those who purchase directly from Disney to the same extent that a bear’s love for salmon is motivated by the US crude oil market. Which is to say, in no way whatsoever.
This resale restriction hurts current owners by virtue of decreasing the value of their contracts–the only benefit here is to Disney. It’s another way to push potential customers who are aware of the resale market towards a direct purchase.
In this era of information, it’s much easier to quickly gain perspective with a quick Google search (just look at the comments from readers on our Disney Vacation Club Buying Guide who found it after hearing the sales pitch). This is something with which timeshare salespeople did not have to contend in the 1990s. Not only was there no highly visible resale market allowing for easy price comparisons, but there was no in-depth financial analysis of timeshares online.
It was much easier for potential customers to get caught up in the sales pitch without the counter-balance of the actual monetary implications of the purchase, and blindly buy. (Fortunately, in the 1990s, DVC was an unequivocally good deal!) Free access to this information has undoubtedly made selling timeshares more difficult, even for Disney Vacation Club which offers a premium that avoids many of the pitfalls of traditional timeshares.
As an existing DVC Member, I can’t really complain. While this will likely cause a slight dip in the value of our contract, Disney’s practices including right of first refusal (ROFR) and price increases safeguard the value of our contract, preventing it from becoming a money pit like other timeshares.
Moreover, the market value of our contract at Saratoga has actually increased in the years since we made the purchase, despite the restrictions. That’s remarkable given that it’s duration-limited with the end date now ~10 years closer.
The question is whether Disney’s restrictions on Membership Extras or resort usage should make those considering Disney Vacation Club look at a direct purchase instead of one via resale. For the purposes of brevity, we will assume you’re going to make a purchase one way or the other, and will thus overlook the threshold question of whether it’s a smart purchase to begin with.
Unlike the last restriction that prevents resale buyers from using their points on certain non-DVC products (which was totally meaningless because Members should rent out their points and pay for those experiences out of pocket since they are such poor uses of DVC points), this restriction does have an impact.
Not being able to use your DVC points at Riviera or Reflections, by contrast, is a bigger deal. Even then, it’s arguably not that big of a deal. The 14 “legacy” Disney Vacation Club resorts are in literally all of the prime locations at Walt Disney World. Disney Vacation Club has been added to every single monorail resort, and has nearly full coverage at the resorts near Magic Kingdom, Epcot, Hollywood Studios, and Animal Kingdom.
At this point, Disney Vacation Club has exhausted all of the ideal add-on locations and is building resorts on parcels of land that are far from ideal. In other words, any new resort at this point will be located on “the leftovers” and have to use some other hook to lure members away from the legacy resorts. Arguably, the Riviera has that with the Skyliner. For some, Reflections may have that with its secluded location among the wilderness.
Next, let’s turn to Membership Extras, starting with the main one: discounted Annual Passes at Walt Disney World. On the Platinum Passes, Disney Vacation Club members save $145 per person (if you’re able to make use of the Gold Pass, it’s over a $200/person discount), per year for everyone in the same household. For a family of 4, that’s $580 per year. That’s a pretty significant discount, and could be enough to close the gap on its own, so let’s have a little fun with math.
Since Saratoga Springs Resort is our home resort and the one I recommend to many prospective purchasers, we’ll use it for our example. If you’re dead-set on a different resort, you will want to do the math yourself with current prices, because the smaller gap between resale and direct prices dramatically change the comparison.
At the time of publication, purchasing Saratoga directly from Disney costs $205 per point, making it one of the more attractive Walt Disney World DVC resorts. By contrast, average prices on the resale market are around $125 for contracts of 150 points. We’ll use that 150 level because that’s about the “average” baseline Disney Vacation Club contract.
With those numbers, you’re saving $12,000 on the initial purchase price by buying resale. In order to recoup that $12,000 savings, you need to purchase 4 Annual Passes at the current discount levels for ~15 years. For your sake, I hope your kids aren’t still living in your basement in 15 years. Instead, let’s say 4 Annual Passes for 10 years and 2 Annual Passes for 20 years after that. At least, that’s the simple math.
This still is not an apples to apples comparison. In the case of buying resale, you’re saving that money on the initial purchase price, rather than over the course of time. If you are financing your purchase (something we do not recommend with Disney Vacation Club), you should always take the upfront savings, and buy via resale. The interest on the difference in the purchase prices will negate any long-term savings.
If you’re paying cash, the decision is a bit more difficult. One thing we’ve repeatedly stressed on this blog–and by far the most overlooked element of calculating the true value of Disney Vacation Club–is the time value of money, or the principle that money at the present time is worth more than the same amount in the future.
The earning capacity of today’s money makes it worth more than the same amount in the future. Think about it this way: if you had $9,000 in your hand today, you could place that money into a low-risk investment and have significantly more than $12,000 in 20-30 years, which is the timeline of your AP savings.
Since you’re paying for all of your future Disney Vacation Club vacations upfront as opposed to when the expenses are actually incurred, large portions of the initial investment in Disney Vacation Club could be invested in other ways if you were instead paying for your room each year as you vacationed.
Suffice to say, in the first year you’d earn $600 on that $12,000 assuming a 5% return, which itself comes very close to equaling the AP discount. That’s simple math without compound interest–in actuality, the return increases with each subsequent year the money is invested.
This is one reason why the purported savings claimed with Disney Vacation Club are dubious. With that said, it’s an admittedly big assumption that people will invest money instead of purchasing Disney Vacation Club. It’s fair to say that for most people, it’s either buying DVC or spending the money they could use towards the initial purchase price some other way.
In the case of these AP savings, it seems more reasonable to crunch the numbers this way. You’re buying DVC this way, regardless. It’s thus a matter of how to buy and where to allocate savings (over time on the APs, or up-front on the purchase price).
Of course, this assumes Annual Passes go back on sale soon and for their previous price points. As of 2023, no new Annual Passes are for sale to anyone except Florida residents. However, we expect that to change very soon. (See When Will Walt Disney World Resume Annual Pass Sales in 2023? for more insight and predictions.)
While this is far and away the largest Membership Extra that has an ascribable value, there are plenty of other perks. This means no DVC dining discounts, no shopping discounts, no access to Top of the World and Journey into Imagination Lounges, and no access to Member events, like the Moonlight Magic Parties. (Here’s a list of all perks for Walt Disney World.)
I think it unwise to factor dining and shopping discounts into any math for two reasons. First, many DVC Members have access to these same or better discounts via other means (Annual Passes, Disney Visa, etc.) Second, you need to keep in mind that all of these are incidental perks that are subject to change. The lack of Annual Passes for DVC Members as of 2023 should underscore this.
Disney itself states as much: “You should not purchase…real estate interest in a Disney Vacation Club Resort in reliance upon the continued availability…[of] Membership Extras…These incidental benefits are subject to change or termination without notice…” (This is Disney’s way of trying to rebut any reliance upon the perks as inducement for entering into the contract; if DVC guides make explicit representations as to the perks, such that the perks are selling points, they aren’t quite so easily “disclaimed away.”)
Even before AP sales paused, the history of the Annual Pass discount for DVC Members demonstrates that this perk has fluctuated over time, ranging from free passes in the 90s to nothing at all from 2000-05. With that said, I would be surprised to see the discount disappear completely.
It’s a selling point for Membership, and the blowback from owners would be substantial. DVC relies on goodwill from its Members to make add-on purchases, and that would significantly damage such goodwill. The amount of the discount can and will change over time, but I think it’s unlikely to ever disappear–at least as long as Disney is building new Disney Vacation Club properties.
So, where does that leave a decision to purchase DVC directly or via resale? If we were in the market for Disney Vacation Club today, this would be a tough decision. I really hate the idea of forfeiting the AP discount, as many people will derive a lot of value from it. I’m also concerned that going forward DVC will actually increase Membership Perks to help bolster sales and draw a greater distinction between direct and resale purchases. On the other hand, direct prices are nothing short of excessive and the gap between the two is only growing.
If you’re thinking about joining DVC, be sure to read our Ultimate Guide to Disney Vacation Club. This covers the pros & cons, resale v. direct, how much money you’ll save, and other important things to know before taking the plunge. If you still can’t decide whether membership is right for you, “try before you buy” with the recommendations in How to Save BIG on Deluxe Disney Accommodations Renting DVC Points.
Your Thoughts
If you’re in the market to purchase Disney Vacation Club, what do you plan on doing in light of these new restrictions? Do you agree or disagree with our assessment? If you’re an existing Member, what do you think? Share any questions, tips, or additional thoughts you have in the comments!
I am wanting to do a Hybrid Buy soon, 150 Points Direct (new requirement) and 100-200 resale. However, I do NOT want to buy into Riviera whatsoever (and Aulani is honestly useless). I have heard that even though the other resorts “sold out” years ago and that is why they are currently only offering Riviera and Aulani, that there is still a way that present day you can still buy Disney direct into some of the old resorts. How does one do this or what is it called? How does it work? I am wanting to buy Disney direct into Poly or Animal Kingdom but obviously they don’t advertise still being able to do this. Thanks for any help
Your best bet is to call them directly, or if you did a tour or something previously and have an advisor’s card/number, they can help you as well. I know that when I log in (as a member), I can see their offerings for resorts that were sold out before, but I’m guessing you probably won’t be able to. Or, if you aren’t in any pressing hurry, in a couple of years I think they’re supposed to be expanding the Poly (much as VGF is being expanded atm), so you can always buy in at that point and have the extra years as well compared to if you buy now and only have the older years I’d assume.
You are all pretty silly to buy Dvc direct at today’s prices. The benefits do not out weigh what you save on resale. Lots of the added benefits will never be used. You can attain discounts through annual discounts, owning the disney visa or debit card for 10% off food and purchases. I own 300 points to Aulani, which in fact is not worthless, obviously you don’t go to Hawaii. There is no other resort in Hawaii that comes close to the amenities of Aulani. I bought Aulani resale and saved 15,000 dollars from direct, at the time of purchase, direct points from Disney were 197.00 a point. I Have used my points at Baylake, Animal kingdom, Boardwalk, California grand, and aulani for 5 trips to date at a weekly stay every vacay. Don’t buy direct, you will never get your complete point price back through selling, never!
2020 2021 2022 — Resort
$195 $201 $207 — Disney’s Riviera Resort
$193 $201 $207 — Aulani, Disney Vacation Club Villas
$235 $245 $265 — Disney’s Beach Club Villas
$200 $210 $230 — Disney’s BoardWalk Villas
$135 $140 $155 — Disney’s Hilton Head Island Resort
$120 $125 $140 — Disney’s Vero Beach Resort
Here’s an idea of how the ‘sold out’ resorts bought directly have increased the past few years.
I realize your comment is 3mo old, but Disney had a flash sale on AKV (I think taking it down to $160/pp direct) a couple months ago and they are doing a similar aggressive combination of sales getting Grand Floridian down below $175/pp) at the moment… I believe existing members can get Grand Floridian at $161pp if they are willing to sell back a year of points. Some of the “big” DVC brokers are currently trying to sell Grand Floridian resale for more than you can get it direct from Disney.
If buying resale to add to a previously purchased resale contract, should you stick with the same 3rd party broker? Is there some hidden benefit to buy thru them again? Or does it not matter and just look for the best listings that match our criteria (UY, qty, etc.) regardless of broker?
What is your opinion now that they have upped the minimum to 150 points needed to be purchased direct? Since that was the amount you posited as being a good amount to have in total?
I just spoke with a DVC guide and he said that the minimum number of points you can buy from DVC is 125 points. I want to give the person the benefit of the doubt, but that sounds like a lot that a person is required to buy.
Just a note – resale owners CAN in fact use the Top of the World lounge. One of the few perks we “white card” members enjoy
Thank you for confirming this! How do they verify your membership without the card?
Hello,
You mentioned, “I also wouldn’t be worried too much about the Riviera or future resorts (and certainly wouldn’t buy at those, as their resale restrictions will hurt owners trying to sell those resorts).” What resale restrictions are you referring to for the Riviera Resort? That seems to be the resort DVC is selling right now so I’m interested to know why you feel that resort wouldn’t be worth buying into.
Thanks,
Amanda
Riviera resale owners CANNOT stay at anything else except Riviera and newer. No poly, GF, contemporary, etc. that is not good.
Your concern about the annual pass discount only holds true the 1st year you buy it. Yes, you wouldn’t get the DVC discount that year if you bought resale, but Disney gives a 15% discount for renewing your pass. That’s a savings of $182.50 for an adult pass, which is pretty close to the DVC discount.
Hello. Can I first buy a resale and then buy 100 points direct from Disney to get the perks still? How soon would I need to buy other points from Disney?
Yes, you can do that. As for when, you would have to buy it as soon as you want to get your perks. Keep in mind that if you’re buying an older resort, such as Vero Beach, Saratoga or anything other than Alauni, Copper Creek or Riviera, you have to either buy whatever they have in inventory, or ask for a custom order and be put on a wait list. A friend recently did this with OKW, because he wanted a specific number of points on a specific Use Year and he had to wait a couple of months for them to have exactly what he wanted.
So one thing in the cost calculations of the direct perks that I don’t understand is the cost difference from an Annual Premium Pass (lowest tier available to non-residents) and the Gold Pass. This is the biggest driver right now for me to buy at least the minimum points direct as that is around a $200 difference. Take that with a family of 2 ($400/yr) or 4 ($800/yr) and you really get close to surpassing that initial $X,000 difference between direct/resale. The biggest knock I would throw towards direct right now is buying into Riviera. I love the look and theming BUT the point per room cost is high as is the maintenance. I would plan to buy direct to Saratoga (feel the same about it as the wonderful bloggers), current $160/pt and enjoy the direct perks that way.
I’m looking at doing a hybrid deal, but don’t understand how mixing the points actually works. I’m looking at either 75 or 100 points Direct from Saratoga (which currently is priced at $151/point direct from Disney) and possibly 75-100 points on the resale market from somewhere else. If I get 100 point direct and 100 points resale – do I then have 200 points to work with and use any way we wish in the eyes of Disney? Or, because we have 100 direct and 100 resale, and the “perks” are different, will Disney keep them separated or only allow us to book 100 points at a time?
Any info on this would be exetremely helpful.
If you buy separate contracts, Disney sees them as separate. You’d essentially would have two accounts. My research suggests that you can bank your resale points and then transfer them over to your direct account if you’re looking at 11 month bookings, but you should talk to the sales rep about it. But if you’re looking at 7 months, another possibility is to just use your 100 points as consecutive stays and call the resort/DVC to notify them as such and request they both be in the same room. Don’t be shy with the sales reps, they know all about the resale market and would probably be just as willing to work with you especially if you’re buying direct from them. If they say no, check again with a different agent the other day. The Disboards are a great resource for these clarifications as well.
I’m also considering splitting my purchase, 100 points Direct (for full Membership) and 100 points Resale. From my understanding, it can work like this:
If both of my contracts are the SAME resort and user year then there is little complication using them together for a trip.
If these are DIFFERENT then a good work-around is alternating contracts by banking/borrowing. Honestly I like this option using 2 resorts because I could alternate my stays and get 11 month booking privilege at both. 11 month privilege is becoming more important as popular room categories are increasingly hard to reserve certain weeks.
So can one make their initial purchase via resale and then add-on points from a direct purchase to gain the perks, but not have to meet the “new member” minimum (100 points in the case of BLT)? I’m trying to make sure I have a handle on this.
If you do the hybrid of direct and resale points would you be able to have 2 home resorts to book 11 months in advance?
Yes you can have 2 home resorts, each with an 11 month booking window. However let’s say you buy 1-100 point contracts, one in Boardwalk and another in Boulder Ridge, both with Feb Use Year. Now let’s say you need 148 points to book Sunday – Thursday in March for your kids spring break over at Boulder Ridge in a 1BR Villa. What you would do is borrow 48 points from next year’s Boulder Ridge, and bank all 100 points of your Boardwalk contract for the following year. The next year you now have your 11 month booking window for Boardwalk to do the same, and you either bank the leftovers for next year or use it for another trip. Each year you’re pretty much rotating which one you will use for the 11 month window.
If you did the hybrid purchase of direct points and resale points could you essentially have 2 different home resorts to book 11 months in advance?
I stumbled upon an FAQ and it stated you need to buy 75 points from Disney directly to have access to the perks.
Do you know, is it (still) the case that you could buy resale first, and then only need to add on 25 direct points to get the perks? We are about to buy 75 points direct, planning to do the rest in resale, so we could get the perks. But we could have considerable savings if all we need is 25 vs the 75 minimum they advertise for getting membership.
They upped the minimum and I still need to update this post. Sorry for the confusion!