As you draw near the end of your DVC research, we highly suggest this strategy: Jump In, Buy Small, and Addon later. In previous episodes, Dani Metzger from DVC Resale Market challenged me to think about this strategy. We brought her back to discuss our thoughts in detail and why we highly suggest potential members consider this approach. Episode 248
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Jump In. Buy Small and Add On Later
At first, it sounds like a sales tactic. However, after careful consideration, I’m really comfortable recommending this approach to new members.
History of this Strategy
Dani discussed promoting this to help people become members in her interview. MyDVCPoints.com/237. Since then, I’ve been observing members' buying habits. I’ve considered this and decided it was worthy of a New Member Education Series show. MyDVCPoints.com/NewMember. It’s an audio-only podcast series, but it’s on my list to redo in video format on YouTube.
Here’s some data from the My DVC Points Community on Facebook
|Addonitis Poll for Existing Members|
|No Desire to Add More Points||8.5%||8.5%|
|I Have Already Added More Points||70.3%||91.5%|
|I am planning to Add more Points||21.2%|
Sample Size n=354
Reasons Jump In, Buy Small, and Addon Works:
- It’s congruent with the buy as much as you can reasonably afford advice. Let your values speak here. If you’re a pay-cash person, I applaud you; stick to your values, and save up to pay cash. If you tend to finance such purchases, do your research, shop for a great rate, and pay this off quickly.
(Note on buying direct – DVC should code as Travel in a purchase, and you could get 3x back in points on a Chase Sapphire Reserve card).
- 91.5% of the members we polled have addonitis. 70.3% of them have added on another contract. 21.2% are in some stage of wanting, planning, or desiring to addon more points. This tells me this strategy works for 91.5% of the members.
- Try Before You Go All In – You get the whole DVC member experience of booking, banking, borrowing, and calling member services.
- Type 1 Error: You Buy DVC, and the reality is that it wasn’t a good fit.
You’ve made a smaller investment. You’re putting your toes in before diving head-first into the deep end.
The smaller you buy, the faster you can find a buyer, and you’ll get a higher price per point when you sell. This hedges your bet and makes buying DVC a less costly mistake.
Buy Direct: You pay retail prices; however, if you hold the contract for 7-8 years (historically speaking – no promises with resale restrictions) when buying Direct and you can sell for what you have into the contract. If you hold on for 10 years and come to Disney every year, you’re pretty much breaking even on the cost of the contract. When you sell, the residual value is all gravy.
Buy Resale: It’s like buying a used car, driving it for a while, and selling it for what you have in the car. You bought at a discount and didn’t have to absorb the hit of paying retail. If you buy resale first and try out the program, you become a member and are eligible for member pricing discounts when buying direct.
- Type 2 Error: You do not buy DVC. However, you should have.
If you keep coming to Disney, all that money that could have been applied to your contract price is in somebody else’s pocket.
The price of DVC contracts continues to rise, and you’re out of the market. Andy Berry calls this becoming a member of the “woulda-shoulda-coulda club.”
You miss out on family vacations.
- Buy As You Grow Model – You can grow your point portfolio as your family grows and needs more points. Over time, children are born, children grow, you want to bring friends and family, your children date/marry and bring a +1, and you get grandchildren.
- Buy As You Go Model – You can buy more points as your finances allow you to add on. If you pay cash, save up and buy more with cash. If you finance, you can pay off a contract and add another as your finances allow.
What are the downsides to this strategy?
Like most things in life, buying in bulk becomes cheaper at the time of purchase.
Resale – the larger contracts sell at a lesser price per point. Smaller contracts have a lot of buyers and are financially within reach of more people. Higher demand = higher price per point.
Direct – the more points you buy, the larger the incentives. However, if we look at Disneyland Hotel Tower points, the sweet spot is 150 points at $20 point savings. It only goes up $1 a point per bracket. Pay attention to the sweet spots.
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