As people research their Disney Vacation Club purchase, there is one area that I think doesn’t get the proper respect that it deserves and that is the annual dues.  Annual dues are the payments made each year for the maintenance and upkeep of the resort.  As people consider the purchase price of DVC, the bulk of the conversations revolve around the resort.  This is where the focus of the conversation should be if you plan your vacations more than 7 months in advance and can take advantage of the Home Resort Booking window.  If you book and plan your vacations at less than 7 months, then the annual dues are an important factor and here is why:  

Cost of Ownership = Purchase Price + Closing Costs + Financing Charges + Annual Dues

 

I think a ton of attention is paid to Purchase Price.  Buying from Disney directly at this time is $165 per point.  You can buy on the resale market at anywhere from $75-$140 per point.  That is potentially huge savings.  However, once you make that initial purchase, you have the annual dues for the life of the contract.  This could be 50 years of annual dues!  

Here is a chart showing the historical annual dues for all the resorts: 

 

Annual Dues Historical

 

Let’s use 2 examples. For simplicity I am going to assume no financing charges or closing costs in our cost of ownership equation.  

 

Example 1

Purchase 100 points on the resale market Vero Beach at $65 per point.  Vero Beach currently has annual dues of $8.06 per point and is averaging a 4.5% increase each year in annual dues.  The contract expires January 31, 2042.

Purchase Price – $6,500

Annual Dues Through 2042 – $40,873.33

Total Cost of Ownership of – $47,873.33

 

Example 2

Purchase 100 points on the resale market for Bay Lake Tower at $125 per point.  Bay Lake Tower currently has annual dues of $5.05 per point and is averaging a 5.5% increase in annual dues each year.  The contract expires January 31, 2060.  

Purchase Price – $12,500

Annual Dues Through 2060 – $92,980.18

Total Cost of Ownership of – $105,480.18

 

In comparing the 2 examples, I need to re-calculate the cost of ownership until the year 2042 for Bay Lake Tower which is $29,789.50.  This would make the cost of ownership to the year 2042 calculate out to $42,289.50 for Bay Lake.  

 

There is $5,083.83 of savings by owning at Bay Lake Tower even though the initial purchase price was significantly higher.

 

I realize my calculation may not be perfect.  I made several assumptions that may or may not hold true.  I didn’t even touch on the fact that in the year 2042 Bay Lake Tower contract has more value since it will still 18 years left on its contract and the Vero Beach contract has no value since it is complete.

The purpose of the blog post is only to show that you should not get swayed by the low purchase prices you see when looking at the resale market. They are not all they are cracked up to be.

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