Money Power: Expect used-car prices, hotel rates to rise
BY ANNE KATES SMITH & LISA GERSTNER Money Power
Sunday, January 20, 2013
1/20/13 at 4:31 AM
Along with the mud, the muck and the hardship that superstorm Sandy left in her wake comes another unwelcome gift - higher used-car prices.
The storm wrecked some 250,000 consumer vehicles. As drivers replace them, used-car prices could rise nationwide.
Sandy didn't skip over new-car lots. Major dealers reported thousands of lost vehicles. But used-car losses are greater, and inventories were already strained. In recent years, people have been buying fewer new cars, resulting in fewer trade-ins.
Expect to pay about $700 to $1,000 more on average at least through February, says Lacey Plache, chief economist for Edmunds.com, with bump-ups most likely in the Northeast. Tax-refund season is typically strong for used-car sales, so don't look for prices to fall again until midyear, says economist Tom Kontos, at consultant Adesa Analytical Services.
A bigger problem will be a torrent of flood-damaged cars hitting the market. Title work might not reflect a run-in with Sandy. A free scan from Experian's AutoCheck (tulsaworld.com/experian autocheck) will tell you if a vehicle has been registered or titled within the past 12 months in storm-affected areas; CarFax is offering free flood-damage info ( tulsaworld.com/carfaxflood). Look for signs of water, mud or rust in unusual places and pay close attention to electrical wiring. Be suspicious of deals that are too good to be true.
With economic recovery comes increased travel. And that means hotel prices are going up. The average price paid for a hotel room rose by 4 percent worldwide in the first half of 2012 compared with the same period a year earlier, according to the Hotels.com Hotel Price index.
Experts expect domestic lodging rates and fees to rise 5 percent in 2013. Fees are proliferating, too. The American Hotel & Lodging Association found that 23 percent of the U.S. hotels it surveyed in 2012 charged extra for Internet service; just 15 percent did so in 2008.
You can save money by steering clear, if possible, of cities where major conferences or events are being held - room rates spike during those periods. If you can wait until the last minute to book (say, within five days before your stay), you might snag a room at a discount. Prepaying for a room may trim the rate, but you likely won't be able to cancel the reservation.
Use Web tools to monitor rates. If you book a room at a "Money Back" hotel through Tingo.com and the price later drops, the site rebooks at the lower rate and refunds the difference to your credit card.
Original Print Headline: Money Power
Anne Kates Smith is a senior editor, and Lisa Gerstner is a staff writer at Kiplinger's Personal Finance magazine. To send either of them a question or comment, go to tulsaworld.com/kiplingerfeedback.