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DEEP DISCOUNTS MAY BE AHEAD FOR ELECTRONICS, TRAVEL & AUTO

DEEP DISCOUNTS MAY BE AHEAD FOR ELECTRONICS, TRAVEL & AUTO

(Photo courtesy of investors.com)  

After watching the markets fall, it may be hard to consider spending the money for a fancy vacation or a new car. But if history is any guide, the correction of 2011 could lead to some good deals — for those who still have the stomach for spending.

While consumers who made an impulse purchase before the market upheaval began last week might have buyer's remorse, there may be good news for those who waited: Prices are expected to fall in coming weeks as automakers, retailers and the airlines try to keep consumers from going into hiding. In 2008, that's exactly what happened. In the weeks and months following the market crash that year, airfares fell, cash-back car deals jumped and holiday retail deals reached a whopping 80% off as consumers cut back their spending.

This time around, the deals may not be quite so staggering. The crash in 2008 was "a major economic shock and not one that was anticipated," says Randy Allen, associate dean for The Johnson School at Cornell University. Comparatively, this correction has come as slightly less of a surprise. On top of that, the last downturn was relatively recent, and many businesses are still running a hard-times operation, with tighter inventories and lower costs. That makes them better prepared if demand gets sluggish — they won't need to offer substantial sales to stay afloat.

So for those planning a trip or a splurge, there may be discounts in the offing. Here's a guide on what big-ticket purchases to make and when:

Travel
There's no reason to buy a plane ticket right now, says Tom Parsons, the chief executive of BestFares.com. "Sit on the sidelines, check the fares and wait until the deal comes to you." It almost certainly will, say experts, as airlines try to keep planes at capacity. In 2008, it took a little while for airfares to respond: in the last quarter of 2008, airfares dropped almost 4%, but then plunged another 13% over the first half of 2009, according to the Bureau of Transportation Statistics. This time around, prices may fall steeper and sooner, pushed lower not just by the economy but also by falling fuel prices and the end of summer vacation for kids. (Some airlines have stopped charging airline ticket taxes, because the Federal Aviation Administration is unable to collect them.) Also, cutting fares is really the airlines' best recourse at this point, Parsons says. In 2008, they were also able to cut back on flights, and they're still running slim schedules. "The only thing they can do is bump fares down," he says.

Cars
A late start to summer clearance sales already led analysts to suggest waiting a few more weeks to buy a new car. Now it's an even better idea. "This [uncertainty] could really dampen enthusiasm and motivation for buying cars," says Lacey Plache, chief economist for auto pricing site Edmunds.com. Automakers could heap a bit more cash onto current offers before Labor Day. (more)

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Article by KELLI B. GRANT, SmartMoney via Yahoo! News | Read full article here

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