Getting around isn’t so costly

PJStar.com April 5, 2003

Whether you were looking for a new car, a plane ticket or even a new pair of shoes, 2002 was a great year to be a buyer of just about anything to help you get around.

If you were a seller, ’02 was pretty much a train wreck.

A recent Consumer Price Index report by the Bureau of Labor Statistics shows prices for a wide range of transportation-related goods and services either fell or remained flat between the Decembers of 2001 and 2002.

At the same time, the overall CPI - the rate of inflation in price of all goods - hit a benign 2.4 percent in 2002 amid a nationwide economic malaise.

The notable exceptions? You won’t be shocked if you ever leave your house or pay your bills. Gasoline prices skyrocketed throughout 2002, and car insurance prices took a big upward hike. But those increases were the exception and far from the rule for transportation-related buys of all kinds.

The average price of all new cars and trucks - amid zero-percent financing deals designed to spur car-buying demand - fell 2 percent; used car and truck prices (hit hard by buyers being lured by cheap financing for new cars) dipped by 5 percent; and car and truck leases fell 2 percent.

The only increased pricing for car acquisitions was a modest one: rental car and truck costs went up 0.5 percent.

The cost of getting a set of tires for your car was up a tiny 0.1 percent, while car repair costs were up 3.7 percent, not much over the rate of inflation. Car-related governmental regulatory fees were up 3.3 percent, while car insurance costs were up 9 percent.

The biggest transportation-related increase - indeed, one of the biggest consumer-related price increases of any type - was in gasoline, up 24.8 percent for all grades and up 25.8 percent for unleaded regular-grade gas.

The blame for gas price spikes at the end of last year fell on the threat of the now-real war with Iraq, low reserves and political woes in Venezuela, America’s fourth-largest crude oil source.

Going by plane? Airfares were down 2.4 percent, as a post-Sept. 11, 2001, travel slump and a business traveler revolt against high walk-up fares continued through 2002. How about by boat? Ship fares were down 1.8 percent.

For those without wheels and lacking access to a jet or yacht, public transportation fares were down 0.9 percent, while footwear prices were up only 0.1 percent in the discount-crazy retail industry.

The bottom line? While investors decried depressed stock prices stemming from slack revenues, and while some industries (notably airlines) struggled to bring costs in line with what consumers were willing to pay, 2002 was a great time to go somewhere on the cheap.

But buyer beware: Businesses of all types won’t be able to sustain themselves - and the jobs they offer - without a reasonable increase in prices or a major restructuring of business models this year.

To see the 96-page price report yourself (which includes not only transportation-related items but just about any consumer-related goods or services) go online to www.bls.gov/cpi/cpid0212.pdf.

• Omar Sofradzija covers transportation issues for the Journal Star. His column appears every other Saturday. He can be reached at 686-3187 or osofradzija@pjstar.com, or by mail c/o Journal Star, 1 News Plaza, Peoria, IL 61643.