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Self drive holiday

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My travelling companion and I are planning a self drive holiday in Japan in early April; primarily to see the sakura, experience onsen at the highlands in central Honshu.
Some questions :
1) is it better to pick up car at airport or at train stations?
2) is driving a better option than taking trains and buses; money wise?
3) is it necessary to book accomodations far ahead? can we rely upon local tourist agency to find rooms at local inns for less than $100 per nite?

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