Lodging in Takayama during autumn festival

We are thinking of visiting Takayam autumn festival, arriving by car. Is it wiser to stay in a nearby location, visiting Takayama by car? Is there nearby less expensive recommended lodging? Where do you recommend to stay? Is it possible to park a car in a walking distance from the festival area?

Is it wiser to stay in a nearby location, visiting Takayama by car?

This is, indeed, not a too bad strategy. I did it once and was surprised how easy it was to find a parking spot in the morning. I imagine the parking situation to be more competitive later during the day and on weekends as opposed to weekdays. Also, Japan is very strict about zero alcohol for drivers. Accessing the festival by car will mean an alcohol-free festival for the driver.

Is there nearby less expensive recommended lodging?

There are usually some lodgings available 30 minutes or so outside of the city center in various directions.

Is it possible to park a car in a walking distance from the festival area?

Yes, there is a large parking lot west of Takayama Station, but it may be full later during the day. Here is a map of the spring festival, but it is similar for the autumn festival:
http://www.hida.jp/matsuri/p-map.html