Buying a used car is often easier with respect to pricing, as the average cost is much more available (through various online and paper pricing guides). Online used car web sites will often make it easy to determine the average list/sale price of any particular model/year, which you can verify against the pricing guides which also factor in the condition of the car.

There are however differences with buying a used car from a dealer, as opposed to a private seller. Buying from a dealer can have some advantages, as the car is likely already been inspected and certified, with any mechanical problems fixed, and also often come with a limited warranty from the dealer to give you some piece of mind. Many new car dealers now also feature Certified programs where they will inspect used cars (that often come back from leases), and for vehicles that pass a rigorous visual/mechanical inspection, they are offered with an extended warranty, with a premium price tag to reflect their top condition - this offers a used car buyer the most piece of mind for their purchase, but again comes with a price.

Buying a used car from a private seller carries more risk, but if you are prepared you can minimize that risk. As the mechanical condition may be unknown and hidden, it is always advisable to have a mechanic inspect the car before finalizing any purchase (ideally one that specialized in that kind of car, and knows about any potential trouble spots to look for). There are unscrupulous sellers that are aware of problems, but try to hide them and pass them on when selling a car, so even if a car is certified and inspected, make sure to have an impartial and independent inspection.

Some obvious things to look for with a used car are rust (both visible rust on the outside of the car, as well as underneath the car, wheel wells, and any trunk or door seams), the condition of the exterior (nicks, dents, scratches, quality of the paint), condition of the interior (cracks in the dash, condition of the seats, cracks in the upholstery, functioning gauges), and the mechanical operation (engine, air conditioning, brakes, tires, many of which are covered under a safety certification). Be extremely thorough when inspecting the vehicle visually, and ask questions about anything that looks out of the ordinary - many countries/provinces/states have laws that require a seller to provide accurate information, especially if asked direct questions. Also be sure to request a complete history of the car (service records, accident history, outstanding liens on the car from financial institutions), some of which is required to be provided by the seller, and some of which you may have to research on your own - this will not only give you a good idea of how the car was maintained, but make you aware of any potential risks in advance.

If you are looking at multiple cars, its a good idea to bring along a written list of items to check, which not only helps you remember to ask the right questions, but also gives you an opportunity to objectively compare the vehicles once you get home. If you have a digital camera, you can ask the seller to take photos, not only of the condition of the car overall, but also of any problem areas you notice.

Buying a new car

The most important thing to do when buying a new car, is to fully research the model youre interested in - after all, a new car is a significant financial investment, so its important to be prepared. There are numerous sources of information that you can tap into to get detailed numbers on invoice costs and actual selling prices for the same vehicle youre planning to buy, which give you an advantage when negotiating with a dealer, as they are armed with this same information.
The Internet has become the great equalizer, not only because of the research you are able to do, but also because it allows you to tap into broader competition between dealers - instead of being restricted to local dealers, you can compare prices, get quotes, and purchase a vehicle, from a dealer outside of your local area.

When negotiating price, it is important to leave out the method of financing that you are looking at (lease vs. purchase), as many dealers are trained to work the numbers to try and fit a new car purchase into a monthly budget - this often works to your disadvantage, as the long term cost to you is often higher (for example, you might pay less per month on a lease, but at the expense of the residual value - meaning that you would have to pay a higher price to buy the vehicle when the lease term expires). Remember that there a variety of numbers under the surface that a salesman can tweak, focus on negotiating the price of the car first, then work out the best way to pay for it.

Also be aware that the cost of options installed by the dealer are marked up much more than the car itself, so when negotiating a price, you often have more room to move with the price of the installed options than you do with the base price of the car.

Once you have your research and know the true cost of the vehicle to a dealer, it is a common tactic to negotiate up from the invoice price, instead of down from the sticker price. Many salespeople are trained with high-pressure sales tactics, so if you feel uncomfortable at any point with the negotiations or terms, you should be prepared to walk away you can always get the same car somewhere else, and you should never feel pressured into agreeing to something youre not comfortable with. If youre not making any headway with what you feel are fair negotiations, get up, leave your phone number and your fair price/terms, and walk way if the offer is fair, you might be surprised at how effective this can be, and if you dont get a call back you can pursue the same vehicle through another dealer.