For a used car, pay attention to rules 1-5. For a new car, rules 2, 3, 4, and 6 are most important.
(If you don't have your own mechanic, I recommend Sharkey's in West Lebanon, by the four aces diner.) Ask him to compression-check the engine, and check over all the suspension parts, drive it and use his tuned ear to listen for any shaking, and so on. Be willing to pay $50-75 to have the mechanic look at it. It *will* be worth it, either way -- if the car bites, you saved a few thousand; if the car is good, you have peace of mind that you didn't get hosed. Even a competent guy like me can get suckered by a dealer; if you set up this rule for yourself in advance, it's very good protection against pressure sales.
An example: the Shaker Valley dealer in enfield will "let you take the car to your mechanic, but he can't take the spark plugs out because people are always stripping the block that way." That means they are scam artists. You can't test the compression without taking out the spark plugs, and testing the compression is the most reliable way you can tell if the engine is nearly dead.
Finally, your mechanic will tell you what things need to be done to the car, and how much you should expect to pay to have them done. You will be able to use that in dickering; that knowledge alone can pay back the $75 you paid the mechanic.
And I really mean your *own* mechanic. Decide who that is before you go car shopping. Don't shop for a car in Portsmouth, where you will be tempted to use a local gas station because your mechanic is too far away. Commit to your decision; if the seller won't work with you to make it happen, you don't want his car.
As you can see, I consider rule #1 extremely important.
This is also very important. You're talking about a few thousand dollars here; if you buy a lemon, it will cost you that, plus all your time dealing with it, plus a lot of mental anguish. If you are renting a car for now, so be it -- $150 to rent for a week beats buying a piece of junk.
This is your best defense against seller (especially dealer) psychology. Dealers will do everything in their power to get you to "buy today." If you have rule #1 in place, and your mechanic can't look at the car until tomorrow, that's a good defense against this tactic. Sleeping on your decision helps you make sure it's a sane one. Remember, these are cars -- *there's always another fish in the sea.* If a car looks like such a great deal that you don't want to let it escape you, you're probably falling for a "too good to be true."
If you're using patience (#2) and a mechanic (#1), this rule should be easy. Use the blue books on the web (such as www.kbb.com, and Consumer Reports' Cars & Trucks page.) to get a range of values on the cars you are interested in buying. (Use multiple blue books to get a better estimate.) Values vary a little depending on region and season. Call your bank and ask them to look up a car you're interested for you, too; banks have reliable pricing guides to keep themselves from financing something for more than they could recover if they had to reposess it.
Set your final price in advance. Dealers will screw with you. Tell the seller your final price, and tell him it includes taxes, tips (:v), licensing, inspection, everything. Tell him to bargain with you based on that final number. He will pretend to agree. If later on you find that new charges are sneaking in, LEAVE NOW. Do not discuss it. Cough and pretend you have to go see your doctor. You are being screwed.
Car salesmen are very good at the psychology of sales, and won't really supply you with any info you didn't otherwise know. I would advise shopping in the paper and in the used car photo rag (I don't know if there is one in the upper valley; check the newsstand at Shaw's.) Private sellers saves about $1000-2000 of 'middleman's fees. I have always had better luck with private sellers. There is the risk that the guy is trying to screw you, but (a) that's true of dealers as well and (b) that's why we have rule #1.
If you must go to a dealer, here are some things to watch for.
As you can see, there are a *lot* of pitfalls and tricks with dealers. Private sellers tend to operate transparently -- you hand them a bank check (not your personal check), and they hand you title to the car and keys. I strongly advise avoiding dealers. However, this rule obviously depends on the kind of buyer you are. Some buyers want to go to dealers because they have greater selection; I can understand that, but go in bearing my warnings -- you're likely to pay a premium for that selection, and the salessharks really are ruthless. Consider the fact that if you avoid dealers, you're likely to avoid most of the hassles described in this section.
This is not a substitute for rule #1. But when you test drive the car (on its way to the mechanic), you can watch out for a few things. The best thing to do is try these things, then report your discoveries to your mechanic so he can investigate further to see if it's really a problem or not.
You can also check the spark plugs, but your mechanic will do a more knowledgeable job.
Rule number 1 is a lot less important here if you're buying a car with 20 miles on it. However, "program" (rental/fleet) cars still count as used. However, now you're messing with a dealer.
Rule 2 (be patient) is even more useful now -- since new cars aren't one of a kind, you have all the time in the world. Select the model of car and options you want in a first pass -- promise yourself not to fall for any "sales" until you have made that decision and left the dealership. Set aside a Saturday to shop for car models; *commit* to not buying a car that day.
Rule 3 (know your price) is even more important now, since it's easier to establish a price for a given model and options package. Use web pages. Use the consumer reports in your public library.
Call around! I did this once to great effect. Most dealers will refuse to tell you a price over the phone. I called every dealer in Portland and Seattle and found only two (one in each city) that would give me a price on a Camry with a moonroof over the phone. One salesmen even said, "you're just going to use these prices to play us against one another to get a lower price!" (Well, yes, why would comparison shopping be bad?)
However, I had priced the car ahead of time in Consumer Reports, and knew that one of the prices I was offered was fair. Just for kicks, I visited one of the dealers that wouldn't give me a price -- sure enough, it was a ploy to get me in to the dealer and BUY TODAY. I escaped, went to the dealer who offered the price over the phone, and was treated courteously and with a minimum of the usual scammery. We left having paid the agreed-upon price. I hear Saturn dealers are good about this; if you like Saturns, sounds like a good deal to me.
When we bought our second Escort, we bought one of the loss-leaders advertised in the newspaper. Those are only available with zero options, but for us it was a great deal, and we got no hassle.
Finally, all the warnings in rule #4 are in effect, because you're going to a dealer.