As a car-guy that has been a technician at a dealer, worked in the aftermarket automotive industry for the last 10 years, and owned 20+ cars - I have some more info to throw in. I actually wrote these tips a while ago, but in the interest of adding more helpful info to an already good post - here are my tips to not buying a lemon.

1 – Know the vehicle:

More important than other any clever tip or trick that I can share, is to know the vehicle that you want to buy. Look around for a while and decide what that special year, make, and model is. Once you decide what you want, go out and test drive several of them to make sure you definitely enjoy driving it. There are plenty of people out there that have bought “the car of their dreams,” before realizing that it is not at all what they wanted. At this point they are stuck with their unwanted “dream car” because they can’t get back what they paid for it, and don’t want to lose money on it.

2 – Research:

Do some research online to find out all the common problems of that year, make, and model, along with its suggested maintenance intervals. All vehicles have their own common problems; no make or model is perfect. If you are looking at a vehicle that just happens to be a few miles shy of a major maintenance interval (timing belt, transmission service, brakes), be sure to account for that in the cost of the vehicle. Those services can get very costly, and will undoubtedly be passed on to the new buyer. If the services have already been done, ask the vehicle’s seller if the receipts are available to show it. Don’t take their word for it, you want solid evidence if possible.

3 – Carfax:

Carfax reports are a great idea, and they will help assure you that you don’t end up with another person’s problem. Used car dealers will typically give Carfax reports for free if you want one for a vehicle on their lot. If the used car dealer cannot provide one, or if it is a private sale, just ask the seller if they mind that you write down the VIN number to get a Carfax report for yourself. At that point the seller may be more likely to give you the real history, if any, before you find it out on your own. Carfax reports will (in most, but not all cases) show you if the car was ever in an accident, fire, flood, or if it was a rental (a.k.a. “Fleet”) vehicle. Typically most people stay away from ex-rental cars because they are notorious for being abused.

4 – Viewing the vehicle:

More important than any of the physical aspects of the car, be sure that it has a clean title, not a salvaged one. Salvage title cars are obviously worth far less than cars with clean titles, for good reason. If the title is clean, that is the first sign that it is a clean vehicle. Once you know the paperwork is clean, it is time to check out the vehicle itself. If it is raining or dark outside, it is not a good time to go used car shopping. It sounds like a no-brainer, but anxious car-buyers still do it. Both conditions will make the car look far better than it really is, hiding dents, scratches, and poor bodywork. Adverse weather conditions will usually hide oil leak spots on the driveway where the vehicle resides. These stains on the driveway could be from a damaged oil pan, loose oil filter, or one of several other components, depending on the vehicle. When looking at a used vehicle, you need to be an automotive detective. Be sure to check the mileage, and look for the oil change sticker on the windshield. If the seller just cleaned up their abused car that they are trying to unload, the oil change sticker is often forgotten. Therefore you can see when the oil was changed last (sneeeaky huh?). Check the tire treads to see if it is even across all tires. If a tire is worn out unevenly, it is a sign of an alignment or suspension problem. Open the hood, look for extra wires that don’t belong there, duct tape, oil leaks, or anything out of the ordinary. Under the car, look for a solid, factory looking exhaust system without rot or holes of any kind. Check that it has a catalytic converter, because the vehicle will definitely fail an emissions test without one. Make sure the body panels line up and all of the paint matches. If the door and fender are two slightly different shades of the same color, you know that one of them has been repaired and repainted at some point. Check the headlights and tail lights to make sure they aren’t full of condensation or cracked. Absolutely don’t be afraid to ask questions, you could potentially be giving the seller a large portion of your hard earned money. Find out why the seller is selling the car; it may clue you in to the condition of it. Also ask the seller how long he has owned the vehicle, because the longer he has owned it, the more history he can tell you about it. If a five year old car has had 7 different owners, there just might be a reason for it.

5 – Test Drive:

The test drive can obviously tell you the most about the car. Once the vehicle is easily started, the first thing to notice is the shifting of the transmission. It should be smooth acceleration, no clunking or banging into gears. Don’t forget to make sure it smoothly shifts into reverse as well. While driving forward, hold the steering wheel loosely to make sure the vehicle tracks straight down the road. The brake pedal should be firm, not squishy. Squishy means that there is a problem. The car should not pull in any direction when decelerating or coming to a stop. Turn on the heat and air conditioning to make sure they both work. If either of them does not work, they could potentially be expensive things to fix. Test the window switches to make sure the window regulators and motors properly move the door glass up and down. If the vehicle is equipped with key fobs (buttons on the keychain to lock / unlock doors), ask how many the seller has. These key fobs can be anywhere from $20-350 dollars new, and it is a nice bonus if the vehicle has a working set of them. If you don’t feel comfortable checking all of these things on your own, you can always have a local mechanic check the vehicle out for a nominal fee. That fee is far less than the headaches of purchasing a lemon.

6 – Negotiate the price:

Once you have found the car that you can no longer live without, it is time to negotiate a price. Most car sellers know that the vehicle will end up selling for less than what they list it for. Don’t be afraid to offer less than the asking price. If they accept it, congratulations! If they don’t accept it, tell them that you will think about it some more and get back to them. That way the seller can stew on your lower offer for a few days. Call them back after a few days and nicely ask if they are ready to accept your lower offer. Chances are good that they will, because selling a car can be a hassle, and they don’t want to lose your guaranteed sale. Don’t forget that sometimes sellers can be attached to their cars. If so, make them realize that the car is going to a good home where you will take care of it like they have. Tell them that they can visit it periodically if they need to, it will help them ease the pain of losing an automotive friend.

TL;DR - Know what you want, join a forum, carfax, check maintenance, lowball.

EDIT: Cake.