Do your research
Research what you choose to buy carefully. Look at the mpg ratings of the cars you are considering, and calculate your annual fuel savings compared to your current car based on the number of miles you drive in a year. Make sure the increased fuel economy is worth the additional cost of buying a less fuel-efficient used car. Once you've decided on the exact model, use a third-party car-pricing site to research a fair price online. Use that total price in your negotiations, not the monthly payment you'd like, because terms and interest rates on car loans can vary widely.
Buy from a private party
Cars sold by private individuals are cheaper than those sold at an independent or franchised dealer because you are not paying for the dealer's overhead. Buying a car from a private party can easily save you $1,000 or more versus the same car with the same mileage and condition as the dealer's car.
To help ensure you are buying a car that is reliable, tap an online service that uses the car's vehicle identification number, or VIN, to check the car's history for accident damage, theft, flood damage and other issues. Ask the seller for the car-repair records, and have a trusted mechanic do a thorough car inspection.
From a dealer, buy a certified pre-owned car
While certified pre-owned, or CPO, cars cost more than their noncertified counterparts, they also offer increased benefits that often result in a cost savings in the long run. Buy a fuel-efficient used car that has been manufacturer-certified -- sometimes called factory certified -- since these CPO cars offer the most benefits. Look specifically for an automaker that offers a substantial extended warranty and free standard maintenance to get the most bang for your buck. Keep in mind that the additional fee for buying a CPO car can be negotiated. Research pricing on several independent vehicle-pricing websites, and negotiate the total price for the car carefully to ensure you get the best value.