If you plan to buy the car outright from a private seller, then you need to determine what your lump-sum limit is. If you’re financing, then the ballpark price is important, but so is your monthly outlay.
The last time I bought a used car, I decided roughly how much I wanted to spend in total and then gave myself a range for the monthly payment, because I wasn’t sure how the financing would shakedown.
But I also decided to limit my upward wavering by just a few thousand dollars on the sticker price — that way, if I saw something that was a perfect fit, I’d end the search and simply buy the car. And that’s what I wound up doing.
Keep your range narrow; if you’re realistic, you should be able to find something that you’ll be happy with.
What about haggling over the price? With a dealer, I’m all for it — within reason. They’re typically going to have better-quality used vehicles, so trying to negotiate some crazy deal is pointless.
Interestingly, private sellers have often used internet sites, such as Kelley Blue Book, to arrive at with a fair value for their vehicle. You can often tell right away whether they’ve been honest with themselves about their car’s condition. If what you see wasn’t what was advertised, I think the best course of action is simply to walk away, rather than trying to hammer out some kind of deal.