Here is the actual process I use for buying a used car to minimize cost.

Step 1: decide my target budget in cash or maximum loan amount. I prefer cash.

Step 2: research reliability ratings for models in my price range. Consumer Reports and JD Power data for specific years. I avoid first-year models of any redesign.

Step 3: search listings for certified pre-owned options from dealers or private party sales 2-4 years old with under 40,000 miles. The sweet spot: past peak depreciation, still in warranty range, manageable remaining mileage.

Step 4: get a pre-purchase inspection from an independent mechanic ($100-150) before committing to any private party sale. This catches hidden problems and gives negotiating leverage.

Step 5: negotiate on total price, not monthly payment. Dealers love to focus on monthly payments because it obscures the total cost.

The last car I bought this way: a 3-year-old Civic with 28,000 miles for $17,500. Same model new was $27,000. The $9,500 difference, invested over 10 years at 7% return, is approximately $18,000.