If you've decided buying a used car is best for your budget, you also need to decide whether to purchase that car from a private seller or a dealer. There are advantages and disadvantages to both.
One advantage of buying from a private party is the negotiating process. When negotiating with a dealer, car buyers are negotiating with a business seeking to maximize its profit on the sale of the vehicle, and with a salesperson seeking to maximize his or her commission. This reflects an inherent interest on both the dealer's part and the salesperson's part to keep negotiations to a minimum and the transaction price at a maximum.
Private individuals are motivated by their need to get rid of the vehicle, not by maximizing profit on it. Typically, they are not professional negotiators. They expect you to offer less than what they're asking and they expect to meet you somewhere between their asking price and your first offer. When buying from a private party, negotiation is usually easy, and it takes little time to settle on a price acceptable to both the buyer and the seller.
Another advantage of buying a used car from a private seller is that they sometimes include a complete history of all maintenance records for the vehicle. People who keep and file a history of maintenance records are likely to have maintained the vehicle properly when they owned it; this is a good sign that a used vehicle has been well cared for.
Remember, private parties are often competing against many other sellers. They're selling the car for a reason: They need to get rid of it, and fast. Furthermore, most private sellers are just like you -- honest, thoughtful and reasonable people. But not all of them are, and that is one of the biggest disadvantages of purchasing a used car from a private individual.