Craigslist is a great place for buying a vehicle if you don't have a specific one in mind, i.e. you're shopping by price. I punched in my hypothetical 2005 Chevy Malibu in my region and came back with one match. However, punch in $2500-$5000 and a wide selection of vehicles pop up.
There's a huge caveat with Craigslist. All of its ads are posted for free. It's easy for scam artists to post ads online. Approach any deal with a high level of skepticism and never feel pressured to buy a vehicle on the spot.
Craigslist recognize these problems and has some basic pointers on the website about being scammed. Buy no vehicle off Craigslist without a complete inspection by an independent mechanic. Also, try to buy locally because buying across state lines can create title and registration problems.
Another caveat with Craigslist is it's a popular place for some used car dealers to pose as private sellers. They do that to avoid dealing with applicable consumer protection laws that apply to them. An article I wrote on dealers posing as craigslist sellersis going to help you out immensely.
I'm apparently among the two or three Americans who has never sold or bought anything on eBay. (What can I say? I'm a tactile person who likes to touch things before I buy them.) eBay Motors is becoming an increasingly popular place to buy a vehicle.
Personally, I've only known one friend who has bought a car off eBay motors, but he just happens to be a columnist for Automobile magazine, so you can read all about his experience.
The beauty of eBay is you can offer a price and the seller can reject it with no awkward personal interaction. Plus, dealers are becoming a bigger part of eBay motors so it's possible to bid on a vehicle without ever stepping on a lot. (It's also an easy way for a dealer to sell slower moving inventory before sending it off to auction.)
In recognition of past problems, eBay has initiated a no-cost Motors Vehicle Purchase Protection (VPP) program that provides protection of up to $50,000 against certain losses associated with some types of fraud. Complete details are available at ebay Motors.