The retail price is what you can expect to pay for a used car from a dealer. This price is going to be for used cars that are not certified pre-owned. You'll pay a higher premium for those.
This is probably the easiest step of all. The private party price for a 2002 Dodge Neon with a five-speed manual transmission and a four-cylinder engine with 50,000 miles on the odometer, according to Edmunds.com, is $4,845, while kbb.com says it's worth $5,660. If you split the difference, you arrive at a suggested private party price of $5,207.
Determine what you're willing to pay retail by adding 20% to the private party price. In this case, it's about $6,250. You're paying for all the work the dealer has put in to prepping the car for re-sale. Frankly, it's work you would probably have to do if buying a used car from a private seller.
A certified pre-owned vehicle is going to cost you at least 5-10% more. It can be worth it depending on the warranty offered. Remember that certified pre-owned vehicles are only worth a premium price when certified by the manufacturer. Otherwise, the certification is meaningless as explained in my section on understanding certified pre-owned used cars.
