look for coolant leaks on the thermostat housing those go bad on these.
oil leaks from the valve cover gasket the gasket is easy to replace but it's still $35
Make sure when you start the car that during the idiot light test the check engine light does indeed go on.
engine mounts go bad if there's any rattling during the test drive your probably going to need to replace all 3 of them.
Crawl under the car if possible and look for mud kicked up. Say there's probably rust under it if you find any (there almost certainly won't be but the owner isn't going to stick his hands in mud to wipe it off and show you there isn't)
Here is a tip on buying - it sounds incredibly corny but it works - the minute you get out of your car and start inspecting the car you want to buy, start talking a mile a minute about all the stuff on it that your going to have to fix - and don't admit that you do your own work, just keep talking about all the labor costs your mechanic friend will charge for it - take a checklist with you, go though everything - even check the radio and CD player - criticize every last thing on the vehicle you can find that is the slighest bit off -from the paint, to the lack of lube on the door latches, to the trunk struts being weak and allowing the trunk to bang down - just keep it up.
Then, when your completely done - LEAVE. Don't make an offer. Tell them your going to think about it and call them back.
then drive to a burger joint close by and kick back for 20 minutes and then call them and tell them you talked to your mechanic friend and told him everything you found and he said it will probably cost about $600 but to go ahead and buy it - so your going to take a gamble - make an offer and tell them you have the cash and will be there with it in 5 minutes if they accept.
Yes, the seller will think your the world's biggest jerk. Yes he probably will think your trying to BS him. Correction he will KNOW your BSing him.
But, he -won't- be CERTAIN. As long as he thinks you might walk away - your in control. The moment you reveal that you have decided your going to buy it in any way - though body language or whatever - your screwed. And that laundry list of real or imagined problems will be eating away at him, even if he doesen't consciously admit to it or consciously thinks it's BS. The -only- sellers who are immune from this BS are professionals who buy and sell cars all day long.
I did this with my last Focus purchase, and I know that it worked because when I went inside to pay for the car, as I was walking out the sellers girlfriend gave me a glare that would have scraped the galvanizing off a light pole.
I didn't give a crap. This is business.
And yes, your in the right price range and that's the right engine. The unfortunate problem right now is that any 4 cylinder fetches a premium due to gas prices. My father in law works at a dealership and is in shock at how much they have to pay to buy used economy cars.