When it comes to buying used cars, Jay Leno, host of CNBC's "Jay Leno's Garage," doesn't negotiate. "The way I negotiate is I say, 'How much for the car? Okay I'll take it,'" he jokes. That's because when Leno adds a new car to his collection, which consists of more than 100 vehicles, he looks for rare and priceless pieces, such as the McLaren F1 he bought for $800,000 that is now worth $12 million. "The cars I buy are generally not cars that come up very often," he tells CNBC Make It. "If you think about it like buying art: 'There's only one of these paintings, would you like it?' Yes." Still, Leno knows a thing or two about recognizing a good deal. Here are three things he says to do before spending money on a used car, especially if it's a collectible.

1. Do your homework to decide if it's worth it

To Leno, there's no magic formula for determining if a car is too expensive, especially if it's a classic car that he's adding to his collection. Instead it comes down to three factors: "If a car is fun to drive, is of historical or technical interest, and has a style that people find intriguing, then it's probably going to up in value." Even if you aren't buying a collectible, it's still crucial to do your homework beforehand and have a sense of how much the car you're looking at should cost. You can use tools like Edmunds.com and Kelley Blue Book to research different models, read reviews and do side-by-side comparisons. "If you're reasonably knowledgeable about cars or motorcycles and you like something, chances are other reasonably knowledgeable people will like it for the same reasons you do," Leno says. "That's what I think makes a car go up in value."

2. Pull the vehicle history report

"You always want to get a Carfax report," Leno says. "These are people who know these cars, who check serial numbers and tell you what you've bought." To pull the Carfax report, you'll need the car's 17-digit vehicle identification number, or VIN, which is assigned to every vehicle in the U.S. The report costs about $40 and provides you with key information about the car, including service and repair information, vehicle registration and reported accidents. It will give you a good idea of how well-maintained the car is and what kind of issues the previous owner had to deal with.

3. Check the car for damage