In the past my approach has been to agree on a price subject to a PPI. That way you know you have a deal if you want, it's just a question of adjusting the price or walking away if the PPI turns up a problem. If there is a big problem then as PEH says, you've saved yourself a lot of money. If it's just a few smaller problems like needs new brakes, worn shocks, etc. then you can negotiate the price down a bit. If I want the car, I'll usually end up settling for about a 50/50 split on minor repairs since I'll end up doing them myself and 50% will easily cover the cost of parts. That way the seller feels that he's getting a good deal too. Either way, my cost of the PPI is money well spent in my view, even if I've paid it on a car I ultimately walked away from.

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LRG
1987 300D Turbo 175K
2006 Toyota Prius, efficent but no soul
1985 300 TDT(130K miles of trouble free motoring)now sold