Get the higher quality used bike off ebay. Do some research on the bike. When you go to check the bike out spin the wheels to see if they are true. Check that the crank, sprocket and chain operate smoothly. Check that the brakes work and for any other bits that might be broken or falling off.

Know what it is going to cost you to get the bike in good working order and use this knowledge to negotiate.

You will end up with a much better bike for the money this way.