If you go along the Lemontree road from Quesada to Guardamar, there are two dealers along there. One on the roundabout before El Raso and one a bit further on by the Repsol garage. I have not used them but I know some who have and are very happy. They also seem to have a good stock and do the necessary paperwork for you correctly.
Yes, there are some rip off merchants (Que horror!) and one such has just been closed down for clocking, giving the wrong year and so on. Also not doing the registration properly so be careful (if you see a car with 30k on the clock advertised as 5 years old with worn down foot pedals and steering wheel be very suspicious).
Also be aware that old cars are quite expensive in Spain. New and up to 3 or 4 years old about the same as UK but after that they don't drop much. I've seen 8 year old cars going for 8k or more. Good when you're selling but not so good if you're buying.
Cars on the coast also seem more expensive. Have a look further inland as the prices seem a bit more realistic.