Buy a vinyl siding removal tool from your local hardware store or building supply store. The tool consists of a handle and a flat metal blade that's bent up at an angle. The end of the metal blade is bent back to form a steel hook. This hook, when inserted beneath the individual vinyl siding panel, hooks the lower edge of the panel, enabling you to pull the panel away from the house.
Slide the tool beneath the lower lip of the vinyl siding panel at one corner, and hook it onto the notch of the panel.
Pull downward on the tool. This unlocks the vinyl siding panel from the one above it. Continue hooking the notch on the siding panel along its length.
Allow the panel to hang free, exposing a nail strip which keeps the vinyl siding panel attached to the house. Remove the nails with a hammer. You might have to use a pry par if the nails prove difficult to remove.
Avoid crushing the foam beneath the vinyl siding panels it the house is insulated with foam insulation.
Push the vinyl siding panel downward to completely unlock it from starter strip at the bottom of the house. Continue this process to replace a small section of vinyl siding, or the entire house.
Look for replacement vinyl siding that closely matches the remaining siding on the house. You can find this at building supply stores. Not only should the color match, but the simulated grain and finish should as well.
Cut the panels to length with tin snips. Be careful to stagger the vinyl siding panels as you replace them. Do not have all the seams match in a straight line or you will encourage water infiltration.
Slide the replacement panel into place from below, and hooking the starter strip at the bottom.
Replace the old nails with new so the vinyl siding panel is secured to the house. Allow the nail head to protrude about 1/32 inch, which allows for expansion and contraction of the wood beneath.
Push the vinyl siding panel above the one you replaced by inserting the vinyl siding tool beneath the lower edge, and stretch the lower lip of the panel downward so that it snaps into place. Do this along the length of the panel by simply dragging the tool from one end of the vinyl panel to another. Be careful not to mark the panel as you do so. Extract the tool gently once you've reached the end.
Tug gently on the vinyl siding panels to make certain the panel is snugly in place.