It's a simple exercise to show that two similar matrices has the same eigenvalues and eigenvectors (my favorite way is noting that they represent the same linear transformation in different bases).
However, to show that two matrices has the same characteristic polynomial it does not suffice to show that they have the same eigenvalues and eigenvectors – one needs to say something smart about the algebraic multiplicities of the eigenvalues. Moreover, we might be working over a field which is not algebraically closed and hence simply "don't have" all the eigenvalues. This can be overcome, of course, by working in the algebraic closure of the field, but it complicates the explanation.
I'm looking for a proof that is simple and stand-alone as much as possible (the goal is writing an expository article about the subject, so clarity is the most important thing, not efficiency).
Best Answer
If you define the characteristic polynomial of a matrix $A$ to be $\det(xI - A)$, then for $M$ invertible we have:
$\det(xI - M^{-1} A M)$
$= \det(M^{-1} xI M - M^{-1} A M)$
$= \det(M^{-1} (xI-A) M)$
$= \det (M^{-1}) \det(xI-A) \det(M)$
$=\det(xI - A)$