I have purchaced a Peugoet 306 XNDT diesel with 160 000 miles on the clock for £600 with one owner and a full service history. It is actually a surprisingly good car.

Interiors do not tend to wear well but if looked after they are extremely confortable with good supportive seats, well set out dashboard and good driving position.

The downside is a lack of top end power but I suspect this is a fault of worn parts or leaks reducing boost rather than the design. There is huge amounts of torque making it ideal for towing. The ride is superb, as you would expect from a french car, as is the handling. Combined with a very low fuel consumption of around 45 - 50 mpg I would recomend one of these cars to anyone after a cheap runaround. The low insurance group (5) also helps reduce costs.

However, I strongly suggest you wait for a good example to come on the market as there are many ropey high millage cars out there which are more trouble than they are worth. Unless cared for inteiors wear badly, electrics are prone to failure and reliablity suffers.

A good service history is vital; you have to ensure the cam belt has been changed when necessary, the service intervals are around ever 80k. If this hasnt been done and it is coming up for a change you are facing a bill of a few hundred pounds, or a new engine if you don't do it.