Toyota’s Midship Runabout Two-seater was launched in 1990. It’s one of the few mid-engined coupes you can get for less than £1000, and majors on reliability. The MR2 is a usable and engaging car too, thanks to its comfortable, relatively spacious interior and lively 16-valve engine.
Toyota claimed that, when new, the naturally aspirated MR2 would sprint from 0-60mph in 7.7sec and reach 137mph. Keep an eye out for examples free from corrosion and with decent service history, particularly making note of any cambelt changes. If you prefer your engine to be in the right place, however, you could dig around for a Mk3 Supra. Good ones will be difficult to come by for £1000, though.
Jeep Cherokee (93-01)
If you want a car that’ll deal with anything, go for a 4.0-litre Jeep Cherokee. Besides being renowned for their durability, a good example is a genuinely rewarding car to live with. The only catch is fuel consumption; expect to average no better than 20mpg. If you’re only doing short trips though, this should prove tolerable.
Besides having a powerful engine and a flexible four-wheel-drive system, XJs have comfortable and relatively refined cabins, are easy to drive, feature plenty of kit and have a surprisingly small footprint. Good examples are hard to come by, as most are run into the ground, so look for low-mileage cosseted ‘Limited’ models. One that’s been cared for should feel tight, precise, responsive and smooth. Despite what you might expect, they’re also surprisingly fun to drive.
Subaru Impreza (93-01)
You'll find a deluge of non-turbo Subaru Imprezas around for £1000, but that's like having a bacon sandwich without the bacon. Or the sandwich. Scour the classifieds and you'll turn up some serviceable early Turbo 2000 models, predictably replete with a turbocharger and - more notably - the legend-making all-wheel-drive system.
Buying what transpires to be a fully functional Impreza, most likely in estate form, at this price point is no mean feat. So, be prepared to crawl all over any potential purchase. Look for oil leaks, headgasket issues, listen for rattles and check everything that moves, switches or seals. Alternatively, you might find it easier to find a more practical - although not quite as stylish - Subaru Forester.
Peugeot 205 GTi (1984-1994)
The indomitable hot hatchback of the '80s - and yes, you can still just about pick them up for £1000. Few cars are as thoroughly enjoyable to drive as the 205, and good examples are a relatively rare and increasingly valuable commodity.
Most at this price point will be the 1.6-litre versions, but don't be disappointed by that fact - they're still spritely, dispatching the 0-60mph sprint in less than 9.0sec. Just make sure the shell's in good condition, as the mechanicals are easy to repair or uprate. Like others here, inexpensive classic insurance is also an option, helping keep costs down. If you're looking for a more modern alternative, consider an early Honda Civic with a VTEC engine.
Saab 9000 (85-98)
A sensible, practical and inexpensive saloon with some refined Swedish style. In standard naturally aspirated form they'll soldier on for hundreds of thousands of miles with just routine maintenance, and they're a good shout if you just want something nondescript, comfortable and inexpensive to abandon in a train station car park.