>older Merc A-Class

Do the older ones have more "get up and go"? The reason I ask is that I had a new 1.6 litre one on hire the other day. "Gutless" would be a horrific understatement. I actually opened the bonnet in disbelief to check that it hadn't been misbadged, but there really was something claiming to be a 1.6 under there.

The A Class in your price range will be just about the most unreliable car money can buy – early A Classes were dreadful – definite potential money-pit. I'd be looking along the lines of a Nissan Almera, Toyota Corolla, as previously mentioned, a Mazda 323F (you get a mint low miler for £2K) If go for one of the Koreans (Hyundais/KIAs). A Daihatsu Terios would be within your budget (mini 4x4) as would the Suzuki Ignis, both very reliable and fun but bit bumpy ride wise.
You could go for a small (outside) big (inside) car! Daihatsu Sirion, they are extremely light so fuel economy and performance are excellent (given the puny engine size) not very nice to look at but they are probably the cheapest car to run in the real world. Sip fuel - run forever - Group 1 insurance and like the new shape Panda are actually quite fun to drive..

Last but not least - I've started to see the (2004-2008 type) Mitsubishi Colt coming in around the £2K mark. these are very under-rated. They drive nicely, are roomy inside, have a good range of engines and are supremely reliable. The much maligned 1.3 (not as smooth as the 1.1 or 1.5) makes nearly 100bhp so performs like an XR3 of yesteryear but uses much less fuel.

ok i was too vague by half, im looking for something that can carry a fair bit of stuff but not an estate something on the size lines of a jazz? but they are too unreliable.