Depends.

In general, the cheapest course of action is to either

a) keep repairing the car you've got, (unless you are faced with a very, very large sum), or

b) replace it and buying something very, very cheap and running it until it needs some money spent on it.

Most of us avoid these cheap courses of action, and replace the car we have with something newer and more expensive and more desireable - and, hopefully, more reliable.

So the question really is "Do you fancy a change, or do you love your current car?"

I have no reason, based on what you've written, to assume that your car isn't safe. I can't know that it is, of course, but I don't see why it shouldn't be.

(Incidentally, I'm in a similar position - my 9 year old Ford Ka has serious rust problems, and I'm still trying decide when to replace it with something else. But I have do doubts that it is perfectly safe.)

Well it won't be worth much unrepaired and £1000 isn't a huge amount of money to keep it on the road, modern Pandas are pretty reliable. I'd keep it.

I think airbag warning light is on this year's list of new MOT fails, not sure if its part of the test yet or about to go-live... unfortunately it will probably mean a lot of otherwise OK cars will be heading for the scrapyard.