You're not going to get a reliable car for £500.
I'd say that's utter, utter rubbish only said by those who have been burned on car deal in that sort of price range. As always with used cars, it boils down to being careful when choosing, and of course, pot luck.
I have/had a 205 XS as my first car. Awesome thing for what it was, 'upgraded' to an E30 316i last weekend and have been missing the manic acceleration. Don't get me wrong, it's not a quick car by any means, but enough to put a smile on your face, certainly if you've been using your Bus Pass to get you from A to B for the last couple of years
. I'd also say a Cinquecento Sporting is a good shout, a MK2/MK3 Polo too.
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. Just play around with quotes and go with what you want (with the insurance man's approval of course 
