£4K won't get him a HDI, you need to looking at £7K plus even for a higher mileage oilburner (not that they hold value much better, they are just a lot newer).
It will get you a S or T reg (99) V6, autotrader has 36 V6's under £4K nationwide.
If you had the cash, the 2.2 petrols are ok too (165BHP), but they are out of you price bracket....
How are they rated? Cosmetically I still think they are one on the best look cars made in the last 20 years. The front lights are looking a little dated now, but I still like them. They are Itallian designed and built (in the Pinninfarini factory). They do suffer from electrical problems - later ones (have a multiplexed wiring loom) are better but are out of your 4K price range.
Running a 3.0 V6 can be quite expensive, make sure cam belt is in good nick or has been changed (need changing at 80K I think), this is quite a job. They can also drink fuel if you start using the 196BHP they offer (later V6's -204BHP- are better, but I think might be a bit late to have dropped into your price bracket), though some 2.0 owners also report appalling mileage (20ish mpg) as they need some welly to drive briskly.
If you get a V6 with Brembo brakes, it is likely that they will squeel, Peugeot gave up trying to fix this eventually and put Lucas on the last models. If you can live with it though those Brembos are better.
Inside - I don't think they are as nice as some others, but they are not horrible, or particularly plasticky. The SE models have a lot of standard kit, but it's some of this kit that suffers the most problems (electric heated memory seats are a particular problem)
Whilst people often say that these dissapear quickly off the forecourt, for some reason this doesn't seem to help there residual values. But buying at £4K, you wont suffer that too much.
As said, these are not built as sports cars, they are mile eaters (for those that can afford the fuel), they are a bit wider and lower than a 406 saloon, and those had class leading handling in their time - not now though. Some folk put on bigger wheels (17-18 inch rims seem to be the choice) and lower profile tyres, combined with a drop in suspension height, and report much better handling on turn in, it does tend to make them a bit firm when taking the mother-in-law places though. V6's have a speed sensitive power steering, which some people don't like - they say it's a bit eager and makes the steering a feel a bit loose.
Body work is not really a problem, though the panels are expensive should you dent them, so Fully Comp insurance might be advised. They also a pretty high Insurane group too, you might find a group 14 quote for the 2.0l, some insurance companies quote group 18 for the V6, a group 16 quote is more realistic.
these people know more
406 Coupe forums
Shoud you really want to, you can get the angle grinder out and do
this to one.