Stick the Old Polo on EBAY, even with the faults you have stated mentioned, somebody will buy it and maybe fix it.
It is amazing what people will buy on Ebay.
I had to dispose of an old Fiat Punto with a blown engine, and got an Easy £300.00 for it, there were literally dozens of people after it.
To a hobby mechanic with time and expertise, your Polo could be fixed up and there should still be plenty of life in it.
Regarding a replacement, you could easily find a decent Renault Clio 1.5 DCI or a Modus 1.5 DCI which cost peanuts to run.
Edited by Mr Fox on 30/01/2013 at 21:26
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