My mid 90s Peugeot 205 cost me €360 almost 9 years ago, I've put over 100,000 miles on it. It did once leave me stranded when the clutch release bearing gave up the ghost without warning, otherwise nothing out of the ordinary has been spent on it - a few suspension bushes, brake pads etc. It easily exceeds 50 mpg, unlike a lot of the more modern cars, it's simple enough for the DIY mechanic with basic tools. I'd be confident of getting my €360 back if I went to sell it. I think this is cost effective motoring.
My sister on the other hand who likes to tell me I should buy a decent car which will be cheaper to run suffers thousands in depreciation every few years, seems to end up with a garage bill in hundreds every turn round (although she really should look at either her driving style or the garage she uses as no car should give so many problems in normal use).