It really depends on what sort of motoring you will be doing and where your preferences lie. All I can do is suggest what I would do if I had about 5K to play with in today's market. Avoid any sort of foreign front-wheel drive hatchback on the grounds that they handle poorly, look awfull and will very soon only be worth the 1K you expect from your current car. Why not just keep what you have and give me the 4K ? My own preference would be to invest that money in something which will actually provide a decent amount of driving enjoyment and might not depreciate too much. Look at what you can get from the Jaguar, Mercedes and BMW ranges at about 9 or 10 years old. Provided you see a good service record they should be as reliable as hell and are likely to put a smile on your face every time you drive (mine do !). You just don't get that from a modern hatchback, so why get one ?