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Hello ste123,welcome to the forum.
The heater matrixes have a tendency to block up.There is an in depth thread with pictures on how to cure this problem in the knowledge base.Also the resistor packs for the fan speeds can give problems,but this is easily remedied.
The only real common failure on early Lag 1's is gearboxes(both manual and auto).Check the inner CV gaiters aren't leaking gearbox
,and check the
Apart from that,the 8 valve engines are pretty much bomb proof,spares are readily available(second hand and aftermarket) and unless your really unlucky you should have a good car.
I'd try and knock him down on the price a little,and go from there(nearer £600 would be reasonable as long as it's a good 'un).
Best of luck to you.....
I'd rather push my Alfa than drive a BMW....
Currently in Lagdti's garage:
2004 Saab 9-5 HOT Aero and a 2001 Audi A3 1.8 Turbo