Recently purchased a 5 door 106 XRD 1.5 diesel on an 'R' plate for under a £1000.
In addition to the usual checks with any car - check the following on a 106
Ask the following questions,
When was the cambelt changed - should be done every 20 to 30000 miles especially if the car is going to be used on a daily basis. If the cambelt goes while you are on the motorway - just dump the car and buy a new one - this will be cheaper than fixing the resulting damage!!
So - if there is any doubt or no proof it has been changed or when - barter the price down and get it done asap.
* Check body for rust - the bodies are galvanised so this shouldn't be a problem but areas prone to rust are the mountings for the bonnet support struts, the roof gutter just above the doors and take a look underneath at the back with the spare wheel removed and check the sub frame - the outer body may look fantastic but the frame helps to keep it all together.
* Instrument panel behind steering wheel - make sure all the gauges and lamps work - it is easy to remove the panel and change the lamps however a gauge not working is usually a faulty diode, transistor or microprocessor. The failure of a gauge or the whole panel is quite common and can be expensive to fix.
* Cannot select gears - due to clutch cable clearance. Early 106's up to 'N' reg have a user adjustable cable - remove the battery - just below the battery tray next to the engine is an arm with the clutch cable connected to it. The adjustment is a long srew thread with a nut which can be tightened to take up slack in the cable. 106's after 'N' reg have an automatic adjustment - the cable is connected to the arm by a bracket and rubber bush - it is possible to take up cable slack by adding metal shims or spacers between the bracket and the round rubber bush.
* Electric windows / mirrors / central locking - Peugeot wiring loom faults are quite common where connections are required to doors and boot - a wire usually breaks resulting in a window, mirror or lock(s) not working. Broken wiring can be fixed however it can be a real pain in the ar** to do - at worst a replacement loom will be required.
* Airbag light keeps flashing / staying on - False fault indications are quite common caused by plug and socket connection under seat or both seats if passenger airbag fitted and connections on the seatbelt pre-tensioner located at the bottom of the central post behind the front seat on both sides if two airbags fitted to car. The plastic panel covering the post on the inside of the car will have to be removed to access the pre-tensioner - cleaning or tightening the the plug socket connections usually clears the airbag fault indication on the dashboard.