I bought an 05 Focus in 2006 that was a Cat D, I think it must've had the engine out to repair it as it had a couple of things wrong with it (fan didn't come on and the pipes for the windscreen washer fluid were round the wrong way, button for the front sent it to the rear and vice versa), but they were both simple fixes, and £4k for a 12 month old car with 11k miles was pretty damn good. For the same money at the time I was looking at cars 3-6 years old.
As it hadn't reached the age for it's first MOT, a lot of insurance companies wanted to see an engineer's report before giving me a quote, however Adrian Flux gave me a good deal without the need for one.
Once it had it's first MOT the premium went down quite a bit as I was able to shop around a lot more. Buying it was obviously a big risk, but when is buying a S/H car not a risk?