A late 80's / early 90's 240sx. the go for around 2500 and have a little bit of sporting potential

 

90's era Subaru Impreza or Legacy.
That way you have a cheap beater that will last a long time and when you "beat" it up, you can get new parts for your current car and move the stock parts down to the beater.

 

check out bankmans beetle. i thought about getting it myself.

old bugs are the way to go. getting them serviced is ultra cheap, and if you get one with a good engine they run like a champ.

they are also cool cause you can learn more about engines and do a lot of the work yourself

 

YES what he said BUY ME BUG! seriously they are the cheapest cars on the road to repair/rebuild/maintain. fenders cost 30 bucks for goodness sakes! most of the VW collectors spend a lot of money on the older models with split windows or oval windows in the back (pre-1970's models) but the big-window models sell for dirt cheap and parts are cheaper for them.

but if you want THE cheapest, most practical beater in the world, it's a 1980's toyota pickup truck with a 20-R or 22-R engine. they're not very comfortable, but you can haul a couple hundred pounds of cardboard in the back and engines last a long time if you keep them filled with oil.

 

my 89 camery dx is pimp****

 

Check out an '83 or '84 VW GTI.
These only weigh 1900lbs stock and have a solid 90HP from a SOHC 1.8. The motors are indestructable (6 bolt main's with solid lifter cam) the suspensions are good out of the box and with less than $700 in mods become insane.
You can buy a fixer-upper for around $500, or a finished one for less than $3000.
Mind had over 350K miles on it and still ran great when I sold it after beating the crap out of it for 3 years.

 

crx... "the pocket rocket"
86 corolla .... for drifting
510 datsun ... is an awesome car and easy to fix.

 

I have a CRX to keep my insurance down, but I agree that a Miata would be more fun. You can get just liability coverage (if you don't care about your car at all) or comprehensive (better coverage) for your beater. My insurance dropped from $1500 to $950 after I added my CRX as my primary car and dropped the mileage on the WRX. It's funny how it's cheaper to insure two cars than it is to insure just one. Here is my pick for your second car:

http://www.craigslist.org/eby/car/37134299.html

 

Old 4-cyl Toyota or Datsun pickup. Bulletproof.