Jaguar's design department's success has been hit and miss over the last twenty years or so, but most would agree than the last generation XK was a bit of a hit. Striking that lovely balance between beauty and aggression - as a good Jag should - the 1996 XK coupé even today has an air of luxury and quality (the latter often unjustified). Early cars were fraught with problems, with some even experiencing catastrophic engine failures - often resulting in the entire V8 powerplant being replaced. The suspension is also prone to wearing out (costing a few hundred pounds) and the automatic gearbox is sealed so that its oil can't be renewed. A replacement can cost up to £1,000.
So, a beautiful car that's cheap to buy - but it's hardly in the city car league when it comes to running costs. If you're thinking about it, make sure you take a proper test drive and insist on a full service history, but make sure you don't need the back seats too much - the XK is a proper coupé, whose back seats aren't really seats so much as parcel shelves.