atm a diesel is not really worth it fuel cost wise, i dunno bout insurance but diesels will be in excess of 1.6litre to be anywere near effective tbh, anything smaller is stupid, i would also stay away from the cars that are often done up cos they cost more to insure even if not modded, i know someone who paid less to insure him, at 17, on a 3.5litre v8 range rover than a 1 litre nova, if you do get a cheap car try it on a policy with a fixed value etc, may effect it may not depends ont he insurer.
edit: have a look at a mini, can tremember how tall you are but im nearly 6ft and have driven a mini(private land) was a little uncomfortable but its not hard work to mount the seats further back, i think you v=cna get kits to do it