I am taking a new job that will have me driving about 30 miles one way. With gas prices like they are, I'm trying to think of a cheap car I can buy to get me to and from work with little gas. One of the cars I've pondered is a first gen water cooled VW like a rabbit, GTI, Scirocco, etc.

Here's my questions:

I'm not looking for HP, I'm looking for gas mileage. What kind of mileage could I expect from a well tuned first gen?

How reliable are these cars? I would like to make it to work pretty regularly

I want a car with A/C. How is the A/C system in these cars?

 

Well, even in a good state of tune, the earlier you go the worse the milage. Digifant(late 80s) stuff isnt too terrible, but as you work back there are various versions of CIS injection and then carbs. The older you get the power goes down, which translates into higher load.
Compounding that is the older the car, the worse the A/C compressor. The early cars had these gigantic friggin A/C compressors which had crap efficiency. The late model cars have modern, relatively efficient compressors.
The old diesels got pretty decent fuel economy. On the highway you can expect about 40 realistically with a Rabbit diesel. But it comes with a price as those things are VERY anemic. And Im sure you know that diesels is not a totally free lunch, especially with the old technology. Diesels awesome fuel economy comes from its ability to run extremely lean at light loads, with their fuel consumption approaching the consumption of a gas engine at high loads. That means if you baby one, you get awesome milage, if you beat on it, you get lousy milage. If you hop it up to make it perform better, you take a significant milage hit.
If you have the time and effort, I think one of the best combinations is one of the early, lightweight bodies like a Rabbit or even a Golf II combined with a late model powerplant and EFI. The 90s 2.0L crossflow is VERY plentiful, has decent power(about 125), has modern diagnostics, and its relatively efficient. Not to mention they bolt right in. The wiring is not even very difficult if you get a post 88 Golf, as they went to CE2(modular electrical system) in 89 I think.

 

I'd be looking to do this thing on the cheap and hoping for a "get in and drive" type of car with normal maintenance.

How reliable are the early diesel cars? The job is out near 301 and SR60 and I'd actually be taking ground roads and avoiding the interstate so I could stay out of the throttle and get good mileage, plus I could run it on veggie oil if I could find a "supplier".

I guess I'd still have the pit falls of the early A/C systems. If A/C isn't in the mix I'd just find a beat up Super Beetle to drive every day.

Ideally a cheap ugly old motorcycle would be great, but I don't feel like dying for the sake of $25/week in gas savings

 

As long as you dont overheat them, the early diesels are pretty reliable. But if you do overheat it, pretty much the first time means a blown headgasket, warped head, and possibly a burst radiator.
Other drawback is the goddamn things are fetching a mint these days. A shitbox rabbit diesel can easily get a grand, a clean one easily 2500-3K, and the rabbit pickups with a diesel can easily get 4K now. Combine the demand for them now, with the relatively low demand in the past(meaning alot of them got junked or converted to gas), they are somewhat tough to find.
The AC compressor isnt the end of the world, as you can retrofit the later stuff on there, it just requires all the brackets and pulleys to do it.

 

Oh yeah, ALOT of the Rabbit diesels had 4 speed trannies. You'll def want to swap that out for a 5 speed.

 

No, because Dave will be easily enough tempted into swapping in a 5 cyl Audi5K Turbo drivetrain.

 

hell, why stop there! The 20V 5 cylinder audis are out in the yards every now and then.