bigger cars dont always mean significantly higher insurance, as they can be less desirable to steal, harder to steal, easier to repair, etc. the difference in insurance can be as little as £50, from my own shopping around a year ago. road tax is the same for any private car with an engine not bigger than 1549cc (reg pre-2001 - which any car available on a tight budget is almost certainly going to be).
fuel consumption is also comparable - there will probably be no more than 5 mpg difference between the cars available to rictus, so the extra cost of petrol is probably possible to overcome by driving sensibly and not using high revs all the time.
seriously, if you look about and do some proper price comparisons, you can find that a slightly bigger car can work out to be no more expensive overall than a smaller car.
as it happens, the only reason why i bought a 1.3 fiesta instead of a 1.4 escort or 1.6 rover 200 (both of which would have worked out at least £250 cheaper, and a lot more comfortable), was that my parents wouldnt allow me to have a car bigger and better than what any of my friends had, as they were worried i would become the taxi driver for the group of us.