Thank you for the further inputs gents. Keep them coming!
Rob - I don't disagree with any of your points.
But, I've always been one to get my machines in absolutely tip-top condition mechanically and accept that just as with a new car, there is a small probability of some items breaking. Then there is the small possibility of total loss though some mishap after all the work - in fact my Rover 420 and 820 had also been written off after much work due to others' fault in the same way.
In this case, I've paid £3k for the car and will spend betwen £1500 and £2k on the items listed. At the end of it all, for £5k, the wife will have a car that will be worth every penny in this price bracket and an absolute pleasure to own/drive. I would hope to get anoter 7-8 years of driving pleasure out of it so as a long-term plan, it starts to make sense (in my mind).
But, I do take your points.
Maninder.