Common Golf Mk3 problems

Rust: VWs tend to rust and the Mk3 Golf is no exception. Check the rocker panels, the front fenders, side skirts, floors, strut towers, behind the wheels, and spare wheel well. You might be in for a treat.

Electricals / locks: Check all power features, including power windows, motors and regulators. Check the locks as sometimes the lock cylinders go bad and the keys wont work. Check whether the BW immobiliser is not playing up as it could be a right pain in the arse!

Engine: Make sure the engine is cold and hasn’t been started up just before you’re checking the car. Check for cut outs, and clouds of blue smoke on start up / revving. It could indicate worn out valve guides or a failed valve stem oil seal. If it’s been a problem for long the cylinder head might be in for a rebuild and it’s not a lot of fun!

Transmission: If the car is an auto, make sure it drives well in all gears (especially in reverse!!) as they have a bad reputation and are known for going bad. If the car hesitates to change gears it might be on its way out. If it’s a manual check whether it pops out of gears. If that happens, don’t worry too much (as it might not get any worse) but use it as ammo for negotiating on the price.

More info: here