Well, even if this weren't a VW forum, I'd still recommend the GTI over the VTS
The VTS is a lot of fun, it's a proper little hot hatch thing, and has lots of pep in it, but the power doesn't compare to the Golf to be honest. When the GTI was standard, 150bhp, there wasn't a huge amount between them. But now I've had the GTI re-mapped to close to 200bhp, it knocks spots off any VTS, whether it's a C2 or a Saxo etc.
Insurance on a C2 VTS is only group 8 I believe, lower than the GTI, so you will definitely be able to get a better quote on your insurance. But VTS's are extremely difficult to mod, they just aren't as tunable as a GTI.
If you can afford it, get yourself a Golf 1.8T. If you can't, you could get a C2 VTS and you probably wouldn't be disappointed, but to be honest I'd probably choose a Clio Sport over a VTS now
