Depends on alot of things
If it was me i would only have one car as the car in the garage is such a waste , whatever it is . If its appreciating in value then that would be the only thing for me to keep it . Both cars are similar in performance and the GTI is more economical and newer (not by much) but is alot more modern than a MK4
With only £13k you are not going to get much , an S4 is just an A4 with a big engine . You have mentioned depreciation and that will be double with two cars .
I would get rid of both an buy the very best Edition 30 you can find and keep any cash left over for some mods , especially if your mileage is not going to be much
But then i am biased