Hi!
Could anyone tell me the average price of a second hand car with tax and insurance in Spain.

Car prices are higher cos they dont lose their value like the UK. Of course ;-)
Road tax depends on the area and car size, usually 40€ to 80€.
Insurance around 400€ fully comp for an 8 yr old 4x4 toyota.

Without wishing to sound rude, 'how long is a piece of string'. It's impossible to say without at least giving a make/model or even type of vehicle. You could probably get a fully legal vehicle for 300 euros but you get what you pay for.

Here are some good sites for vehicle sales which will give you a better idea of prices

http://www.autoscout24.es/QuickSearch.aspx

http://www.coches.net/ocasion/

http://www.compraventa.com

This is a large Second Hand advertiser where you can specify the vehicle and get some good ideas of costs. http://www.segundamano.es/

Thats exactly what I was going to say. The impossible question.
You also have the option of buying in Germany or Belgium and importing to Spain but you have to get your sums right to ensure its worthwhile

We are thinking of selling our RHD Spanish plated car to our son in law and buying a LHD car in the UK and driving back with it. I think there is a company called something like LHD Midlands but can´t find it on the net.

I believe they advertise on Ebay. Just type in LHD in the auto section