Just wanted to check, can you transfer routes to a this unit? will it give directions on the go? or do I need a higher model?

You’ll need to go for the Edge touring or 810 to follow routes.

You CAN follow routes on the 200, but there’s no mapping. This includes following gpx files you’ve uploaded. You just follow a squiggly line on screen. Works fine for this in my experience – I’ve had one.

Yes.
As above, the feature is called courses and works reasonably well without maps. A few guides and videos on the web show the function.

How to set up turn by turn directions on Garmin 200

Fine for plotting routes. Either download one or plot your own, I use gpsies and had total success on all my audaxs with it. The odd thing is that although it has no mapping my screen shows nodes where other roads are.
Using something like gpsies allows you to add waymarks. On the 400 and 600km rides I plotted checkpoints and turns in major town centres. Otherwise I just followed the line map.

As has been said – you can follow a route on a 200.
The main difference between 200 and 500 is: you can use cadence and HRM and a 500. Also the 500 you can (re)configure each screen to show what you want (and the size you want it).
The one thing that annoyed me about the 200 was that I could never work out how to show the time once you were recording a ride (ie it only showed the time when you were at the home screen).

Currently have both the 200 and 800

I use the 200 for mountain biking if I just want to follow a route as I find it easier to follow the black line, less cluttered than the mapping when on the trail for me.

The 800 is great for road riding with it’s turn by turn and extra features but don’t need these for the mb.