I don’t tow caravans, but I do tow trailers and have down with everything from a Pug 205 1.8D (H reg so a while back!) and a 1.3L Mazda 323 to a 2L Citreon C5 (which was a dream to tow with!).
I wouldn’t be towing 700 kg with a little 206 unless the trailer was braked (this may be required legally, if not it will be borderline – and stopping will be interesting!). Once you experience the trailer trying to overtake you whilst doing an emergency stop at 50 mph – you’ll never want to tow a borderline trailer again!
As for the age of the car – I’d certainly want to make sure it was recently services and had breakdown cover (remember to check they cover the trailer too) before doing any real mileage in it.