I am suprised that the car even made as much as £5600 as its CAT D status knocks 30-35 % of a proper cars value and also its the less desireable Rover 260 version over the MG 260. so a £7k proper no drama car is worth around £4500 if CAT D
also if it struggled to make £5651 i dont understand the logic of starting a new auction at the last top bidders auction price of £5651. i cant see anyone wanting to bid now as its looks too expensive to start with and its not really an auction now !!
IMO - i would start it at £4000 and see how it runs or list as £5500 classified price with also an "offer" option button
goodluck