Money is all relative anyway. It sounds like you are both savers, and you know that you get what you pay for. Yes, you can buy a working vehicle for 1500, but if you can afford 8500, you get the bonus peace of mind that goes with it.-
I would not want my 16 yr old daughter breaking down on some highway by herself. Maybe more importantly than her contributing 1000, is that she can pay her own insurance, gas and maintenance. Teach her how to check the fluids, and insist on regular oil changes, etc.