Your daughter is over 18. She can buy whatever she likes, assuming she’s spending her own money. I think you’re being a little bit too over-protective. I, too think a small sedan is a much better idea, but, as I said, she’s old enough to make her own decision (and live with the consequences).
If she’s on her way to college she’ll need the money for tuition, books, etc, much more than she’ll need a car, especially a Tracker. How’s she (or how are they) going to maintain a vehicle, and pay for insurance and fuel, while she’s (they’re) in school?
Sharing a car usually works much better in theory than it does in practice, but again, this will be a learning experience for both of them.
It’s time to let the little birds fly.