i agree that a very slow car can actually be unsafe -- i've avoided many an accident by hitting the gas, not the brake.
another thing to think about is the availability of diesel in your area -- does NJ have it at most pumps? if not, it might be safer to go with gasoline.
having said that, i would have killed for ANY mercedes when i was 16, so your daughter is pretty lucky just for having you consider buying her one...
1994 E320 wagon