Smudge, sounds to me like she wanted to show off to her family about about (i) how successful her 22 y/o boyfriend is to have a nice car like yours and (ii) that you trust her with it. You told her to do one on the basis that it's not worth the petrol. That is, probably, why she has the huff with you.
My finacee drives the Zed frequently. She is a bit on the hesitant side but perfectly safe. It's not surprising if your nearest and dearest is like a cat on hot bricks and not driving that well if you chew her out over the car.
So, assuming she's not a liability on the roads then say something along the following lines over dinner at a point when the car is not otherwise a subject of discussion:
"I've been thinking about it and I'm happy for you to drive my car every now and again as I know it might be nice for you go out with a friend in it sometimes, or you might just want to take it for a spin if you are in the mood. However, I want you to promise that you will pay it as much care as I do which means making sure:
(i) the wheels do not make contact with the curb, ever.
(ii) the car does not make any contact with a stationary object, ever.
(iii) use car parking spaces where the car is far away from other cars - i.e. on the other side of the car park from the door.
Every time one of those three things happens we are going to have to spend money and time sorting it out. Also, it will make me feel as though you don't care about something important to me."
Then don't mention it again and tell her when she drives well (or at least better than normal) in your presence.
If she stacks it, or someone drives into her, then what can you do? There is more chance of her stacking it though if she is cra**ing herself when she drives it though.