i don't think any 16 y/o kid needs a $20k vehicle, regardless of the parents finacial situation.
the first car is about growing up, being responsible, and having respect for the things they work hard for. handing a teenager a brand spankin' new suv eliminates a life lesson.
however, i don't see a problem upping the ante if my child wants to add money to the pot by having a job and helping with the payments/insurance. that just reinforces the entire goal of the first car.
ie; i used to work for a guy who owned a highend used vehicle dealership. the guy had a 30 car garage built under his home with half a million dollar vehicles sitting in it. he bought his 16 y/o daughter a 1982 camaro for her b-day. he had us replace every peice of suspension, transmission(leak), brakes, tires, and seatbelts.
when she graduated HS, he had the bodywork done, car sprayed, and some sweet rims put on the car, promising any new vehicle of her choice upon completion of college.
she graduated law school 2 years ago and purchased a new bmw for herself(without her dads offer), thanking her father for the camaro and donating it in the process.
point proven.