Inheritance vs Marital Asset

My STBX used 7,500.00 of an inheritance as a down payment on a 32,500.00 automobile 5 years ago. The rest of the car was put in her name but we used marital money to pay the remaining 25,000.00 dollars. After the first year of owning the vehicle, I got rid of the clunker I was driving and was going to get a newer car. Rather than do that, she suggested I take the car she used her inheritance on so we could get her a car she always wanted. We did that and it was put in both of our names.
We are now separated and trying to reach agreements.
On this issue, she is requesting all 7,500 back from the car that was “given” to me to drive even though it is now, due to miles, worth only 4,000.00 dollars. Is she entitled to all the money, or is she entitled to a portion, or is she entiled to none as the car was a marital asset and thus the inheritance “gifted” to the marriage? The car she drives has 2,000.00 left to pay off, and its worth 6,500.00 dollars.
I have offered 1,500.00 to offset the "inheritance’, but she wont take it. (Does the inheritance depreciate with the car/property?) What is a fair agreement here and what does she legally have a claim to in relation to the inheritance and the autos? Thanks.

A gift between spouses is marital property and in my opinion her re-titling the car shows clear intent that she gifted the money to the marriage in its entirety.

Hi Erin and thank you for the response.
The car that she put the inheritance into is still in her name only. But, I have driven it for the last 4 years and we put the car she wanted in both of our names. She now says she didnt “give” me the car, and that she wants either the car or her inheritance back.
At the time we bought her the car she wanted, it was pretty much said and understaood that I would have and drive the car (still in her name) and that she would take the car we got for her as her vehicle. The car I drive, the one in question, was never titled out of her name. Does that change the equation significantly or would a lawyer be able to reasonably argue that based on who was driving and caring for the cars for the last 4 years, that the vehicle in question was indeed “gifted to the marriage”?
Thanks again.

Yes, it does change the equation, but the car still has a partial martial quality in that you paid $25,000 in martial funds towards the loan, in my opinion you should argue that the car is only 23% marital, and the remaining 77% is martial. You should also account for the depreciation in value, so she is not entitled to $7,500, but rather 77% of the now current value. (her 50% of the martial value plus 23% of her separate interest.)

OK. So on this same topic, how is that car value identified? Is it the KBB value at the date of separation or the date of divorce?

If you get a car dealer quote to buy the car 1 year after separation, does that count for the value of the car? What if that quote is literally half of what KBB currently states is the true car value and half of what that same vehicle is going for on car trader? And what if the car has over 30k more miles on it than at the date of separation?
Thank you!

KKB is a good place to obtain a value, and the date of separation values are used. In the case of a car, it may be difficult to ascertain what the value was on the date of separation if a long period of time has since passed. The quote given by the dealer is also a factor in the value. Ultimately if you two cannot agree on a value and end up in court, the court will review all evidence of value (the quote, KBB and any other evidence presented) and will assign a value to the car based on all the evidence.