Personally, and again, take this with a grain of salt since I’m an internet stranger as well, I would strongly lean towards option 1 - and go even lower than $10k if possible, considering she is on a $42K salary. I wouldn’t consider financing, and leasing is out of the equation right now with that credit score.
Also, does she need the car urgently? I’ve been helping a friend shop for used cars, and prices are pretty high compared to normal times. If she can wait, I would recommend that.