Know the Safety Features and Crash-test Ratings
So, the size of the car your teen drives is important, but don't forget to evaluate how well the car will perform in the event of an accident. For maximum protection you want your teen in a car that not only will be safe during a crash (its crashworthiness) but one that will also help to prevent an accident from happening in the first place (crash avoidance).
The crashworthiness of a car is how well it protects occupants during an accident; here you want to evaluate such things as airbags (how many are there and where are they located) and crumple zones. Crash-avoidance features such as how the vehicle handles, its braking performance, whether or not it has anti-lock brakes (you want them), and electronic stability control system (which can help prevent rollovers) are important features to help reduce the risk of a novice driver losing control. Some car makers now offer in-vehicle monitoring features that will alert you if your teen is speeding as well as allow you to block incoming texts while the car is moving.
Newer models tend to be safer than older models, generally, but look at and compare crash test ratings for any car you consider allowing your teen -- and yourself -- to drive.