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First things first, where do you live? Most of what you are saying makes it sound as though you are not in the US, and neither of you have much legal knowledge.
A brief analysis says if you don't pay, she can take it back. Almost sounds to me like you should probably bail, give it back and consider the monies paid to date as rental fees.
Used cars are usually sold AS IS, so if the transmission takes a dive 2 or 3 months later, she has no liability.
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