Can we sell my Mom's car while applying for Medicaid?

My mother has been receiving long term care since August 2013. We have applied for Medicaid. One motor vehicle is allowed without being considered an asset, correct? But if it is sold the amount must be used for her care. The price it is sold for must be within a reasonable percentage of fmv, right? Now my mothers car had been immobile and off the road for over 2 years, we would like to sell the car, but would have to sell it much less then if it were in running condition. Can we do this? We live in SC. The car is 17 years old and if it were running would be worth around $1500 but would like to sell it for around $500. We will apply the purchase price if sold directly to her care, but will she be penalized anyways? What is the fmv of a vehicle that isn't mobile? Thanks!