When I have replaced quarter skins I have always spliced them in just below the top style line, not sure what year mustang you are working with but if it's a 60's era car then the quarter has that sharp peak on the outer top edge. That peak provides a lot of strength and I would splice in 3/8 to 1/2 inch below that peak (on the outside) if I were doing the job.
You could also do an overlap seam at the top of the quarter and it would be easy to hide. With an overlap I would cut 3/4 to 1 inch below the top and overlap 3/8 inch.
I would be curious to hear if anyone has a different opinion on the best place to splice and why.