How about the opposite: Show the car with a nice interpolation using the last two positions, but with an extrapolation arrow with the point located where you th

How about the opposite: Show the car with a nice interpolation using the last two positions, but with an extrapolation arrow with the point located where you think it is now. Then when the system thinks the car is moving fast and it actually comes to a quick stop, it can cut down the extrapolation arrow instead of moving the car icon backwards, and it shouldn't look as weird.