Still taxed. You're effectively selling them your Bitcoin for the car. Or think if it with any other currency: if you bought Yen as part of your investment port

Still taxed. You're effectively selling them your Bitcoin for the car. Or think if it with any other currency: if you bought Yen as part of your investment portfolio and it increased relative to USD, you still have capitol gains when you cashed it out. Basically whenever you leave any financial position that increased in value for something not a financial asset then capitol gains are likely (there are exceptions)