Car players often only display a limited number of tags. They may not even use them in their background processes either. But that shouldn't affect whether or not any tag is consistently used. It either is or isn't. Sounds like they are using a simple Folder/Filename structure and not a true library browser from the tags.
At least this way you have preserved the data. Strange that some of those cars at least don't support FLAC at this point. But if this is going onto a SD card or USB drive of some sort in lossy, does the mp3 format work any better in those cars? The id3 tag data is different than the m4a type used in aac files and may have more support for you.
That is Apple's way. But if you are using an iPod that is really your only choice. At least on newer iDevices with iOS you can install player apps that do support FLAC and other formats Apple doesn't natively play nicely with. Or move to a separate player altogether that can play your FLAC files as lossless and then the conversion won't even be necessary.