I hear you. My DS, who is now 7.5 months old, cries every time we go in the car. Other than that, I never let him cry either...and despite the car issues, he still seems to be happy and healthy, and clearly trusts us and doesn't seem to have any lasting trauma despite the tears.
I also sit in the back seat when I can, and my new trick now is to nurse him in the carseat. It's tricky - we are both still belted in, but I am aware it's not the safest position. However, having a baby screaming in the back seat is extremely distracting for the driver, so I figure it's probably better all around. Now I find that if I can just have him nurse like that for five minutes or so, he usually plays fairly contentedly or sleeps for the rest of the trip.
I find that if I put him in after a nap and with a full belly, the ride will go a bit better. If I also give him something to play with that is usually verboten - like my (closed) lip balm, or a hairband - that will keep him busy for much longer than one of his usual toys. (Of course, I am sitting right next to him when he's playing with that sort of thing.)
Still, though, if it's just the two of us, I try to keep trips to a minimum. It does suck! Nothing is worse than driving while listening to your baby cry!
Don't you wish everyone just rode bikes, and it would be safe to just tote them behind us without worrying?