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Sounds like the world is going down ...
If he can't afford the car anymore, he will have to give it back. Tell your wife that you certainly will be prepaired to chip
in if people are ill, in hospital and other real urgent cases.
But this whole story of a car which can't be financed, I believe my wife wouldn't start a discussion with me about that.
Hope your wife will understand your principles and such money questions will not have any impact on your relationship together.
Question:
Do you have financial plan together with your wife, do you set goals together and involve her in accomplishing these?
We have set realistic goals, mid/long term, and my wife is very keen on accomplishing them, she's blocking out unimportant
material requests kind of by second nature.
Just my suggestion, of cause all and everyone is different and what works for one, doesn't necessarily work for others.
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...life's good 
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