I wonder if filtering just based on the GPS previous positions (thus averaging different errors to kinda cancel them) works almost equally well in this case, since cars tend to move in a quite smooth way.
This is also the ideal place to add in additional data such as from an accelerometer. If you only have the calculated position (and speeds, which are useful for figuring out how far you're actually likely to have moved since the last fix) but not the error estimates to work on then you've thrown away much of the useful data.
Sure, 99.9% of gps measurements on a sat nav are users going in a straight line - but it's when navigating complex junctions with many turns, traffic circles etc that users most need the sat nav's guidance.