OGIONIK, this episode has nothing to do with capitalism...this is government regulation. Your argument would be in the realm of agitating for smaller government. Capitalism, overall, deals with supply and demand of goods and services and the proper pricing thereof.
One of the basic functions of government is regulation of transactions for the purpose of consumer protection. This is just a sub-set of government’s main function of protecting its citizens.
As a citizen of the U.S. your uncle has two choices ,legislative or economic. His legal recourse is to try to change the regulations by petitioning his state legislature for a “redress of [his] grievances” to change the offensive regulation. Good luck here, for the law doesn’t regard the ignorance thereof as an excuse. Simply, therefore, your Uncle had the responsibility to fully understand the law relative to his buying and registering the vehicle.
The economic solution is, like the basis for all economics, simple. Sell the car at a fair market price and cut his losses. This is probably not the outcome he would prefer but by not doing anything the situation becomes quickly intolerable. Plus, by selling the car he not only eliminates the problem, he will then have money.