OP, I would feel exactly as you do now and yes, I would want to know what had happened to the money. I think your instincts are spot on, but I would want to have it in the open.
If it was me, I would wait until DSS was over and you, DH and DSS are together having dinner, (maybe even at a restaurant? Captive audience), and bring it up and say “when are you looking for a car DSS?” He will avoid the subject etc, but then you or DH throw him a lifeline and say “look, you keep avoiding this, we think something has happened to the money, tell us now, did you give some to your Mum?” Make it easy for him to tell you. There’s no point getting angry at him, so make it way for him to tell you, ask how he feels about that - “did you want to give the money to Mum in exchanging for using her car?” And then once all the info is out, say “well, we thought you preferred to buy your own car for these reasons - independent, don’t need to share, can use it to come over to our house as well as at your Mum’s, can take it with you when you left home, an asset in your name etc - but you obviously thought of all these things and decided they weren’t important to you, so that’s ok. You are the one who lives with the consequences of having no car here etc, so we will say no more about it.”
‘And then move on. You can’t do more about this particular situation. But I would make him feel those consequences subtly - no access to your car etc.
Then, you have three other issues to address:
- confront his mother? I wouldn’t;t bother. It is really DH’s job, and it seems clear he won’t.
- discussion with your DH that there are no more public promises of money to DSS in advance. You and DH may decide to gift money for other things, but given the situation with his mother, DSS should not be told in advance like this time, so his mother can’t do what she has done here, and probably any gifts of money should be in the form of paying the bill itself, not cash.
3) issue with your DH as to transferring the money without telling you. You haven’t raised this much in you OP, but this is the one I think is key. If a grown man, who is divorced from this woman can’t stand up to her, what hope does her son - underage and who does live with her (so gets the pressure all the time?!?)