I watched this Disney-style cartoon on tv between 1997-98 but it was probably much older than that since the car in question appears to be, if memory serves me right, a 1957 Chevrolet Bel Air Convertible which was probably a popular luxury car at the making of the animation.
The majority of the movie or episode was centered around this toy red Hand-wound car and the small hero trying to tinker it and dangerously drive it under normal-sized cars in traffic until it was somehow destroyed and he was thrown on a tiny deserted Island.
The little guy really loved this toy car and was pretty broken up bout it but since he was stuck he tried all sorts of tricks and gadgets to get off the island.
The little hero might have been a small robot like Gyro Gearloose's little helper. I just don't remember for sure.