How to retrieve category NAME instead of ID in a function with a taxonomy custom field?

You need to get the term object first.

//Your meta field
$post_custom_title = get_post_meta($post_id,'car_name',true);

//Get the term object by id. change taxonomy_slug to the taxonomy you intend to use
$term = get_term_by( 'id', $post_custom_title, 'taxonomy_slug' );

//Retrive the term name and use it as post title
$term_name = $term->name;

//call the wp_update_post function setting $term_name as the post title.  

Just curious, why would you want to set a common title for all those posts belonging in the same term?