Yea it's because there is no echo cancellation as someone mentioned.
The only thing I can suggest is something like this:
http://www.amazon.com/Griffin-Techno...133187&sr=8-12
You can stream music and make/receive calls. It's very low profile too and will most likely fit in the armrest.
EDIT: So reading the description, the unit has a mic. So it will need to be in the open, such as the ashtray.