Keeping a towel in your car can be a surprisingly versatile, practical and beneficial thing to do.

Having a towel readily available can help you out in many situations and is a helpful addition to your car's supplies. For simple emergencies to unexpected adventures, Arthur Dent knows all about that!

A towel can be useful for loads of things:

Drying; (Bet you didn’t think of that one!)

Whether it's after a spill, a rain shower, or a trip to the beach, a towel is handy for drying yourself or your passengers.

Warmth:

In case of a breakdown or a sudden drop in temperature, a towel can provide extra warmth for you or small people in the back.

Escape:

If you find yourself stuck on ice or snow with your wheels spinning, placing your trusty towel under your drive wheels will give you grip and an opportunity to escape.

Comfort:

A towel can be used as a cushion or to provide extra comfort either on a rest break or for passengers on long journeys. Who needs to buy a bulky neck pillow? Also as a buffer, separator between fighting children.

Cleaning:

Use your towel for dusting, or other messes that may occur in your car.

Emergency signalling:

In an emergency, a towel can be waved to attract attention or used as a distress signal.

Psychological Value: (May be pushing is a bit here!)

Having a towel can create a sense of preparedness and make you feel more comfortable in unexpected situations.

Other Uses:

You can use it to cover items from theft, or even calm a distressed animal.

In short, a towel in your car is a small, lightweight item that provides a surprising amount of versatility and peace of mind in various situations.

Credit, in short

"the towel"
"about the most massively useful thing an interstellar hitchhiker can have".
Douglas Adams's The Hitchhiker's Guide to the Galaxy