The iPhone 5 snap-in adapter (cradle) won't be available for another few months, so I modded my BMW iPhone 3 snap-in cradle to work with the iPhone 5. I figured the cradle for the 3 isn't worth much now, so I might as well experiment.
The result is admittedly a bit crude, but it works great, and it's a whole lot better than messing with the Y-adapter wire. (Plus, IIRC, it gives you more functionality than the Y-adapter.)
Unlike the original cradle, the phone won't be clamped in place at the top. Instead, it will simply be held in place by the friction of the plug. But unless you're driving like Mario Andretti, that shouldn't be a problem - the plug holds it pretty solidly.
The whole project takes only takes about 30 minutes, assuming you have a Dremel tool.
Purchase an Apple iPhone Lightning-to-30-pin adapter ($29):
Since the iPhone 5 is longer than the 3 (especially now that we're using an Apple Lightning adapter with it), you'll need to remove the top portion of the BMW cradle (the part that clamped onto the TOP of the iPhone 3). For the spring-loaded clip, just take a pair of pliers, and yank it off. Crude, but effective - it comes off easily. That leaves you with the piece sticking up on each side of that clamp - just use a Dremel to cut them off, and grind them down to make the whole thing level.
You'll notice that, surrounding the 30-pin plug on the BMW adapter is a curved plate that's spring-loaded. The intention was to make it easier to remove the iPhone 3 from the cradle, once you released the clamp. The spring would help push the phone off the 30-pin adapter. But we'll be using the Apple Lightning adapter, and we don't want anything spring-loaded, forcing it off the 30-pin plug. So we want to remove the springs behind that curved plate. To do that, remove the 4 screws on the bottom of the cradle. The cradle won't come apart, but you can now pry it open enough with your fingers to see the 2 springs inside (one on each end of the curved plate). Just use a jeweler's screwdriver to reach in, and pry them out. They pop out easily. Now screw the cradle back together.
Now, you can pop the Apple Lightning adapter onto the 30-pin plug, and insert the cradle back in your car. The iPhone 5 easily plugs in. You'll see that it sits up higher than the iPhone 3 did, but there's clearance under the armrest - it still closes fine, without squeezing the phone. And the phone stays put.
You may find that the Apple Lightning adapter pops out when you pull out the phone. If so, you can carefully glue it in place. I may get around to doing that. For now, I'm holding the Lightning adapter in place with some carefully-placed strong thread, taped in place. The adapter stays put when I remove the phone.
Again, it may not be perfect, but it functions great. No problems yet, and very easy to use. I can even use it with the (very thin) case on my phone.
And it may not be beautiful, but it's hidden by the armrest.
Heck, this works so well, I may not even buy the (overpriced) BMW adapter when it's released.