Please, consider some parent coaching or family counseling.
I know you are concerned with him being honest, however, I think the adult reactions to these situations are rather extreme. Let's be clear; I do not condone lying. I don't. However, I think you are raising the stakes on this when it might not be the most effective way to get him to be honest.
Instead of repeatedly questioning him in the car, could you have just sat with the information and then, when you got home, asked him "I know you told me that you found the money for the candy bar on the floor at school. I also know that you might have liked to spend your money from this weekend on something, and that the dollar you spent on the candy might have been the dollar you earned this weekend. I'd be really happy if you could tell me, before we open your piggy bank, what really happened."
There's an old saying: you catch more flies with honey. When Nurtureshock came out, one chapter was devoted to the topic of why children lie and how they learn to. First, they learn from us; either they see us do it, or they learn to avoid trouble with fibs (like what your son tried to do). One study they did was to see which tactic reduced lying: teaching children the story of "The Boy Who Cried Wolf" (which is punitive) or teaching "George Washington and the Cherry Tree", in which Washington's father praises him for being honest, even when he didn't like what had happened. When children were then placed in a tempting situation and then had to recount for their actions, the children who heard the George Washington story lied significantly less than the kids who had heard "The Boy Who Cried Wolf", who overwhelmingly lied.
One thing I do, when I've sussed out that my son is lying, is to give him an opportunity to tell the truth, and then to let him know how happy it makes me that he can tell me when he's made mistakes, and that I can help him fix them. It brings us closer, he feels understood, and it keeps the lines of communication open. And he knows that if he lies "Mama always finds out". He's still amazed that I do.
Now, I'm going to get a bit more personal. I WAS that kid, the one that you are describing. I lied to save my butt, and I felt (at the time, with my kid logic) that my offenses weren't *that* bad. And in the grand scheme of things, they weren't. I was older, but I still remember feeling that I was a disappointment and failure to my parents, reprehensible and someone not worthy of love. As my parents tried to punish me into being a good kid, my behavior only grew worse because I could never seem to do anything right. There was never a good moment or a win, and it took me years to heal from that sort of parenting. You are lucky. You are starting now. You have the chance to make things better while your son is young, before you all hurt each other any further. Because he is hurting. Kids who lie like this have something going on, and they just lie automatically because that's become their way of interacting with their adults--getting into trouble.
You need to find out what's going on with your son, deep down. Get your family into counseling. At the very least, talk to the school counselor. If you are at the point that he is writing 100 times "I will not lie" for four days, that's when there needs to be some outside help brought in because it seems extremely excessive. (Even in fifth grade, an infraction in the classroom meant writing something fifty times, not one hundred, multiplied by four.) Think about it: he's supposed to be six years old and hold back a certain amount of money, but you gave him access to it? That's a LOT to ask of a child, to not spend money that he has access to. I think that is far more than what's appropriate for a child of this age. If you want him to save that extra dollar, you should own that and make him hand it in to you, so you don't put him into this tempting situation.
And no, I would not pull him off basketball. Please know I mean this in the best way possible-- he needs *something* to look forward to. Can you imagine being six with all of your favorite things taken away? Would that make you want to be good, or just hate life? Please find another way of addressing this.