Mr Neil died after being stabbed at a barbecue in Comber, County Down, at the weekend. His body was found in Belfast.
The accused, Wesley Harry Vance, of Mill Street, Comber, appeared before Newtownards Magistrates' court.
A defence lawyer said Mr Vance had admitted his part in the alleged knife attack during police interviews but claimed he had acted in self-defence.
The lawyer told the court the accused was a "friend" of Mr Neil, but had been "in fear of his own life" during the weekend attack.
The victim's body was discovered on Sunday morning inside the vehicle on Windsor Road, off Belfast's Lisburn Road.
In regards to why Mr Neil's body was taken in a car from Comber to Belfast, the accused told police he was in "a frenzied state of mind".
"The defendant made full, frank and clear statements to police and made it abundantly clear he knew the victim," the lawyer said.
"This will hang like the sword of Damocles for the rest of his life."
A police officer said he could connect the accused to the crime.
No application for bail was made, while police search for an appropriate address where restrictions could be applied.
Mr Vance will appear in court again on 8 May.
A 25-year-old woman is still being questioned by police.
A man has appeared in court charged with murdering Kyle Neil, whose body was found in the boot of a car.