When I got my second car (a toyota corrolla), the guy also had a Pontiac Fiero 5 speed. My dad explicitly told the guy to hide the Fiero and not tell me about it before I got there. I sure hope you don't pay the kids insurance, especially if you let him walk all over you by buying a sports car against your wishes. That's what McDonalds is for if he wants to be Joe Cool Fast'n'Furious.
As to finding a tranny, check ebay. You should be able to get a pretty darn good deal, even with shipping.