Is the death of a young man in a car accident a punishment for him and his parents for their sins, and how can the family help the deceased to have a better life in the Hereafter?

Allah Almighty has wisdom in His decrees. The incident might not be a punishment for the parents, but rather a reason for their honor through their patience and contentment. The young man might also be a martyr. You should console them and urge them to be patient, reminding them of the reward for losing a child. Seek forgiveness for the deceased and pay off his debts, give charity, recite the Qur’an, and dedicate its reward to him. It is not permissible to say that this is a divine punishment. However, they should be urged to repent if they are people of disobedience.