ah, ok - don't think I tried USB. Guess the radio of the car then takes control and tries to use the phone as an external drive, overriding the native music app.
I leave a flash drive with a bunch of MP3 files permanently plugged in to my Harley, although I usually play music from my iPhone via Bluetooth. When I turn the bike on, it starts playing from the flash drive wherever it left off (e.g. in the middle of a song). When I tell it to connect to my phone, it also starts playing wherever it left off. I can switch back and forth and it never "starts over" so I'm guessing it must be the vehicle that controls the playback?