>I am trying to explain them that cars are not growing on trees and producing a new one is not really that environment friendly and that during past 10 years cars were not improved so much in terms of CO2 emission to justify the change

If anyone else is wondering, I think you're right about this. I've looked into it and there are a few people who've tried to tackle the question of what's better but I find they all have some problem with the assumptions they make, largely because it's just a difficult problem with a lot of variables. Mileage, age of each vehicle, expected life of each vehicle, what emissions can be attributed to production, whether to include emissions of the inefficiencies of recycling one but not the other, etc.

I decided that a new eco-friendly car and a similar old used car were close enough in emissions - i.e. within the same magnitude - that it wasn't worth it if it's your only reason for spending the money on a new car. What's far more effective is reducing mileage done in a car.