Building a new car creates a lot of carbon emissions, but it's the number of miles you drive that really determines whether keeping your old clunker is a sustainable choice.
An article in Wired back in 2008, compared the environmental costs of buying a new Toyota Prius with buying a second-hand car. Their conclusion: Because a used car has already “paid off” its initial carbon cost, buying an old, energy efficient model is more eco-conscious choice than purchasing a new hybrid.
The author notes that making a Prius requires 113 million BTU of energy, equivalent to about 1,000 gallons of gasoline. So buying a Prius only makes sense if you are replacing a real gas guzzler. Otherwise, you’d be better off buying a fuel efficient used car that’s a few years old.

Better than a Hybrid? Yes, if you keep the driving to a minimum.
But as is often the case when assessing ecological impacts, getting the full picture is tough. Another, more recent study at MIT (link below) notes that the lifetime energy impact of a vehicle accounts for about 75 percent of its overall carbon emissions, and producing that fuel adds another 19 percent--which means that only 6% of vehicle's overall lifetime CO2 impact happens in the manufacturing stage. That figure is EXACTLY what I would have expected.
Why? Because it's the same for new housing. The "footprint" of the materials used in a home quckly become almost insignificant, because, as the NAHB reported about 20 years ago, the heating, cooling and maintenance of a home typically amount to 94% of its CO2 emission over its lifespan. That's why insulating, and using durable materials (that don't need much maintenance) is more important than the initial impact of those bricks or vent fans.
It’s a challenging conundrum for buyers who want to do the right thing. On the one hand, used cars don’t require 1,000 gallons of fuel to manufacture. but how much extra gas will an older SUV use (versus a Prius, for example) if kept on the road an extra 10 years?
One importan t variable to consider. An older car--even a gas guzzler--driven lightly, may be greener than a brand new hybrid. You can tip the scale simply by changing your behavior, and using alternative modes of transportation--especially your legs.
Wired article HERE
MIT Report HERE (pdf)