OP, I appreciate your desire to maintain peace with your neighbors. I think you have to face the fact that they apparently don't give 2 sh!ts about maintaining peace with
their neighbor.
That said, you have 2 choices. Issue an ultimatum, which probably won't work and will escalate the entire situation. Or - as others have already suggested - take the nonconfrontational approach and create a barrier to their cars in the grassy area.
I agree with the idea of landscape boulders. First, they can be decorative, and shouldn't be hard to find. Second, and more importantly, a rock (unlike a fence or a planting) can't be damaged, but sure as hell can inflict damage if the dicks try to cross over to your driveway. Imagine the satisfaction you will derive: you avoid escalating the problem, you nonconfrontationally solve the problem, and you get to laugh your ass off if they try to cross over to your driveway (and damage their vehicles). Win, win, win!
