Can’t read? Then maybe he can’t purchase surveillance equipment.
Buy a decent camera and record your car in its parking space. Scratch up your neighbor’s car. When you are confronted, deny everything, but finish with a strong, “if your worried about scratches so much then maybe you should not park your car so close to my car.”
Record the subsequent vandalism of your car and show the police. Then show the tape to small claims court along with the bill for damages.
How to deal with anger you ask? I read in a book that anger is an emotion that is triggered when you don’t get what you want. The more you feel like you must have something, the stronger your anger will be if you don’t get it. The solution to managing anger is to manage unrealistic notions of entitlement.
When you’re angry, think about what you’re not getting. Then think about whether you “must have” whatever it is you did not get. Your neighbor is not listening to your requests to park further away. Is it vital that he parks further away? It would be more helpful, but not vital, right? Is this in retaliation for your past actions? You don’t know if that’s true. He has another good reason for parking close, which you described. Does he have to reduce your anxiety over the risk of damage to your car if he parks too close? No. I do not think it’s his responsibility if you are too anxious about a perfectly legal situation.
Keep asking questions about what you believe you’re entitled to, or what your neighbor “should” be doing. Then question your answers to see if they are true or not. Question if anyone really “should” be behaving like you think they should.