Converting files to flac requires a lot of space - is it worth it?

I consider flac to be better than mp3 for a number of reasons. However what you did is called transcoding, which is something that is not recommended.
You took the lossy compressed music of your mp3 files and bloated it up to a lossless format that takes up more space. However this step cannot undo the data loss that occurred when the music was encoded as mp3 in the first place so now you have the worst of both worlds. Big file size AND no gains in audio quality over the original mp3.

When converting audio files there are 4 possible scenarios.

  1. lossless to lossless (wav to flac, alac to flac, flac to wav etc.)
    You can perform these steps as many times as you want without losing any audio data or quality.
  2. lossless to lossy (wav to mp3, flac to mp3, alac to aac etc.)
    This step is usually performed only once to save space as audio data is permanently lost.
  3. lossy to lossy (320kbs mp3 to 160kbs mp3, mp3 to aac, ogg to mp3 etc.)
    This should be avoided as you are performing a step that loses audio data on already lossy compressed audio files, which further degrades the quality.
  4. lossy to lossless (mp3 to flac, aac to wav, ogg to alac):
    This should be avoided as you bloat up the lossy file without regaining the lost audio data, resulting in big files with the same quality as the original lossy audio files. Furthermore if you share your files with others, they probably think flac files are lossless, which is not true for transcodes.

When doing this:

You perform scenario 3, lossy to lossy, which is already not recommended.
By then converting the resulting files to flac you follow up with scenario 4.

It's lossless, you can convert it to any other lossless audio format as many times as you want without losing quality. Flac also includes a checksum for the audio data meaning you can verify that your files are not corrupt easily. Flac files allow ~60% space saving compared to wav files while still being lossless, having better tag support etc..
Another upside is the wide support, pretty much any modern player supports flac.
But flac files only make sense when the source is lossless as well.

If you want to see how compressed your music files actually are you can use software like spek or ffmpeg to visualize the audio data.
This is the spectrogram of a flac file with a CD as the source:


And this is the samg song converted to 128kbs mp3.

To save space, frequencies that humans cannot hear are cut off as part of the compression. This data is lost permanently.
If I were to convert this mp3 back to flac and then created a new spectrogram, it would still look exactly like the 2nd one. Which is why serious collectors often check the spectrograms of audio files instead of believing what the audio extension suggests to detect transcodes.

For your use case I would try to find out which audio formats are supported by your car stereo. It would surprise me if it supported flac files but not mp3 files as in my experience it's usually the other way around.
If it really only does support flac, convert the audio for your car to it but keep your original mp3s as there really is no point in wasting space by keeping transcodes.