To answer your question, the path of least resistance would be for your parents to go back to the US, renew the drivers license and then once back in Germany, upon loosing logistical support (ie, SOFA statust or ID card - which seems to have already happened?), go to the local (German) DMV (Führerscheinstelle) and have them convert the US license to a German license. They will do this depending on the state the US license is from. If it is from a state which is accepted by Germany, no problem (https://www.gesetze-im-internet.de/fev_2010/anlage_11.html). If not, they're screwed and will have to get a license from scratch.
It has been well known and distributed that everybody who has a USAREUR license must maintain an active, valid US license. There is no excuse for not having followed the regulations on this one, really.
Upon loosing logistical support, you can essentially "immigrate" into Germany and at that time declare all of your household goods as part of the move (Übersiedlungsgut). There will be no import duty or VAT to pay (so no "40%"), although of course they will need to pay the yearly car tax (KfZ Steuer) but this isn't too much and everybody in Germany pays this if you want to register a car. And of course gas gets a ton more expensive without SOFA status!
Now there is a time limit for all of these things. If they just recently retired they need to get on it! And there is numerous informational material available in the various US agencies on post that pretty specifically clarify exactly what to do.
