We often attach the new ADU to the existing garage via a breezeway, storage area, trellis, etc. This is done because building fire code rules in Los Angeles require that free standing (detached) structures have to be 10’ apart from each other if they are not attached, so “attaching" the ADU to the garage is often a viable option in tight backyards.
Demolish the garage to make room for the ADU. In most cases, the parking that was in the garage can be legally replaced with uncovered (open air) parking somewhere else on site.
Demo the existing garage and build a new garage (probably in a better location on the property) when the ADU is constructed.
If you have the space, leave the garage alone and build the ADU elsewhere. It’s not hurting anyone