Open the air freshener bottle and remove the small plastic stopper underneath the cap if your model includes one.
Pour the alcohol into the bottle. I've found using a small funnel helps. The alcohol should fill around half of the bottle. Since most air freshener bottles are 12ml, 5 ml is a good estimate. I started using a perfumer's alcohol (basically a denatured alcohol without much scent of its own), but that was rather expensive. I was afraid to use a denatured alcohol because I thought that its own scent would be overpowering, but in practice I haven't found it to be a problem. It works just as well. I've even tried vodka, which has also worked well and may even last a bit longer due to its lower alcohol content (meaning slower evaporation).
Fill the rest of the bottle with an essential oil of your choice.
The instructions with the bottles I bought suggested using a 50%/50% mix, but lately I've been using a little more alcohol and a little less essential oil. I haven't found too much of a difference between how strong the scent is or how long it lasts between doing the different concentrations, so it may end up being a bit less expensive that way.
Put the wooden cap on the bottle without the plastic stopper. Tip the bottle over to wet the cap with the alcohol and essential oil mixture.
Hang the bottle from the rear view mirror of your car. Adjust the length of the cord in a way that keeps the bottle from hitting your windshield in case of going over bumps. Any time you need to add a bit more fragrance to your car, just tip the bottle over for long enough to wet the wooden cap again.
You can use the plastic stopper under the cap to keep the liquid from evaporating when not in use.