The inset opertation produces the polygons shown in red. Delete the polygons outlined in green and move the blue vertices to the center (i.e. set their x-coordinates to zero.) Make sure you do the necessary vertex tweaking to maintain the proper shape.
Select the red polys shown and delete them. Select the green edges and extrude them inwards a little.
Now we are going to have to make some adjustments to the mesh to get good results when it is smoothed. Make the cuts shown in red. In the next step we are going to work on the corners shown by the green arrows.
Now we have to set up the corners of the hole. Zoom into the area shown and select the edge shown in red. Chamfer the edge to a value of 2. Do the same for the other corner shown in the yellow square. Chamfer the purple edges around the hole by about 0.3.
To further clean up the geometry, make the cuts shown in red to get rid of the five sided polys.
When smoothed, you should get a nice shape like shown in the picture.
Back to the front of the car. We need to make holes in the car for the indicator lights. Start by making the cuts shown in green and adjusting vertices as required. Select the polys shown in red and inset them by any amount.
Adjust the new vertices to shape out the indicator light as shown in the picture by the green dots. Select the polys shown in red.