Bob-
according the c.a.r.s. website, a dealer cannot require that you return the car and reverse the transaction if the application for the credit is non-compliant. HOWEVER! One of the necessary forms to sumbit to the government is called a "Summary of Sale and cerification" form. If you signed it, you are certifying to the NHTSA that you are compliant with the program, including having continuous insurance for 1 full year prior to purchase. This form is signed, deemed too be true under penalty of law. Simply put, the dealer has the ability to come after you, because you are not compliant with the law. in addition, you signed a form certifying you are in compliance with the program. I would do exactly what the dealer asks and start over perhaps with another dealer. We are all supposed to know the law, and having a car salesman tell you everything is cool when it's not is a pretty dumb mistake that could get you into serious trouble for fraud.