Headlights
The next step is to model the headlights. Before we start modeling, we make
a copy of the Mudguard object and make it Wireframe invisible. This
copied object will later be used for modeling the glass of the headlight.
First we model the Casing for the headlights. Select the Mudguard
object. Take a top view and make
sure you are in Face Edit mode. Select all faces in the headlights area as
shown in the next image:

All faces of the headlights area selected
Take a side view and use the Extrude tool to move the selected faces
down, just a little at first. This creates nice sharp edges for the casing. Then extrude
again to complete the shape of the Headlight Casing (simply use the 'Again' option from
the right mouse button pop-up menu!). When the shape of the Casing is ready, rotate the
bottom faces a little to realign them with the blueprint image.

Press the right mouse button in the view window to get this
pop-up menu
Note that your current object still is the Mudguard object! To make the
Headlight Casing a separate object (which makes the texturing process easier
later on), simply duplicate the current object. Select all faces that
are not a part of the headlight casing and delete them, so only the
Headlight Casing is left. Rename the current object to 'Headlight Casing'.
Now the Mudguard object also contains the headlight Casing faces. These are
no longer needed, because we made the headlight casing a separate object.
So, select the Mudguard object, select all faces, except the first row, that
form the shape of the Headlight Casing and delete them. The result is a
Mudguard object with space for the Headlight.
Now select the first copy of the Mudguard that we made Wireframe
Invisible and make it visible again. Select all faces, except the
Headlight area and delete them.

All faces of the Mudguard selected, except the Headlight area. Delete
them!
The result is a set of faces that form the shape of the glass of the
headlights. Rename this object to 'Headlight Glass'. Note that you only made
copies of the Mudguard object and that none of these copied objects have
moved! Your hierarchy now looks similar to this:

The hierarchy after creating the headlights
Almost done now. The last step is to add a vertical edge to the Mudguard
object, similar to what we did with the Hood object. So, select Edge Edit mode,
select the Mudguard object, then select all outer edges of the Mudguard.
Press and hold the Ctrl button and move the mouse down a little, just like
you did before.

Extra vertical edge added to the Mudguard object.
And of course, save your work before continuing. Here is a test render of
the car so far. For clarity, all objects have a different color.

Test render showing all different parts in different colors.