Hi! Sorry about that. I had to switch to this format due to all the problems I was having posting the requested information on the chat format.
So, when a sales person makes misrepresentations - ie either states facts that are false, or that are misleading, and the consumer justifiably relies on such misrepresentations, the damages generally awarded are the economic damages actually suffered i.e. the cost of the insurance. The salesperson stated it was free, then had a contract stating the contrary.
Additionally, as far as the inconsistencies in the agreement, these are construed against the drafter of the document, as the party presenting the contract is responsible for such vagueness/contradictions, etc. If the policy states that it is not an insurance policy, but that is in effect what it is, then that would be inconsistent. Furthermore, stating that the very service the consumer was purchasing was not guaranteed, many courts would consider that unconscionable.
Also, as for cancellation policies/refund policies, these generally need to be conspicuous, and can't be "hidden" in pro forma documents, as that is generally considered an unfair and deceptive business practice.
The DMV regulates car dealers, and you can file a complaint here: http://dmv.ny.gov/vehsafe.htm#complaint
One of the possible resolutions is restitution -reimbursing the purchaser for the damages suffered.
If this is as ongoing problem (ie you have cause to believe this is a standard practice) you can file a complaint with the attorney general. http://www.dos.ny.gov/consumerprotection/