This sentence can translate as "in the garage there is a white car". Though location modifiers are not allowed at the beginning of sentences, they are sometimes dinner that way in speech.
Beyond burner's apropos comment, Duo wants to emphasize that the Russian and English completely neutral location expressions differ quite markedly. The closest conceptual translation of the Russian here is, indeed, the provided English one. The word for word translation into English has a different emphasis. It puts the emphasis on being in the garage as opposed to the white car. It's a subtle distinction - and it differs from the way the same matter is represented in Russian. [I think the best translation of your version just flips things around again: "Белая машина стояла в гараже." Russian word order actually does matter ;) despite what one often seems to hear.] Read up on the linguistic terms topic and comment if you're further interested.
Isn't "There was a white car in the garage" an even closer "conceptual translation", as you put it? That's the pattern which most translations of this kind of Russian sentences beginning with a location expression in this course have used, if I remember correctly. (For example: На камне муха=There is a fly on the stone.) "A white car was in the garage", on the other hand, emphasizes the car and the fact that it's white, so it's not entirely neutral, whereas the Russian word order is the most neutral possible, as far as I understand.
Hmm, I would think you're right. I'd think I'd only have left the comment were the provided translation indeed, "There was a white car in the garage." I do think "В гараже стояла белая машина" is the default translation of "A white car was in the garage," (with spoken emphasis on "белая" and "white" respectively, I suppose), but the same isn't true in reverse.
Why if we say "В хххх стоит уууу", we don't say the past as "В хххх стоил уууу" ?
(The я in стоял, why, where?)
The past tense of "стоять" is formed regularly – remove "-ть", then add "-л" for masculine. So the more relevant question is why "стоять" is conjugated the way it is in present tense. To which the answer is – because it's irregular.