"This is my car."
Translation:Este es mi coche.
I believe you were marked wrong because coche is masculine and "eso", though it ends in "o" is actually used with neuter/unknown nouns. So, in the case use "ese/este" with masculine nouns. Use "esa/esta" with feminine nouns. Use "eso/esto" when the sentence is one who's gender is unclear. Example: "¿Qué es eso?"
You would use "esto" when you don't know what the thing is, or what the name is, so you couldn't say whether it is masculine or feminine. It is one of the few neuter words in Spanish. In this sentence, because you are using the name of the thing you are referring to- in this case, coche, you already know the gender, so you should use the masculine form, "este." To answer AbbeyC5, use the accent when este or esta is being used as a pronoun (not as an adjective, as in "este coche"), and this helps to distinguish the 2 forms.
When I learned spanish, in every example in every book, there was: " ¿Qué es esto? Esto es un coche." And if I am not mistaken, there was one example here at duolingo that also used esto in a simmilar sentence. Isn't it like that if you ask question using one word you also use the same word in an answer?
In this case that you have referred to the esto is neuter because what you are referring to is not known gender-wise. What is this? (masculine, feminine? we don't know). When you respond with Esto es un coche the esto is now being used as a pronoun, not an adjective so it takes the place of the idea of 'this' from the previous question (thereby keeping the neuter). Neuter is only used with pronouns and are often used to take the place of an idea rather than a particular thing. this is a good article on Demonstrative prounouns in Spanish: http://spanish.about.com/od/pronouns/a/demonstrative_pronouns.htm