| | Re: Answer "I understand" or "I understood"
In the present, as I said, can is nearly always used - we express the idea as relevant to our ability to see, hear etc - to avoid the problem that the present simple expresses permanent events and therefore can't be used. However, you're right that it's different changes in the past. Then it depends whether 1) you're just talking about the event or 2) really talking about your ability to see the car.
1) A : Did you see the red car that was parked in the car park this morning? It was a Ferrari I think.
B : Yes, I saw it when I came in.
This is a past event and the past simple expresses past events -so here there's no conflict and you can use it.
2) It was so foggy when I drove to work this morning that I couldn't see the white lines on the road. = it wasn't possible to see