The first thing you need to do is to talk with his dad about this. It isn't MY car and MY insurance bill, it's OUR car and OUR insurance bill.
Together you need to work through what rules are best and be prepared for him to tell you which ones are "overkill". I have 4 girls. The older two are step-daughters to my husband, who began to parent them when they were 5 and 8. He will readily admit that he came to parenting with a tougher legislative agenda than he would have had if he'd parented them since birth. After practicing on them, we have another 2, ( I LOVE the 10 year age split ! ) and the younger two have had it "much easier" than the first two, whom he loves just as dearly, even if he has to share them with a biological father who did nothing but hurt them during their growing up years.
Definately work out the details with your husband first. Start by asking what your husband actually "meant" when he said his son "could use" the 2nd car. I am assuming between the two of you, you have 2 cars, so one is generally driven by Dad and one by Mom. This must be the car you usually drive ? Or do you have a spare one around that doesn't get used much?
Either way, be sure you BOTH agree on the rules of the road, and remember that he isn't your son in quite the same way he is his dad's. All 16 year olds make some dumb decisions, as I'm sure you did, too, and at some point we ALL talk back to our parents, bio or step.
I am not in favor of "giving" a child a car, anyway. We never had one to share, so our kids always had to ask to use a car. Generally they used one to go to work and back, but having the kids drive to school events, so we didn't have to go get them afterwards was heavenly. (esp. with the little ones running around at home to be dealt with)
Parents of kids older than mine, shared with me that they didn't allow their children to drive with passengers in the car. This was for liability purposes, and also for concentration. You can't lose yourself in conversations if you are the only one in the car. And you can't injure someone else's child in a car accident in they weren't in your car. So those parents only allowed their children to drive with siblings in the car. That said, I gave sibling responsibilities to the other kids in our family: they are responsible NOT to distract the driver, to shut up when there's traffic and/or decisions to be made. If they bother the driver, they won't be allowed to go next time.
The good thing here is that because the car is yours and not your son's, you guys have the legal right to control the car's usage. Allowing him to drive that particular car is different from "giving it to him". If you keep it yours, and he has to ask one or the other of you to use it, you can ask where are you going, and who's going with you, kinds of questions. There is always that element that Mom and Dad could say no, so even if your son calls it "his car", he will know that he always has to ask. That doesn't require a contract. Just an understanding that he doesn't grab the keys and leave without anyone giving him permission to take their car. You also have to decide how and when he will contribute to the price of gas. Whether he will have to contribute to the cost of car insurance, etc. And you have the right, when you allow him to take passengers, to pre-screen the friends whom you will allow him to take in his car. You can be more strict in the first year of driving than in the successive ones. He does need to gain experience at the wheel on his own, he needs to respect that fact that the car is an expensive piece of family equipment, and his privilege of driving it requires the responsibility of driving it carefully. (That said, our eldest had 3 accidents prior to getting her license -- little things, and 1 in college afterwards -- our 2nd has had one, a fender bender during a snow storm -- never any injuries, thankfully. You can PLAN on an accident at some point, due to inexperience, so don't berate him as a bad decision maker if he comes home sometime, frustrated and upset and tries to find the words to tell you that he hit something. I went off the road this year in a snowstorm, after 30 years accident free, and it isn't fun, even when no one is injured.)
Also, I used to roll my eyes and talk back to my mom at 16 and 17, and she isn't a step-mom. It's a function of who the parent is and who the child is. Parenting is frustrating, and step parenting is even harder, so all I can say is to try to listen to him more, ask questions, and try to hear what he's trying to tell you, so he feels heard. THEN give your comments. The more heard he feels, the more he will also hear you. He's the oldest child, so he's going to be more of a leader, and he'll want his own way more than the 14 yr old will when he gets to be that age. The next younger seems to learn from #1's discipline, and often doesn't make as many waves -- plus, we ease up some after going the rounds with the first one. It's just he way life is. #1 is the "experimental child".
P.S. If you must put the ground rules in writing, be sure that YOU follow them also. I'm afraid that if you put them in writing, and they aren't working, that they will be harder to change. For instance, if you put in writing when he can take the care and where he can go with it, and you want to shorten the reins, it's going to be harder to do, because you've already made a contract with him. I think if you keep it verbal, and he has to ask to borrow the car each time he wants to use it, you get the opportunity to hear what he's doing, where he's going, if there will be drinking at the event, etc. And then you can GIVE him your key. That way, you are handing him the responsibility each time he takes the car, and he will give it back to you when he comes home. (At some point, you'll probably want to give him a key of his own, but I wouldn't right away -- esp cuz these days it's really nice to use the black ones that come with the car, and I assume you carry one of those and your hub carries the other)
Best of luck ! And thank God he got his license in the Spring ! Our daughter turns 16 in Nov., so her first driving days will be with snow on the roads. ugh.