I would like to have damage affect the car both visually and as a degradation of its performance. Collisions ought to leave debris on the track, and the debris ought to affect cars if they run over it. Skidding and locking brakes ought to degrade the tires, and that ought to affect their performance. Running the engine in the red ought to damage it. For long, multi-lap events, the track ought to be affected by debris, including rubber pellets, and by a thin layer of rubber accumulating, which improves grip.