Damage is rediculous!
That is crap you cant drive aggressively - touch a car it costs you - is that good for racing? Look at Forza- damage is related to the speed you hit and you can drive aggressively to spin the car infront of you, if you've got the skills, without getting penalized. Try that on the SEGA game ! However skillfull you are you always get the same amount of damage. Forza also models where the damage is and this can affect the handling. Again if you are skillful you can compensate. Its also possible to turn damage down or off and they make it clear how this affects your earnings. Brilliant!
In SEGA's game you end up trying to avoid the other cars and racing is boring.
Do yourself a favour and play Forza instead (or PGR2).