I really hate it when you see someone flying up behind you at South City. As they get closer, you realise that they are smacking in to the wall every second corner with absolutely no consequences.
They fly by you, continuing to bang the armco while you continue to drive as hard as you can, but keeping it off the walls like a proper (sim) racer.
I'm not sure that a temp fix such as the OP suggested, would work. But I really, really hope that collision detection and car/engine damage are absolutely at the top of the dev's list right now.
It would make a HUGE change to the way LFS is played, and would make thinks like clutch heat seem like an insignificant little tweaks in comparison. Bring it bloody on !!