Try increasing "Steer centre reduction" in Options-->Controls. This will slow the steering wheel when it's close to centre but it will become even more twitchy at large steering angles. play arund with this setting.
Maybe someone whos using a joystick will be able to help more
The best is just to reduce car steering lock in car setup in garage. Start off by reducing by 50% and see from there where is the sweat spot that allows for best balance of manuveability vsrsus steering precision. For XFG on BL1 you may even go down to 12deg and still be able to complete a lap without any issues, just pit exit will be somewhat tricky.