It may be counter intuitive but with a correct physics model, following actual car and parts specs / dimensions makes life easier since you don’t have to tweak everything by yourself to get a good result.
For arcade games, you may have the same physics as a base and then tweaks on top of it to make it more entertaining.
Cars are the easy part though.
Tires are where the fun begins, along with different road types and weather.
Now for the original question, it’s up to the devs and for games that are level locked you will have arbitrary limitations or boost ups for different levels. (Especially pay to win games)
Lastly you also have IAs and usually in arcade games they are not following the same limitations and can defy the physics (need for speed, gran turismo etc…).
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