Project Torque is a free to download and free-to-play multi-player on-line racing game for the PC. You buy car upgrade with the experience you earn. You can even save up to get a better car. There's also a Pro area where you can hit other cars. Not bad for a free game.

Check it out here: http://www.gamespot.com/pc/driving/projecttorque/index.html?tag=result;title;0