I am also using Vsync, I experimented with bunch of different settings and this is the smoothest way for me
Yes there is tiny lag, but I only notice it when the virtual steering wheel is on, not a problem for me because I don't use the virtual wheel, so I don't notice the lag, believe it or not
2 smoothest way is capping the frames at the same refresh rate as your monitor (in my case 60fps) It's the same smoothness as with Vsync, but no lag this time.
Biggest drawback is horrible tearing all actors the monitor just above the middle, may be some are okay with that, but I just can't stand it.