Cheaters are usually not of the subtle kind, so they're easy to spot due to them going down the straight at 300 km/h in the XFG.
For a subtle cheater to succeed, he would be required to have a decent driving skill and keep his cheating to minimal bursts of speed that improve his time, but not beyond the world record. Not because times better than the WR aren't possible, but because they draw lots of attention. Overall the existence of a subtle cheater is very unlikely, considering how people with decent driving skill don't tend to cheat in the first place.
If you have a suspicion, a thorough look at the replay should reveal what's up. Sudden jumps forward are a giveaway, as are laptimes that seem very unlikely compared to what skill the driver displays. If someone consistently has problems in corners or botches one or two in a lap but still has a very good laptime, something is up.
That said, you can't cheat in single player / hotlaps. I mean, technically you can, but anyone watching the replay will get an OOS error, making it obvious that whoever recorded the replay didn't have the same physics restrictions as you do.