I'm considering buying a license but this game is over a decade old and the multiplayer community might be a little dried up and there are popular competing games (iracing). Are there still a lot of people playing?

Not really, 350 in peak. Half of them are drifters/cruisers.

If you want to buy a racing game, I'd say don't bother with LFS at this time.

There isn't a lot of racing going on, and updates to the game are very rare.

If you do decide to get the full game, I would definitely advise against purchasing an S3 licence. S3 has been out for years and the only extra piece of content (compared to S2) is one track. And it's £12.

Basically, we have one or more events every day through the week: https://www.lfs.net/leagues/calendar . Some of them are less popular, some of them are full-server-popular every week (like the FM GTi Thursday or Fox Friday).

Short burst of interest during the whole covid hype but as expected dropping back to early year levels by now which is near zero activity. Unless you are really hardcore, dedicated I would pass and wait until something structural happens. You can subscribe to the email update feature @account settings (I believe)

Although if you are considering renting iRacing for longer periods of time, you can just buy LFS S3 to have it around in case you are curious, because it's total bargain compared to iRacing costs (which is total bargain compared to real world racing ... my sore back is reminding me I shouldn't do go-kart races without proper practice after 6 months of pause)

There may be fewer players than before, but so what? There's enough people playing that you can always find someone to race against.

And you don't always have to race someone.

Cruising
Some people like this, driving about like you're in a town, sometimes playing cops and criminals, doing tasks for money, etc. Not my thing, so I don't bother with these. But lots do like this. I suspect was not thought of as an option by anyone when LFS was being developed, but it's popular, and the only racing game I know where you can do this.

Drifting
Some people are good at this, and happy to spend lot of time on drift servers. Sadly, I'm not good. Don't have the skill. If I did have, then likely I could drive some of the cars that want to oversteer a lot better than I can actually do.

Drag Racing
Lots like this, but it helps to have good reflexes and technique. Both well beyond me now

AutoX
Be creative, and make your own. Or drive on other peoples. Or both. Lots of varied and different types, from placing objects on an empty car park, to driving on layouts that involve the roads that surround tracks.

Hotlapping
Think you're fast? Prove it. Over a thousand car/track combinations to try and set a world record or two.

Top Gear type challenges
People have built tracks in the sky, have developed soccer games with cars (before there was Rocket League), loops, jumps, etc.
Lack of caravans is a bit of an unfortunate omission as far as some of us are concerned.

Nonracing
Some people like getting involved in the administration of servers. Or video making for youtube and other platforms. Or making websites for teams. Programming to interact with game via InSim (e.g LFSLapper, Prism, etc). Making car skins. Changing object textures.

And of course, there's always the racing. Bigger the license you buy, the more choice of both car models and tracks (and associated multi layouts). And access to Rallycross and go-karts.

Or mix and match to suit.

Me. I rent a server, designed and made my own Autocross layouts, load these on my server to set lap times and score (very low) drift points, and do some coding scripts that I like to have on my server.

I haven't found any other game, never mind racing simulator, where I can do all this. And am still interested in doing this over 10 years since I got S2 license.

I've just worked out that LFS has cost me 5p a week (= £2.57 a year) since I first bought a license! And in that time, I've done in excess of 44,000 laps, over 350 hotlaps (sadly, no WR's), designed and made, and made public, a large number of autocross layouts. And compared to a lot of people, these stats are only middling.

Well there is racing, but its league limited. Only one pickup server and that is multiclass.

Good thing in LFS is this : You can race only vs. 1 car, but if that car similar pace to yours, you're gonna have loads of fun.

I think these days LFS suffers from elitism. New guys can join established leagues, like the ones my team hosts (GTI on thursday and FOX on friday), but you really gotta be good to be able to drive normally there. If you are just learning the ropes, field will just devour you and your motivation will probably fall, just because the difference in pace will be massive.

Quote from NumberTwo :

Well there is racing, but its league limited. Only one pickup server and that is multiclass.

Good thing in LFS is this : You can race only vs. 1 car, but if that car similar pace to yours, you're gonna have loads of fun.

I think these days LFS suffers from elitism. New guys can join established leagues, like the ones my team hosts (GTI on thursday and FOX on friday), but you really gotta be good to be able to drive normally there. If you are just learning the ropes, field will just devour you and your motivation will probably fall, just because the difference in pace will be massive.

agreed, there is some kind of league race everyday, at times even 3 leagues on same day, but competition is very fast.

Competition level is high, yes. But you can learn massively from faster drivers. Join a league server early and ask for some tips and setup, this will get some seconds off your time

Online statistics show the activity:
https://www.lfsworld.net/?win=hosts&whichTab=licensed_history&t=7

which is flawed since the introduction of cruise (at least the caption licensed racers is wrong), demo is quite accurate though because demo theoretically has no cruise.

The following can be said for both demo and licensed servers, virtually no-one wants to be the first or only person to join a server so people will and do look to join licensed servers but due to the what i stated they stay empty, throughout the course of a day if myself or a team member are on our licensed servers we have many that have been on the server, i suppose many also just want a few quick races hence why they do not want to be the first on a server and have to wait until others join.
It is far from how it used to be but not totally dead and all it takes a little patience to get a few racing.

@sinanju - Hit the nail on the head

I'm very active - working on mods every day 7+ hours and LFS is 24/7 opened on my computer.

Quote from Evolution_R :

I'm very active - working on mods every day 7+ hours and LFS is 24/7 opened on my computer.

But you're not racing. Your last racing online is three years ago.

I was speaking figuratively.
Also a lot of opening and closing LFS.exe is involved in mod making....

Well, if league racing is your thing, there are plenty going on right now, as well as active rotate track servers and demo servers. Cruise is also a big thing, although not reflected well in the stats.

We're also racing around

Quote from Scawen :

's own creation in LRL this coming Saturday https://www.lfs.net/forum/post/1957656#post1957656 , if you've gone around to get a licence