Banger racing is a great idea, grip racing with all the strict rules is fun and all that but sometimes its fun trying to pass your oponent by grinding them up against the wall or fishtailing them.
The very sad thing about lfs is LAG, lag causes cars to fly thousands of feet into the air just because of a slight touch of another car, maybe LFS can work a little bit on the crash behaviours so it won't do that.
Togues would be GREAT for lfs, all the cars including the forumula cars would be great for hill climbing, the whole elevation change thing is an awesome idea, LFS did really well when they made the bridge in SO and also some of those bumps in FE rally, but I was thinking like a hill climb with a lot of sharp corners. It would be challenging and add a lot more fun to LFS!