In LFS we currently have three options to recover from an accident within the game.

The most straight forward option is the reset by hitting space. If your reset does not cause a yellow flag, you get a brand new car without body or engine damage and with a cooled down clutch. It is just a minimal interference into ones race and a very convinient option, however it is also an option with the potential of exploitation as a fresh car without damage could perform better then if you somehow struggled your way back to the circuit and back to the pits. Also this option is only available on servers, where /canreset yes is set.
The second option is to be sent back to the pitlane by the admin command /pitlane username. This is a wonderful command that respawns the car at the pit spawn point. Especially the application in automated racing servers, where stationary cars or jump starters are sent to pitlane at the start of the race, is really improving the racing experience. Yet the command not only repairs the car completely, just like a reset does, it also respawns the car on Lap 1 and requires a /setlap username lapcount by an admin, if it were intended to keep the laps or have adjusted laps.
The last option is to join the pits or the spectators from the track (shift+s/shift+p). It is probably the go-to-method for most racers. It pretty much has the same consequences as the /pitlane username command, but it can be used by the racers without the need for an interference by the admin. Furthermore the admins can force someone to spectate with /spec username. If /midracejoin no is activated however, drivers joining the spectators or sent into the spectators can no longer participate, while drivers joining the pits can. If a driver can rejoin, they get a fresh car to continue their race.

While these options all can be used to serve the same purpose, to leave and reenter a session, they all share a common problem for competitive racing as they minimize the consequences of body, engine or suspension damage as a driver gets a fresh car. Especially in endurance racing this gives the competitors an advantage in the long run.

My suggestion therefore is the introduction of tow-backs, either as an alternative to resets (i.e. /canreset yes/no/towback) or a stand-alone option that can be activated serverside. A tow-back in that sense shoud be characterized by the following features:

1. The car is teleported into the pitlane like when the /pitlane command is used.
   
2. The car stays on the same racing lap.
   
3. The car stays in the same physical condition with all damage and the car can conduct a pitstop to repair damages regularily in the pit box OR a pitstop is simulated to repair the damages right away.
   
4. The car is held after the spawn for a time penalty at the spawn point, similar to stop-and-go penalties or time-trail starts. The time penalty can be calculated by the distance between where the tow-back was "requested" and where the pit spawn point is located (e.g. 1 s for every 10 m distance between the points) or by a similar suitable measure.
   
5. EDIT The tow-back shall not violate the mid-race join condition if that is set to /midracejoin no.
   

Especially for organisers that don't want to implement Safety Car and Rescue Car procedures or who don't have the personal resources to do so, this could greatly help the running of long distance or endurance races. Furthermore I think such a system could improve the fairness of damage repairs compared to "restarts" with the above mentioned methods. EDIT 2 Yet it is clear, that this option cannot adress the same problems with drivers who lost connection to the server and are allowed to restart their race after reconnecting.

An alternative would be to keep the current system but allow for engine damage repairs and clutch temperature cooling in the pit lane. If those effects were a known variable, admins and organisers of such races could implement a system manually or semi-manually with a serverside script.

In my opinion an increase in repair times in general would be much appreciated to simulate the repairs a bit closer to reality then they are right now. Yet I understand that the current repair times give players the option to repair damages even in shorter races and still enjoy a good competitive race.

There's an option to "tow" car without repairing it via InSim. It can be respawned at any chosen point in the world.
Partial repairs would be nice to have though!

I was not aware of that to be honest. Thanks for the info! I still think that such a tow-back as described was a good addition to the core simulation.

Great idea TFalke55, there should be a penalty for a full repair, and for the tow back time, if you are in a competetive race. No point if you are just lapping, which seems to be the most common type of driving here, but reset car is already there for the lappers.

I've just tested a mixed variant for this - teleport right into a pit box so it takes time to repair the car. But unfortunately LFS doesn't start repairs right after the teleport. Anyone know a way to trigger pit stop from server?

Cool. two steps forward and one step back, is still progress of a sort.