Flatout 2 Is awesome. Fits your description perfectly.
DiRT is a good one.
Need for speed most wanted is one of my favorite games but i dont think it has much damage mapping. idk havent played it on pc.
If you don't mind the lack of smashy smashy then Gran Turismo 4 is a good game for racing cars. Although you can only race up to 5 people at one time and the tuning is anal to get right.
Burnout: Revenge. The game rewards you for ramming other cars of the road and if you do crash, you can press a button to blow your car up so that it hopefully obliterates the competition.
Try (Driver 3) and you will experience real accidents and car crashes.
Also you got (Burnout) which is about crashing cars.
You can test (Driver parallel lines)and (L.A.rush),they are amazing car games.