In a racing game: How should we penalize the player for colliding head on into obstacles such as walls, trees and so on.

What is the way it is done in your favorite racing game?

How is it done in other successful racing games?

Do you think temporarily disabling the engine for a second is too severe? If I do go that route, how would I convey the 'engine is disabled' to the player in a subtle and easily understood way? Is this 'too much' of a penalty? Would the slow-down from the collision be sufficient to discourage the player from driving too carelessly?

Which one is more fun?

Should I consider a health-bar and affect engine performance for 'low health' status?

Could you offer examples of games that handle this well and one that do it poorly?

Please share your experience with racing games obstacles and reference games you feel perform well in this aspect.

I am sure we all enjoy our racing games differently and I would like to hear different opinions regarding this issue.

I would also like to hear how you feel we should penalize or reward for colliding with other vehicles?

Should enemy vehicles be destroyable? Should they slow down severely when they hit the back of your car or would that make the gameplay imbalanced?