"Fascinating"--that's high praise indeed! Thank you!
Sorry about your car! Yes, it's definitely a possibility that it was breaking down. Crashing into things does indeed reduce the car's performance! Then again, it's possible it have been some lag, too.
As the end of the game jam development time drew near, I was like, "Oh wait, I should probably try to reward good driving". I considered adding a damage meter, but I already had two bars already on the screen, and didn't want to overcomplicate things. So instead of making the car take damage and then eventually explode, I made the player car become a little slower the more damage it takes. However, since I was running out of time to finetune how much damage it should be allowed to take, and since every player is different, I decided to make it so that it never completely runs out of speed; it just loses part of what speed it has remaining.
Right now, the tiny smoke particles are the only indication of how much damage you've taken (unless you're into viewing hidden debug info), but once there are a lot of them, it's hard to really notice enough change in their quantity for it to mean anything useful. I could definitely think about adding some other kind of damage indicator!