It's the shadow caster for the tire. It's up that high to avoid conflicts with the car body shadow caster (for DX9), because the car has longer suspension travel. Conflict issue seems to be fixed in DX1. So it doesn't need to be that high no more.
Car need some other graphic fixes anyway.
- Lensflare shader: no needed anymore
- car paints are to bright (glow)
- headlights are to strong for roadcars. (Glow at night)