A GTX 1060 is a good card of single-screen gaming at 1920×1080 60FPS. An Oculus Rift/HTC Vive resolution is 2160x1200, so you get the idea of it's underpowered for top tier VR. To be fair a GTX 1060 is okay for a lot of basic VR games. Sim racing titles are far from basic, but some people out there are running VR racing titles on these cards.
And I'm sure someone will pipe up and say they're sim racing with this card in VR with a GTX 1060 and it's fine. Fine is subjective, and they don't the mind the compromise of running these games at 45fps, low settings and using reprojection to smooth out the framerate. The thing is if you're okay with it and still able to enjoy the games then that's all good.
Upgrading your GPU will improve performance, just as it would with monitor-based games. More powerful GPU gives you faster performance = higher FPS (and less or no reprojection).
The new GTX 1660ti has just come out, that's the one to go for. It's faster than the GTX 1070 and a bit cheaper too.
https://www.techspot.com/review/1797-nvidia-geforce-gtx-1060-ti/
One final thing, even the GTX 2080 which is double the price of the GTX 1660, and of course more powerful still can't max out the graphics setting in VR sim racing games. Even the GTX 2080ti, which over $1000 can't. But of course, the more expensive the GPU, the nicer the visuals.