2/ Car Damage and repairs - At each service point your car is AUTOMATICALY repaired to new and at that point you can sellect your tyres for the following group of stages. During a stage, if you damage your car but finish the stage, the damage will carry on to the next stage (not including and damage to the body or windows, they are fixed each stage). If after the stage, you select "REPAIR NOW" you will be retired from the NEXT stage and be given a nominal time for that stage, so i advise only to do this if your car is VERY BADLY DAMAGED.
If you have retired from a stage your car will be automatically fixed for the next stage regardless of service.