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The rules were changed to a recoup limit after, I think, $2003. Prior to that it was simply the price of any car(s) used could be claimed back to zero value. I know one person bought a car for like $4000 and then simply sold parts off it until he got it down to the $2000 limit; however, it wasn't competitive because he couldn't afford to modify it then.
It took two cars to build one for our winning effort in $2002, but then we only paid a few hundred bucks for two rusty POS's.
Like any other form of racing, the smartest guys read the rules and learn the gray areas, and exploit them. GRM then figures out the loopholes and tightens things up for the following year. It's pretty rigid now; I think you have to even figure in shipping costs on whatever you use if I'm not mistaken. While it was fun building a car, you wind up with something that isn't really legal for much of anything if you build to win.
More photos and details of our supercharged 2002 here: http://www.mongrelmotorsports.homestead.com/chall.html
Here's a link to the Supercharged car that was there for $2006.
Cool stuff and clever engineering. This guy spent a lot of time in front of a lathe and mill.
Cheating? Like any other motorsport there is a certain amount of "creative rules interpretation" but like any other motorsport you can also be protested. Show up with a shiney red Diablo or M1 that your brother in law sold you for $1900 and there may be issues. Most of the cars I see are drivers after the event, mine wasn't, it's actually a mailbox at a VW shop now.
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