Wreckfest

Wreckfest deforms the real car model so damage changes how cars behave. Wreckfest uses soft body physics to squash the actual car model, so damage changes how the car moves and interacts with the environment. Most racing games only show damage visually.

The general technique builds a vehicle from nodes joined by stiff, spring-like beams, so a collision yanks on connected beams and crumples the car. Shaders and textures can only show damage. The source says it can "literally squish and squash the model of the car to fundamentally change how the object moves". BeamNG.drive is named as another game that does this.

Wreckfest uses visible car damage instead of a health bar. The state of the car's body shows how close it is to being wrecked, so the game needs no separate meter. Players read their car's condition straight from the object.

The source puts it as "you don't really need a health bar in Wreckfest to know how close your car is to being written off". It groups this with Mario's sprite size showing his health and Breath of the Wild signaling heat or cold without an indicator. The lesson is to carry state through the objects themselves where you can.