From what we have seen from past demos and what they have said, then no, there are consequences, visual and mechanical, and I'd expect it to be applied 100% in the online part of the game. You stuff it into a wall at 200mph, you are going nowhere.
It's a game however, it's supposed to be fun, so I do not expect these things to apply until later in the game in terms of the single player aspect, otherwise it will put the casual players right off. You can't have them going around a track for 10 minutes, and then making a mistake that ends their game on a single error.