The very first car i bought with the starting money was the Chrysler PT Cruiser...a nice black one....its the best car i could afford at the time and is one of the most powerful and fastest for the money...
just keep doing the races you can win over and over till you get enough to buy something decent....save up and get the Lotus Esprit 350...the rest of the game is a breeze from there....you win more money and get better cars...etc etc...