Like I said, I have used my two player cars many many times on my old GT4 mem card. When it got corrupted, I forgot how to set 2 player up on the new mem card so that I can do this.
I know its possible 100% as I have raced many many times using my own garage cars against other players garage cars.....
My main problem is that for some reason cars I have bought racing tires for do not carry the racing tires with them into 2 player mode. My old GT4 game save used to do this perfectly..... I think it is a setting somewhere, but I forgot where....