For a demo this is good, but could use some work before it reveals it's final form. Firstly, the timer and lap counter overlays the track, which is distracting and takes attention from what should be focused on: the car and racetrack. Also, a graphics/aesthetics revamp could really help this game succeed. Finally, hitting the outside seems a bit too punishing, and will be especially difficult to deal with if other racers are introduced. Maybe a simple slowdown(really, really slow) can make it less brutal on your time, while still preventing cheating. Or maybe some grass near the edges of the track that slows the car down, but some walls in the center that function just like the grass currently does.
It works good and the shape looks like those "Newgrounds glasses". Easy to guess the controls, but it don't stop when you reach lap 3. But it's a demo, but continue working this good!
I like the easing to zero velocity and the turning felt pretty good. I would experiment with drifting and maybe even a bump back on collision with the edges.
It took me awhile to know which was front and back for the car. Maybe make that more obvious.
Overall, good starting point for something cooler!