How can I deal with the overpowered Red SUV on the Level 3 Races?

In my opinion your best option is the Malibu Stacy Car I beated Level 3 Races with that car, the trick in the races is to practice the curves, if you turn too much the car will Drift, and You have to avoid that, the best way to turn is slowing down a little bit the moment you're going in the curve, this is to avoid crashing and because drifting slows you down for all the momentum the car gets towards the side you turned.

Race 2 have a lot of curves, use that trick to win advantage and win the race.

Race 3 it's the toughest, you will need a couple of tries to win this race, do the slowing down trick on the curves; and something you can do to win advantage it's to Crash the Red SUV in the beginning of the race. Try to reach the SUV just in the start, avoid the other 2 cars, try to hit the red SUV and this will cause to Drift and crash, you will win advantage.

Practice this and tell me how it goes.
Here's a video where you can get an idea: