The criteria for the car is simple. Cheap (obvioulsy) but light and japanese is a good starting point. This race is about endurance, so while power would be nice, it's a distant 2nd to having a car run for more than 15mins on a track. Reliability is king. Jalopnik has a good guide on choosing a car.
Thanks to Craigslist, finding sub $500 cars isn't hard, finding a decent sub $500 is. So far the general rule of thumb seems to be this; for every 10 cars that are rubbish, there are 4 that are crap.
Not a good ratio so far.
If I had a dollar for the number of times I came across a car that 'only' needed a $10 air filter to fix it (which would also magically fix the dead clutch, the 0psi compression in the #4 & blown head gasket)... I'd have at least $15 bucks.