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There are 231 cars in Forza Motorsport ranging from a Honda Civic to supercars such as the Enzo Ferrari and Le Mans race prototypes such as the Audi R8. The cars are separated into 9 classes named D, C, B, A, S,(subclasses 4, 3, 2 and 1) and R (subclasses GT, GTS, and P1)

Class D: Standard production vehicles such as the Honda Civic and Mitsubishi Eclipse.
Class C: Sports cars such as the Impreza WRX STi and Lancer Evo VIII.
Class B: Performance cars such as the Porsche Boxster and Ford Mustang GT.
Class A: High performance cars such as the TVR Tuscan S and Dodge Viper.
Class S: Supercars such as the Enzo Ferrari, Koenigsegg CC8S and Porsche Carrera GT.
Class R: Purpose-built race cars (non-production vehicles) such as the #1 Audi R8, and Bentley Speed 8. These cars cannot be customized in any way.
Each class, except class R, has 4 subclasses with 1 being higher and 4 being lower rated. For instance, a D1 would be better than a D3. Upgrading by tuning or buying new parts can move cars between classes except class R (no car can enter or leave class R). There are 3 subcategories of class R:

R-GT: Grand Touring racing cars such as the Dodge Viper Competition Coupe.
R-GTS: Higher performance race cars such as the Saleen S7R.
R-P1: Racing prototypes, mostly LMPs. These cars weigh around 900 kg (~2000 lbs) with roughly 450 kW (~600 hp). Examples include the Bentley Speed 8 and the McLaren F1 GTR.
Each car can be upgraded and tuned with a large number of extras and parts. Upgrades are separated into 3 categories: engine/power, appearance/aerodynamics and chassis/drivetrain. There is a wide range of tuning available including tire pressure (which changes during races due to temperature), downforce, gear ratios and limited slip differential.