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The first game I remember hearing about where hitting pedestrians was a game mechanic was Carmageddon, which was a long time after the C64... this sounds more cartoony though. I guess the only advice I can give is to look at
http://en.wikipedia.org/wiki/Vehicular_combat_game
and see if something jumps out at you.
nope, definitely not combat game. just driving for the sheer fun of it.
nevermind, found it by myself: https://www.youtube.com/watch?v=ggAhDG1sRPg
speed racer, born in 1983.
commodore 64 videogame, about a top down highway where you can drive a car and run over dogs and grannies. they leave a neat red puddle after you hit them. there are oil slicks and policemen (also squishable) and if i remember correctly, at the end of a run you are judged by your kill count; angel or devil scores, the latter if you avoid anyone and just race.