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I personally am a big fan of Assetto Corsa and Assetto Corsa Competizione, and when on sale, both can be had for relatively cheap with the game + all the DLC. AC is a more of an all around sim that has a seemingly infinite amount of mods as the game is relatively old (2014 I think) whereas ACC is strictly a GT3/GT4 simulator, but the realism and physics is absolutely top notch. iRacing is ridiculously expensive and I'm not hardcore enough to pay for all the cars/tracks/subscription - I think it gets into the 1k dollar range over time if you seriously invest in it.
As for F1, I haven't played F1 2021 but F1 2020 is pretty arcadey when compared to something like ACC, but if open wheel racing is a must, go for it. AC I think has a couple of older F1 cars included and there's a ton of mods for other F1 cars too, but it might be harder to find online races for that.
For wheel/pedal combos, would probably recommend either Logitech or Thrustmaster for a few hundred bucks. Once you get past those two brands I feel like it gets exponentially more expensive. I used my old Logitech wheel for ages (Driving Force GT) mounted to my desk and only recently upgraded to a fancy cockpit setup - definitely not necessary but it is a lot more realistic.
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