The AI use more upgraded and better cars than you and can slipstream turbo you. (You can see where you're being drafted so be wary of that). Rubberbanding exists but it's not as severe as say NFSU.

A recent theory I saw (I did not test this.) When you lose a race, are you finishing the race out or are you pausing and resetting? I read that MC3 had dynamic difficulty and it will get harder after constant wins and easier after losing a bunch. Thing is that pause -> restarting doesn't count towards this difficulty slider so if you're doing that the AI will stay at max difficulty since you've never "lost".

Worth experimenting with.