[tristancliffe]

For best exhaust performance you want to keep the heat in the exhaust - look at F1 and Top Fuel cars - they do NOT lag their exhaust pipes. There might be a tiny benefit in lagging a closed wheel car as it MIGHT reduce the under bonnet temperatures sufficiently to give another horsepower or two, but I'm not a believer.

Exhausts scavenge better with higher temperatures. Lagging also increases the chances of the exhaust material becoming too hot and it softening/deforming.