SpinTires is a DX9 game so it can’t even use tessellation. It’s also taking the deformations into account in away that I don’t believe their collision model is that coarse (possible that they do the math on same data). If you need something like this, I think this could help to achieve it: Runtime Mesh Component - Marketplace - Epic Developer Community Forums ! Other option would be to do make the displacement data both on gpu and cpu and use cpu version to offset the suspension values (would only work on linetraces and shape casts and not with actual physics geometry).
Yes, the best way to solve is by using some custom technique to render landscape. Might be overkill for now. To make it work properly it have to be connected to streaming and etc.