Me and a friend were getting on to play some split screen races. when i got onto free play i was able to change the division to “ANY” so that we could choose whatever car we wanted. once he had signed in and pressed “A” to join. it reset the settings, i went to change it back but the option to change the division is removed and it is stuck on “Early GT Racing” cars. Effectively limiting our car selection. However, just to see i backed all the way out to the start screen and let him start it and his account and it worked fine on his.
It will revert to whatever division drive type and class you had set previously for single player free play, even though you can’t modify those parameters in split screen. Which sucks. Or choose ai drivers also lame. But i suspect that’s the problem. That happened to me after I got the nascar expansion, my free play went to nascar only for some reason. Figured out those division parameters had been set, by me or a consequence of the dlc idk but if that doesn’t work do a hard reset of the console and try it again. Make sure your single player parameters will be to your liking before starting split as it remembers those minus ai.