Dashboard views are used to make the player feel as if they are in the middle of the action. It's usually presented as an option and never forced upon the player. These views have suddenly popped up on next generation consoles because of the the graphical power of the hardware that allows for a detailled, immersive view.
Dashboard views do have inconveniences though. They tend to obscure the view (especially on smaller monitors) and make handling the car more difficult.
Dashboard views are more commonly known as the cockpit view. In some games, the right stick lets allows the player to see out of the right or left windows and some games (such as Need for Speed: Shift) go as far as blurring the action momentarily when the player crashes, to add to the realism.
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