Old-school steering with a D-Pad was easily the best input method - pressure sensitive analogue D-Pad during the PlayStation 3 generation - because applying pressure downward is way more controllable than applying the right sense of pressure left or right on a stick. Usually I'd end up applying way too much pressure, especially when there are swift direction changes in track layout or overtaking.
In this thread I learned that the Directional Buttons on the DualShock 2 and 3 controllers were pressure-sensitive. But the functionality sounds nearly-useless to me...because the possible travel distance seems really small. Similarly to the Cross/Circle/Square/Triangle buttons on the same controllers, I'm not sure how I could merely half-press the buttons.
In general, I feel that the Xbox 360/One's standard controllers have better analog sticks for racing games than the PlayStation consoles, because they require more pressure to move. This increases the gap between the minimum and maximum levels of pressure, making it easier to apply half-pressure, 75%, etc.
But an even better solution was the Namco neGcon, which had analog "I" and "II" buttons that came up further on the controller than the others, introducing a much greater travel distance. This made it easy to press it down halfway, 25% of the way, etc. Combined with the natural-feeling twisting motion, it really was an ideal controller for racing games. I played Ridge Racer 1 through V with it. It also worked with Gran Turismo 1 and 2 (but sadly not 3 and 4). I'd love if they could reintroduce it for modern consoles.