Well, there is always the more popular FT NitroTC3 and HPI R40. Both are very good cars. The NTC3 is shaft and the R40 is belt. There are also the higher priced Kyosho VoneRRR, Mugen MTX-3 and prospec version and the Serpent710.
The later 3 (all belt drives)are all very equal. Of course there are the pluses and minuses but over all any of those three are top competitors. All average about $350. For engines, you can look to spend anywhere from $220 and up. The engines will be up to you but to keep them in ROAR spec for theraces, .12 engines with 3 ports are the max and turbo plugs are allowed. If you go with a 5 port .12, you are in the outlaw class. 15 engines are outlaw as well and some places allow the .18 small blocks in outlaw (not all, check the track rules). Pipes can go for about $65 and up. Different pipes will make the engine perform in different ways but there are also ROAR/EFRA legal pipes and outlaw pipes.
Cvec pipes and any other pipe that allows you to tune the pipe with an adjustable inner diaphram are illegal since they consider that another port.
$500 is kinda low for a racer but probably can be met. Since you are pretty much at the tail end of the nitro season, I would suggest waiting for the Mugen MTX-4 to come out. That is the model that all the racers seem to be waiting for since it has a bunch of new designs based on the MRX-4 (1/8 onroad mugen).
Out of the models that I mentioned, the Nitro TC3 has the best instruction manual.
The Mugen is known to be a performer straight out of the box. Nothing much has to be tweaked to get good performance. Same goes for the Kyosho. The Serpent 710 is the car that needs to be tuned to the driver. Stock, it will be good but it takes a bit of time to get it to suit your needs.
I owned a Nitro TC3 and loved it. It was a tank and took to the track very well. It grew with me as I was making my way up the ranks of racing competatively but after a season, I moved on the the Serpent 710. Comparing the 2 ... well there is no comparison. The NTC3 had to be coaxed into doing a lot of things but was still limited. My Serpent 710 is a dream to drive. Only thing is that there are sooooooooo many adjustments that it's easy to get frustrated. Almost a full season of running it and I am just starting to really enjoy it.
The R40 is a nice ride as well. I can't really comment on that one since I don't own one and my "real time" experience with one is limited. The MTX-3 is very nice. I have had my hands on one (completely stock configuration) and it is a dream to run. The VoneRRR is also very nice.
I would look to rossb (r40), Team17(mtx-3) and Ratzo (VoneRRR WCE) for their input on those cars since they have raced and/or race them competatively.
The guys that I have raced with, here on this forum, are RossB, Team17, RatzoRC, Sl0eg1n (my brother and also runs a 710) and 710baby (ran a 710 but now runs a VoneRRR). There is also another one that lurks around, Adlawoo. He runs a Kyosho FW05 but can't remember if its the R or RR version. All these guys are pretty much the known racers of the on-road scene (myself included). Ratzo probably has owned the most out of all of us and also has the most racing experience with nitro's. I would wait for those guys to chime in as well with the other cars and their racing experience with them.