I've gone through this before and while I usually just let it roll off me, it becomes like a broken record and every time that you see that person, it's the same thing. Trying to get your point across to someone who's not even listening or reasonable just gets old after a while. It came ot the point that it was either do something about it or not go to Family events.
I'd challenge him to a race in front of people and tell him that if he's so sure that he'll beat you, to put up some money (Put up or Shut Up). It's always better to have skin in the game, especially if you know you're right. Some people just have to be proven wrong. Another thing is to bring someone along so that he can't say that you're mistaken and he just had a bad start or some other excuse.
You do it in front of people to make him either back down with the insanity or get him to race you and put an end to the Craziness. Forget that he's your Father in Law and now he's just become another Smack talker that has gotten on your nerves!
Last, but not least, if you think that you are that much quicker than him, then give him the bust (let him take off first and then you have to play catch up with him) and then reel him in. This limits his excuses and shows that your car is not only faster, but fast enough to catch up and pass him.
I'd also suggest that you first tell your Wife what you plan to do because I don't know about you, but my Dog house isn't that big and sleeping in it isn't Very comfortable (I've been in it quite a few times too, so I do know what I'm talking about

).
Just the thoughts of someone who has walked in your shoes!
I Apologize for hi-jacking this thread too and now Please back to our regularly scheduled program!