The first hydrojet has the cheapest upgrades and will need to be at least mostly upgraded to be competitive as you don't get a different one until after the first boss race.
Just grind the first races over and over for $1,000 per win, plus the money you get from leveling up, which increases by $500 per level. At the final post-race screen you can hit
to do the race over again. This is a great way to earn money and XP quickly since you save some time in the menus.