There are many origami and paper-folding books and videos for simple construction ideas. There are also web sources with directions for toy cars made from a cardboard tube or toilet paper core, and toy vehicles powered with a balloon. One website which may be of interest is ArtistsHelpingChildren.org. (Search their website or check their alphabetical listing for "cars" or "paper car" or "transportation", etc.)
Kits may be another idea to explore. Many have small pieces therefore a child may benefit from direct supervision and/or working with a parent or sibling.
There are also hands-on project ideas such as Rube Goldberg machines mentioned in this recent thread, tailored to a 7-year-old:
in need of suggestions re: a "builder"
