I don't build model car dioramas, but I started building detailed model railroad buildings in the late 1950s, and was pretty good at it by the late 1960s.
There are two primary woods used for models, balsa and basswood. Balsa is softer, more open-grained. Basswood is harder, more close-grained (so it usually looks better as scale lumber).
You can cut your own strips, planks, any dimensional lumber from sheets, or buy commercially prepared strip-wood.
Just bear in mind what scale you're working in. For example, a 2X4 in 1/24 scale will measure .083" X 0.166".
A 2X4 in 1/87 (HO scale) will measure .023" X .046".