Once that's taken care of, then the audio can be appreciated. When I last owned a car, it was an enormous Lexus. The audio experience was sublime just with the premium factory system. But with the audio off, the cocoon was still so much better than what I've experienced in "regular" cars.
Unless you're in a Rolls Royce or Maybach while driving, I seriously doubt you'll tell the difference between FLAC and MP3. There's just too much external interference to compete with the subtleties that a high end audio signal can offer compared to a more typical system.
I would not be surprised if additional noise, such as road noise, can also subvert masking phenomena in some way, but I don't know of any studies that tested this.
from your other comment, I see that you are using a pretty good DAC in your car. kudos to you, sir.
How many cars actually support FLAC or Apt-X HD?
