Rigs of Rods is an excellent technical achievement, and it's the same guys that have made this demo. I'm not sure it has any official link with Crytek, but there seems to be very little information around.
As was mentioned in one of the other numerous threads bearing this video, the way the cars are actually built is completely different. Usually, you have the hollow shell of the car and "bolt-on" animated parts that respond to the physics, namely the wheels and suspension. The production of a working car is mostly the same as that for a static scenery object, up to the point that the cars are "rigged" with the suspension and undercarriage and the "physics" tweaked to suit. Come run-time, only those rigged components do any real physical interaction, except during collisions where simple "convex hull" intersection checks are performed and reactions based on angles and speeds of impact are calculated at that instant for the car body.
Rigs of Rods uses vehicles that are made entirely of, well, "rods" - i.e. beams. The structure of the vehicle is underpinned by a lattice of these beams, forming a sort of "space frame", and the physics engine does its magic on every single beam to give surprisingly convincing results.
A simple example showing the "rods" structure.
A more complicated example, one of the early "built in" vehicles, that shows the combination of the bare rods and the submeshes for "beautification".
In order to make these structures look more like the real objects, you need to add props and "submeshes", i.e. polygonal "skins", which are a bit more complicated from what I can remember, and take their shape and position from the deformations of the underlying beam network. Some or all of the rods themselves can be hidden, if memory serves me, so that only the "decorations" are left. I think some of the more elaborate vehicles are made this way. Note that most of the content is community-made, at this point, and there have been numerous improvements and additions (e.g. "flexbodys" instead of "submeshes" etc.) to the make-up of these models and how the simulation runs on them, I just haven't been near it in a while!
What's special about this is the physical properties of the created vehicle are a high level effect borne from the properties of the individual beams, some special beams and nodes (like wheels, springs, hooks etc.) and the structure in which they are arranged. As such, it's a very different system to be working with, and takes some getting used to as well as requires at least a basic understanding of the underlying physics, especially if the structure of the real object isn't much like a tube-frame. However, it appears to have issues with damping, in that everything seems too "springy". It's also pretty heavy on CPU usage, especially interactions between complex vehicles, but there's always room for optimisation.
There's definitely a future for this sort of thing, though. Many racing sims sort of do an approximation of this kind of "bulk physics", although it's rarely visible / animated, and usually only affects the way the suspension moves against the surface of the "ground". When it comes to real cars, it's probably easier to use these approximations than it is to arrange a complex system of interdependent beams into something that approaches the same level of accuracy. However, the full-body simulation captures so many subtle and not-so-subtle effects that makes it very much an improvement when done well.
Anyway, here's a similar video taken from Rigs of Rods itself.
Oh yeah, it's completely free, too.