Good question :) -- IMO, this primarily holds true for tape-based media -- while I recognize that a well recorded cassette tape can sound great when properly played back on a well-maintained high quality deck (think Nakamichi, etc.), your typical car tape deck is likely neither of these (well-maintained or high quality) at this point in its life.

Digital media gets a bit "foggier" from a sound quality perspective due to the introduction of "lossy" compression into the mix. First, even if all the music on my phone is in the form of high resolution lossless files (which CAN potentially sound better than a physical CD), transmitting these files from my iPhone to a receiver via Bluetooth necessarily requires them to be converted to 256mb/s AAC compressed files (lossy compression) which will compromise the sound of the original file to a resolution lower than that of a CD. OTOH, especially as they age, CD players and Cds are increasingly susceptible to playback errors (skips/pops/etc) which are not introduced into digital media.

Of course, the interior of an air-cooled 911 is not an ideal environment to consider the nuances of these differences/distinctions. From personal experience, neither of the blaupunkt cassette decks I had in my 911 did any justice to the cassette recordings I made with high quality source material/gear. While my subsequently installed CD changer did sound better, I was happy to ditch the hassle of swapping disks into the changer for a bluetooth receiver wired directly into my power amp (to me, the much shorter signal path between my source material and the power amp made up for any shortcomings caused by bluetooth's lossy compression). Now that I have a Blaupunkt Bremen SQR-46 DAB, I can plug my iPhone directly in (via a lightning cable) and avoid lossy compression altogether -- while I haven't done a double blind test between bluetooth and hard wired audio playback, I haven't noticed any difference during casual listening and primarily use the cable when my iPhone could use some charging.

Having purchased some FLAC and ALAC I agree it’s definitely not cheaper than buying a CD and if you’re looking for something older you can always find used CD’s which are even cheaper so there’s no cost savings.

Having said that, the SQ in an older aircooled 911 is average at best so CD or FLAC high resolution are lost on these cars. Someone could argue that they can or have created a great sounding system but unless you add tons of sound deadening to the car it will not matter once you’re above 25 mph. Besides, who wants to add all that weight into a car that was designed to be lightweight anyways.

FLAC and ALAC are for the home sound system and or high quality headphones with AMPs. For the car convenience and ease of use is far more important. If you’re particular about how your interior looks then it narrows down the options further and all the good ones have already been mentioned on this thread.