Armor

Armor protects your vehicle from damage, however, the exact damage mechanics are not explained clearly by the game.

Regular armor pieces add durability to the vehicle cabin, but if an armor piece is destroyed then the cabin loses that durability. However, if the durability of the armor that is destroyed is greater than the remaining durability of the cabin, then the cabin will be left with 1 durability. The opposite is not true; cabin damage does not damage armor pieces.

This results in two non-obvious damage mechanics: first, that the killing blow to a vehicle must be to the cabin itself, and second, that it is theoretically possible for a vehicle to absorb damage up to 99% of its durability directly to the cabin, then rotate itself so that the enemy is hitting its armor instead, and then reabsorb the damage again to its armor pieces before eventually being destroyed.

Effects of Fused Cabins on Armor
Fused cabins which have "Durability +10%" will also gain +10% more durability when adding armor pieces. However, if that armor piece is destroyed, the cabin also loses the +10% durability that that armor piece was giving.

For example, a durability +10% fused cabin adding an APC Roof Part (120 durability) will add a total of 132 durability to the cabin. If that piece is destroyed, the cabin durability will drop by 132.

Armor is not affected by fused cabins with "Resistance to all damage +10%". The perk only applies to damage done directly to the cabin itself. Also note that the description of this perk is misleading, and that it actually only reduces incoming damage by 9%, not 10%.

The result is that these two perks behave virtually the same. In both cases, hits to the cabin effectively do 9% less damage, while hits to armor do full damage.

Armor Parts
You gain armor parts by leveling up with the various factions. The different factions have parts with different characteristics: the parts supplied by the Lunatics generally have the best durability-to-mass (D/M) ratio and worst durability-to-powerscore (D/PS) ratio, while the Steppenwolfs generally have the best D/PS ratio and worst D/M ratio.

"PS Efficiency" is simply D/PS multiplied by D/M, which can be useful to determine which parts save the most mass relative to their PS cost.

'Melee' armor pieces do not add durability to the cabin. They do extra damage in collisions. They are resistant to melee damage.

'Pass' armor pieces do not add durability to the cabin. They allow a percentage of enemy damage to pass-through. Enemy damage passing through will disappear completely after 6 blocks of distance. Your own weapons cannot shoot through them.