you drive the car around a circle of a certain size and they time you. this is a cliffnotes version of it and there is some math involved but i dont have time to reallly explain, im sure someone else can
A skidpad, like junglistgsr said is a circle of a certain size (on flat ground). You can measure lateral acceleration at maximum cornering speed, steady state (constant radius) cornering ability, and understeer/oversteer. As for how it works, you drive the skidpad as fast as you can without losing it, then calculate how many g's you're pulling. Bampf can give you the equation if you're interested, I don't know it.
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