I am in midst of developing a multiplayer racing game , targeting Steam platform.

I have got some car models from a freelancer that actually resemble the original cars.

If I intend to use the actual names of the cars inside the game, is there any legal permission required from each manufacturer(if yes, how much does that generally cost and what are the other complications?) or is there any procedure that can bypass all the copyright elements and allows me to use the actual names without any complications?

I am not willing to pay for this(to get permissions for using brand names) purpose as of now . That way can slightly altering the names - like naming McLaren to MacKaren will be legal?

They would be protected by Trademark rather than Copyright.

Yes, you would need permission to use the unaltered names. No, you won't get that permission for free - I would expect it to be quite expensive.  Note that the designs of the cars or distinctive features may be legally protected, not just the names.

Changing the names slightly may protect you, but you would need to ask a lawyer to have more certainty.  Lots of other games have gotten away with that approach though.

Note that the key here is to prevent confusion (prevent the possibility of someone getting the false impression that the game is endorsed by the owner of the trademark or connected to the actual trademarked product). So as jbadams intimated, even having cars that look too similar may be a problem; some cars have distinctive visual features that help customers identify them. Of course, to what extent would be up for a court to decide, and only a lawyer could tell you what your chances are (and I too am not a lawyer).

If I was in your position, I would change the cars' designs and names sufficiently so that there's no possibility of confusion. This may require either extensive research or good knowledge of car models, so that you can identify what features are common engineering choices and what features are used to help customers distinguish models. And just to be on the absolute safest possible side, I would include a disclaimer as well stating that the cars in the game are not intended to represent any real-life cars and that the game has no connection to any car manufacturer.

You may be able to get away with less, but if you intend to do so, definitely get some legal advice first.

11 minutes ago, JulieMaru-chan said:

Note that the key here is to prevent confusion (prevent the possibility of someone getting the false impression that the game is endorsed by the owner of the trademark or connected to the actual trademarked product). So as jbadams intimated, even having cars that look too similar may be a problem; some cars have distinctive visual features that help customers identify them. Of course, to what extent would be up for a court to decide, and only a lawyer could tell you what your chances are (and I too am not a lawyer).

If I was in your position, I would change the cars' designs and names sufficiently so that there's no possibility of confusion. This may require either extensive research or good knowledge of car models, so that you can identify what features are common engineering choices and what features are used to help customers distinguish models. And just to be on the absolute safest possible side, I would include a disclaimer as well stating that the cars in the game are not intended to represent any real-life cars and that the game has no connection to any car manufacturer.

You may be able to get away with less, but if you intend to do so, definitely get some legal advice first.

Thanks for making it more clear, @JulieMaru-chan .

If models resemble 80%, names are completely different (Jaguar-->Parrot), and I put a disclaimer , should that be safe enough?

I will definitely try to seek a legal advice in the advanced stages of production. 

Thanks!

I have been downvoted and argued against by mods and users alike on this subject before. People just want to believe what they believe I guess.

Anyway, this time I'll just take myself out of the equation and post a recently released (today) video that goes over the subject in-depth. It is mainly on film use but does include some video game usage. It is a very informative video regardless.

But be warned, it could cause even more confusion.

6 hours ago, Ripples said:

I will definitely try to seek a legal advice in the advanced stages of production. 

The longer you wait, the more expensive it can get to change. If you start now without using any trademarks or copyrighted material, you'll be in a better position.

It's somewhat of a grey area, because you can be sued for anything at any time, regardless of whether the person launching a legal attack against you is correct or not. Even if they're not in the right, can you afford to hire an IP lawyer to defend you in court against such an attack?

So the question isn't "is this legal" (a black and white yes/no answer), it's "how risky is this" (a grey area answer).

Using real-world products within fiction has a very long precedent as a way to ground the fiction within the real world. Usage of a product in it's intended manner, in a way that doesn't imply endorsement by the product, or unfairly attribute flaws to the product, is legally allowed.
However, many games which have tried to do this have found themselves the target of lawsuits anyway. I'm not aware of any game that has actually gone to court to successfully argue that they have done no damage to the brands involved and are innocent -- in every case I've seen, the game developer has backed down and paid a settlement fee, or changed their game, etc...

The actual design (shapes, styles) of the cars is covered by copyright. Straight up copying those designs opens you up to legal attacks based around copyright infringement.
The names (brands, logos, etc too) of the cars are covered by trademark. Using them at all opens you up to legal attacks based around trademark infringement.

So, it actually can be legal if done carefully, but it's always extremely risky, especially if you don't have the money to fight for it in court...

On 12/5/2018 at 8:56 AM, Ripples said:

I put a disclaimer , should that be safe enough?

Parallel:  I'm only going 5 over the posted speed limit, is that safe enough?

The only right answer is to tell you to not do it all.  Don't do anything that is in the gray area.  If it is someone else's idea, product, design, image, name, story, or anything else, then it is theirs and not yours.

If you still want to do it, talk to a lawyer to understand the actual risks and the actual costs.  Something may have a low chance of causing trouble, but if it happens you will be in the poorhouse, or the business will become bankrupt.  Other things may have a worst case of costing a few hundred dollars if it is a problem.  Usually the best option is to get permission so you eliminate that risk.

If you don't get permission, don't use it.

Thanks everyone for your valuable suggestions.

Now i feel , as this will be my first indie game, the best way to stay out of any legal complications is to alter the model of cars as much as possible to prevent copyright and use completely different names for the trademarks. If I gain something remarkable out of game, I can consider to pay for the licenses later on.

@fleabay Honest opinions are always welcome.

14 hours ago, frob said:

The only right answer is to tell you to not do it all.  Don't do anything that is in the gray area.

But that raises the question: how do you put cars in your game without having an automotive designer? If every car model that ever existed was somebody's IP, and so many cars look alike, is there such a thing as a generic car?

Going on a tangent, it's even worse for something like airplanes: aerodynamics govern how to make airplanes, so most airplanes* look similar. How can you put airplanes in your game without infringing on any existing design?

* of the same category, of course