The 1989 Mustang GT is powered by a 5.0-liter V8 engine that is renowned for its low-end torque that provides a healthy dose of performance even in stock form. This year is part of the 1979 through 1993 generation of Mustangs, also called "fox body Mustangs" because of the styling of the car. The 5.0-liter V8, while impressive in stock form, also takes quite well to modifications that are relatively cheap and easy to install.
One of the first steps to getting more power from a Mustang GT is fitting a larger diameter exhaust. You can either go to a muffler shop and have a larger diameter exhaust and freeflow muffler installed or you can also simply order an aftermarket, cat-back exhaust, which starts at about $300 and goes up from there. For another $180 or so you can also replace the mid-pipe for even more power. Headers are another quick and cheap way to free up horsepower. Replacing the restrictive stock manifolds with tubular headers not only makes the car sound better, but it adds power as well. A pair of equal-length "shorty" headers starts at just over $200.
Another common and relatively inexpensive way to get more power from a Mustang 5.0-liter motor is by installing a computer chip that has a more aggressive map for the fuel and ignition curves, thereby increasing power. Some chips even allow you to choose from several different levels of tuning and power.
Installing a smaller, underdrive pulley for the belts that run the fan and other components reduces parasitic power loss on the engine and frees up additional horsepower. Prices for underdrive pulleys range from as little as $70 to as much $150. You can also eliminate some pulleys, such as the one for smog pump, to free up horsepower with a pulley eliminator kit. Getting as much cold air to the engine also allows it to produce more power, so bolting on a cold air intake is a good idea. Another thing to keep in mind is that a properly maintained car also produces more power, so make sure that components like the fuel injectors are clean and the spark plugs are not fouled. Likewise, make sure that aspects such as the ignition timing is set correctly.
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