I would put the 351 in if your going to race. The '66 coupe only weighs about 2600-2700 LBS. But since there are more 5.0's then old mustangs, most of those get raced. Thats why u don't see many old mustangs, pplus most of them get restored.
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You can make any car fast with enough money. 5.0s are just more popular cuz more people grew up with them. You can take any classic mustang and make it just as fast. It is just that 5.0s are alot cheaper and easier to make fast than a classic mustang. Plus a classic mustang is alot more valvuable in its original condition so you don't see to many people buying them for racing.
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I think it's cheaper to race an old car, as long as the body keeps up. No computer, or junk like that to mess with.