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I think it has all been said. Modding can be a huge waste of money (we've all seen cars that have huge ridiculous wings or overwrought body-kits) if done poorly. Even if done correctly the cost can outweigh the benefits.
Some mods can void your warranty or make your car uninsurable (is that a word?). The bottom line is, you have to decide for yourself if it really is worth it. I agree with carrera, most people never even come close to pushing their car to it's limits.
I also agree that often you are better off buying a better car rather than spending the money on modding what you have. It wouldn't be hard to drop 30k on a modified focus- think of all the cars that sell for around 30k. Why not just buy one of them instead?
Still, there is a certain satisfaction in creating something original. If it gives you an outlet and you are approaching it in a safe way (i.e. not running soccer moms into the ditch while you fly by at 120mph) why not?
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