Probably wouldn't be too hard if you dump it before the t-case. I wouldn't expect to see any real performance or economy gains. As for the money, well I guess that depends on how much you spend. I could probably do it for less than $200, and most of that would be universal cats and mufflers.
I'd stick with stock. The performance gains will not be felt unless you send the heads out to be ported and upgrade the intake. Same thing with my 5.0. No point in making exhaust or intake upgrades if the heads cannot push the air. The exhaust will be louder but if the engine cannot flow the air there is no real benefit. Plus, less back pressure will take away torque. Hope this makes sense.
What size would you recommend in this application? My Dad has an 86 Ranger with a 2.9. He tows a trailer back and forth to the ranch. The hills can be tough. Not trying to steal a post.
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