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Too low is not bad on a car that is designed for it, i.e. any ground up race car. Too low is bad for a street car do to the lack of suspension travel. The lack of suspension travel does not allow the car to resist the forces of turning AND absorb bumps at the same time. This causes the car to hit its bump stops which will then send that corner of the car (or side, or whole car) off the ground. A tire that is not on the ground isn't doing anything to help the car turn, stop, or accelerate.
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