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We asked Cameron why it is that many brands of shocks -- KYBs, for instance -- are not recommended for use on lowered cars, whereas the same Bilsteins can be used with both stock and lowering springs. Here's the answer:
KYB has stated that their shocks are not for use on lowered cars. My understanding is that the valving is set up assuming a given ride height and that the shocks works poorly when held closer together. Also, the KYBs are preloaded: they come from the box fastened with a zip cord. If this cord comes off, the shock expands immediately. Eventually, the shock won't do that (it wears out). Next, shocks fails prematurely because the car (being too low) has held the shock under greater pressure than it is designed for. Instead of the piston inside occasionally traveling to the far end of its travel, it rests there and suspension travel is further limited. Ride will be really harsh for a while and then become bouncy once the shocks lose their "preload."
I have used KYBs in the past and I was pleased overall with the ride; everything else was stock. They did last for about three years.
The Bilsteins have two pistons inside: the one that's attached to one end of the shock and another "floating piston" at the far end of the cylinder. Picture the shock vertical; the top mount is attached to the cylinder and the lower mount is attached to the rod. The rod passes through a seal and attaches to the lower piston. The piston is surrounded by oil both above and below.
Near the top end of the shock is the second piston. This one is not attached to anything, but uses a much tighter seal than the lower piston. Below it is the oil and above it is gas at high pressure. This higher piston keeps the oil inside from foaming under hard and repeated use (foaming will prevent the shock from working right). The gas pocket at the top is pressurized; this is how this shock is preloaded. But, because it isn't fully preloaded like the KYB, it can easily handle differing ride heights; the gas is pressurized at the lowered height (a lowered car will compress the gas more than a normal height car). Ultimately, since the gas is squeezed tighter, the shock will offer tighter response than it would on a stock height car.
Additionally, the inside surface of the shock cylinder where the lower piston rides is slotted; this allows the piston to move up and down with less resistance than it would if the cylinder were smooth (Monroe shocks have this also: they call it "Sensatrack"). The other aspect of this is that the lower piston is closer to the end of this slotted area. When it travels out of the slots, resistance increases and damping control is tighter still.
Bilsteins, unlike most (perhaps all) other shocks, also have a feature that makes them superior to other shocks -- in addition to the car's existing bump stops, they have an internal bump stop that comes into play in the event of a hard compression. Hopefully not required, but certainly a nice addition if one should run short springs and happen to compress the suspension fully. Even so, it's not a good idea to set up a car in such a way that it will bottom out on a regular basis.
So, not only is the Bilstein good on a stock height car, it will offer better rebound control and a tighter feel on a lowered car without compromising its overall integrity -- these will be the characteristics sought by those lowering their cars as part of suspension tuning -- but only to a point. I did speak to an owner who had been using them on a 122 that sat a full three inches lower in the suspension than stock. He had used them for over ten years and they had finally failed. I spoke with a a couple techs at Bilstein in San Diego, and their response was that this shorter ride height would require stronger damping than the "regular" 122 spec shocks. Cars that are lowered "only" an inch or two should have no problems.