I went to test drive an STi yesterday which had a broken speedo cable and was apprently making the fuel cut off, cut in
So when he booted it, it would cut out after 4-5k rpm

Is this true, or would this not happen?

 

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Tell him to get it repaired and then go and have another look! The fact is if he's selling the car with anything broken then the chances are it hasn't been very well looked after. I certainly wouldn't buy a car that is basically in limp mode it could be hiding other problems. If he won't fix it then walk and find another one!