How much would it cost if my parents added a 1994 mustang on to insurance

The age of the car is one factor, but, your age and driving record is even a bigger issue. Depends upon how old you are? Under 25 costs a lot more for any car, plus it also depends on your insurance company, where you live and even your grades in school. You can just get PL and PD, public liability and property damage without collision.

You're absolutely correct! There's no reason to get a V8, they consume much more fuel and in many cases are not as good than a modern naturally aspirated Four. Four cylinder cars have come a long way and many newer ones today have the performance of an old Six cylinder.

And, 1994 is not that "super old", for engine performance, certainly not like cars from the late 70s or early 80s. In terms of technology, cars from even 10 years ago have gone through marked changes, Bluetooth, vehicle stability control, navigation, pre-collision braking, side collision air bags, electric power steering, CVT transmissions and of course fuel-efficiency. Twenty years is really a long time for car upgrades.