What is understeer and oversteer?

Oversteer generally refers to a car's tendency to lose grip at the rear wheels, around corners or when pushed hard. This results in the back end sliding out.
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Oversteer can be found easily in older rear-wheel-drive cars (such as Falcons and Commodores) when pushed hard around a bend or in the wet.

Understeer is the opposite of oversteer and is generally more related to the front wheels. Understeer takes place when a car refuses to turn into a corner and insists on going straight ahead.

Generally more cars are designed to understeer as oppose to oversteer, with the view that drivers will be more comfortable with losing grip at the front than at the rear.