In this work torque vectoring methods are used to compensate for a low performance steer-by-wire system. Currently a number of vehicle manufacturers are considering introducing steer-by-wire into their range of vehicles. Some of the key concerns for the manufacturers are safety and cost. The safety can be subdivided in the integrity of the steering system and the effect on handling. The focus of this study is the use of low cost steering actuators on a vehicle and identify its effects on the vehicle's handling response. The test vehicle is dune buggy modified to accommodate the low performance steer-by-wire system without a direct mechanical link between the steering wheel and the wheels and equipped with various sensors to data recording. In order to investigate the influence of torque vectoring system on the steer-by-wire, an eight degrees of freedom vehicle model in Matlab/Simulink has been developed. The eight degrees of freedom are longitudinal and lateral translations, yaw and roll motion and rotation of each wheel. The Matlab/Simulink model also includes the dynamics of the actuators, which is validated against the experimental data. The actuator was shown to have a bandwidth of less than 0.3 Hz. The eight degrees of freedom model's response was validated against experimental data for both steady state and transient response up to 0.5 g. The tyre forces and moments are implemented by using the Dugoff tyre model, which has been validated against experimentally measured data. The torque vectoring system uses the cascade approach based on a reference model, which uses a two degrees of freedom (bicycle model) to generate the reference signal for control purposes. The upper level yaw controller is based on the optimal control theory and uses the LQR (Linear-quadratic regulator) approach. The lower level wheel slip controller is based on a slidingmode structure and prevents tyre force saturation. The simulation results show that the vehicle augmented with the torque vectoring system outperforms the low performance steer-by-wire vehicle and also the vehicle with conventional steering arrangement.