Fuel Economy and Drivetrain Wear
When using overdrive gearing, the car's engine speed drops, reducing wear and normally saving fuel. Since 1981 U.S. corporate average fuel economy (CAFE) legislation on virtually all domestic vehicles have included overdrive to save fuel. One should refer to the car's owner's manual for the proper speed to run at overdrive. All engines have a range of peak efficiency and it is possible for the use of overdrive to keep the engine out of this range for all or part of the time of its use if used at inappropriate speeds, thus cutting into any fuel savings from the lower engine speed.
Overall drivetrain reduction comes down to three basic factors: transmission gearing (including overdrive), differential gearing (in the axle), and tire size. The rotation speed problem comes into effect when the differential gearing is a high ratio and an overdrive is used to compensate. This may create unpleasant vibrations at high speeds and possible destruction of the driveshaft due to the centripetal forces or uneven balance.
The driveshaft is usually a hollow metal tube that requires balancing to reduce vibration and contains no internal bracing.
The higher speeds on the driveshaft and related parts can cause heat and wear problems if an overdrive and high differential gearing (or even very small tires) are combined, and create unnecessary friction. This is especially important because the differential gears are bathed in heavy oil and seldom provided with any cooling besides air blowing over the housing.
The impetus is to minimize overdrive use and provide a higher ratio first gear, which means more gears between the first and the last to keep the engine at its most efficient speed. This is part of the reason that modern automobiles tend to have larger numbers of gears in their transmissions. It is also why more than one overdrive gear is seldom seen in a vehicle except in special circumstances i.e. where high (numerical) diff gear is required to get the vehicle moving as in trucks or performance cars though double overdrive transmissions are common in other vehicles, often with a small number on the axle gear reduction, but usually only engage at speeds exceeding 100 kilometres per hour (60 mph).
Read more about this topic: Overdrive (mechanics)
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