Off ("O/D Off" light in dash is lit, if you have one) for city driving below 45 MPH or so, and on ("O/D Off" light in dash is not lit) for highway driving. This is how it is for 2Gs, but I would imagine 1Gs are the same.
but still, does it hurt anything keeping it on always?i usually dont, but the rpms are down. and 60 is way to high for me to leave it off. at about 50 or so my rpms are up at about to 3k margin, to high for me just to cruise. gas=bad. and turning it on and off frequently during driving (say if you speed up and down to the right number) will that hurt anything?
The car manual says to keep the O/D on at all times for normal driving purposes. It keeps engine RPMs down low and keeps the transmission fluid temp low too. This is all very good. Of course the OD clutches are crappy on DSMs. I got a clutch upgrade but haven't installed it yet. It is perfectly alright to drive with it shifting into 4th gear all the time. It was designed to do this.
Turning O/D on and off shouldn't hurt anything. All it does when on is allow upshifting into 4th. Default mode and how most cars are driven is with O/D on at all times. Keeping it off just allows you to cruise at a more comfortable rpm range in 3rd gear, especially useful with a bigger turbo.
Basically, the O/D button just gives the user/driver more choice in gear selection. It's not necessary to make use of it but it's available if you choose to use it.
for city driving, as someone has mentioned already, OD should be off. our overdrive is very weak and unless you want to have to rebuild the end clutch very soon, i advice keeping it off while driving under 40. this is from my own experience and an advice of a very experienced mitsu mechanic...
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