An overdrive is a device which was commonly used on rear-wheel drive cars to allow the choice of an extra-high overall gear ratio for high speed cruising, thus saving fuel.
Early manual automotive transmissions were limited to three or sometimes four speeds, with only the most sophisticated being five speeds. This left an unfulfilled need for a higher gear ratio for highway cruising, which was filled by the addition of separate overdrive units. However, automotive manual transmissions manufactured since the 1980s tend to include a larger selection of gear ratios than before, the highest of which is usually greater than 1:1. This trend has rendered overdrives a complex and obsolete solution to economy gearing in automobiles, and very few cars are fitted with them today, although they still appear on large trucks, where more gear ratios are always in demand.
How overdrive works
The overdrive consists of an electrically or hydraulically operated epicyclic gear train bolted behind the transmission unit. It can either transfer the input drive shaft directly to the output shaft, called a propshaft (1:1), or increase the propshaft speed so that it turns faster than the input shaft (1:1 + n). Thus the propshaft may be "overdriven" relative to the input shaft. It is actuated by a knob or button, often incorporated into the gearshift knob, and does not require operation of the clutch.
Overdrive in Europe
The vast majority of overdrives in European cars were manufactured by an English company called Laycock de Normanville, which is now defunct, but its overdrives were found in vehicles manufactured by Ford, British Leyland, Jaguar, Rootes and Volvo to name but a few.
Gas Mileage and Engine Wear
Using overdrive gearing, your car's engine speed goes down. This saves gas and reduces engine wear. Refer to your cars owner manual for the proper speed to run at overdrive.