I am new to driving automatics and my stang has overdrive, what does it do and when should I use it.

 

In an auto just leave the overdrive on all the time unless you are racing it. It is just using a higher gear that is geared less than 1:1 to save gas. It is the same as using 5th gear with a manual trans.

 

I had heard that it only really works when your on a highway or when your car would be in fifth gear, so driving around with it on around town at 25 MPH doesn't really do anything except rob you of horsepower

 

no, it makes the car basicly the same around town. Going 25 you would probably be in 2nd in a newer GT anyway. I guess it technicly robs you of hp all the time being more weight and another gear the tranny has to turn.

 

it kicks in at about 30-40 at low acceleration. it dont rob horsepower...it saves gas.
Your trans will downshift into a lower gear if you accelerate a little harded. The lower you keep your rpms...the better gas miliage your gunna get.

 

so your saying that even if I leave it on, I will still get the same pickup if I need it, but if I don't accelerate fast overdrive makes the wheels turn faster than the engine does to get better fuel economy.

if I do get better fuel economy with overdrive what do you think I would get, becasue if it's anything substantial than I 'll just leave it on all the time.

 

Overdrive is controlled by the speed you are going. All it is going to do is get you noticibally better mileage on long trips at highway speeds. It won't harm your gas mileage at all. The tranny won't even shift into overdrive if you are going 25 MPH through town. It can't really hurt you if it is your daily driver.

 

Leaving OD off all the time would be like driving an old 4-speed as far as gas mileage. For example my truck gets 13 mpg on the highway while the Cobra gets 25 mpg.

 

Overdrive is your top gear. Switching it off will prevent your transmission from engaging it.
The original term was from when most transmissions had the last gear as 1:1 ratio. The next generation of trans made the last gear turn the output shaft more than the input shaft. Hence the term overdrive.

Leave it on all the time. The computer will decide when you don't need it.

 

Agreed. No need to turn it off. The only times you should do that is when you decide to race going from a high-speed start. This only because it will take extra time for your tranny to drop a gear or 2 when you begin to accelerate. The other time is if you are pulling a trailer with a heavy load. This can overheat your transmission because it will have to shift out of overdrive to keep up with the demand of your foot. Like everybody said above...it's not going to hurt you to have it on. Just keep in mind if you live in mountainous or hilly area you need to pay attention to see if it is constantly having to shift in/out of OD to make it up hills. Other than that it should be OK.