Overdrive is a device to step up the gear ratio in the car. 

It is fitted in between transmission and the propeller shaft.

Overdrive have become very popular in the USA. 

It enables a high cruising speed to be attained with a comparatively low engine speed (upto about 20 to 25% less) on long journeys. 

This results in less wear of the engine parts and decreases vibration and noise. 

As the friction losses at lower speeds are less, there is a saving of fuel also with the Overdrive.

Overdrive is generally fitted On top gear only. 

But in some sports cars, overdrives are also fitted on gears other than the top gear which increases the torque ratios available. 

For example, when overdrive is fitted on top, third and second gear, seven forward speeds or torque ratios are available. 

The overdrive may be operated either manually or automatically at a predetermined speed.

To understand the working of an overdrive consider figure. 

It consists of an epicyclic gear train in which the sun gear is free to rotate on the input shaft, while the carrier can move on splines on the input shaft. 

A freewheel clutch is also fitted on the input shaft splines. 

The output shaft is connected to the ring.

When the sun gear is locked with the casing that is it becomes stationary, the speed of the output shaft is increased that is overdrive is engaged. 

When, however, the sun gear is locked to the carrier or to the ring, solid drive through the gear train is obtained. 

Thus depending on the locking of the sun gear with casing or with carrier, the overdrive or the normal direct drive is obtained. 

There is another possible control of the mechanism that is when the sun wheel is kept free to rotate on the input shaft. 

In this case there is direct drive through the freewheel clutch when the engine develops power. 

However when the accelerator pedal is brought to zero,position and the engine is simply idling, the output shaft will tend to overrride the input shaft. 

The rollers of the freewheel clutch in this case no longer remains wedged and the car freewheels. 

Thus for gear changing one simply has to lift his foot off the accelerator pedal, the clutch need not be operated.