Overdrive

Overdrive is designed specifically to use less fuel by making the engine run slower, but only when the engine does not have to struggle to maintain speed. Think of riding a ten-speed bicycle. In first gear you can climb up the side of a building, but it would take you forever to go across town. In tenth gear you can sail across town in a few minutes, but your legs are not strong enough to pedal up a steep hill. The gear you choose is a trade-off between power and speed/distance. Tenth gear is like the overdrive gear in your car.

Which light are you referring to? A flashing check engine light indicates the fault detected is one of the most serious, and you are supposed to stop the engine right away to let the exhaust system cool down before expensive damage occurs. Too much unburned fuel is going into the exhaust system. A flashing overdrive light means a problem was detected, and the computer is not allowing the transmission to go into overdrive. Most often that is caused by a failed sensor or a wiring problem related to a sensor in the transmission.