DMMs do have a limit on how much current they can measure. Usually this limit is printed at the point where the red lead plugs into the meter. If it says, "10 Amps Max" then there is a 10-amp fuse inside the meter that will blow if the current is above 10 amps. If you take out the 10-amp fuse and put in a 20-amp fuse, you will burn out the meter beyond repair. I would suggest buying a DMM that will handle at least 20 amps for automotive testing.
Some DMMs have an inductive pickup that clamps around the wire being tested. These ammeters measure amperage based on the magnetic field created by the current flowing through the wire. DMMs that have an inductive pickup usually will read higher current and have a higher limit. Since this type of meter doesn't become part of the circuit you do not need to disconnect any wires to get a reading.
Voltmeters are usually connected across a circuit. You can perform two types of tests with a voltmeter. If you connect it from the positive terminal of a component to ground, you will read the amount of voltage there is to operate the component. It will usually read 0 volts or full voltage. If you test a component that is supposed to have 12 volts, but there is 0 volts, there is an open in the circuit. This is where you will have to trace back until you locate the open.
The other test is a voltage drop test. With a light bulb circuit, if a voltmeter reading indicates full voltage at the light sockets but a light doesn't work, the problem could be the bulb, the socket or the ground connection. If you install a bulb that you know is good, the problem now becomes the socket or ground. Without disconnecting anything, connect the voltmeter to the ground terminal of the socket and a good chassis ground. If the socket is bad, the meter will read zero volts. If the socket is good and the ground connection is dirty or bad, the meter will read very close to battery voltage. Any voltage reading at all indicates a poor ground circuit.
Another useful function of the DMM is the ohmmeter. An ohmmeter measures the electrical resistance of a circuit. If you have no resistance in a circuit, the ohmmeter will read 0. If you have an open in a circuit, it will read infinite.
An ohmmeter uses its own battery to conduct a resistance test. Therefore there must be no power in the circuit being tested or the ohmmeter will become damaged.
When you test a component you put the red lead on the positive side and the black lead on the negative side. Current from the battery will flow through the component and the meter will determine the resistance by how much the voltage drops. If the component has an open the meter will flash "1.000" or "OL" to show an open or infinite resistance. A reading of 0 ohms indicates that there is no resistance in the component and it is shorted. If a component is supposed to have 1,000 ohms of resistance and a test shows it has 100 ohms of resistance, which indicates a short. If it reads infinite, then it is open.
Analog ohmmeters will need to be calibrated before they are used. There is an "ohms adjust" screw on the meter used to do the calibration. To calibrate the ohmmeter, you touch the red and black leads together and turn the adjusting screw until the needle is at 0. You should do this each time you use the ohmmeter and each time you change scales. DMMs do not need to be calibrated since they will self calibrate themselves. Holding the two leads together will confirm that they are, indeed, calibrated.
To check a wire in a harness you connect one lead at one end of the wire and the other lead to the other end of the wire. If the wire is good you will get a reading. If it is broken, you will get an infinite reading. This is useful in determining why a particular component is not getting power. Just be sure you isolate the wire from the circuit so your ohmmeter does not get damaged.
These are the three basic functions of all DMMs. Some DMMs will have many other features such as averaging where it will take a reading over a period of time and average it out. Some have a MIN/MAX feature that will hold the highest/lowest reading. Some will do specific diode tests, measure injector pulse times and even have thermometers. Meters like this can be many hundreds, or even thousands, of dollars.
Whatever kind of meter you have it can be the most useful tool you have when it comes to tracking down an electrical or electronic problem. Make sure you know what your meter can and cannot do. And don't push it past its limits. With a good wiring diagram, a decent DMM and a little common sense there won't be any problem you can't track down.
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