A 3-way catalytic (TWC) converter is used on most newer cars and trucks in order to control the exhaust emissions of hydrocarbons (HC), carbon monoxide (CO), and oxides of nitrogen (NOx). This is mandated by the federal gonvernment and must be present on your vehicle. The catalyst chemicals within the converter promotes a chemical reaction which oxidizes the HC and the CO that is present in the exhaust gas.
This process will convert the HC and the CO into a water vapor and CO, and will reduce the NOx, converting the NOx into nitrogen. Plain water is produced in the process. So, when you see water dripping from the muffler or tailpipe, this is normal and no cause for concern.
The converter also has the ability to store oxygen. The powertrain control module (PCM) has the capability to monitor this process by using a heated oxygen sensor which is in the exhaust stream past the 3-way catalytic converter. This is normally sensor 2 bank 2. The HO2S sensor produces an output signal which indicates the oxygen storage capacity of the catalyst. This indicates the catalysts ability to convert the exhaust emissions effectively. The PCM monitors the catalyst efficiency by first allowing the catalyst to heat, waiting for a stabilization period while the engine is idling. Then the PCM adds and removes the fuel while monitoring the reaction of the HO2S.
When the catalyst is functioning properly, the oxygen sensor # 2 response to the extra fuel is slow compared to the oxygen sensor #1. When the HO2S 2 response is close to that of the O2S 1, the oxygen storage capability or efficiency of the catalyst is considered to be bad and the malfunction indicator lamp (MIL) will illuminate and set a code P0420.
Code P0420 catalyst efficiency low can also be caused by one of those cheap replacement types you buy at a parts store or have installed at a discount exhaust shop. We have seen this several times where a customer brings in his car and tells us that code P0420 came back even after converter replacement so there must be something else wrong. They say we replaced all the sensors and it still comes back. It is hard to convince customers that the converter was the original problem but you just wasted your money by installing a cheap one that does not clean the exhaust good enough.
So of all the things you try to save money on car repair, the catalytic converter should not be one of them. The proper way to diagnose this code is to look at live sensor data and compare them. Do this at a higher RPM around 2,000 after it is already hot.
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