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CEL what does it do?...

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The Engine Control Unit checks various sensors for electrical values and ranges. When one comes up with a "wrong" value, it trips the CEL and stores an error code. You break out the code(s) when diagnosing why the CEL came on, hopefully avoiding later, more expensive damage from an engine running in a condition that is out-of-tune.
Bypassing the CEL removes this protection, but is sometimes necessary if some modifications are implemented.
 
For example, you can get a MIL eliminator in order to prevent a CEL happening if you were to remove your rear o2 sensor. CEL's can also be useful for misfire codes, front o2... etc
 
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