Understanding Breaker Point Ignition Systems
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Use the voltmeter to take a reading at the ends of the battery cables. The voltage should be the same as at the battery itself. If not, clean the ends of the cables and try again. If you still get a voltage drop at the end of the cables, junk them and get new cables. While you are at it, try wiggling the cables around with the voltmeter probes firmly attached. If you see a low or nonexistent reading you have a cable that is corroded on the inside.
Assuming you have a good battery that is fully charged, good battery cables and clean, tight connections you can start testing other parts of the circuit. Place the positive probe of the test meter on the positive battery terminal and the negative probe on a clean part of the engine block. This tests the ground connection between the negative battery terminal and the block. If the voltmeter reads lower than the battery you need to clean and/or tighten the ground connection.
You can go through the whole circuit testing the voltage at each wire and component. If you find a significant drop in voltage, stop to check for a bad connection or wire. Some engines have an external resistor near the ignition coil. This will affect the voltage reading you get according to the strength of the resistor.
You can check the resistor with an ohmmeter. Get the resistance of the resistor from the manual for your engine (some resistors may have their ohm rating marked on them). The coil can be checked the same way.
Use your voltmeter to check for a short to ground between the battery and the points. Block the points open with a small piece of wood and put one probe on the appropriate battery terminal and the other probe on the point itself. Just make sure that you have your polarities straight. With the points blocked open one will be positive, the other negative. If the meter doesn't show any voltage when the probe is on the "spring clip," you may have a bad insulating washer at the distributor, which would let electricity go to ground through the block before going to the points. Test for continuity between the block and the negative coil terminal to confirm this theory. Test for continuity between the block and the stationary point attached to the distributor plate.
Rotate the engine until the points are closed. Use the multi-meter to test for a good connection between the points. A slight gap when the points are supposed to be closed will keep your machine from running.
If you do not have a test meter you can use a self-powered test light to do essentially the same thing. Always use the test light with the battery disconnected. When the circuit is closed the light will shine. If you have a fault in the circuit, such as a broken wire, the light will not come on.