So which dyno is better? The answer, of course, is it depends.
If you want to break in and tune a new engine, compare the effects of different parts on power, or extract maximum power from a current engine combo, the engine dyno is the way to go. Because it measures "true" engine torque, monitors a wide array of engine functions, and tests under controlled conditions, an engine dyno provides very accurate and repeatable results. Those results are why engine builders, manufacturers such as Trick Flow, and the OEMs rely on engine dynos for testing, tuning, and development work.
Determining the overall performance of a vehicle's drivetrain is where the chassis dyno really shines--after all, the power at the drive wheels is what ultimately moves your vehicle down the road or around the track. You can tune and compare parts combinations with a chassis dyno; the power figures generated will be just as accurate an indicator of performance as the ones from an engine dyno. Perhaps the biggest draw of a chassis dyno is that you don't have the time and hassle of yanking the motor out--just drive up on the platform, make some runs, then drive home with some printouts in your hand.
The thing to keep in mind about a chassis dyno is that it really isn't designed to measure true, or flywheel, engine output. You have to determine the amount of engine power consumed by the drivetrain and add that to the drive wheel power figure. While there are generally accepted loss percentages for manual and automatic transmission-equipped drivetrains, they are really only estimates. Add in the fact that drivetrain losses can vary from one run to the next, and things like tire temperature and pressure also affect final results, and you can see a chassis dyno is much better suited as a vehicle tuning tool than an engine horsepower measurement tool.
good link
http://www.trickflow.com/articles/dynotest_primer/
I used an engine dyno to get a decent tune and break in, but I also was trying different parts and I really really hate putting a new engine to then find out its leaking or something screw's up lol
Like cough cough too tight valve guides
And in another thread I will tell a little story about a my "new" rebuilt tranny
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