low octane gas can cause detonation because the fuel ignites at lower temp.
Why is this a problem?
1. The extreme pressure cause by detonation can ruin engine bearings, bend/score the crankshaft, bend the connecting rods etc..
2. ECU can only correct air fuel mixture and timing to a certain point and once outside the ecu's ability to correct the degradation of performance is increased greatly.
3. Poor combustion increases emissions which can choke a cat.
Remember:
High compression + engine age = higher octane requirement.
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