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All internal combustion engines (like the one in your car, unless you drive an electric car!) have compression. It's the way they work.
Measuring your compression is done by removing a spark plug (or injector in a diesel), inserting a compression measuring gage, then spinning over but not starting the engine. Because of this, compression can vary as to how fast the engine turns over. You look more for even compression between all cylinders than a certain number on the gage, although a gas engine needs at least 100 pounds of compression per square inch (PSI) to fire.
Compression which is too low can result in poor running, high emissions, and bad fuel mileage. A more accurate test is the leakdown test. This blows compressed air into each cylinder. Not only can the percentage of compression loss be measured, you can determine the cause of the low compression by seeing where the air leaks out. Bad rings will leak into the crankcase and you can hear the air blow out when you remove the oil filler cap. Cars with a bad exhaust valve will blow out the exhaust pipe, and a bad intake valve will blow back through the air cleaner.
The engine takes a fuel/air mixture, compresses it, then ignites the mixture. This mixture burns, making the power which pushes your car down the road.
Most modern cars turning over at a normal starter speed generate 150 PSI or more.
Low compression can be caused by cylinder head problems or bad piston rings (or apex seals in rotarys).
WET AND DRY COMPRESSION TESTS
If you suspect bad rings, do a compression test on all cylinders, then squirt a bit of oil in the spark plug hole. Test the compression again. If the "wet" reading is a lot more than the 'dry" reading, you probably have bad piston rings.
Leakdown Test
WHAT IS COMPRESSION RATIO?
The compression ratio of an engine is determined like this: the volume of the combustion chamber with the piston all the way down at the bottom of the cylinder (bottom dead center) is divided by the volume of the combustion chamber with the piston all the way at the top of the cylinder (top dead center). The lowest compression ratios are around 8 to 1. The highest stock compression ratio (found on 60's muscle cars) is around 12 to 1. A higher compression ratio makes more horsepower. It can also make you burn high octane, premium gas, even racing fuel. Few modern cars exceed 10 to 1 compression ratios.
Here's a video on how to do a compression test