The highest current ground is to the engine block since that is where alternator and starter currents flow. A ground must always connect from the battery.
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Ground battery to engine or frame. Finally insulated wire is best if youre running wire for any sort of length. If the ground wire is loose then the alternator wont deliver its full power to the battery particularly at idle. When i build or restore a car i run a heavy ground cable from the battery negative to the engine block from that ground point on the engine i run the other 2 smaller grounds to the body and then the frame this way i only have one connection to the battery negative. Unless you have a trunk mounted battery and are using the frame for a ground the frame on most stock vehicles is not grounded to either the body or the engine. Insulation ensures that the wire will not deteriorate due to moisture. That ground has to be a very solid low resistance connection.
The ground is a major part of the batterys charging system so assuming that youre getting proper voltage output from the alternator wire and the battery isnt hashed then you may be looking at a bad ground wire. The starter and alternator are both large current devices and are both grounded directly to the engine. There should be 3 grounds from the battery negative. The starter alternator and most distributors are grounded through the engine block. The battery ground should go to the engine block or transmission to engine bolt. Grounding mistakes with car batteries can cause hazardous electrical contacts or even battery explosions.
When you use the frame or chassis as a ground the electricity flows from the battery through the copper wire and then back to the negative side of the battery through the frame of the car which is substantially different than a wire. Grounding is a fundamental safety feature in any electrical circuit but establishing a good ground in a car battery is vital because their lead acid design is tailor made to deliver a huge jolt of electricity. Trying figure out where to run your ground wire. Just because the negative cable is ran from the battery to the frame doesnt mean the engine is getting that ground. But steve is right the ground wire for any device must be capable of carrying the same current as its supply. You could always run it all the way back to the battery and connect to the negative terminal or you can just find a nice piece of vehicle frame to.
When you guys create a circuit dont you generally have the same size wiremetal throughout excluding components. A braided copper ground strap is best attaching the engine to the frame. One of the leading causes of abnormal ignition and gauge problems is a bad or improper ground. Heavy 2 gauge cable should be used to connect the battery negative terminal to the engine block or starter mounting bolt. In reference to dans point on the ground between engine and bodyframe thats fine if you run a ground cable from the battery to the engine thats of equal gauge to the cable. It is a direct connection to the battery with batteries near the engine and often via the chassis with remote batteries.
If you have rubber polyurethane or painted motor mounts and no ground strap you may not have a sufficient ground supplied to these electrical components.