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I, too, have a 1986 244GL, autobox with o/d. Fortunately I got the owner's manual when I got the car. (Mileage reads 184995, same since April 1998 or before).
Upon start-up, the default position for the amber arrow is off. No arrow means the tranny controls when o/d engages. It should do so around 40mph, if the road is level and the car's load is light.
When you push the toggle button on the shifter handle, the relay trips, the arrow comes on, and the tranny is inhibited from engaging o/d.
Your situation seems to be that the arrow is always on, therefore the o/d is inhibited - won't engage.
As the other posters say, it is most likely the relay. Repair is a DIY job, but if your leaning is not that way, a shop will be glad to replace the relay. (That relay is one of the more expensive on the car.)
If you can do the DIY, three routes. (1) Install a used one from eBay or from a junkyard. If this route, be sure to get the same color, different for a stick shift.
(2) Re-solder the one you have. Somewhere on this board is a good set of instructions, with pictures. Relay failure often happens over time when the vibration cracks a solder line on its circuit board. If you get a used one, do the re-solder before installing.
(3) Install a new one, at least you would save the labor charges and the hassle of getting the car to and from the shop.
The relay is located below the right hand center a/c vent. It is very easy to get at. Pull the glove box (7 Philips-head screws, leave the "everything" in the box) and look to the left. It is a larger relay and may be held to a rail by a clip. I use a flat-tip screw driver to get the clip loose. Move the relay, on its base, into the glove box space. Then its just pull off the old, plug in the new, and reassemble. Be careful to not over-tighten the 7 screws, the threads strip easily.
Getting the o/d back will keep engine revs down, fuel efficiency better, and quieter running.
Good luck,
Bob
:>)
PS In third gear, engine speed = driveshaft speed, less any loss thru the tranny. In overdrive, engine speed = about 20% less than driveshaft speed. Lower engine revs usually means less horsepower, runs more efficiently when all Hp is not needed, as when above 45-50 mph on level roadway.
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