The majority of production cars use a wet sump oil system. In this system, the oil that lubricates the engine is stored underneath the crankshaft in the oil pan. The pan must be large enough to hold four to six quarts of oil. The oil pump sucks up oil from the bottom of the oil pan and then pumps it to the rest of the engine.
In a dry sump system, extra oil is stored in a tank outside the engine and a large oil pan isn’t necessary. A dry sump system uses at least two oil pumps. One pulls oil from the sump and sends it to the tank. The other pump takes oil from the tank and pushes it to lubricate the engine. The dry sump system allows for the minimum amount of oil possible to be in the engine.
Major racing series such as Formula One and Indy Car utilize the dry sump system. A dry sump system is designed to provide lubrication for the engine’s internal parts and also increase performance. A wet sump system is not practical for racing as lateral G-forces would pull the oil to one side, which would momentarily leave the engine without oil. Because the oil is stored in a separate tank, a large oil pan is not necessary. This allows for the engine to sit lower to the ground, which lowers the center of gravity.
Source: f1technical.net, auto.howstuffworks.com
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