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When I take my multimeter and attach it directly to the battery - engine not running - it reads 12.5 volts. When I take a reading with the engine running it reads 14.5 volts.
But when I look at my newly installed volt meter under the dash - 18 gauge wire, attached to the solenoid fuse - it reads 10.5 volts. And if I cut on the dash lights it drops considerably.
What solenoid fuse are you talking about?
The readings your getting with your multimeter are correct.
First, I would use something bigger than 18 ga. wire. My preference would be 14 ga., but that's just me.
I would find a switched 12v source to hook the voltmeter to, something like the radio or accessory feed. One wire goes to the power source the other goes to ground.
You are reading the voltage at a place that has a bad connection or corrosion upstream, i.e. undesired resistance in that circuit. That is what causes things to heat up and eventually fail.
It would be like reading the voltage between 2 resistors wired in series.
One important thing to consider is that you're using two different instruments to take two different measurements. You can't necessarily compare the two. Your dash voltmeter could have a different sensitivity level than your handheld meter, and vice versa. To eliminate the variables, disconnect your dash voltmeter and perform the same experiments that you did with your handheld meter. If you see the difference there, then you know the dash voltmeter itself is at least partially responsible. Otherwise, your dash voltmeter is picking up the drop across some unwanted resistance as described above.
18 AWG is plenty for a voltmeter; they are ultra high impedance and draw very little current. The advantage to going bigger (lower AWG) would be tensile strength, but it doesn't have anything to do with your problem. Agreed that I don't understand what you mean by "solenoid fuse," unless you meant the fusible link.
Got it, you're tapping off the idle stop solenoid fuse in the panel, not under the hood. Typically you want to tie a voltmeter off the accessory bus (radio, etc) so that you can turn the key to ACC and still get a reading, without having to turn the key to RUN (which powers some more things up). What you have is not preferred but there's nothing wrong with it functionally.
You need to do the experiment I described, as that information will be the most valuable. Based on your description I suspect what you're seeing is a result of calibration and sensitivity differences between your two meters rather than unwanted resistance. The reason I say this is because current through the circuit you've tapped off of (and therefore the drop across the resistance between this point and the battery) should not change at all based on the dash lights being on or off. In other words I would suspect your meter would behave the same even if you tried another fuse. The experiment I described would prove this easily. This of course assumes no major wiring modifications by a previous owner. Otherwise, all bets are off as to what's what.
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