A faulty oxygen sensor can cause several problems in a car including a poor fuel economy, failure of the catalytic converter and an overall bad engine performance. Having a bad oxygen sensor can also send the the "Check Engine" light to go on or in more recent car model, send an O2 sensor code to the car's computer.
Cars that were manufactured since the 1980s have oxygen, or O2, sensors built into them. This component is part of the vehicle's emission control system and sends data to the on-board computer. The premise behind oxygen sensors is that the device should help the car's engine perform more efficiently and, at the same time, produce the least amount of harmful emissions as possible.
Oxygen sensors are usually located in the exhaust pipe where it can analyze whether the emissions are lean or rich. As gasoline only burns with the presence of oxygen, the air to gasoline ratio can either be rich or lean.
A mixture is considered rich when there is fuel left after combustion. This is bad for the environment as unburned fuel causes pollution. A mixture is considered lean when there is excess oxygen after combustion. This produces nitrogen-oxide pollutants, impairs engine performance and may cause damage to the car's engine. Oxygen sensors, serve to keep the air-to-fuel ratio as close to the perfect ratio as possible because different fuels have different perfect ratio.