Any time the motor is running, it needs oil pressure. The "on-demand" oil pump is actually "flow controlled". Personally I think it's a stupid idea for a reported 1% fuel savings.
As for the knocking... If the knock goes away when the engine warms, your problem is piston slap. True knocks (wristpins, spun bearings, etc...) don't go away. Many manufactuers will claim piston slap is normal, but some people have been able to get the dealer to replace the offending piston(s). My wife's Toyota exhibits piston slap, and Toyota refused to do anything about it.
GM went so far as to extend the warranty of its engines that were prone to slap (in order to give some peace of mind to consumers).
I do not believe it is "normal", particularly because it doesn't happen identically across all engines of the same model. The argument you should present to your dealer is "that other car doesn't slap (knock), so is it abnormal?" |