On board is built into the firmware or software of the system, think Windows 10 diagnostics to try and resolve software issues, whereas off-board would be an engineer plugging in a diagnostics device, think a car diagnostics machine used by a mechanic to determine the fault code causing problems with your car.

Once plugged in, the diagnostic machine scans your vehicle's ECU and bring up all the stored faults. The fault code, however, can only tell the technician which location the fault is coming from, or from which sensor. It however does not tell the technician 'Why' it is showing that specific fault or how to fix it.