The invention discloses automobile special lubricating oil with a friction reducing effect and a preparing method thereof. The automobile special lubricating oil is prepared from, by weight, 25-45 parts of polydimethylsiloxane, 0.2-6 parts of dodecyl acid phosphite, 20-40 parts of 4-hydroxy-4-methyl-2-pentanone, 5-25 parts of carbon tetrachloride, 20-40 parts of alkenyl succinate, 1-10 parts of vulcanized calcium alkylphenol, 20-45 parts of benzotriazole, 0.2-10 parts of zinc naphthenate, 20-45 parts of polyoxyethylene glyceryl ether laurate, 1-10 parts of oxidized petrolatum, 20-40 parts of uracil, 0.1-3 parts of vitriol 2-ethyl hexanol zinc salt, 20-40 parts of paraffin powder, 0.1-5 parts of antiwear agent, 20-45 parts of zinc borate, 20-40 parts of granite powder, 0.1-4 parts of antirust agent and 0.1-4 parts of pour point depressant. All the raw materials are mixed and stirred to obtain the automobile special lubricating oil. The automobile special lubricating oil is stable in performance, good in rust resistance and corrosion resistance, simple in preparation process, low in production cost and suitable for the automobile field, improves friction reducing performance and abrasion resistance, improves oxidation resistance and controls the high-temperature oxidation conditions.