It's an example of a not-quite-completed piece of Cockney rhyming slang. I describe it thus, because the rhyme-part has never disappeared, as it normally does. In other words, we would expect it to have become just 'dip' by now. The point is that it rhymes with one of the slang names for the male organ...which is often used to mean 'idiot'...simply on the basis that it performs a similar function to the device on a car's engine! It was, of course, mainly popularised by Del-Boy in 'Only Fools and Horses'.