Regarding the use of "in" to indicate means, as in "in pencil"

[so3342]

Hello.
I have a question.

For example, there are usages of "in" to indicate means, such as "in pencil" and "in his car," but sometimes when faced with a question asking to choose the correct preposition, it can be unclear whether to use "in," "by," or "with."

I understand the difference between the latter two, but I'm having trouble understanding how to use "in" correctly. Could you please explain?

 

[tedmc]

The word "in" has many meanings, serving as a preposition, adverb, adjective, noun, etc. As to the two phrases you asked about, the meanings are as follows:

in pencil - in indicates medium or means.
eg. She did a sketch in pencil.

in his car - in indicates location or position.
eg. He was in his car waiting for his wife.

Definition of IN

—used as a function word to indicate inclusion, location, or position within limits; into; —used as a function word to indicate means, medium, or instrumentality… See the full definition

www.merriam-webster.com

There are too many meanings of the word for you to consciously remember. The use of prepositions comes naturally through a lot of reading, which is why reading (apart from your textbooks) is important in learning the language.