Hyperbole is a figure of speech that uses language to exaggerate what the author means or emphasize a point. It's often used to make something sound much bigger and better than it actually is or to make something sound much more dramatic. S.E. Hinton uses a lot of hyperbole in the novel not only to exaggerate or emphasize a point in the plot, but also to emphasize that the people in the novel are all teenagers—and she wanted to have her characters sound like the teenagers she knew.
An example of this is found in Chapter 8, when Ponyboy and Two-Bit went to see Dally in the hospital. When Pony caught on fire and Dally hit him to put out the flames, Ponyboy lost consciousness. The next day, Dally used hyperbole to describe his concern. “Kid, you scared the devil outa me the other day…” Dally didn’t really think he was possessed by the devil or that he’d killed Ponyboy, but his exaggerated language shows the reader the level of concern Dally had for Pony and about what he’d done.