Hi my father in law has a 2002 SL1 it makes this weird knocking noise in the rear end when driving, any help...

Could be a bunch of things from bad tires or wheel bearing to dead squirrel caught up in something. You just need to crawl up there and take a look.

The tires are new, and theres no squirrels, could be the wheel bearings, would both sides need to be replaced.

could also be the rear strut mounts or shocks. also check for clearance around the exhaust system. heat sheild could be touching

Don't exclude the exhaust system including the muffler strap as a possiblity. A visual as you push on this and pull on that should yield a result.