From the October 2015 issue of Car and Driver.

Open Differential

What It Does

Splits engine torque into two outputs, each of which is able to rotate at a different speed.

Shortcomings

When one tire loses traction, the opposing tire also experiences a torque reduction. In the worst case, your car is stuck with one wheel freely spinning while the tire with better traction can't deliver enough torque to budge the vehicle. Modern traction-control systems compensate by applying the brakes (and thus a reaction torque) to the slipping wheel. That said, a more sophisticated diff is generally quicker-acting and more effective than this type.

Found In

Anything without the pretense of performance or off-road ability—family sedans, crossovers, minivans, economy cars, etc.

Locking Differential

What It Does

With the diff locked, the connected wheels always spin at equal speeds. In sand, mud, and snow, a locked differential ensures that torque continues to flow to the wheel with higher traction.

Shortcomings

Behaves like an open differential when not locked. Locking the diff on a high-grip surface such as dry pavement makes it difficult to turn the vehicle and can grenade the driveline.

Found In

Jeep Wrangler, Mercedes-Benz G-class, Ram 2500 Power Wagon; optional on most full-size trucks.

Limited-slip Differential

What It Does

A limited-slip differential marries the concepts of open and locked diffs, working like an open differential the majority of the time, then automatically beginning to lock as slip occurs. Lock-up can be achieved via a viscous fluid, a clutch pack, or a complex geartrain.

Shortcomings

Purely mechanical limited-slip diffs are reactive. That is, they don't begin to lock up until after wheelslip has occurred.

Found In

Nissan 370Z with Sport package (viscous), Mazda MX-5 Miata (clutch type), Scion FR-S/Subaru BRZ (helical gears).

Electronically Controlled Limited-slip Differential

What It Does

An electronically controlled clutch pack offers rheostatlike control between open and fully locked behaviors, with adjustments made hundreds of times per second. For example, if the computer determines there's too much oversteer during cornering, it can dial in more lockup to stabilize the car.

Shortcomings

As with a conventional limited-slip diff, torque is biased toward the slower wheel.

Found In

BMW M3 and M4, Cadillac ATS-V and CTS-V, Chevrolet Corvette with Z51 package, Ferrari 488GTB.

Torque-vectoring Differential

What It Does

Using additional geartrains to overdrive the half-shafts, torque-vectoring differentials fine-tune the torque delivered to each drive wheel. This produces a yaw moment that can slow or quicken the car's rotation in a corner. Still confused? Read the damn story.

Shortcomings

Torque-vectoring differentials are heavy, complex, and expensive, and inflict a slight fuel-economy penalty.

Found In

Audi S4, S5, and S6; BMW X5 M and X6 M; Lexus RC F.

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