The differential assembly is an integral part of all vehicles. Differential technology was invented centuries ago and is considered to be one of the most ingenious inventions human thinking has ever produced. The main function of the differential assembly is to allow the drive wheels to turn at different rpms while both receiving power from the engine.
The differential is found on all modern vehicles, and also in many all-wheel drive vehicles. These all-wheel drive vehicles need a differential between each set of drive wheels, and they need one between the front and the back wheels as well, because the front wheels travel a different distance through a turn than the rear wheels.
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The rear differential allows the rear wheels to rotate at different speeds to facilitate turning. It's the large bulge in the center of the rear axle.