App version: 0.1.0

How Much Does a Rear Differential Replacement Cost?

How Much Does a Rear Differential Replacement Cost?
Austin Kilham
Austin KilhamUpdated September 19, 2023
Share this article:
Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
A rear differential helps the wheels on your car turn smoothly and stay safely planted on the ground while you drive and make turns. The cost to replace this component can run up to $5,000 or more. Here’s a look at the factors that contribute to rear differential replacement cost, how to spot signs your rear differential might be failing, and how to pay for the cost of replacement. 

What Is a Rear Differential and What Does It Do? 

A rear differential is a part that mediates between the transmission and the rear wheels. The transmission delivers power to the wheels, but if the wheels were to turn equally at the same time, it would put strain on the axle and make it difficult for your car to stay on the ground.When everything’s functioning properly, you turn the wheels of your car and the wheels on the inside of the turn rotate at a different rate than the wheels on the outside. This is because of the rear differential. Having wheels that spin at different rates helps you negotiate turns and bumpy terrain. The rear differential is located between the two rear wheels on your vehicle.

What Is the Average Cost of a Rear Differential Replacement? 

Replacing a rear differential can cost, on average, $1,755 to $5,425 at the mechanic. If you’re mechanically inclined and have the proper tools, you may be able to save money by replacing the component yourself. But the task is time consuming and labor intensive, so you may want to leave it to the professionals. Recommended: The Cost of a Replacement Engine

What’s Included in a Rear Differential Replacement?

Removing and replacing a rear differential involves removing the brake lines, the axle and hub, the driveshaft, and your old rear differential. When replacing a rear differential, a good mechanic will also take a look at nearby components, including the driveshaft, rear axle, transmission, and wheels for damage or signs of wear. The mechanic will make sure the related components are in good shape and that the differential is installed properly. 

What’s the Labor Cost to Replace a Rear Differential?

Replacing a rear differential is a relatively large job and can take your auto mechanic three to five hours to complete. It will also likely involve more than one person in order to hold heavy components in place while they are installed. Price of labor can cost anywhere from $255-$425. Labor costs can vary by location and the complexity of the job. 

What’s the Cost of Parts?

The cost of parts to replace a rear differential can run from $1,500 to $5,000. Part costs will depend on the make and model of your car and the quality of the part.  

Signs You need to Replace Your Rear Differential

Be on the lookout for the following signs that your rear differential needs to be replaced:

Leaking Fluid

Differential fluid, or gear oil, is the oil that lubricates the moving parts of your rear differential. If you notice fluid under your car, it could be a sign that this fluid is leaking and that you may need your rear differential fixed or replaced.

Grinding Noises

Your rear differential is made up in part by a set of gears. As it wears out, these gears can start to grind. You may hear grinding noises or humming noises that get louder as you accelerate. If you catch this early enough, a fluid change may fix the problem. 

Vibration While Accelerating

When the rear differential wears out, you may start to feel vibrations coming from the direction of the driveshaft. The vibrations should increase as you accelerate. Vibrations may signal a differential fluid leak or that you need your rear differential replaced.  

Tire Wear and Tear

The rear differential allows your wheels to turn at different speeds. If it’s not working correctly, and your wheels are turning closer to the same speed, your inner tires will start to wear out because they’re rotating too fast. A differential that is locked will cause your tires to grip and slip intermittently. This could translate into chirping or squealing sounds, as well as vibrations. 

Difficulty Handling While Turning

If you notice that your car has poor handling or feels unstable, especially while turning, it could be a sign that your rear differential is no longer allowing your wheels to turn at different speeds. Any case of poor handling should be checked out immediately to head off a situation in which you lose control of your vehicle. 

What Happens If You Don’t Get a Rear Differential Replacement? 

A faulty rear differential can mean that your wheels aren’t spinning at the speed they’re supposed to, even when you’re driving straight. That can cause your car to pull to one side, or otherwise cause you to lose control. If the rear differential completely breaks, your wheels may stop turning and your car will no longer be able to move. A damaged rear differential can also cause damage to the components around it. Replacing it as soon as possible helps keep you safe while driving and protects the other components of your car. 

How Often Should You Get a Rear Differential Replacement?

Your rear differential should last between 50,000 and 200,000 miles. Your owners manual may have information about the ideal time to replace it. You may have to replace yours more often, though, if you drive on rough roads or bumpy terrain frequently. 

The Takeaway: How to Pay for a Rear Differential Replacement

A properly functioning rear differential is critical to a smooth and safe ride. If yours is faulty, it’s important to have it replaced as soon as possible. If you don’t have the cash on hand to cover the cost of replacement, you might consider financing with a personal loan or a cash-out auto loan refinance. A personal loan for car repairs is a type of unsecured installment loan that allows individuals to borrow money which can be used for most purposes, including car repairs. In return, the borrower agrees to pay back the loan, with interest, in monthly installments. When you refinance your auto loan, you pay off your old loan with a new one, preferably with a lower interest rate. You may consider refinancing when interest rates have dropped or when you’ve built your credit score and you qualify for a better rate. A cash-out auto refinance allows you to get cash out of the loan, which can then be used to pay for the new rear differential.If you’re interested in refinancing, Lantern by SoFi allows you to shop from a variety of lenders to ensure that you’re receiving the lowest interest rate and best terms for you. With Lantern, you can explore rates and terms all in one place with a single application, and no obligation to you.

Frequently Asked Questions

Can I drive my car without a rear differential?
How do I maintain my rear differential to prevent future issues?
Will my insurance cover the cost of replacing a rear differential?
Photo credit: iStock/lechatnoir

About the Author

Austin Kilham

Austin Kilham

Austin Kilham is a writer and journalist based in Los Angeles. He focuses on personal finance, retirement, business, and health care with an eye toward helping others understand complex topics.
Share this article: