Rear differential replacement cost

Expect to spend roughly $2,500 to $6,000 if you’re out of warranty

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close-up view of a rear differential

When it comes to fixing your differential, there’s bad news and good news.

The bad news is that differential replacements are expensive, often ranging from $2,500 to $6,000.

The good news is that both front and rear differentials are typically covered under powertrain warranties. Provided you’ve kept up with maintenance and the differential failed on its own, your out-of-pocket cost may be $0.

Keep reading to learn more about what you can expect to spend and how to save money when the time comes.

Key insights

  • Rear differential replacements for trucks (about $2,500 or more) are far more common than replacements for cars (about $4,000 or more).
  • Most shops won’t rebuild faulty differentials, but they can often find salvage or aftermarket parts to lower your cost.
  • Most powertrain warranties — factory or extended — cover rear differential replacements because they’re part of the drive axle.
  • If you’re out of factory warranty coverage, an extended powertrain warranty can potentially cover the cost of a differential replacement — as long as you buy the warranty ahead of time.

How much does a rear differential replacement cost?

Broadly speaking, the cost to replace a rear differential can range anywhere from $2,500 to $6,000 or more. It largely depends on whether you drive a car or truck.

Differentials tend to fail more often on trucks and other heavy-duty vehicles because, in general, they’re subject to far more stress. “Trucks are getting used and abused much more,” the shop manager at an Atlanta mechanic told us.

If we can find a used differential for your truck, the cost may come down to $2,500. If we can’t, the cost to fit an aftermarket differential usually goes up to $3,500 to $4,000. ”

But the silver lining to truck “diffs” failing more often is that parts are more plentiful and affordable. “If we can find a used differential for your truck, the cost may come down to $2,500. If we can’t, the cost to fit an aftermarket differential usually goes up to $3,500 to $4,000,” the shop manager reported.

Aftermarket” parts are any parts not made by the original equipment manufacturer (OEM), which is the brand that made your car.

What about for cars?

“We really don’t see differential repairs on cars that often,” the shop manager said. In fact, five mechanics we spoke with struggled to come up with a quick estimate for a rear differential replacement on a normal car simply because that particular service is so uncommon. But we did manage to find one narrow estimate.

“You’re in luck because we’re replacing one for a BMW 6 Series right now,” the owner of a German import repair shop told us. “The cost to replace the rear diff on a 6 or 7 Series would be between $4,500 and $5,000.”

As a last resort, you can always visit the dealership — but prices tend to be inflated compared with independent shop rates. We spoke with a local Lexus dealer that quoted us $3,800 for parts and $2,000 for labor, resulting in an eye-watering $5,800 bill.

*According to multiple independent shop estimates in the Atlanta, Georgia, area

Rear differential replacements are expensive because you have to replace the entire rear axle assembly along with them, according to the shop manager from earlier. That will cost you a significant amount in parts, and it also involves eight to 10 hours of labor.

How much does a rear differential rebuild cost?

Rebuilding your differential may seem like a tempting alternative to a replacement, but don’t hold your breath.

“You can get away with repairing a differential if you can find someone that will actually do it,” said Eric Hamilton of Whyte Knyte Inspections, an expert in pre-purchase inspections. A large part of the challenge, he said, is that repair parts are hard to find. “Manufacturers and retailers have preferred to offer entire units instead of individual components.”

When your differential needs repair, you have two options: find an aftermarket differential or purchase a brand-new one. ”

“When your differential needs repair, you have two options: find an aftermarket differential or purchase a brand-new one from BMW. We don’t do rebuilds,” confirmed the German import specialist we spoke with.

Due to a lack of data, we can’t provide a reliable estimate of what a rear differential rebuild might cost you. You can reasonably expect the price to be lower than a full replacement, but the trade-off is that a rebuilt differential may not last as long.

Do car warranties cover rear differentials?

Generally speaking, both bumper-to-bumper warranties and powertrain warranties cover failed differentials. That’s because the differential is part of the drive axle, and your drive axle is considered part of your powertrain because it’s crucial to making your car move.

Factory powertrain warranties tend to last longer than bumper-to-bumper warranties.

So, before you pay out of pocket to replace your failing differential, check to see if your vehicle is still under warranty.

» MORE: Factory warranty guide: coverage & term lengths

The catch is that auto warranties only cover parts that fail due to manufacturing defects (i.e., when there is something wrong with your differential from the factory). If your differential failed because you collided with something, towed too much or failed to keep up with the recommended maintenance schedule in your owners manual, your warranty won’t cover your repair.

» MORE: What does a car warranty cover?

If your car isn’t under warranty anymore, you might consider buying an extended warranty as a preventive measure to protect you from the cost of a differential replacement in the future.

Extended bumper-to-bumper plans are usually the better value since they cover almost all of your vehicle, but if you’re only concerned about your differential(s), a powertrain extended warranty could cost you up to 40% less.

» MORE: How much does an extended car warranty cost?

Just know that you’ll need to buy your extended warranty before you need a new differential. Once you know there’s a problem, it’s considered a preexisting condition and ineligible for coverage.

Quick and easy. Find an auto warranty partner now.


    What is a rear differential?

    A rear differential is a set of gears inside your drive axle that allows the attached wheels to spin at different speeds.

    Here’s why that’s necessary: When your vehicle turns, the wheels on the outside have to rotate faster than the wheels on the inside to make it around the corner -- similar to how a runner on the inside of a track has to run a shorter distance than the runner on the outside.

    For wheels that aren’t connected by a drive axle, rotating at different speeds isn’t a problem. (Both can essentially spin freely from one another.) But for wheels that are connected, there needs to be a special set of gears allowing them to spin at different speeds.

    That’s what your differential is for.

    What is the difference between a front differential, a rear differential and a transaxle?

    A differential enables a pair of wheels powered by the engine to spin at different speeds, but that means differentials have to function differently in vehicles with different drivetrains:

    • In a rear-wheel-drive (RWD) car, the differential is located between the rear wheels. That’s why it’s called a rear differential.
    • In a front-wheel-drive (FWD) car, the differential is located between the front two wheels and is also known as a transaxle because it does the job of a transmission and drive axle, too.
    • Four-wheel-drive (4WD) and all-wheel-drive (AWD) vehicles have both front and rear differentials.
    What are the symptoms of a bad rear differential?

    Vibration, grinding, burning, leaks and a “howling” sound coming from the bottom rear of your vehicle are all potential signs of a failing rear differential.

    Can you drive with a bad rear differential?

    You shouldn’t drive on public roads with a malfunctioning rear differential. A functioning differential is essential to your car’s handling, and without it, you could lose control, especially during a turn.

    How do you maintain your rear differential?

    You can maintain your rear differential by having an inspection and an axle fluid change (when necessary) on a regular basis. Ram, for example, recommends having your axle inspected every 30,000 miles.

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