Differential fluid often looks just like motor oil. Once again, you’ll have to put your eyes on the leak to determine its origin. Usually, if you have a leak at the rear of your vehicle and it’s rear-wheel drive or all-wheel drive, it means your differential is leaking. Differential oil usually has a distinctive smell. So if you see oil from a leak and it has a distinctive odor, it could be a differential fluid leak.
However, differentials don’t always leak from the differential itself. Sometimes the outer axle seals fail and fluid leaks into the brake assembly. You might not see a leak of this type right away. What you might notice, though, is an increase in braking distance or a noise coming from the rear brakes when they are applied. You can sometimes spot this trouble by looking at the back of the backing plate. If you have an axle seal leak, the backing plate is often covered in oil. Keep in mind this could also be brake fluid, so you might as well remove the wheel and brake drum (if applicable) and inspect the brakes. If the wheel cylinder isn’t leaking, then it’s likely the axle seal is bad and needs to be replaced.
FYI, when replacing axle seals of this type, you often need to replace the axle bearing at the same time. Be prepared for this eventuality should you find you have a leaking axle seal. If you find that your leak is in the front of the differential where the axle joins the assembly, it’s likely your pinion seal is leaking. Pinion seals aren’t always easy to replace, so be sure the leak is bad enough to be worth fixing before you dive in. In addition to replacing the seal, you might also need to replace a crush sleeve installed in the differential that helps set the proper preload on the pinion. If this preload is not correct, then you could damage the differential. Be sure to check the service procedure for your vehicle for torque specs and proper procedure before you commit to replacing your pinion seal. It might be more involved than you suspect, and it would be good to have that information before you get in too deep.
Also, know that a limited slip differential takes a special fluid or additive to operate properly. Sometimes limited slip differentials are identified by a tag bolted to the outside of the unit. Other times, it might be stamped into the cover. Either way, be sure to use the correct fluid, especially if you have a limited slip differential. If not, you could damage the differential and that can get expensive. FYI, when a limited slip needs a fluid change, it will often make a noise when you make a turn. You might also notice this if the fluid gets too low.
Up to this point, I’ve been talking about the traditional straight axle. These days, there are a lot more configurations than just a straight axle for differentials, not to mention the differentials used in front wheel drive or all wheel drive systems. That said, always consult your service manual for the correct procedures and torque sequences for your application. You’ll also find information about what type of fluid should be used.
Before you dive into repairing your differential fluid leak, be sure to do your homework and know what you’re getting into. If you don’t, you could be in way over your head before you know it.