Originally posted by Glades Runner:
whereas the full-time option allows the driver to drive the truck in 4wd on all types of pavement without any negative effects.
Correct, and that third mechanism is nothing other than another differential, this time in the transfer case. This allows the front drive shaft and rear driveshaft to spin at different rates.
Full-Time 4WD is just another term for AWD, just like in a Subaru.
(Xterra Kid, all Jeeps have transfer cases).
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