Most people already know that when a car turns, the wheels on the outside have to spin faster then the ones on the inside because they have to travel a longer distance. This means that if you have a fixed axle (where one wheel can’t spin independently of the other) one of the wheels will have to skid if the axle is going to keep turning. This is bad for your tires and it’s bad for your car’s traction.
The differential mechanism basically allows each wheel to spin freely of the other, while providing power to both. If one wheel is spinning too slowly the mechanism will keep driving the other one without any skidding. In this situation, the slow one is the inner wheel and the one spinning more quickly is the wheel on the exterior of the turning radius. Thanks to the differential no torque is lost and the tires aren’t shredded every time you make a turn. It’s both brilliant and deceptively simple.
Informational Links:
Below are links to the website “How Stuff Works” that go into more detail about differentials.