My experience comes from Landrovers with manual hubs and vaux/opel frontera's with both manual & auto hubs.
on the up side you do save a small amont of fuel..
In my experience fuel economy can be improved by leaving behind all the 5hit landrover owners carry.! - I'm one so i can say it..!

On the downside as only the wheels are turning you lose the splash lubrication effect on the top bushes of the wheel hubs.
With manual hubs once hubs are locked you are good to go however with auto hubs when engaged they take approx 1 revolution of the wheel to engage and lock so if you are stuck and need to rock back and forward to escape with auto hubs they constantly lock and unlock when you change direction.
So when stuck you engage reverse the wheel rotates once then engages with a shock load, then you go forward & the wheel rotates once then the hub engages again with a shock load.

Less components in a drive drain the bettter IMHO.

Regards All

I'll preface this with "it happened in the 1980s" when I worked for Isuzu Trucks.


We had to do some fuel economy testing of a 4 tonne 4x4 truck that we hoped to sell to a rural fire brigades. Part of the testing included running the vehicle in 4x4 on dirt tracks and through a quarry for about half a shift, the other part of the testing was on a banked "speed loop" with the hubs in the free position and the locked position whilst in 4x2. The vehicle was fitted with fuel consumption gauges with a cross check by dipping/temperature check the tank before and after the tests and allowing the fuel to cool to the before test temp.


There was a marked difference between locked and free hubs - the figures escape me. When we won the contract I remember developing the driver training package which included having the hubs in free before driving on roads with a good surface - dirt or bitumen. The fuel consumption figures were significant enough that if they had to drive 100kms each way to a fire and then drive for six hours in rough terrain, they were pushing the limits of the vehicles safe fuel range.


I think there was also some engineering issues about the transfer case being "driven" by the front axle and not the engine. Probably no interaxle diff back in those days.