This transfer case is designed to be driven in the two-wheel drive position (2WD) or four-wheel drive position (4WD AUTO) for normal street and highway conditions on dry hard surfaced roads). Driving the vehicle in 2WD will have greater fuel economy benefits as the front axle is not engaged in 2WD.
For variable driving conditions, the 4WD AUTO mode can be used. In this mode, the front axle is engaged, but the vehicle's power is sent to the rear wheels. Four-wheel drive will be automatically engaged when the vehicle senses a loss of traction. Because the front axle is engaged, this mode will result in lower fuel economy than the 2WD mode.