My 240 has the oh so rare 4-speed tranny and due to excessive rpm at highway speeds,which translates to more fuel consumption not to mention the noise. I was wondering if it was possible to change the differential to achieve lower rpm at higher speeds (70+ mph) ?

read............
this
there are many threads on this out there.........

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1984 123.193 372,xxx miles, room for Seven.

1999 Dodge Durango Cummins 4BTAA 47RE 5k lb 4x4 getting 25+mpgs, room for Seven.

It is possible but the gains will not be much. The RPMs will be lower but the engine will have to work harder.

My mechanic says that I can replace the differential with one from a 300TD wagon and improve MPG at highway speed (lower RPM) but will pay the price on low end acceleration. Personally, at 65 to 70 I turn up the stereo.

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'81 240D 4-Speed 328K (Daily Driver)
'01 Cadillac SLS 135k (currently up for sale)

You don't want the turbo motor car rear end. Its too high.

The 346 is as tall as you really want.

The taller one just won't work.

Tom W

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[SIGPIC] Diesel loving autocrossing grandpa Architect. 08 Dodge 3/4 ton with Cummins & six speed; I have had about 35 benzes. I have a 39 Studebaker Coupe Express pickup in which I have had installed a 617 turbo and a five speed manual.[SIGPIC]

..I also have a 427 Cobra replica with an aluminum chassis.

Personally, have never seen alot of mileage variation at different engine speeds. "Oh so rare 4-spd 240" of mine always pulled 28mpg no matter how it was driven.