The idea is to sneak up on the preload. If you over-tighten the pinion and create too much preload, the crush collar is then crushed beyond what is usable and you have to start over with a new one.

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First, what you were planning to do isn't correct. The problem is, to correctly get the preload set, you have to measure the torque at the pinion. Also, you should NOT reuse the same crush collar if so equipped (GM differentials). The preload is measured in inch-pounds (a very small amount Nm). It is basically the turning resistance of the pinion by itself after there is some amount of "squeeze" put on the bearing from tightening the pinion nut. Too much preload and you destroy the bearings in the pinion (after a period of time). Not enough preload and your pinion is too floppy, which causes wear on the gears of the differential, premature seal failure, and the differential is usually noisy during operation.

I made a mistake using a sharpie to mark the nut when changing the radial seal of my rear differential’s input shaft. Oil and tools made the mark disappear. The common way to put this back together is to mark the bolt and torque until it is positioned as before removal. How would you proceed in putting the flange nut back now that I no longer can rely on the mark?

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Some differentials do not have a crush collar, but the check/tighten process is still the same. Remember, this is the resistance measured in in-lb on a free spinning differential (has to be jacked up on stands). You'll have to check for your specific vehicle whether it has a crush collar and what the exact preload is supposed to be.

I’m not sure if it’s the same for all differentials but this nut does not have a torque specification and the amount of tightening define the preload on the pinion bearing.

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