In some vehicles a freewheel unit (also called freewheel clutch) is provided just after the gearbox. 

It is very much similar in action to the bicycle freewheel.

The inner driving member is connected to the gearbox shaft and the outer one to the propeller shaft. 

The driving member has three steps. 

In each step there are three spring mounted rollers of different sizes.

When the driving member is rotating in the direction shown in figure the driven member will also be rotating in the same direction. 

But when the driven member becomes the driving member example when the car is going downhill with the engine stopped or clutch disengaged, the inner member will not rotate along with the outer one. 

Thus in this case the transmission and the engine will be isolated from the wheels. 

This results in fuel economy.

In some instances, the free wheel has to be locked example in reverse drive. 

In such cases the provision of locking the free wheel drive is there. 

There is a dog clutch provided whose teeth can engage with the teeth on the inside of the outer free wheel member. 

The dog clutch is automatically engaged by a connection from the reverse gear selector. 

There is also a provision for the manual locking of the freewheel.

The advantages of using a freewheel unit are :-

1. The engine can idle simply by closing the throttle without bringing the gears in neutral. Thus gears changing at low speeds is much simplified as the clutch need not be disengaged for this purpose.

2. Less wear on the transmission because whenever the car freewheels, the engine and gearbox are disconnected from the propeller shaft.

3. On long downward slope, an appreciable amount of fuel is saved. The saving may be up to 20%.

However, the main disadvantage is that there is no resistance due to engine and gearbox friction while freewheeling, the brakes must be used more effectively to stop the vehicle on a downward slope.

Freewheel is also used as essential component of torque converter in modern automatic transmissions.