Are AWD cars more expensive to maintain than FWD?

The short answer is yes, an all-wheel drive vehicle is more expensive to maintain for one simple reason: an AWD vehicle has more components. The more important question is how significant is the difference?

To compare apples to apples, let's look at two similar vehicles, one with FWD and the other with AWD. We picked a front-wheel drive Nissan Altima sedan and all-wheel drive Nissan Rogue compact SUV, both of the same model year, equipped with the same 4-cylinder engine.
Nissan Rogue and Nissan Altima2018 Nissan Altima and Nissan Rogue. Photo courtesy of Nissan North America
What is the difference in fuel, maintenance and repair costs?

According to the EPA estimates, the AWD Rogue will cost around $150 more a year in fuel, if driving 15,000 miles a year. We suspect in real life, this number will be a bit higher, but it's not a huge difference.

What about the regular maintenance? The price for oil changes is the same. A set of tires for the Rogue (they are larger) costs about $200 more; tires are usually replaced within three years assuming you're driving the average 15,000 miles per year. The price for all-around brake job is also almost the same. The cost for the wheel alignment, air filter, drive belt or spark plug replacement is roughly the same for either vehicle.
The Rogue has a simple FWD-biased all-wheel drive system, similar to many other compact SUVs. It's a light-weight setup that is very effective on slippery roads, but is not intended for heavy duty off-roading. The Rogue AWD system has a small power transfer unit (transfer case) and a rear differential, see the diagram below. The Rogue's maintenance schedule only mentions inspecting the fluid in both components, but the reality is that both components will probably require fluid change within four years under average driving conditions. Replacing the fluid (gear oil) in both components will cost $200-$300. The Rogue AWD system also has a driveshaft (prop shaft) that transfers the power to the rear differential and two more CV axles at the back, but they don't need any maintenance.

All in all, the AWD Rogue will cost at least $600 more in fuel, plus another $400-$500 in maintenance over the first four years. Considering the benefits of the AWD, it's reasonable. However, in an all-wheel drive vehicle the cost of repairs will increase significantly at higher mileage if some of the AWD components fail. The proven reality of the automotive world is the more complicated the car is, the more chances that something will go wrong. In addition, some of the common repairs, such as, for example, rear wheel bearing replacement, will also cost more in an AWD vehicle due to extra labor.

What is the mechanical difference between FWD and AWD?

Let's first look at t the front-wheel drive setup of an average car. The engine together with the transmission (also known as transaxle in FWD vehicle) is mounted transversely across the engine compartment. A transaxle has an open differential that splits the torque between left and right wheels.
FWD and AWD mechanical components FWD and AWD mechanical components
Two CV axles 1 and 2 transfer the torque from the transaxle to the front wheels. CV axles don't need any maintenance. Overall, it's a very simple system.

Now let's compare it to a simple on-demand all-wheel drive based on a front-wheel drive. Many modern compact and medium SUVs have some variant of this system, although the manufacturers use more marketing-friendly names for their AWD.
In addition to the front-wheel drive components, it has a power transfer unit (transfer case) 3, the rear driveshaft (prop shaft) 4, rear differential 5 and two rear CV axles, 6 and 7. Only the power transfer unit and the rear differential need regular maintenance; other components need regular inspection and may need to be replaced at higher mileage if worn out.

How a front-biased on-demand AWD system works: front wheels are powered at all times. A transfer case is a simple mechanical device with a few gears inside. It provides a torque output for the driveshaft that directs it to the rear axle. The rear differential has an electronically controlled coupling that can engage the rear axle and send some of the torque to the rear wheels as needed.

Is AWD better in snow? In general, yes, but a lot depends on the type of AWD system, tires and many other details. Here is a little personal story to illustrate:
The snowstorm just passed. We are at the foot of the steep uphill road leading to the ski resort.
Several AWD wagons and SUVs are spinning the wheels, but going nowhere. The temperature is just above freezing point; this is when the snow is the most slippery. Out of nowhere the white Toyota Camry navigates around stuck cars and continues up the snowy hill like nothing happened. The astonished look on people's faces says it all.
Later, we are talking to the driver. It's a V6 front-wheel drive Camry with good winter tires. The driver obviously knows what he is doing too. The weight of the heavy V6 engine over the front drive wheels allows tires to dig in better into the loose snow.
It just goes to show that simply having an AWD is not enough. Driving skills and good tires are also important. A heavy engine over the drive wheels helps too.