Is there an on demand 4 wheel drive car (not truck or suv)?

Nope. Coasting, coasting and holding in the clutch. Stopping. Stopping and starting. Nothing worked, except getting off dry pavement and onto something wet, slippery or loose (like dirt). If you didn't the thing was harder than hell to disengage!

Amen!

I understand that AWD always comes at a price.

That said, I also have a liking for the new Fusions. If they made an AWD Fusion Wagon in that 'cool white' color, I might actually consider one.

IIRC, Subaru says "no more Legacy wagons in North America".

-J

Hmm. Differently worn tires can cause the transfer case to bind up as well. Keep them properly inflated and rotated.

Oddly enough, there have been a few instances of 4x4 vehicles equipped (probably mistakenly) with differing front and rear axle ratios. Some (as claimed by their owners) directly from the factory that way. That's also asking for trouble.