A power transfer unit includes an input shaft extending along an input axis and an intermediate drive shaft extending at least partially through the input shaft along the input axis. The power transfer unit further includes a ring gear assembly having a ring gear and a ring gear shaft coupled to the ring gear. The ring gear shaft at least partially surrounds the input shaft and extends along the input axis. The power transfer unit also includes a collar coupled to the input shaft. The collar surrounds the input shaft and is movable relative to the ring gear shaft along the input axis between an engaged position and a disengaged position. When the collar is in the engaged position, the input shaft is coupled to the ring gear shaft. When the collar is in the disengaged position, the input shaft is decoupled from the ring gear shaft.