The final drive is, as the name suggests, the last gear pair that the drive goes through before it reaches the road wheels.
FWD Layout With
Final Gear Being The Large One
It is another opportunity to increase the speed of the engine and is used, and chosen, in conjunction with the gear ratios.
Once the individual ratios have been chosen to ensure that the engine stays in its power band, the final drive can be used to fine tune the car's ultimate speed characteristics.
For example, a longer final drive will provide a higher top speed but reduce acceleration, while a shorter one will have the reverse effect.