The prediction of the wet-clutch service life still remains a challenge for scientists and engineers. Previous research has shown the significance of the wet-clutch friction characteristics on the driveline dynamics. To avoid driveline vibrations an increasing friction coefficient with increasing sliding speed is desirable. Consequently, prediction of the occurrence of driveline vibrations relies on a detailed knowledge of how the friction characteristics are affected by wet-clutch degradation, as well as an understanding of the driveline dynamics. Wet clutches are used in both automatic transmissions and all-wheel-drive systems in cars, where they are referred to as limited slip couplings by manufacturers. Wet clutches used in automatic transmissions are subjected to high slip levels, but for very limited time periods. In all-wheel-drive systems, where the limited slip coupling can be used to control the torque transfer to, for example, the rear wheels, the slip levels are low but continuous. Most wet-clutch research has been performed for clutches in automatic transmissions and not for clutches used in all-wheel-drive systems. Thus, a simulation model was developed to evaluate how different operating conditions of the limited slip coupling influence degradation of the friction characteristics and the tendencies towards driveline vibrations. First, the changes in the friction characteristics with the time of ageing are simulated. The friction characteristics after ageing are used as the input to a simplified driveline model, which is used to evaluate the occurrence of vibrations. It is shown how the developed simulation model can be used as an efficient tool for engineers. The developed simulation model can be used to predict how the operating conditions for the limited slip coupling influence degradation of the friction characteristics.