Transfer Case Leaking Oil; Explained and Fixed.

First of all, what do you mean by a transfer case? A transfer case is a device attached to the transmission of cars that transfers engine power from the driveshaft to either the rear or front wheels. 

It does this by allowing for a different gear ratio in each wheel. So, for example, if your car has a five-speed manual, it would have two transfer cases: one for the front and one for the rear. 

A leak in these cases can cause damage to either or both sets of gears and could make your vehicle difficult to start or stall out while you’re driving.

Transfer cases are part of a drive train of a vehicle. Different vehicles, typically SUVs and trucks, have them, but not all cars do. 

If you have an SUV or truck, it is something to be aware of if you ever take it in for repair. Some of the repairs may be covered under warranty by the automaker, but only some may include a transfer case leak. 

The warranty coverage depends on the manufacturer and different circumstances, so this is something to look at and decide with your service advisor if you are considering any repair work. 

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How Can I Tell If My Transfer Case Output Shaft Seal Is Failing?

You can tell if your case output shaft seal fails by noticing the leaking fluid from the transfer case. There are other signs too that can tell you about its bad condition. 

The output shaft seal is an essential mechanical part of the transfer case. Its main job is to connect your transfer case to the vehicle’s axles. The transfer case is used to shift the car from two-wheel drive to four-wheel drive. 

So transfer case does the hard work of shifting from one drive mode to other car modes for you. As with any other mechanical part, the output shaft seal sometimes fails for various reasons. 

But there are many symptoms associated with a failing transfer case output shaft seal, but the one that can identify it is a grinding noise when you step on the brakes.

Once a seal leaks, it may not always produce that noise while using the brakes or accelerating. 

However, if you continue to drive with nothing in your gauges or lack of power and then brake hard before suddenly, your vehicle won’t accelerate, and there will be no grinding noise when braking. 

You can also notice the driving mode shifting problem to determine the bad output shaft sea. 

The transfer case has a lot of components that subject it to wear; any seal can fail if you don’t maintain your vehicle well enough.

If you are lucky, your vehicle will take care of the seal, but a seal should not fail on its own.

Like other wear and tear issues, a seal can fail because of a lack of maintenance or damage from an accident. So if anything other than normal wear and tear is causing a failure, it could be worn out or broken. 

A broken seal will cause the noise that you are describing. To determine the cause of the issue, you will need to inspect each seal. If you find a long crack in any seal, replace it. 

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Find The Cause Of Your Transfer Case Leakage

There could be a couple of causes or the reason for your transfer case leakage. Transfer cases, like all automatic and manual transmission vehicles, sometimes leak. 

Many factors can cause leaks, such as age, fluid type or condition, seal condition, and installation. There are usually a few common causes for these leaks:

  • Old Shaft Linkages 
  • Broken Seals  
  • Corrosion on Shafts and Cogs
  • Poor Fluid Type
  • Faulty Valve Seals 
  • Faulty Electronic Control Unit 
  • Bad Installations 
Transfer Case Leaking Oil
Transfer Case Leaking Oil

To help determine if your problem is a leak, you need to first test for fluid consumption. This can be done by adding fluid to the system and observing the levels. 

Then check for fluid coming out the output when a test pedal is pressed. If this occurs, then the vehicle leaks. If no fluid consumption occurs, the problem may be elsewhere in the system. 

If you have found out that you leak in your transfer case, take it to your mechanic or the auto repair shops to fix it immediately. 

Can You Drive With The Bad Transfer Case?

No. Driving your car with a bad transfer case is not advisable because it can damage the transfer case to an extreme where you may have to replace it.

If you’ve had a bad transfer case, you may be wondering if it is safe for you to drive with the vehicle. If your car has a manual transmission, fear not. 

Transfer cases have two essential functions: they distribute power from the engine into the differentials through a set of gears. They allow a four-wheeler to go forward or backward without any differential input from human input. 

Unfortunately, when one of these four systems breaks down, it can put your car at risk for stalling on either side of the vehicle. 

So having a bad transfer case is a serious issue, and you should not drive with the bad case at all. 

Driving with a bad transfer case can cause further stress on the axles and shafts of the transmission. This situation can result in the damaging of other mechanical parts of the vehicle. 

Thus the entire repairing job will be costly for you as there may be a situation where you have to replace the transfer case. 

Because if you continue to drive with the bad transfer case, it will make it challenging to repair them, and hence only option would be a replacement that will be expensive for you. 

What Is The Cost Of The Repairing Transfer Case?


In general, replacing a transfer case with a new one will cost you $3000 to $4000.

The cost of repairing the transfer case depends upon the severity of the damage. Thus, if you suffer from a transfer case problem, you should immediately take your car to the mechanic. 

A mechanic is a perfect man for the job, and he will be able to properly diagnosis the issue in the transfer case. 

Then after checking and the diagnosis process, he would be able to tell you whether you need to repair or replace the transfer case.

And yes, it is an expensive job and the price range can vary according to the country and place.

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