Transfer Case Replacement Cost: How to Save Money

Author: Daniel Rey

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Most light trucks come in two varieties: two-wheel drive and four-wheel drive. Both varieties direct engine power to the rear wheels, but four-wheel drive models use a transfer case that can take some of that engine power and direct it to the front wheels as well. Usually, four-wheel drive is only used when necessary, when extra traction is needed on all four wheels.

The transfer case is bolted to the end of the transmission and has two driveshafts: one goes back to the rear differential, and the other runs forward to the front differential. 

It can be easy to replace the transfer case. The driveshafts need to be taken off, and the transfer case needs to be unbolted from the transmission. Sometimes there are shields or cross-members that also need to be removed, and there are usually a few electrical connectors and hoses to undo. 

How Transfer Cases Fail

Transfer cases are usually pretty robust and reliable, but like anything mechanical, they can fail. The majority of four-wheel-drive problems begin with noise. There is usually a chain drive connecting the main shaft to a secondary shaft, which takes some power from the rear wheel drive and sends it to the front. The chain between the two can stretch with age and wear and develop slop and noise. There are also several bearings that can wear out and cause noise issues. 

Most transfer cases have a clutch pack that makes up for any difference in speed between the front and back wheels. These clutches can wear out and cause the transfer case to slip. 

The actual gear changes are made by a shift fork that is operated by an actuator; problems with that can cause a failure to shift. All of that is handled by electronic modules in most newer cars, and if there is a problem, it will show up as a trouble code and the car won’t shift.

Transfer Case Replacement Options

If a transfer case breaks down, it can usually be rebuilt, just like most other large mechanical parts. In most cases, it’s not usually possible to get a good idea of the cost until it’s all in pieces and the internal parts are inspected. 

Normal procedure would be to take off the transfer case and look at it, then figure out how much it would cost to fix or replace it. The main advantage of a replacement is that you typically get a more comprehensive warranty. There’s not always a good aftermarket supply for whole assemblies, but problems are infrequent enough in that case that a used replacement is usually a safe option and usually comes with a warranty.

Cost of Transfer Case Replacement

For some rough estimates of replacement costs, assuming a shop rate of $150 an hour:

  • For a 2004 Ram 1500 with a 4.7 liter engine, the labor time to replace the transfer case is 1.8 hours. An OE transfer case costs about $3100, and a remanufactured Zumbrota unit costs about $2100. That would make the job about $3400 using factory parts or $2400 using aftermarket parts. 
  • For a 2016 Chevrolet Silverado with the 6.6 liter engine, the labor time to replace the transfer case is 3.5 hours. An OE transfer case costs about $2000, and a remanufactured Zumbrota unit costs about $1900. This would make the job about $2600 using factory parts or about $2500 using aftermarket parts.
  • For a 2013 Toyota 4Runner with a 4.0 liter engine, the labor time to replace the transfer case is 7.2 hours. An OE transfer case costs approximately $3200, while a used replacement with warranty costs approximately $2,000 That would make the job about $4300 using factory parts or about $3100 with a used transfer case installed.

What Else Can Seem Like a Bad Transfer Case?

A bad actuator is probably the most common problem, which can usually be replaced separately. It’s not always easy to tell whether a shifting problem is due to the actuator or the transfer case, and following the diagnostic steps for any given code is the best approach. 

In many cases, there is also an actuator in the front differential that has to be operated to engage four-wheel drive. On some vehicles, it’s very common for this to fail or for the switch or relays that operate it. Usually this can be determined fairly easily with the vehicle on a lift.

The means of engaging four-wheel drive should also be ruled out. For a system operated by a switch, there will be a fuse and wiring and so forth that could be a problem. For a system with a lever operating a cable or rod assembly, there is usually some adjustment, and things can slip, break, or become disconnected. 

Frequently Asked Questions

Can you drive with a bad transfer case?

A transfer case usually has a continuous shaft between the transmission and the rear driveshaft, so if the four wheel drive function fails, it will usually still be possible to use the vehicle as a normal rear wheel drive. There are exceptions, of course, and in some cases removing the front driveshaft is done to bypass some some problems.

How can I avoid transfer case problems?

Maintenance is the main way; the transfer case has fluid lubricating the internal parts, which needs to be changed on a schedule, usually every 30,000 miles. The other way to avoid problems is to only use four wheel drive when appropriate, in wet or slippery conditions. And then it’s also important to have the sizes of the tires matched, or extra strain and wear occur in the transfer case.

What’s the difference between four wheel drive and all-wheel drive?

A four wheel drive vehicle primarily drives the rear wheels, while an all-wheel drive vehicle primarily drives the front wheels. 
Or, in another way of explaining the difference, a four wheel drive vehicle starts out as a rear wheel drive vehicle, and then a transfer case and a front differential are added, allowing the front wheels to be driven as well. 
An all-wheel drive vehicle starts out as a front wheel drive vehicle, then a power transfer unit (it can be called different things by different manufacturers) and a rear differential are added, allowing some of the engine power to be taken off to drive the rear wheels. 

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