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Average Cost for Transfer Case Replacement & Repairs

Average Cost for Transfer Case Replacement & Repairs
Austin Kilham
Austin KilhamUpdated September 18, 2023
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The transfer case helps send power to the wheels in all-wheel drive and four-wheel drive vehicles. If you have issues with your transfer case, you’ll have to get it repaired or replaced as soon as you can. Replacement cost can range from $2,000 to $8,000 depending on your vehicle, while repair costs will vary depending on the type of fix required. For example, replacing an output shaft seal will typically cost around $350, while more complex repairs can run into the thousands of dollars. Here’s a closer look at what a transfer case is, the factors that affect transfer case repair and replacement costs, and options for financing repairs. 

Transfer Case Repair and Replacement Cost Breakdown

The chief factors that will affect transfer case repair and replacement costs are parts and labor. On average, you can expect to pay a mechanic between $75 and $130 per hour. Rates will vary depending on where you live, with mechanics in big cities, for example, possibly charging more than those in more suburban or rural areas. Removal and replacement of a transfer case takes about 3.5 hours. It’s a heavy component, so it may require more than one set of hands to complete the task. In addition to labor costs to replace a transfer case, you can expect the cost of parts to be about $2,400, on average, while labor will likely cost between $475 and $600.There is a wide range of costs associated with transfer case repairs depending on what the issue is. For example, if there is a hole in your transfer case, you may be able to replace half of it instead of the whole thing. That could cost you $450 to $675, with parts costing $115 to $150. Replacing a damaged encoder ring could cost you $425 to $800, with parts costing $30 to $60. While labor costs for these fixes may be high, it is still cheaper than replacing the transfer case entirely. Recommended: How Much Do Cars Cost in 2023?

Getting an Estimate

Get estimates from multiple mechanics to ensure you’re getting the best deal for the repair or replacement of your transfer case. You may want to start by consulting online tools like Kelley Blue Book’s Repair Pricing tool or the Consumer Report’s Car Repair Estimate. They can give you an estimate of the price range you can expect to pay in your area for the make and model of your car. This range can act as a benchmark against which you can compare estimates from local mechanics to determine if you are getting a fair price. Before settling on a mechanic, be sure to look up reviews to see if other customers have had trouble in the past. You can also look them up on the Better Business Bureau to see if they’ve received any recent complaints. 

What Is a Transfer Case?

A transfer case transfers power from the transmission to the front and rear axles in your vehicle. They can deliver power to all of the wheels equally, in the case of all-wheel drive vehicles, or they can split power between the wheels, as in the case of four-wheel drive vehicles. In this way, the transfer case can help optimize the spinning of the wheels for rough conditions. 

Why Do Transfer Cases Fail?

Transfer cases will typically fail due to regular wear and tear, lack of regular maintenance, or a leak that causes low fluid levels.

Signs of a Bad Transfer Case

Keep an eye out for these common signs that your transfer case is failing. 
  • Unusual sounds. A failing transfer case could cause grinding, humming, or whirring sounds that come from under your vehicle. 
  • Fluid under your vehicle. Low fluids are one of the number one reasons that transfer cases fail. Pooling liquid under your vehicle could be a sign that your transfer case is leaking. 
  • Your car won’t stay in four-wheel drive. If your transfer case is not functioning properly, your car may have trouble staying in four-wheel drive. 
  • Your car won’t shift into low gear. A four-wheel drive system has a low gear that allows your vehicle to creep slowly in rough conditions. If your car can’t shift into this low gear, your transfer case may be malfunctioning. 

Can I Drive With a Bad Transfer Case?

It’s not a good idea to drive with a bad transfer case. It could, for example, cause your car to jump in and out of four-wheel drive mode unexpectedly. If you allow damage to persist and get worse, there could be ripple effects on other parts of your vehicle, such as the transmission, drive shaft, and axles. If these get damaged, you could end up having to repair or replace other expensive components, as well. Recommended: How Much Does an Engine Replacement Cost?

4 Ways to Cover Transfer Case Replacement Costs

Consider the following ways to cover the cost of transfer case replacement. 

Cash Savings

Cash savings, such as an emergency fund, will allow you to pay for a transfer case replacement and is the cheapest way to cover costs, as there are no fees or interest on cash transactions. Consider setting aside some money in a cash savings account to cover the cost of car repairs.

Credit Cards

If you don’t have cash on hand, you could consider a credit card. However, be aware that if you carry a balance on your card, you will owe interest, which can be as high as 20% or more. If you carry a balance for more than one month, your interest payments will compound. This means you’ll owe interest on your interest, and you can end up in deep cycles of debt. As a result, credit cards are best used when you know you will be able to pay them off each month. 

Personal Loans

Personal loans may be a cheaper alternative to credit cards for financing car repair. They allow individuals to borrow a lump sum, which the borrower agrees to pay off in regular monthly installments with interest. Interest rates may be significantly lower than credit card rates. 

Auto Loan Refinancing

You may also consider refinancing your auto loan. When you refinance, you pay off your old loan with a new loan, ideally one with a lower interest rate, which can save you money over the life of your loan. You can put that savings toward other expenses, including car repair. Use a car loan refinancing calculator to figure out the savings you can expect when you refinance.

The Takeaway

Transfer case replacement can be one of the most expensive items to replace in your vehicle. However, if yours is faulty, it’s necessary to fix or replace it to prevent further damage to your car. Signs of a bad transfer case include strange noises coming from the engine, leaking fluid, or your car not shifting into lower gears. If you notice any of these signs, take your vehicle to the mechanic as soon as possible.If you can’t pay cash for your transfer case replacement, one option is to apply for a cash-out auto loan refinance. With this type of refinance, you’ll get cash back from your loan that you can put toward car repairs.If refinancing is something you’re considering, allow Lantern by SoFi to help. Lantern allows you to compare multiple lenders, including rates and terms, all in one place, with just a single application and no obligation to you.

Frequently Asked Questions

Can I continue driving my vehicle with a faulty transfer case?
Are there different types of transfer cases for different vehicles?
Can a transfer case be repaired, or does it need to be replaced entirely?
How long does it take to repair or replace a transfer case?
Does the make and model of the vehicle affect the cost of transfer case repair or replacement?
Photo credit: iStock/g-stockstudio

About the Author

Austin Kilham

Austin Kilham

Austin Kilham is a writer and journalist based in Los Angeles. He focuses on personal finance, retirement, business, and health care with an eye toward helping others understand complex topics.
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