Merchant Automotive Transfer Case Speed Sensor - 261XHD, 263XHD, 261HD, 263HD, NP246 | 1998 - 2007

This is the Speed Sensor found in the transfer case of many Gas and Diesel GM vehicles from 1998 to 2014.  This includes 1500, 2500 and 3500 pickup trucks and SUV's . It is located on the tail housing of the transfer case.

If there is excessive play in the mainshaft due to a worn rear output bearing or worn bearing pocket in the rear case half the tone wheel can make contact with the speed sensor damaging both pieces causing erratic readings. This can cause the the truck to drop into neutral unexpectedly and typically throw a gear ratio error code or something similar.

NOTE: If contact has been made between the speed sensor and the tone wheel both should be replaced.

While you are working on the transfer case it is a good time to inspect for the dreaded “pump rub” issue and upgrade to the Merchant Automotive Transfer Case Pump Upgrade to ensure a long and healthy transfer case life.

To view the Merchant Automotive Pump Upgrade installation video click here.

To view the Truck U segment on the Merchant Automotive Transfer Case Pump Rub kit click here.

What is a Transfer Case “Pump Rub” Failure?

GM transfer cases used from 1998 through early 2007 use a gear pump inside the case that is driven off the mainshaft. The pump forces oil to the planetary as well as the drive sprocket sleeve. Because the pump is driven by the shaft, the housing of the pump must "float" in the rear housing. There are tabs around the pump housing that fit into spots in the rear housing to locate the pump housing and prevent it from spinning inside the case with the mainshaft. Over time, the pump tabs can start to wear on the rear housing. GM installed a spring steel clip in the housing intended to prevent wear, but the clip can break and be rendered useless.

Since the pump housing is aluminum and is a harder material then the magnesium rear housing, it can wear a hole in the rear housing and cause a very small leak. This leak is frequently high enough on the case that it typically will not leak when vehicle is not moving and therefore not leaving any drops on the ground; it will however leak while the vehicle is in motion. Unfortunately, since the transfer case does not have a low fluid indicator the pump rub failure is often not found until there is transfer case damage from running the case out of fluid.

Avoid costly repairs to your transfer case by preventing “Pump Rub” by installing a Merchant Automotive Transfer Case Pump Upgrade kit in your transfer case today, before it happens to your vehicle.

With installation of this kit, you will have a LIMITED LIFETIME WARRANTY against pump rub. If your case ever wears a hole in the new rear housing with the upgrade installed. We will buy you a new transfer case. However, if you already have a hole in your case, we recommend installing a new rear housing for a complete repair. The MA Lifetime Warranty will only apply to installations with a new rear housing.

1 Year Warranty