Merchant Automotive Transfer Case Pump Upgrade and Repair Kit - Seal Driver and Pump, Duramax 261XHD 263XHD | 2001 - 2007


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Transfer Case Pump Upgrade and Repair Kit - Seal Driver and Pump, Duramax 261XHD 263XHD | 2001 - 2007
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Product Information

With pump rub being such a prevalent problem for 2001-early 2007 GM transfer cases, preventing the problem before it occurs is always a good idea. This Merchant Automotive transfer case upgrade is your #1 choice for preventing pump rub or replacing a transfer case housing that has succumbed to pump rub. If your transfer case has not failed due to pump rub, the basic kit can be installed to prevent future failures as preventative maintenance. The MA transfer case pump upgrade can be installed during your repair to prevent future failure.


This all in one NP261XHD/NP263XH transfer case pump upgrade kit will include all of the necessary parts to upgrade and repair a transfer case that is needing a rear case replacement due to pump rub failure. This will include Duramax diesel LB7, LLY, and LBZ engine as well as 8.1L gas engines equipped with an Allison transmission. Note that transfer cases operated without lubrication may also have additional internal damage that will not be evident from external inspection and could require additional parts. When properly installed this kit is backed by a Limited Lifetime Warranty against pump rub failure from Merchant Automotive.



  • Direct Replacement 
  • Stronger Than Factory
  • All In One Kit


  • OE Style Transfer Case
  • Includes Pump Upgrade
  • Seal Driver/Pump Included

What's In The Box

  • Merchant Automotive Billet T-6061 Aluminum CNC-Machined Transfer Case Pump Housing
  • Merchant Automotive Performance Transfer Case Fluid
  • Merchant Automotive Magnetic Drain Plug Kit
  • Transfer Case Adapter Gasket
  • RTV Silicone with applicator nozzle
  • Blue Threadlock
  • OEM Magnesium Rear Transfer Case Housing
  • Rear Output Seal
  • Pickup Tube Seal
  • Speed Sensor Seal
  • Snap Ring for the Output Shaft Bearing
  • Snap Ring Grommet
  • Snap Ring Pliers
  • Spline Pump Assembly
  • Rear Output Seal Driver

What Is Pump Rub?

Pump Rub refers to a gear pump failure in GM transfer cases from 1998-early 2007. The gear pump works by forcing oil to the planetary as well as the drive sprocket sleeve. The gear pump is driven by a shaft, so the housing of the pump must “float” in the rear housing of the transfer case. The pump housing has tabs 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, these pump tabs can wear on the rear housing and start to wear on the aluminum pump housing causing a small leak. Due to the location of the leak, many vehicles do not experience dripping while parked, but rather while driving, leaving it gone unnoticed. The transfer case on these vehicles do not have a low fluid indicator, which means that by the time the problem is noticed, it is usually too late.

From the factory, GM installed a spring steel clip in the housing to prevent this type of wear, but this has proved to break and become useless in these situations.

With the installation of this transfer case repair/upgrade kit, you can prevent this before it happens and avoid costly repair bills. You will also get a LIMITED LIFETIME WARRANTY against pump rub. If you have this kit installed and your case wears a hold in the new rear housing, we will buy you a new transfer case. This warranty will only apply to installations with a new rear housing.

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