duramax , diesel , transfer case , pump rub

Transfer Case Upgrade Only vs. Upgrade & Repair Kit - What’s Best For You?

Transfer Case Upgrade Only vs. Upgrade & Repair Kit - What’s Best For You?

If you own a 2001 - 2007 General Motors HD 2500 or 3500 truck then you need to be aware of a common and potentially expensive issue that can creep up on these normally robust powertrains. Over time, transfer cases on these trucks can spring a small leak that can lead to gradual fluid loss and the eventual failure of this critical part. Not only is this repair expensive but it can leave you stranded on the side of the road. Not the kind of road trip most of us want to have!

This troubling phenomenon, known as pump rub (which we will cover in more detail in this article) can affect trucks with the NP261XHD or NP263XHD transfer cases running with the Duramax Diesel LB7, LLY, and LBZ engines. It can also present itself on 8.1L gas engines when equipped with the Allison transmission.

A Merchant Automotive, we’ve cemented a reputation as the Duramax experts for a reason and we’ve developed a custom-engineered collection of upgrade and repair kits that can repair components damaged by pump rub and ensure that the situation doesn’t present itself for the lifetime of your truck. That’s right, we said a lifetime warranty!

We’re going to cover everything you need to know about this troubling condition and how to prevent this situation on your Heavy Duty truck:

  • What is pump rub?
  • How do you prevent pump rub?
  • What’s a transfer case upgrade kit?
  • What’s a transfer case repair and upgrade kit?
  • Why Act Sooner Rather Than Later?

Let’s get into it!

What Is Pump Rub?

Transfer cases on 2001 - 2007 GM Heavy Duty trucks utilize a pump that is driven off the mainshaft. Due to this design decision, the pump housing must “float” in the rear housing. To prevent the housing from spinning, it is anchored by tabs that secure it to the rear housing in order to prevent it from spinning with the main shaft. Although General Motors installed a steel spring to prevent the housing from spinning, over time, the force exerted on this part causes the steel spring to break.

Why does this matter? It comes to the story of two different metals. The housing is made of aluminum, while the rear housing is made of magnesium - which is a much softer metal. Once that steel spring breaks and the tabs begin to move against the rear housing, it’s only a matter of time before this weakened part wears a hole right in the side of the rear housing. What makes this issue so nefarious is that the leak is small enough to not leak while the vehicle is at rest, therefore you most likely won’t notice any drops under the ground when you move your truck out of its space. However, when your truck is in motion, pressure in the case will force out fluid while underway. Since there’s no monitor for the fluid level in the transfer case, most truck owners learn about this scenario when it’s far too late.

What this means for you is a big dollar repair and a potential stranding on the side of the highway. Not good.

How Do You Prevent Pump Rub?

Preventing pump rub requires an upgrade of the housing itself with something that is considerably more durable than the stock parts offered by General Motors. Replacing the stock unit with a Billet T-6061 Aluminum CNC-Machined housing that’s part of the upgrade kit offered by Merchant Automotive is the solution.

This durable upgrade replaces critical parts on the housing and upgrades the design of the locking tabs on the stock housing to prevent movement and eventual breakthrough.

This upgrade can be completed along with a rear housing repair or be completed prior to repair in order to prevent pump rub from causing a catastrophic loss of fluid. Merchant Automotive includes all necessary gaskets, silicone, and thread locker to ensure completion of this job with relative ease.

What’s a transfer case upgrade kit?

Merchant Automotives Transfer Case Upgrade Kit is a comprehensive and proactive solution to the eventuality of pump rub in your 2001 - 2007 GM Heavy Duty Trucks NP261XHD or NP263XHD transfer cases running with the Duramax Diesel LB7, LLY, and LBZ engines. This upgrade kit also works on 8.1L gas engines when equipped with the Allison transmission.

As discussed above, this comprehensive upgrade kit includes all components necessary to upgrade the housing to eliminate rotation and prevent rub through on the rear housing.

Kit Includes:

  • Merchant Automotive Billet T-6061 Aluminum CNC-MachinedHousing
  • Adapter Gasket (#331304A)
  • RTV Silicone with applicator nozzle (#SU500530-ALU)
  • Blue Threadlocker

Vehicle Fitment:

1998-2007 SILVERADO/SIERRA 1500, 1500HD, 2500, 2500HD, 3500 NP246, NP261HD, NP263HD, NP261XHD, NP263XHD
1998-2003 BLAZER/JIMMY - NP236
1999-2005 ASTRO/SAFARI - NP136
1999-2007 ESCALADE - NP246, NP149
2002-2007 AVALANCHE 1500, 2500 NP246, NP261, NP263, NP263HD


1500, 2500


What’s A Transfer Case Repair And Upgrade Kit?

What if your truck has already shown the signs of pump rub and your 2001 - 2007 GM Heavy Duty truck’s rear housing is damaged? Trust us, we’ve heard plenty of stories about owners who heard about the infamous pump rub issues and proactively took apart their transfer case only to realize that the rear housing may not have sprung a leak quite yet but had already sustained quite a bit of damage. There’s a very thin line between leaking and not leaking with these components, so many owners take it upon themselves to repair the existing damage, as well as upgrade the parts.

Sound complicated? No worries! Merchant Automotive has you covered with our Transfer Case Repair and Upgrade Kit. This comprehensive kit bundles together an OEM rear housing to replace your damaged housing, along with an upgrade kit as well as all the gasket, seals, and tools to accomplish this job with ease. We also provide a comprehensive instructional video and a comprehensive set of instructions so that you can get the job done yourself and save on going to the mechanic. We know the in’s and out’s to get the job done quick and easy because we work on these trucks day in and day out.

Check out the kit below!

Kit Includes:

Vehicle Fitment:

1998-2007 SILVERADO


2500HD, 3500HD 261XHD, 263XHD LB7, LLY, LBZ, 8.1L GAS

Why Act Sooner Rather Than Later?

An ounce of prevention is worth a pound of cure.

When it comes time to handle this notorious issue on GM HD trucks, upgrading your pump housing will prevent a repair that can easily run into the thousands of dollars. This issue is well documented by General Motors and a quick browse through the deep levels of the internet reveals hundreds and hundreds of owners who’ve dealt with pump rub and the resulting damage from the loss of fluid. Once your transfer case bleeds its fluid all over the highway, it loses critical lubrication/heat protection and it can suffer from serious damage. Why not just upgrade now and not worry about having to deal with this issue down the road?

Beyond straight dollars for dollar arguments around upgrading this flawed design, consider for a second the potential for a ruined trip, or a bevy of other issues that can surround a truck that is suddenly rendered useless on the side of the road. Part of why we love these incredible machines is because of what they can do and where they can take us. How far are you going to get with a shredded drivetrain? Exactly.

Handle the situation now or deal with big consequences down the road.

Trust The Duramax Experts

We’ve built a legion of loyal fans for a reason.

When it comes time for the best parts, upgrades, and accessories for your Duramax truck, the experts at Merchant Automotive have you covered. We just don’t sell parts and accessories. We sell fully engineered solutions that are tailored for this incredibly unique platform and back them up with industry-leading warranties and a top-notch customer service experience that’ll have you coming back time after time.

Merchant Automotive is here to help guide you to get the most out of your truck. 

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