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The NP246 is GM's electronically-shifted, chain-driven Autotrac transfer case, used behind the 4L60E/4L65E and 6L80/6L90 on full-size Silverado, Sierra, Suburban, Tahoe, Yukon, and Avalanche trucks roughly from the late 1990s through the mid-2000s. It shifts between 2WD, Auto 4WD, 4-High, and 4-Low with a dash switch instead of a floor lever, which means some of its most common failures are electrical rather than mechanical — and that changes which kit you actually need.
Before you buy a kit, match your symptom to one of the four categories below. Buying a full bearing overhaul kit for a problem that is actually the encoder motor wastes money and does not fix the truck.
Four Kits, Four Different Problems
1. Bearing & Seal Kit — Fluid Leaks, Whining, General Wear
Covers the input and output shaft bearings and all the case seals and gaskets. This is the right call if the truck is leaking fluid from the case, you are hearing a bearing whine that changes with road speed, or you are doing a preventive rebuild on a high-mileage case that has never been opened. It does not include the chain or the pump.
Typical cost: $140-190 for the kit. Figure a comparable job to any chain-driven case teardown in labor if a shop does it — 4 to 6 hours.
2. Pump Rub Repair Kit — The NP246-Specific TSB Issue
This is the failure that is almost unique to the NP246: the oil pump housing can rub against the drive chain under normal operation, grinding aluminum shavings into the case fluid. Those shavings circulate through the whole case, accelerating wear on everything else they touch. It typically shows up first as a "Service 4WD" message or intermittent 4WD engagement problems, sometimes with no obvious noise at all until the metal content in the fluid has already done damage. GM addressed this with a revised pump design, which is what the pump rub repair kit replaces.
Typical cost: $50-65 for the kit — by far the cheapest fix on this list, and worth doing proactively on any NP246 getting opened up for another reason, since it prevents a much bigger repair later.
3. Drive Chain — Rattle, Slap, Delayed Engagement
Same wear mechanism as any chain-driven transfer case: the chain stretches, develops slack, and the slack shows up as rattle or clunk, usually loudest on light throttle. If the pump rub issue above has been grinding metal into the fluid for a while, inspect the chain closely when you have the case open — contaminated fluid accelerates chain wear too.
Typical cost: $100-130 for the chain alone. Combine with the pump rub kit and bearing kit if the case is open for a full rebuild; the labor to split the case is the same regardless of how many internal parts you replace.
4. Encoder Motor — No 4WD Engagement, No Mechanical Noise
The encoder motor is what physically shifts the NP246's internal collar when you flip the dash switch. When it fails, the symptom is usually a transfer case that will not shift at all, a Service 4WD light, or a dash switch that does nothing — with no rattle, whine, or leak to point at. This is a bolt-on external part, not an internal rebuild, which makes it one of the few NP246 repairs you can do without splitting the case.
Typical cost: $140-180 for the motor. DIY install is often under an hour since it mounts from outside the case.
Decision Table
| Symptom | Kit Needed | Approx. Cost | Case Must Open? |
|---|---|---|---|
| Fluid leak, general whine | Bearing & Seal Kit | $140-190 | Yes |
| Service 4WD light, no clear noise | Pump Rub Repair Kit | $50-65 | Yes |
| Rattle/clunk on light throttle | Drive Chain | $100-130 | Yes |
| No 4WD engagement, dash switch dead | Encoder Motor | $140-180 | No |
| Case scored from metal contamination | Rear Half Housing (new) | $340-370 | Yes (replaces the housing) |
If you are already splitting the case for one of the top three rows, add the pump rub kit regardless of which other symptom brought you there — at roughly $50-65 it is cheap insurance against the one failure mode that is most specific to this case.
When You Need the Rear Half Housing Instead
If the pump rub issue has been present long enough to score the bore or chew up the housing material itself, a bearing kit will not fix it — the aluminum housing surface is physically damaged. In that case the rear half housing comes pre-fitted with new seals and replaces the damaged section outright. This is the most expensive single part on this list, but it is still well under what a full reman or used replacement case costs, and it lets you keep the original front half and electronics.
Bearing Kits, Pump Rub Kits, Chains, and Encoder Motors Ship Same-Day
We stock the specific parts for NP246 jobs like these, matched to the GM applications above. CoreTransmissionParts carries the broader catalog if you need something we don't stock direct.
Shop Gearbox Insider → Shop CoreTransmissionParts →FAQ
Is the pump rub issue covered by a GM recall?
It was addressed through service bulletins and a revised pump design rather than a blanket recall, so coverage depends on your specific truck's service history. Treat it as a known wear issue worth checking proactively rather than assuming it was already fixed.
Can I replace just the encoder motor myself?
Yes — it is one of the more DIY-friendly NP246 repairs since it bolts on from outside the case and does not require splitting anything open. Disconnect the battery before you start since you are working near a wiring harness connector.
Should I do the pump rub kit even if I have no symptoms?
If you are already in the case for another repair, yes — it is cheap relative to the labor of getting back in there a second time. If the case has never been opened and shows no symptoms, there is no need to preemptively tear it down just for this.