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H3 Transfer Case Issue Help


So recently my 06 H3 had an issue in the transfer case where I would put it in 4-low, would hear it click in, and then right back out (while the car is in neutral). This would then throw a "Service 4WD" code on my dash that I ran as a "encoder circuit malfunction" and an "A/B motor circuit malfunction". All my other 4wd settings function fine and the car drives totally normal. I tore into it about a week ago, replaced the plastic shift fork with a aluminum one as many others have and that didn't solve it so I put a new encoder motor on which also failed to fix the issue. Using the original motor, I can press the 4-LOW button and it does the same thing with no transfer case connected to it. Simply rotates the half turn and then rotates back and throws a code. This is leading me to believe this would be an issue in the circuit for the 4wd system but even after looking at the schematic of how the signal is sent, I have no idea where to start looking. Does anybody have any insight or experience on issues like these? Any help would be greatly appreciated!

Happy Hummer

Well-Known Member
Is that a new encoder motor or used or reman?
Because the reman are pretty much rubbish. Had to go through several before finding one half way decent one.
Used ones are a crap shoot.
New ones if not GM/OEM product are equal abysmal.

Are you sure that the shift fork is 100% correct in the transfer case?
Have you pulled the encoder motor and with it still plugged in gone through multiple cycles of the 4wd system?

Also, a wheel speed sensor can cause weird behavior. As will a faulty TCCM/TCM. Faulty wiring too.:thumbs:
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Well-Known Member
After replacing several encoder motors on my wife's Tahoe and my son's Silverado at +/-$200 per pop, I finally came to a realization; I was wasting money replacing the wrong thing. The encoder motor and it's attached gearbox is NOT the problem, as there is very little to go wrong with those components. However, inside the encoder case behind the gear, is a rotating ring setup with multiple electrical contacts. THAT is what goes bad. And THAT can be purchased for around $40. It also makes it much easier to change out the encoder motor because you can align it exactly as needed to reinstall on your transfer case, regardless of what "mode" your TC was in when you removed the failed encoder motor. The only downside is that you must disassemble the encoder motor, but that is very easy (literally 4 torx screws).

Sadly, the H3's TC uses a different encoder motor, so replacing just the electrical contacts part may not be possible; as I haven't been able to find that individual part yet (if anyone does, please post it).

I agree completely that the encoder motor MUST be an OEM; I've had horrible luck with aftermarket units. Saving a couple of hundred dollars is not worth it when the unit inevitably fails again shortly after installation, sometimes stranding you miles from home...in Low Range!
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