Honda Element owners have reported 2 problems related to transfer case (under the power train category). The most recently reported issues are listed below. Also please check out the statistics and reliability analysis of Honda Element based on all problems reported for the Element.
While driving 30 mph and making a left turn in the snow 4-wheel drive mechanism kicked in automatically, vehicle spun out and hit a vender yard post.
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Four wheel drive does not engage when front wheels slip or spin. The left rear wheel turned one rotation on one incident. That is the only movement I've seen from the rear wheels.