Transfer Case problems of the 2005 Toyota Highlander

My 2005 Toyota Highlander developed a leak from the transfer case, which has the potential to cause a complete loss of transmission fluid as well as loss of steering control. There are documented accidents which have occurred as a result of this problem. This repair would normally be covered by a 5 year/60,000 mile power train warranty however the leak was discovered a few months after the 5 year time period expired. I have since learned that Toyota was aware of this potentially dangerous problem and first released a technical service bulletin (TSB) in November of 2007 with the most recent TSB being issued may of 2010. My vehicle was clearly under warranty at the time that the TSB's were initially issued, but Toyota withheld this information from the consumer. This results in a cost of several thousand dollars to the consumer in potential repairs. I have contacted Toyota corporate headquarters and they refuse to negotiate any type of reimbursement for repairs. Toyota has continued to issue TSB's for the same problem for 3 years and has apparently made no attempt to correct the problem during production.

Front differential catastrophically failed on 2005 Toyota Highlander (4wd) (65,220 mi) while traveling at 65 mph on interstate. Vehicle instantaneously lost speed (to 30 mph) & we narrowly avoided being run over by semitrailer at highway speed. Due to configuration of road - only sporadic shoulders because of terrain - this was a very dangerous situation. Car stuck in travel lanes for an extended period. Feel very lucky that no one was hurt. Repairing dealer asserted that the part had no fluid remaining due to seal leak. Vehicle was last serviced by local dealer ~2,000 miles earlier (63,226 mi) with no leakage seen. Entire front differential / transfer case assembly was replaced (still have part). Car was totally inspected by repairing dealer at the time (65,220 mi) and no other problems found. One month later found fluid puddle in driveway (66,216 mi). Dealer investigated and reported that the inspection plug on the rear differential was rapidly leaking differential fluid. Told not to drive vehicle till plug and gasket replaced. Seems to be ok now. So, within a month and 1,000 mi use, both the front differential and the rear differential rapidly lost fluids. I suspect bad gaskets were used in manufacture.

2005 Toyota Highlander with only 72000 miles (12,000 miles out of warranty), seals on transfer case of transmission leaks onto exhaust pipe causing smoking and smell of burnt fluids.

I have a 2005 Highlander that developed a transmission fluid leak at 62,000 miles. Toyota currently has a service bulletin out stating that the transmission seal on certain awd Highlanders and siennas are prone to premature failure. This can result in leak of transmission or front differential fluid. The repair is not being covered under the warranty for me since the car is beyond the 60000 mile powertrain warranty. The loss of transmission or gear oil can lead to sudden freezing of dive-axle, which should be considered a serious safety issue.

Purchased a new 2005 Toyota Highlander 4wd. After 45k miles the 4wd transfer case began to leak gear oil and transmission fluid. I noticed this since I do all my own oil changes on the vehicle. No harm was done, but I have brought the same problem to the dealership 5 times. Each time they stated that they have repaired the problem. However, without fail several months later I am still experiencing the problem. Toyota's customer service was not very friendly or helpful. One representative stated that the dealership really did not have the tools to properly fix the transfer case seals properly. My safety issue: if this transfer case fails again and I do not notice it, then I fear that the vehicle could be sent into an uncontrollable spin or even worse. Thus far Toyota has replaced the transfer case twice and the transmission once with a re-manufactured transmission.

Toyota, Highlander 2005. Going down a mountain at approximateky 50 mph and the vehicle stopped suddenly, back end flipped up, and the vehicle started to fish tail. The vehicle slid into a busy itersection then stalled. Had the vehicle towed to Toyota, where it was diagnosed with a defective transmission. While working on the vehicle I discussed the problem w/a customer service representative about getting a new vehicle. (this vehicle was only 3 months old). And was told that if I took the vehicle into arbitration they would immediatly cease working on the vehicle and would take away my free rental car leaving me stranded w/no transportation. Toyota blackmailed me.