The transfer case shift motor, located on the outside of the transfer case, moves the selector arms which mesh the gears to engage the front axle driveshaft or to engage a gear reduction for a special low-gear mode usually marked as 4LO on the dashboard 4WD switch.Click to see full answer. Hereof, what are the symptoms of a bad transfer case motor? Noted below are a few of the common side effects of a damaged transfer case output shaft seal that should be replaced. Difficulty shifting gears. Grinding noises coming from underneath the vehicle. Vehicle jumps in and out of four-wheel drive. Likewise, where is the encoder motor located? Since the encoder motor is located close to the ground, it is easily susceptible to damage due to road debris. One of the indications of a bad encoder motor is the flashing of the 4WD warning light in your vehicle’s instrument cluster. Likewise, people ask, what is a transfer case motor? The transfer case motor is a part of the transfer case that allows the vehicle to switch into and out of four-wheel drive. Four-wheel drive allows all four wheels of a vehicle to receive power from the engine. A transfer case motor can wear out, be damaged by debris, or corrode over time.How do I know if my transfer case control module is bad? Symptoms of Failing Transfer Case Control Module This could be a broken gear, debris from driving, or anything else. If you have a grinding sound or clanking sound when the module is working, then you need to get it checked out right away, so it won’t break completely on you.