Transmission Fluid Leak - is my car scrap metal

I was driving my 2004 Toyota Matrix XR (same engine as 2004 Corolla) when the check engine light came on. I stopped and checked the error code with my code reader and it was code P0741.

This code means " The Powertrain Control Module (PCM) will set the P0741 diagnostic trouble code when it notices a difference between the rotational speed of the torque converter and the transmission input shaft that is greater than 200 revolutions per minute (RPM).

So I checked my transmission fluid and it was low. I bought a quart of transmission fluid and put it in. It was still a little low and I noticed some transmission fluid leaking on the ground underneath my car. I drove a little bit and it seemed to drive fine and the error code did not come on. However I was worried about totaling the transmission and had the car towed home.

I was hoping just a hose or line broke but that didn’t appear to be the case, they seemed fine. I’m posting a picture of where it appears to be leaking. What is this part?

I’m hoping someone can tell me how bad this is? Should I take it to a transmission specialist? I don’t think the car is worth more than 3 to 4 thousand. Maybe a little more due to the recent used car inflation. The leak appears to be transmission fluid. I don’t think there’s any oil in it. Do I try to use transmission sealer? I don’t think it would be worth the money for a new transmission or major cost repair.

Thanks in advance for any advice.

Yes, as long as it is an independent trans shop that has been established for several years. With any luck, it might only need to have some seals replaced.
However, if you go to a chain-run trans shop (Lee Myles, Cottman, Mr. Transmission, AAMCO), you will be told that you need a new/overhauled trans–whether you really do, or not.

Hold off on that approach until you have a diagnosis/estimate from an indy trans shop.

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I see transmission fluid leaking from what appears to be the half shaft seal, running along the bottom of the transmission and dripping on the ground.

If that’s the case, it should be a cheap fix.

The half shaft seal is located where the red plug is on this Matrix transmission.




Looks like it’s going to be leaking up above there at the output shaft seal. It’s hard for me to tell exactly how I’m oriented under there as I’m not familiar with the vehicle. If it’s leaking at an output shaft seal to one of the front cv axles, probably not a huge (or terribly expensive) ordeal to get a shop to put a new seal in.

I took the picture almost directly underneath looking straight up.

What I said is basically the same thing as Tester said as far as a seal, although we used different terminology.

Is this vehicle front wheel drive or all wheel drive?

Either way, it looks like it’s leaking at the seal where that shiny round shaft (at the top of your picture) comes out. Should be a relatively inexpensive fix, as far as transmission fixes go.

The vehicle is front wheel drive with a 1.8 L 4cyl engine

It’s hard to say where that sort of leak is coming from based on the photo b/c when you drive the wind blows any leaking fluid all over the place. My guess, most likely it’s the half shaft seal mentioned above. The half-shaft is the part that transfers power from the transmission to the wheel, & contains the axle shaft & CV joints and their rubber boots. There’s a half-shaft on each side: right wheel, left wheel. The half-shaft slips into a hole in transmission case, and since the half shaft rotates, but the transmission case doesn’t, there has to be a seal there to prevent transmission fluid from leaking out. It makes a lot of sense imo just to replace the half shaft transmissions seals on both sides, won’t be cheap, but not overly expensive either. Have the half shafts ever been replaced? If so, that’s probably the cause, the seals were damaged in the replacement process.

There’s one other possibility though, the transmission fluid can leak into the radiator if there’s a breech in the transmission fluid cooler inside the radiator. That’s a much more serious problem b/c coolant can also leak into the transmission, which will cause a lot of damage if left uncorrected. Unlikely in a 2004 provided the cooling system has been properly maintained, but worth asking your shop to check the coolant for signs of transmission fluid contamination, and visa versa. Best of luck…

Is it leaving big stains where you park it?
Try leaving a piece of cardboard under it overnight to see how bad it is.
Periodically check the fluid level to see how fast it’s dropping.
It might be just a very slow leak and it took years for the level to drop.
Not surprising for an 18 y.o. car.

It’s good that the fluid looks red.
If it’s just slow seepage I’d keep topping it up and drive on.

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cleaning everything up first. it might give you a better idea of where it is coming from.


That is a bad leak, fluid dripping from the extension housing and bell housing, more than a quart low causing malfunction.
Get the axle seals replaced.

I checked the transmission fluid several weeks ago before going on a road trip and it was good. I haven’t checked it since (until the error code came up) so it could have started leaking at any point during or since the trip. I put a piece of cardboard under it and there were no drips on it after a day. I put transmission fluid in it and ran it for around 10 to 15 minutes and it started dripping with just the engine running but not moving. I would say a drip every two or three minutes.

So I took the car into a transmission repair shop and they confirmed it was the axle seal. They said on my car it’s a pretty easy job and said it would cost $150. That really seamed too good to be true. After working on it they called me back and told me there was an issue with the axle not being able to snap completely in, and because of that it’s still leaking. I was told this can happen when you have an axle replaced that some mechanics really pound on it and it can mess up the piece that the axle snaps into. They said they also tried a new axle to see if it would snap in but it did the same thing. Because of not stopping the leak they told me they wouldn’t charge anything.

I recently had an axle put in earlier this year however I’m not sure if it was that axle. I also had bearings put in on both sides in the front. I had an issue that both of my rotors were bent after getting the car back that caused a lot of vibration. I measured how warped they were with a dial inspector. One was 9/1000 off and the other was 3/1000 off. I had a new hub assembly put in on the one that was off 9/1000 and the new assembly checked fine after in. I still had some vibration but it was a lot better after having the new hub put in.

So it looks like my car is scrap metal since I’m not planning on putting in a new transmission. I may try putting in some transmission sealer and seeing what happens. It doesn’t sound like there’s any way to fix the leak or get the axle to lock in. Has anyone heard of this happening?

Any thoughts, let me know.


Hmm. I’d try taking it to another shop before scrapping the car.

If it’s really an “easy fix”… paying $150 plus a tow charge is a heck of a lot cheaper than a new (or new to you) car.

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Don’t need a new transmission at this point. Has the car ever been in an accident? 3 warranty repairs and still leaked, trans shop said things just don’t line up anymore. Last free fix and traded it in. Van got pushed over a boulder by fed Ex truck. No cost to me but the cause of the problem.

If the only transmission damage is to the part the axle inserts, the repair cost should be fairly reasonable. The biggest expense is likely the labor to remove the transmission so the part can be replaced on the bench, and that’s on the order of replacing a manual transmission clutch.

It’s not uncommon here to hear reports of adverse after-effect upon half-shaft replacements. It seems there’s definitely a knack to getting the axle to seat properly in the transmission. But most experienced mechanics would know how to do that. The most common problem is the wrong half-shaft, wrong part number in other words. There can be two or three different versions depending on what options the car has. Automatic vs manual transmission probably uses different part numbers for example. An experienced mechanic will always compare the old one to the replacement very carefully to verify they are the exact same part.


I’ve seen this phenomenon

Cheapo halfshafts sometimes don’t fit correctly, resulting in a leak

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Couldn’t there be some way to file down the splines to either repair the damage or make it fit?

The right axle assembly was replaced 6 weeks ago and won’t stay properly engaged into the transmission, who is responsible for the work? Parking lot mechanic? Good independent shop?

Unless there is apparent damage to the transmission, I would first try a new retaining clip on the inner joint. Next, a better quality axle assembly.

The inner CV joint engages into the differential side gear. To replace the gear the transmission must be removed, case split and differential unit removed. 12 to 15 hours of labor.

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Possibly might work. But Nevada’s advice above is where I’d start first if I had that problem.