Oil May Leak From AWD Differential Housing on Volvo XC90

Problem Description and Possible Solution

Oil leaks from the all-wheel drive differential housing have been reported.

Problem Data
RepairPal Verified
Average mileage: 113,413 (60,000–190,000)
7 model years affected: 2003, 2004, 2005, 2006, more2007, 2008, 2010
38 people reported this problem
Viewing 1 - 18 of 18 comments
After spending $1000 to have our local shop fix the oil leak, it began leaking again a month later, so we took it to the dealer. They said there are about 9 different problems that came up on the electronic diagnostics and probably $3000-5000 to get it . From what I am reading a lot of people have the same problems.

Is it worth spending the money? or should I take a standing offer I have for $5500 as is?
2006 XC90 with 101,500miles on it. It is in pretty good condition, and runs well. Just the oil leak that is the problem currently.
I really appreciate any input!
My XC90 experienced the exact same issue, though the leakage was minor when I caught it in time. As with many other like-units, the seals within the angle gear drive assembly began to fail, allowing for a slow weeping of oil out of its gearbox. to remedy the problem, I had a certified Volvo mechanic change out the seals with new ones. Unfortunately, those began leaking right away, so I had them replaced again (at no charge) with great success. The AWD systems on these cars are prone to such anomalies, so best to keep an eye on yours and have it repaired as soon as you spot the problem so it doesn't lead to a more serious failure later. Some common signs that system failure is coming is hearing a rattling, or fluttering noise coming from the angle drive or front axle assemblies (which tie into the angle drive box where these seals are located). Some owners have also reported a sound akin to that made by baseball cards clipped onto the front spokes of a kids' bicycle with clothes pins, or a sound like marbles rolling around in a barrel. Those sounds are common for an AWD system that is failing and needs attention, and can occur as a result of those leaking seals, or from a failure of the CV joints / axle assembly, or even from cracked boots on the CV joint that have let all the grease out causing joint failure. Short answer, best to have that whole system checked over by a certified Volvo mechanic whenever an oil leak is discovered in this area. An early catch can save a lot of grief later.
My car is burning oil thru the exhaust pipes. took it to the dealer and they charged me $329.00 for softwRE UPDATE THEN THEY CHARGED ME $ 250.00 for them to test my truck just to see wht the problem was. after all that they still couldnt tell me what was wrong but i damn neared pay a $1,000 in test for my truck then i took it some whereelse and i fing out that my egine is burning oil and that i need a turbo and to fix that is $ 6,800.00 i would never buy theis vechicle again.
first had to have seals replaced for an oil lead, a few months later another oil leak; had oil trap removed. Labor for this very expensive, first had to find the problem, so I paid that labor. Then they ordered the part and had to pay the labor for repair, nearly $1,000 in labor alone. Now, immediately after that repair, another oil leak. I am told it is probably head gasket and will cost approximately $4,200 including labor. Just can't do it.
rear differential leaking, had to replace with use 2011 differential for $4,000 otherwise new diff would cost 8,000 to replace.
noise from differential getting louder.
replace rear differential and seal leak after replacement.
replaced with used 2011 differential, cost $3500.
You can see and smell the leak from the rear differential above the rear axle. Mechanic had to stop tjecaxle to repair...very expensive.
Leak noticed at 75K (120,000KM), just after expiration of extended warranty...wish I checked as it had been leaking for a while.. Fix is dismantle, file a chamfer on the inner case, and reseal. The is also called the Angle or Bevel gear. Parts cost, 350..which included all new bolts and a valve...although you could reuse the old ones. I paid 250 for a mech to do the job in his own time. A simple reseal runs about 500 but they won't do it to include filing the chamfer and will use old parts where they can. I have done 6K miles since the repair...all seems well.