Welcome to the forum
1996 Ranger 4.0l should have the 4R55E trans, 4-speed, 1997 and up 4.0l got the 5R55E, 5-speed.
Same trans, computer control added a new 2nd gear for the 5-speed rating.
No, it is no worse that any other automatic, Ford or any other manufacturer.
130k miles after 20 years is 6,500 miles a year, 550 miles a month, my guess would be it sat for long periods, so rubber seals in engine and trans would dry out then tear a bit when it was used.
I have run into this on a few low milers I have bought over the years, when you start driving them daily parts start leaking and failing, lol.
Automatics run strictly on ATF pressure, leaking seal internal or external will cause problems, every seal needs to be changed on a rebuild.
Soft parts rebuild(clutches, servos, and bands) on an automatic will last 12 to 18months, so unless you are selling it, lol, not good to cheap out on a rebuild.
Some transmission shops charge for full rebuild but only do soft parts fix, and trans will last thru the 12month warranty, barely.
You always need to replace the pump(Ford part only, others fail), one-way clutch and overdrive drum in most.
And always new torque converter.
The 4R and 5R also needed newer valve body with bonded gasket, that was an issue specific to this trans.
Any automatic needs a 2nd trans cooler, not just for towing, cooler trans = couple of extra years of service, so well worth the $100
"E" transmissions use electric solenoids inside the trans for computer controlled shifting, all manufacturers, weakness of these is HEAT, 2nd trans cooler extends their life.
1996 Transfer case will be a Borg Warner 1354, no real problems with these either.
Electric shift motor on transfer case was an issue when they got older, would quit working, Rebuild or replace, up to you, not hard to do.
You can rebuild the 1354, google: bw1354 rebuild
Not hard to do but many just buy a used one, safe bet since they seem to last a long time.
Because you are having these issues maybe there is something else wrong that is causing it.
With 4x4s front and rear tires need to be the same size, almost the same will cause issues.
Are the Auto front hubs working, or have they been changed to manual yet?
Truck is not a Salvaged title, right?
So wasn't wrecked, sat for a long time and then "resurrected".
Slightly tweaked frame can cause loads of issues
Last edited by RonD; 04-24-2016 at 02:06 PM.