Does the differential fluid need to be changed?
Differential Fluids are recommended to be changed at 15,000 miles.
15,000 Maintenance 2006 XK 3.7L:
Change the engine oil and engine oil filter, if not replaced at 3 months.
Inspect the engine air cleaner filter, replace if necessary.
Drain and refill the front and rear axles.
Inspect the exhaust system.
Inspect brake hoses.
Check the engine coolant/anti-freeze level, hoses, and clamps.
After completion of off-road operation, the underside of the vehicle should be thoroughly inspected. Examine threaded fasteners for looseness.
What oil should I use and do you need to remove the covers or can you just siphone it out?
(not all) 2006 XKs will take 75W140 Synthetic gear lube.
The Front differential has drain & fill plugs, the cover is extreamly diffacult to remove. The Rear differential only has a fill plug, normally the cover is removed for servicing, but according to your warranty manual "Drain & Refill" is acceptable, although I would recommend pulling the cover to get out as much debris as possible.
The dealer wanted $264.00. Seems alot.
Wow, thats cheap, Its $405 for the differential services here, ya just checked - $190 just for the fluid & RTV (parts) only.