I was looking around under my jeep and noticed this around the front passenger side. What could be causing this?

 

Most likely gear oil leaking past the inner axle seal.

First thing to do is check the differential oil level.

 

And if it is leaking, would the whole axle need to come out to repair the seal? Sounds expensive.

 

The axle shaft, and the differential. Might as well do the other side while the differential is out.

 

Pretty labor intensive job but not insanely difficult - did it on a friends TJ and it was a solid 4-5 hours. First time I'd ever done it but I've had enough parts off mine to know what needed to come out. Tie rod also needs to be moved so yo u can get the dif out.
There are a few good write ups. If you do it yourself, the Yukon tool makes it easy. Buy an extra seal in case you bugger one up too. You can always return it and it may save you some frustration. It's also a good time to clean out the axle tubes
Good luck!

 

Very common issue...leaky axle seal as mentioned earlier. If you are a handy person with some tools, not technically difficult, just a little time consuming. A good all-round learning experience though.

jack up axle
remove tires
remove brakes
remove bearing bolts with 13mm 12-point socket
remove entire unit bearing/axle shaft assembly (no need to remove the axle shaft nut)
repeat on other side
If you need to, remove a tie rod end to get more clearance
drain gear oil
remove diff cover
take a good look at your gears
- keep all these next items organized so they go back EXACTLY where they were before, even the top/bottom bearing cap bolts
remove bearing cap bolts
remove bearing caps
carefully pull the entire carrier out of the diff (you will have shims on each side of the bearings....keep all this stuff organized so it goes back EXACTLY the same.
now you have access to your axle shaft seals....fun times!
knock out old seals with something like a pole through the axle tube
clean the area the seals was in
install new seals, preferably with a suitable press (i usually use a small bit of rtv around the lip of the seal
reassemble opposite of how you took apart...torquing everything to spec
get a lube locker so you don't have to scrap rtv off the face of the diff again next time
make sure you grease the splines on the axles shafts when putting them back in, and don't go jamming in them in there all reckless. slow and steady.
fill diff with appropriate amount of gear oil

I think that about covers the cliff notes. there are probably good youtube vids. I'd say solid couple hour job having done it several times. first time doing the job.....probably looking 3-4 hours

 

Having done this job twice- buy the Mopar seals and ensure they're the new revision. Synergy makes a seal and the set is super cheap, I think like $12. That's what the old style seals look like. The new ones are a two piece unit that seems to seal better.

 

Has anyone had this done at the dealer? Curious to hear what they charge? Since I just recently purchased the car, I thought it might be a good idea to take it in and have any TSB's taken care of and maybe a flash/tune too.

 

I would bet the dealer is gonna charge a lot....probably 3-4 hours of labor billed at some stupid rate, on top of gear oil and RTV supplies at a redonk price. I'd bet they charge dang $400-$500 for it. Look what they charge to "service" a diff, which is literally draining gear oil from a drain plug and filling it back up with under 2qts of new. 10 minute job.

 

Diff service is right at $200, and that was 9 years ago. If you 'just' bought the vehicle then I'd take it back and ask them to remedy the issue. If it's going to be out of your own pocket then yeah, you'll easily be into $500 for the work. It's not difficult and the only specialty tools are the seal installer and a torque wrench. There are home brew ways around a seal installer but once you've got it......you won't look back at that pile of washers, nuts, and all-thread you bought, I know I haven't.

Until you get it fixed, I'd be sure to check fluid levels and ensure you've got enough and that it isn't highly contaminated.