Automatic transmission fluid (ATF) does more than just lubricate, it operates the hydraulic mechanisms in the tranny and propels the car (fluid drive in the torque converter). It is highly stressed and breaks down, largely from heat. (To give you an idea of its heat load, ATF is typically passed through the radiator to cool it down–and the temperature inside the radiator is roughly 150-200’ Fahrenheit.) The standard recommendation is to change it every two years or 30,000 miles. Guys who work in tranny repair shops, who spend all day seeing the results of ATF breakdown, typically change it in their personal cars every year or 15,000 miles.
There are two common ways to change it. The traditional method is to remove the tranny pan, which drains roughly half the fluid, and replace the filter while in there. On older cars it was advisable to also drain the torque converter (TC), so that maybe 90% of the fluid was changed. Modern cars tend not to have TC drain plugs, though, so this method has the limitation of leaving a fair amount of old fluid in the trans.
The other method is usually called a transmission flush. Fresh fluid is pumped in, forcing the old stuff out. It changes 95+% of the ATF, which is good. It doesn’t change the filter, which may not be so good.
The perfect thing is to do both procedures, but that gets pretty costly. Either one is pretty helpful, and a lot better than doing nothing.
A few cars–Hondas come to mind–do not have filter access on their automatic trannys (short of removal and disassembly), so the choice is either drain and refill or flush.
Fresh fluid is (pinkish) red, with a slightly fruity odor. As it deteriorates, it turns dark red, to orange, to yellow, to brown, to black. It also becomes increasingly burnt smelling. If it’s black, things are pretty bad inside and changing the fluid may push it over the edge–the car may not move afterwards. Don’t change black fluid unless you’re willing to overhaul it if this happens.
It’s not unusual for the ATF to still look dark red after a traditional service. If I see fluid of this color, I want to know when it was last changed to properly advise whether or not to service it. If it’s orange, yellow, or brown, and/or smells badly burnt, it’s past due.
There are always anecdotal stories of not changing the fluid for 150,000 miles and having no problems, or of changing it every 30,000 miles and having the tranny give out before reaching 100,00. Nevertheless, I think it’s fair to say that any given transmission is going to last longer with regular maintenance than without.
I don’t trust the service chains because I believe they’re overtrained to sell and undertrained to do things really right. I don’t trust the chain transmission shops because they have a long history of overselling, overpricing, and scamming. I would trust most dealerships, and I would trust a reputable independent repair shop–emphasis on reputable. It can be either a transmission shop or a general repair shop, both types should be competent for this maintenance. I’d definitely go with a transmission shop for tranny repairs, though.
In this particular case, I would seek a second opinion from a trustworthy shop.