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Pelican Technical Article:

BMW E36 3 Series Limited Slip Differential Swap
Jared Fenton
Wayne R. Dempsey

Difficulty Level: 4
Difficulty scale: Adding air to your tires is level one
Rebuilding a BMW Motor is level ten

     Want to get some more cornering acceleration out of your BMW? Do you want to add a limited slip differential to your car? In both cases, the differential must be replaced. In this article I will go over the steps involved in swapping out differentials in the BMW E30 3 Series from 1984-91. Keep in mind that this tech article covers all 3 series models, including the BMW E36 318ti from 1995-99, as it uses the same rear end setup.

     Whatís a limited slip differential? Simply put, a limited slip differential or L.S.D. is a differential that distributes power evenly to both rear wheels. Regular differentials only distribute power to one wheel. The real advantage of an L.S.D. is felt during cornering, as power distribution is split between both wheels. Basically, the wheel with less resistance will receive more power then the other. A good way to explain this is when a car goes into a turn; the outboard wheel will be spinning faster than the inboard wheel. More resistance is placed on the inboard wheel, making it spin slower. Though a series of clutches or weights, the L.S.D. mechanically sends less power to the inboard wheel and more power to the outboard wheels. This helps to increase the stability of the car when coming out of turns at high speed, such as freeway on ramps or that high-banked turn at the track.

     The BMW E30 3 Series cars have an excellent reputation for handling and control, however if you wanted to go one step further, you would get an ďisĒ model. The ďisĒ models featured the L.S.D. as well as other handling upgrades. The nice thing about the design of these cars is that the L.S.D. can be easily swapped into cars that did not originally come with it.

     The first step is to get a hold of a L.S.D. These can usually be picked up on EBay in good shape for around $250-300. I would be cautious if buying off EBay, as there is no guarantee of the age or condition of the diff. Your best bet might be going to the junkyard to find one. Most major junkyards offer a limited warranty on items such as engines, transmissions and rear ends. So you have a little piece of mind. They are easy to spot, as there is a large ďSĒ stamped on the outside cover. (For all of you out there interested in doing this, and you are not sure if itís L.S.D. or not, I can always check part numbers for you)  If you are looking to have your current differential upgraded to an L.S.D., there are several companies out there, such as Quaife, that can convert your standard differential into an L.S.D. many times with custom lock-up rates far beyond what was offered stock on the ďisĒ models. While these are great for track use, they donít apply very much for the street. So, in this article we will be assuming that the unit in question is a low-mile, stock used unit picked up from the local junkyard.

     Now, letís jack the car up. First, chock the front wheels to keep them from rolling while you have the rear wheels jacked up. Next, loosen (but do not remove) the rear lug bolts. Now, use a floor jack and jack up the rear of the car. Be sure to jack the car up on a re-inforced part of the body, such as a crossmember or chassis beam. Be sure not to jack the car up on any other part, as you could put a hole right through the bottom of the car. I have seen Porsches in the past where jacks have punctured the floorboards. A handy reference is Wayneís article on jacking up your BMW. This article is specific to the E36 series, however, the same principles apply to the E30 as well.


     Once the car is firmly secured on jack stands, the next step is to remove the lug bolts on the rear wheels and take the wheels off. Now, look at where the drive axles are bolted onto the differential. We will need to separate the axle shafts from the differential in order to remove the differential. There are six internal Allen head bolts that hold each axle to the differential. Before you remove them, itís a really good idea to clean them off to get any dirt of grease out of the bolt heads. Any good brake cleaner should work perfectly. We donít have to get them spotless, however just enough to where we wonít have the Allen key from popping out. Itís also a good idea to hit the bolts with WD-40 or good penetrating oil. Typically, I like to let the spray sit overnight, to let the oil work itself into the threads. This will make it much easier to remove the bolts, not to mention preventing stripping and seizing when you hit them with the wrench. Put the car in gear if itís a manual gearbox. This will lock the rear end and allow you to loosen the bolts. Now remove all the bolts. The drive axles will now be free of the differential. Use a piece of rope or stiff wire to hang the drive axles to the car and keep them from crashing downward.

     Now look at the front of the differential. You will see the mounting flange for the driveshaft. There are four bolts that hold the driveshaft to the mounting flange. Put the car in gear to lock the driveshaft in place, and then use and open-end wrench to hold the nut on the end of each bolt. Now remove the bolt.  Put the car in neutral and rotate the driveshaft so that you have enough clearance to remove the next bolt. Now put the car in gear again and repeat the procedure. Repeat these steps until all the bolts are removed. Now use some wire or rope to suspend the driveshaft in place to prevent stress on the centering bearing.

     Now move towards the rear of the differential and remove the electrical connector from the speedometer sensor. I forgot to do this one time and ended up ripping the wires off the ends of the connector. Nothing was damaged to badly, but I did end up having to splice the wires back together.

     Now we have to remove the mounting bolts for the differential. Iíve found that using WD-40 or another good penetrant spray on the bolt will help loosen things up. Iíd recommend that you spray it on all the differential mounting bolts and let it sit overnight to soak in. The next morning, it should be a lot easier to get these loose. I have found that in some cases, using a torch to heat up the bolts also helps to get the bolts turning. If you decide to do this, use EXTREME caution as you are directly in front of the fuel tank. Gas vapors and a torch = explosion. Just use enough flame to heat the bolt up slightly. This will cause the threads inside to expand and free up.

     Next, put a jack under the differential to support itís weight. Trust me, you donít want the differential falling on you while you are under the car. Now we have to remove the two rear upper mounting bolts. These are located at the top of the differential. You will need to use an open end wrench to get these off. You may also need to use a ďcheater barĒ to loosen the bolts. A cheater bar is essentially a large piece of pipe fitted over the wrench. The extended length of the wrench provides you more leverage. Just like you learned in basic physics. A longer lever equals less force required to move it.

     Now remove the two front mounting bolts. They are located at the very front of the differential on either side of the driveshaft. Once again, you may have to use the cheater bar in order to get them loose. Now remove these bolts. Lastly, remove the nut and bolt for the rubber mounting bushing. Use an open-end wrench on the nut to hold it in place while you loosen the bolt.

     Now we will be able to lower and remove the differential. Keep in mind that the differential is very heavy, so use caution and while pulling the differential back, lower the jack. The differential will come out of the car.

     Once out, take the old differential off the jack and place the new L.S.D. differential on the jack. Now position the new diff in roughly the position it would fit in the car, but slightly to the rear. We will need to do this in order to angle the diff into position. Now start to raise the jack. As you bring the diff into position, push it slightly forward to line the driveshaft up with the input flange on the front of the differential. Once, there, slide a bolt through to hold it in place.

     Now, use the jack to carefully lift or lower the diff until the mounting holes line up. This may take a few tries, as the diff is very heavy. Once you have it correctly positioned, slide the front mounting bolts through the mounting holes and torque the bolts to 59ft/lbs. each. Now re-install the rear upper mounting bolts and torque them to 59 ft./lbs.

     We now need to re-install the driveshaft mounting bolts. Take the car out of gear and rotate the driveshaft til the mounting holes line up. Now re-install the rest of the bolts. Itís a good idea to use new self-locking nuts on the ends of these bolts. These nuts will not come off once torqued. Use an open-end wrench to hold the nut in place and torque all the mounting bolts to 53ft./lbs. Now attach the sender for the speedometer on the rear of the diff.

     Now we need to re-install the axle shafts to the new differential. Before you start, make sure to clean the mounting bolts. They must be clean and free of grease before you install them. Now, make sure the car is out of gear and rotate the flanges on the side of the differential until the bolt holes line up with the ends of the drive axles. Thread the 6 bolts into the flanges and put the car back in gear. Having the car in gear will lock the diff and help you torque the mounting bolts. There are two different sizes of bolts used on these cars, M8 and M10 Torx. If you have M8 bolts, torque them to 47 ft./lbs. If you have M10 bolts, torque them to 74 ft./lbs.

     Itís a good idea to change the diff oil while you are under the car. Look under the diff, you will see a hex-head plug. This is the differential drain plug. In order to drain the old oil, we will need to remove this plug. Slide a drain tray under this plug. Now, look at the back of the diff. You will see a similar plug on the rear face of the differential. This plug is the fill port for the new differential oil.

     Now, remove the fill plug first. Use a 14mm Allen key or socket to remove the two plugs. This will help relieve any vacuum built up inside the diff and make it easier to drain the old fluid out. Next, remove the drain plug from the bottom.

Immediately, the differential oil will pour out. It should take a few minutes for all the fluid to drain out.

     Once all the old fluid is out, re-install the drain plug and tighten. Next you will want to measure out the correct amount of fluid for the differential. For 4 cylinder cars, you will want to measure out 1.2 quarts of oil. For 6 Cylinder models, you will want to measure out 1.8 quarts of oil. BMW recommends you use BMW SAF-XO Synthetic Oil for differentials without limited slip, or use BMW SAF-XLS Synthetic Oil for differentials with limited slip. I just use Swepco products, as they seem to work wonderfully in the differential.

     Now, use a siphon or pump to get the new fluid into the fill port on the rear of the differential. When the fluid starts to pour out of the top of the fill port, the differential is full. Remove the pump/siphon, and re-install the fill port plug and tighten using a 14mm Allen key.

     Lastly, re-mount the tires and snug up the lug bolts. Now lower the car and tighten the lug bolts using a criss-cross pattern.

     Well, there you have it - it's really not too difficult at all.  If you would like to see more technical articles like this one, please continue to support Pelican Parts with all your parts needs.  If you like what you see here, then please visit our online BMW catalog and help support the collection and creating of new and informative technical articles like this one.  Your continued support directly affects the expansion and existence of this site and technical articles like this one.  As always, if you have any questions or comments about this helpful article, please drop us a line.

Comments and Suggestions:
Bmw 325i Comments: Hello i swamped my open diff in my 1992 325i for an lsd one its been a while and i realized oil covering my diff a layer of oil its not dripping. What should i check??
June 26, 2016
  Followup from the Pelican Staff: Check if the seals are leaking and if the vent is plugged. - Nick at Pelican Parts  
revmachine Comments: Hi,
So I would like to install a 94' 318i diff into a 91 318is vehicle.
the 94' is an e36 not e36-5 and it is an automatic transmission and comes with a 4.44 LSD.
The 91 318is is an e30 that uses a 4.10 open diff with a "small case".
If i remember correctly, the housings are different and i cannot simply swap the rear covers and have it bolt up. are you able to verify this?
This means i need to do a ring and pinion swap, which is fine. I have done something similar to this before and my friend has done a few of these on BMW differentials before i only say this since everyone i ask tells me I need to know what im doing or blah blah blah So first, i would ideally love to find rebuild kits for both differentials since the 4.10 open ring and pinion will go into the 94' e36. If not rebuild kits at least new seals throughout.
Finally, I noticed on Korman auto's website they say they offer BMW LSDs in the factory lock-up of 25%, or you can pay an even more money to have an LSD in 50% or even 75% lock.
This leads me to believe that they are just adding "clutch packs" to the LSDs. If there room allows, I would like to do the same. Where can i purchase a new differential clutch pack?
Thanks for your time and any help you can give if any.
March 14, 2011
  Followup from the Pelican Staff: I'm not a super expert on LSDs, but I will try to empart what I know. I don't think that you can swap covers from the E30 to E36 as you mentioned - I think you're right on that. The BMW 318ti used an E30-style rear end. I don't know if there was ever an option for an LSD on that car, but that would be the way to go in my opinion for making E36 components work on an E30. As for the clutch packs you're talking about - yes, there should be no cost differential (pun intended), as they are simply just adding more friction discs into the pack. You should be able to get almost any bias you want when you order one. Hope this helps... - Wayne at Pelican Parts  

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