Photos by author.

“If I finish this project, anything afterwards will be a piece of cake.” Have you ever found yourself in the middle of a seemingly endless project with this thought? I have, as the 1989 BMW E30 I picked up half a year ago has certainly put me through the wringer.

The initial hurdle to clear was rust—a lot of it. After being run through the gamut, I learned a new skill—welding—and came out of the battle with a win. 

However, the end was was far from over.

What lay ahead were the multitude of mechanical issues that befell the little E30. While these were problems I was more familiar with, the sheer number of them was enough to humble me once again.


In this write-up, we’re going to look specifically at the drivetrain-related ailments that were in dire need of attention.

Rear End Revival

The drivetrain components at the rear of the car looked beyond rough. From the differential to the brake lines, everything seeming like it could fail during the next drive around the block.


The differential was leaking from every joint, the CV axles had split boots, the rubber hydraulic brake hoses were cracked, and the parking brake cables were broken in half. Not a pretty sight.

The first order of business was to replace the non-functioning parking brake cables. Without the ability to lock the rear wheels via the parking brake, I wouldn’t be able to remove the CV axles or the differential.


In order to remove the old cables, I had to completely disassemble the parking brake shoe assemblies at each wheel. With little intricate brake parts lying everywhere, the old cables were finally out of the car.

I routed the new cables through the car’s body and fastened them to the parking brake handle. I then rebuilt the parking brake assemblies at both wheels and adjusted the new cables so that the wheels locked up when the handle was pulled. A marked improvement!


Now that the parking brake worked properly, I secured the rear wheels and popped the axle nuts off as well as unbolted the axles from the differential output flanges. The CV axles pulled out of the trailing arms with unexpected ease. I then dropped the differential from the subframe by removing its five mounting bolts.

This particular E30 came from the factory with an open differential. Open differentials are fine for normal driving, but they will spin an inside wheel if you ask too much of the rear tires. One wheel-peels, not graceful powerslides. Basically, they detract from the driving experience whenever the car’s rear end is pushed beyond its traction envelope. Even though my stock-engined E30 wasn’t in much danger of exposing the limits of traction in dry weather, wet pavement might still pose a problem.


With one-wheel-wonder nightmares filling my head, I decided to cough up $400 to buy a secondhand limited-slip differential pulled from a low-mile BMW 325is. I told myself that a limited-slip differential would ultimately give me a greater level of control over the car’s rear end when accelerating, regardless of the weather.

I elected to throw in some new output flange seals in the new-to-me differential to ensure it wouldn’t leak.


Before I could install the differential, I had to address the decrepit intermediate brake lines that bridged the gap between the car’s body and the rear subframe. I picked up a stainless steel brake line kit that would replace all the flexible rubber brake hoses on the car. These new, sturdier brake lines would not only look great, but they’d also offer an improved brake pedal feel when compared to standard rubber hoses.


With the new brake lines in, I offered up the differential to the car’s rear subframe and secured it in placed with the five mounting bolts. Next on the docket was to install new CV axles.

The old CV axles’ rubber boots had split open which allowed all the lubricating grease to escape. I considered rebuilding the old CV axles but then just ended up buying new ones out of the interest of time. The new axles slid back into the trailing arms with a little persuasion and then bolted up nicely to the differential’s output flanges.


With everything in the rear end now refreshed, I could step back and admire the new parts I’d just put in. It all looked relatively nice! Here’s to hoping it was worth the effort.

Section cost: $628.84

Transmission Time

The transmission was one of the first parts I removed from the car way-back-when. Not long after pulling it out I uncovered the serious rust issues hiding within the car’s body. This discovery meant the transmission would have to wait its turn until the car’s body was a bit more structurally sound.


With that hurdle now out of the way, it was time to devote my full attention to the tired transmission resting in the garage.

What used to be a silvery-aluminum colored hunk of metal was now what looked to be an oily pile of junk. However, with a little bit of elbow grease, I figured I might be able to turn the transmission around and have it be useful yet.


The first thing to do was blast all of the greasy grime from its exterior. I loaded it into the back of my Toyota Tacoma and drove it to the nearest car wash. Upon giving it a thorough spray down, the transmission looked decent once again. Environmentalists, don’t worry. All the grease ended up in the bed of my truck. Hooray!

With the transmission cleaned up, I focused on replacing its leaking components. There are three seals and two flange surfaces on the Getrag 260 transmission which are susceptible to leaks: the input shaft seal and its corresponding flange, the output shaft seal, the shift selector rod seal, and the detente spring cover.


With new seals driven in as well as some fresh sealant applied to the flange surfaces, the transmission would hopefully contain its fluids for the foreseeable future. Before I could chuck the transmission back into the car, I had to first attend to the worn parts on the backside of the engine.

Section Cost: $220.72

A Clutch Move

The operation of the car’s clutch, from the 10 or so miles I’d actually driven it, didn’t seem bad at all. The seller, who also happened to be the original owner, stated it had never been replaced before. For a car with well north of 230,000 miles, I was not only impressed by the clutch’s longevity, but I was also curious as to what such a well-used part would look like when removed.

Getting to the clutch was a piece of cake since the transmission was already out of the car. All I needed to do was unbolt the pressure plate to catch a glimpse of this rarely-seen component.


With the pressure plate removed, I couldn’t believe my eyes. The clutch was in shockingly great shape considering it was original to the car. That’s right - nearly 30 years and over 230,000 miles of use. The friction plate is typically the first component to wear out in the clutch system and they usually don’t survive 150,000 miles under even the lightest of use.

The original clutch. Not in bad shape overall.

If it wasn’t for the oil contamination, caused either by an engine or transmission leak, I’d say the clutch could have made it another 50,000 miles. However, the clutch had done its job and then some—it was definitely time to retire it. Before I could throw a new clutch in, I first needed to address the engine’s oil leaks to prevent any future contamination of the new clutch.


I pulled the flywheel off the crankshaft and expected to find a heavily-leaking rear main seal. As it turns out, the seal was in decent condition. It appeared that the primary oil leak was coming from the engine’s valve cover gasket. The car won’t be driving anywhere until the engine gets a complete refresh, so the valve cover gasket will have to wait until I finally get around to doing the engine-related repairs.

However, forgoing the replacement of the rear main seal and seal housing gasket would be foolish with the access I now had. Because of this, I went ahead and swapped them out for new. I was able to successfully rejoin the rear main seal’s housing with the oil pan gasket by using a sealant called Permatex No. 2.


Using a non-hardening sealing agent like this to reseal a gasketed joint isn’t optimal. It’s best to replace the entire oil pan gasket any time part of its seal is broken. However, I’ve had success using this sealant before in situations exactly like this, and so far, I’ve not had a drop of oil escape the resulting rejoined gasket surface.

With the rear main seal now replaced, I prepared fit up the new clutch system. The flywheel first needed to be resurfaced before the clutch could be installed. I took it to a local machine shop and had its contact surface machined flat so that the new friction plate could wear-in properly.


With the flywheel resurfaced, I then replaced the pilot bearing in the end of the crankshaft. The pilot bearing serves two purposes:

1. It keeps the transmission’s input shaft aligned with the engine’s crankshaft.


2. It allows the transmission’s input shaft to spin independently of the engine’s crankshaft when the clutch is disengaged.

The pilot bearing is a wearable part, so it’s important to swap it out whenever replacing the clutch. With the old pilot bearing exchanged with new, I then mounted the resurfaced flywheel to the crankshaft and secured it with new flywheel bolts.


At this point, it was time to install the new clutch. The clutch kit that I purchased included a new pressure plate, friction plate, throw out bearing, and clutch alignment tool. It’s critical to keep the friction plate centered on the engine’s crankshaft while the pressure plate is being bolted down. Failure to keep it aligned will make it impossible for the transmission’s input shaft to slide into place upon installation.


To compliment the new clutch, I also picked up a new clutch slave cylinder and hydraulic line to ensure everything related to the clutch was ready to handle regular use.

Section Cost: $389.99

Bolting It Up

It was finally time to install the transmission in the car. I plopped the aluminum gearbox on the transmission jack and began carefully plotting my next move. I raised the jack stands precariously high, lifting the car just enough to slip the transmission-laden jack underneath.


With the transmission’s bell housing lined up with the engine, I began grafting it into place. This is a procedure that’s always more difficult than you first imagine it to be.

To begin, the transmission’s bell housing always runs into the car’s transmission tunnel. This results in having to angle the whole circus upward in order to clear it. Once free of the transmission tunnel, the transmission then has to be leveled back out and carefully inched closer to the engine. If you’re lucky, the transmission’s input shaft effortlessly slides past the clutch’s friction plate and then proceeds into the pilot bearing at the end of the engine’s crankshaft.


The process may not sound too difficult, but I have yet to do it in any manner that could be called graceful. With the transmission flush with the backside of the engine, I secured it down with the numerous and difficult-to-access bell housing bolts. Good times!

Now that the transmission was in the car, it was time to address the sloppy, worn out shifter linkage. There are a couple of bushings and other wearable items that make up the shifter linkage. Since I had access to them, it would pay to just refresh them now.


Once all the wearable linkage parts were replaced, the shifter regained a precise feel while rowing through all five gears.

Exhaustive Work

All that was left to do at this point was mount up the exhaust system. The rear exhaust section was rusted out and completely unsalvageable. The front portion of the exhaust, which included the oxygen sensor and catalytic converter, was in good shape overall and serviceable.


Before reinstalling the front section, I figured it would be a good idea to replace the oxygen sensor as a preventive maintenance measure. This was easier said than done as the old sensor was heat-seized in place. I tried nearly every trick in the book, but that sensor was not going anywhere. Ultimately, I took the exhaust to a mechanic shop where they used an oxyacetylene torch to heat up and extract the old sensor.


The new oxygen sensor threaded into place without issue, making the exhaust now ready to go back into the car. To finish it all off, I purchased a new rear muffler section with new gaskets and mounting hardware.

Everything bolted together fairly well and gave the bottom side of the car a refreshed appearance.


Section Cost: $422.27

Rear Drivetrain Related Costs: $628.84

Transmission Related Costs: $220.72

Clutch Related Costs: $389.99

Exhaust Related Costs: $422.77

WRITE-UP TOTAL: $1,662.32

A Few Things Down, Many More To Go

I wish I could say that this write-up concluded all the needed repairs for the little BMW, but unfortunately there’s still quite the laundry list of items to address.


The car can’t be driven until the engine gets a thorough going-over. To add to the fire, the interior has some electrical gremlins that need sorted and the bodywork has some paint issues that need attention.

None of this is out of the ordinary for a well-used old car, that’s for sure. A generous helping of time, patience, and money will be all that’s needed to help me make it to finish line. Rest assured, you’ll see this neglected old E30 turn into something worth owning once again.