[e90yyc]

Just to confirm, your car is RWD, right? And when you say the diff “went out,” is the car drivable? If so, is the noise pretty loud?

Regardless, those prices are ridiculous. (More the part pricing than the labour.) I have a barely-used rear diff (donor car had 30k miles) in my garage that I paid $220 USD for—and I thought that was a lot. I bought it because it was such a clean, low-mileage part, and so it was worth the price to me.

Rear diff replacement entails dropping the exhaust, disconnecting the prop shaft, and disconnecting the rear axles. Not effortless, but certainly not a $700 job IMO.

I also think warranty on a part like this isn’t worth much so long as the donor vehicle is low mileage and the part is in good shape. So paying $800-1000 for a used part sounds insane to me, warranty or no.

One other thing to consider with used parts is the seals; make sure to replace them if they aren’t in good shape. Some would say (and I’d be inclined to agree) that you should replace them regardless of how good they look. These will run you about $100 or more for the three seals you’ll need.

Okay, so what should you do? I would replace the whole diff, don’t bother with the repair kit. Look on eBay or Car-Part.com and find a good low-mileage replacement. Make sure you’re buying the correct diff, as the final drive ratio can vary!

Once you’ve got your replacement diff, phone a few more shops if this isn’t a job you want to do yourself. I don’t think this is necessarily a specialty job for a transmission shop either, so find a few local independent BMW/Euro mechanics and see how they compare. The most I could see paying for this job would be around $400, which assumes $150/hour for labour. I hope others can chime in on what’s reasonable (bearing in mind we’re talking CAD $). I have a friend who runs a transmission shop here in Alberta so I’ll ask him what they would charge—maybe I’m off base in saying $500 is too much.