E46 M3 Diffsonline Custom Performance Differential

Increase the torque and traction delivered to the ground for faster acceleration and reduced lap times!

+ -
+ -
+ -
+ -
+ -
+ -
+ -
+ -


$1,649.00 – $9,849.00

A great upgrade - and common maintenance item - for drivers looking for added acceleration and grip for their E46 M3!

The S54 in the E46 M3 lacks torque in the lower RPM range. Using a shorter gear ratio puts you at a higher RPM for any gear, and much closer to the meaty part of the power band. Our rebuilt differentials also address shortcomings and common complaints with the factory M Variable limited-slip. Diffsonline has 20 years of expertise in BMW differential upgrades and rebuilding and we make it easy to replace and upgrade your diff.

When planning a diff upgrade in your M3 there are multiple factors to consider: tuning upgrades, limited slip type, and gearing choice.

E46 M3 Limited Slip Options

DOL Helical limited slip
There are a number of limited-slip carrier upgrades for the E46 M3 but they fall into two groups - clutch and helical. For purely street use we would recommend a helical such as Wavetrac or the in-house Diffsonline carrier. Helical diffs offer advantages in wear resistance and performance over traditional clutches. Torque transfer happens instantly and it doesn't need to sense a spinning wheel first. Lock-up is quicker and smoother and it's less affected by heat than a clutch. The only downside is potentially higher gear whine (but not in all cases). Some street 2 and 3-disc street clutch options have been discontinued due to the dwindling supply of original BMW cores.

Our clutch options are designed around serious track or race use since they can be easily customized around car setup and driving style. These diffs feature multiple clutch and spring discs - more clutches equal greater capacity for torque and heat management. Custom ramp angles are machined into the carrier to dictate lockup behavior under acceleration and deceleration (coast). Lower values equal a more aggressive lock-up. Our clutch options are generally not for street use except in highly-modified cars that need the extra traction.

The BMW M Variable viscous diff uses plates and heavy fluid to transfer torque between axles. When new and fresh the system works quite well for street use. However, it is out-performed by traditional clutch differentials on the track and loses performance and refinement within 60,000 miles.

Full Race LSD carrier - This carrier is a wish list come true for differential features. Up to 10 clutch discs are used with preload set by coil springs instead of spring plates that are affected by wear. As with any racing part, weight is the enemy and Diffsonline reduces mass by over 25%. Engagement is set by single-driven ramps - aggressive engagement on acceleration but none or very little on deceleration. This is known as a 1-way limited slip and the zero lockup under braking and mid-corner coasting means very little lock-up is pushing you into understeer. The Race carrier option is designed only for race and track use - it will be noisy and unrefined for street use and no warranty is offered.

The OS Giken is a multi-clutch design that is recommended only for track use and no warranty is provided.

Definitely contact us by phone or email to discuss the best E46 M3 diff upgrade that will meet your needs.

Gear Ratio

Polished Ring & Pinion
Multiple gear options are available to meet your acceleration needs. The M3 was offered with a 3.62 ratio from the factory - not too short and not too tall. Many people choose to keep the stock 3.62 ratio because of its balance of acceleration and livability (lower revs on the highway). However, with the lack of torque from the S54, shorter gearing is very popular. The 4.10 gear set is very short and will be a huge improvement in acceleration. BMW used to have a 3.91 gear set but it has been discontinued (a 3.85 is still available). If you have supercharged the car you may find the stock gearing is too short and a 3.23 is a popular alternative to keep you from hitting the rev limiter so quickly.

The gear ratio you choose is based largely on personal preference and how you plan to use the car. Keep in mind that shorter gearing requires more frequent shifting. Refer to the charts below for speed and RPM data.

REM Polishing

Diff REM Polish
REM treatment is a multi-step light surface polish of the gears and/or bearings that removes small imperfections and high spots on the surface. BMW does some final detailing on their ring & pinion sets that removes most of these imperfections but there is still room for improvement. High spots create heat risers which raise the surface temp of the surrounding metal and leads to imperfections and wear. REM polishing reduces internal temps and friction, improving performance and efficiency. It also makes the ring & pinion quieter with smoother engagement. REM polishing is done on a as-ordered basis and may result in additional build time. REM is a registered trademark of REM Chemicals, Inc.

Core Charge

Diff Core
We're able to offer rebuilt and performance differentials at a reasonable cost due to the use of cores. A "core" is your original used differential that is returned to our diff builder to be recycled into a new, fully-rebuilt diff. If we did not have cores available, and had to buy new factory differentials from BMW, our performance diffs would be four times the price they are now. To keep this upgrade feasible for the entire enthusiast community we rely on having your good, reusable core returned to the diff builder (Diffsonline) within fourteen days of receipt of your new diff. In order to cover the cost of sourcing another used diff, a core charge is applied to your order at the time of processing. This core charge can be refunded when you send back your original limited-slip diff. Only complete and reusable cores will be eligible for a refund (no blown out, abused, or modified cores please). You must return a diff equal in components and accessories to the one sent to you. Non-limited slip (open) differentials returned for cores will not receive a full refund.

The core charge on a E46 M3 diff is $1,500, which is not included in the price and will be charged separately at the time of processing. Click here for the core policy and instructions. You can also avoid the core charge altogether by sending in your original diff to be rebuilt. Note that this will mean downtime for your vehicle, so we recommended using the core service.

Rebuild Process

BMW Diff Rebuilding
While we take in used diffs as cores, what you get is a fully rebuilt and properly set up unit that is often better than what BMW can provide. There is a lot of specialty knowledge required in the diff building industry and Diffsonline has over 20 years of experience in BMW differentials. Nearly all of the major retailers of performance differentials use Diffsonline, even when sold under other brand names. Rebuilding a diff is a very involved process -
  • The used diff is disassembled and cleaned
  • The outside case (carrier) is stripped of grease, grime, and rust
  • The desired limited slip unit is prepped
  • The specified gear set is assembled with the LSD
  • Any machining of the carrier is done in-house
  • New OEM bearings are fitted
  • New OEM seals are fitted
  • The entire internal assembly is aligned (crucial in avoiding gear whine later on)
  • Final assembly and checks
  • Carrier is given a fresh coat of black paint
  • Shipment to your door in special heavy-duty packaging
The packaging can be reused to send back your core. Diffs are shipped without covers and with no fluid inside. Diffsonline recommends Red Line 75/110 fluid for all of their differentials, except M Variable (Castrol SAF-XJ) and OS Giken (OS 80W250).

BimmerWorld offers FREE GROUND SHIPPING on all diffs.

Upgrading the differential in your BMW is one of the best ways to improve handling, acceleration, and all-around performance. Whether you're looking to alter the final drive gear ratio, or add limited-slip functionality to get all that power to the ground in the turns, we've got the knowledge to guide you in the right direction. Should you have any questions on BMW diff upgrades or the process, please call or email one of our knowledgeable sales reps.

BMW Fitments:

3 Series
E46 (99-05) > M3
Z Series
E85 / E86 Z4 (03-08) > Z4 M
Recently Viewed Products