E36 318i/323i/325i/328i Diffsonline Custom Performance Differential

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

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$1,549.00 – $5,449.00

A great upgrade for drivers looking for added acceleration and grip for their E36 318i/323i/325i/328i!

A differential upgrade/rebuild for your E36 delivers performance far above the original factory spec. Diffsonline has 20 years of expertise in BMW differential upgrades and rebuilding. Deleting the ASC traction control is common on E36 which makes the limited-slip more important. A properly set up LSD makes the E36 a hugely capable performance car. Diffsonline specializes in BMW differentials and makes it easy to replace and upgrade your diff.

Note: this product listing is for non-M E36 models. If you are building an E36 with the larger M3 rear axles (half-shafts) you must order an E36 M3 differential because the output flanges are different. You can find that product listing by clicking here.

When planning a diff upgrade in your E36 there are two factors to consider: limited slip type and gearing choice.


E36 Limited Slip Options

DOL Helical limited slip
Only a tiny number of non-M 325i/328i came with a limited-slip from the factory. The majority came with an open limited slip and relied on ASC traction control to limit wheelspin. There are a number of limited slip options for the E36 but they fall into two groups - clutch and helical. The traditional BMW M limited slip uses a clutch layout. Clutches are simple, reliable, and the less expensive. The LSD in the M3 uses a traditional 2-clutch layout which is fine for daily driving and moderate street use. We also offer a heavy-duty 3-clutch and a 3-clutch with more advanced ramp angles to change lock-up behavior on acceleration and deceleration. The OS Giken is a multiplate design that is recommended only for track use and no warranty is provided.

Several non-clutch type LSDs are also available. Wavetrac and Quaife both make a helical-style LSD that are more expensive but offer advantages in wear resistance and performance. Helical diffs use multiple sets of gears instead of clutch discs and plates. They are always engaged and have quicker and smoother response and are less affected by heat than a conventional clutch. There are a few downsides to helical diffs: if one wheel becomes airborne (hopping a curb on track or lifting the inside wheel during cornering) the lockup goes away. There is also additional upfront cost and some slightly higher gear whine than a traditional clutch LSD.

Note: non-limited slip cores will not receive a full core refund. See additional notes under the Core section below.


Gear Ratio

Polished Ring & Pinion
Multiple gear options are available to meet your acceleration needs. Non-M E36 manual transmission cars used a very tall 2.93 gear ratio. This was good for fuel economy and highway speeds. The M3 was offered with shorter 3.15 or 3.23 gears. Our data below is based on the M3 3.23 with stock 17" rear tires, which is also a common size for 325i/328i. The weak torque of the US engines is screaming for a shorter ratio. Shorter gears have a higher number and will deliver faster acceleration at the expense of top speed. The gear ratio you choose is based largely on personal preference and how you plan to use the car. The 3.46 is a happy medium between a civilized highway revs and acceleration. A 3.73 gives way more acceleration but will leave the revs 4,000 RPM at 80mph. Keep in mind that shorter gearing requires more frequent shifting and a higher rev limit from a tune is recommended. 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 limited-slip 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 receive only a partial refund.

The core charge on a E36 diff is $900, which is not included in the price and will be charged separately at the time of processing. 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.

E36 non-limited slip (open) differentials returned for core will receive a partial refund up to $150*. E36 limited-slip cores will have the full core charge refunded*.
* - subject to core inspection and evaluation.

You can also avoid the core charge altogether by sending in your original diff to be rebuilt.


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.

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
E36 (92-99) > 323ic
E36 (92-99) > 323is
E36 (92-99) > 325i
E36 (92-99) > 325ic
E36 (92-99) > 325is
E36 (92-99) > 328i
E36 (92-99) > 328ic
E36 (92-99) > 328is
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