Great cars. I own a '99 740i Sport, no problems. Spent a few hundred on the upper control arms, that's it.

In 1996 the M60 was replaced with the M62 series engines.

BMW used Nikasil, an aluminium, nickel, and silicon alloy, to line the cylinders of the M60 engines. The cross-hatched Nikasil linings react with the high sulfur content found in lower-quality gasoline, such as that used in parts of the United States. This reaction causes damage to the very top of the cylinder bore, where there is the most contact of the burning mixture and the cylinder lining. The damage prevents a good seal from forming between the piston and the cylinder wall, causing a loss of compression in the combustion chamber. This "leak down" will cause M60s with worn linings to exhibit a rough idle, and if the problem continues unchecked, the engine will not start.

The only permanent fix for this problem is the replacement of the short block with the equivalent block using Alusil linings, which do not exhibit this corrosion problem. After the problem was found, BMW issued an extended six-year, 100,000-mile (160,000 km) warranty to cover these engines at no cost to the owner.

The composition of the engine can be found by checking the serial number stamped into the engine block:

M60B30:

* 1 725 970 - Nikasil
* 1 741 212 - Nikasil
* 1 745 871 - Alusil

M60B40:

* 1 725 963 - Nikasil
* 1 742 998 - Nikasil
* 1 745 872 - Alusil