BMW M5 Common Problems

Known issues & solutions

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All 1999 2000 2001 2002

The BMW E39 M5 — sold in Australia across the 1999–2002 model years — is widely considered one of the finest performance sedans ever produced. Its hand-built 4.9-litre S62 V8 produces 294 kW, channelled through a six-speed manual gearbox to the rear wheels. Today it has firmly entered modern-classic territory, with clean Australian-delivered examples fetching anywhere from the mid-$30,000s to well over $80,000 depending on condition and provenance. That rising value makes pre-purchase diligence more important than ever — because when an S62 needs specialist attention, bills climb steeply.

VANOS variable valve timing

The S62 runs a dual-VANOS system (variable valve timing on both intake and exhaust camshafts) and it is one of the engine's most critical maintenance-dependent components. The internal seals and solenoids degrade with age and heat cycles; neglected oil-change intervals accelerate the process.

Symptoms: A diesel-like rattle on cold start that should clear after warm-up but persists on worn units; loss of mid-range torque; rough idle; misfires.
Fix: A full VANOS rebuild using an aftermarket seal kit is the accepted solution. Expect rough costs of $800–$1,800 AUD at a BMW specialist, depending on solenoid condition and whether camshaft seals are addressed at the same time.

Rod bearings

Rod bearing wear is perhaps the single most discussed reliability concern on the S62. With tight factory clearances, the bearings can wear prematurely — particularly if the engine has ever been run on incorrect oil grades, suffered extended service intervals, or been revved hard from cold.

Symptoms: Faint knocking under load that progressively worsens; metallic particles on the drain plug magnet or in a used-oil analysis.
Who is affected: All S62-engined E39 M5s are considered at risk regardless of mileage. High-kilometre cars and those without documented history carry the greatest exposure.
Fix: Preventative rod bearing replacement is considered standard practice by M5 specialists. Budget conservatively for $2,000–$4,000 AUD at a reputable workshop. Any car without evidence this has been done should factor that cost into the purchase price.

Timing chain guides and tensioners

The S62's plastic timing chain guides and hydraulic tensioners are age-limited components. If guide failure is allowed to progress, the chain can jump timing — resulting in valve-to-piston contact and a destroyed engine.

Symptoms: Rattling noise on cold start (distinct from VANOS rattle); small dark plastic fragments visible when draining oil.
Fix: Timing chain guide and tensioner replacement requires front-of-engine disassembly and is often combined with VANOS work or rod bearing service to minimise total labour hours. Some owners report guide degradation above 150,000 km, though earlier failures on neglected cars are documented on owner forums.

Throttle body actuators

The S62 uses six individual throttle bodies controlled by electronic actuators with internal plastic gears — a system notorious among E39 M5 owners worldwide. Australian examples are no exception given their age.

Symptoms: Sluggish or unresponsive throttle; hesitation under acceleration; the car entering limp mode; a check engine light referencing throttle position or drive-by-wire faults.
Fix: Australian suppliers including Euro Car Upgrades offer a throttle actuator rebuild service with a 12-month warranty. Rebuilding all affected actuators at once is the practical approach. Budget $600–$1,500 AUD depending on how many units need attention.

Cooling system

All E39-generation 5 Series are well known for cooling system fragility with age, and the higher thermal loads of the S62 V8 make diligence essential. Vulnerable components include the plastic expansion tank (prone to cracking), the water pump, thermostat housing, and coolant hoses.

Any E39 M5 without a documented comprehensive cooling system refresh is living on borrowed time. A full overhaul at a specialist should be budgeted at $800–$2,000 AUD depending on what needs replacement — and should be considered a non-negotiable expense for any new owner.

Valve cover gaskets and oil leaks

With the S62 now 25-plus years old, oil leaks from the valve cover gaskets, camshaft seals, and various engine gaskets are routine. The V8 layout means two banks of valve covers, doubling the potential leak points. Look for oil residue on the engine block or a burning smell from the exhaust. Valve cover gasket replacement is relatively straightforward for a specialist — budget $400–$900 AUD for a full reseal.

Rear subframe and differential mounts

The aluminium rear subframe on the E39 M5 is subject to fatigue cracking at its mounting points — a well-documented structural issue on owner forums. Symptoms include clunking from the rear under acceleration, a vague rear-end feel, and visible cracking around the mounting area. Cracked subframes require professional welding and reinforcement; aftermarket reinforcement kits are widely used by specialists. Rear subframe bushings should be inspected at the same time.

Rust

The E39 M5 is generally well-built for its era, but check the rear wheel arch jack points, behind the plastic side sill covers, and underneath the car around the sill structure. Coastal or high-humidity environments accelerate corrosion, and significant structural rust on a modern classic of this value warrants walking away.

Recalls & safety

The BMW 5 Series E39 was subject to multiple recall campaigns in Australia, documented on the ACCC Product Safety website. The most significant involved Takata airbag inflators across E39 model years 2000–2003 — a serious safety issue where the inflator propellant can degrade with age and humidity, potentially causing the metal housing to rupture and project fragments toward occupants. Any car you are considering should be checked to confirm Takata recall work is complete via a BMW dealer or the BMW Australia recall portal.

Carify tracks recall data for the E39 M5 across the years it was sold here — check the year-specific pages for your car:

Buying a used BMW M5 (E39)? What to check

Full service history is non-negotiable. An S62 without receipts for regular oil changes (every 10,000–12,000 km or annually) and documented preventative work is a significant financial risk.
Ask specifically about rod bearing replacement. No records means treat it as an upcoming expense — negotiate accordingly.
Cold-start the engine and listen. Persistent diesel-like rattle after warm-up signals VANOS wear; a separate metallic rattle points to timing chain guides or tensioners.
Test throttle response thoroughly. Hesitation, lag, or limp mode activation indicates actuator issues.
Check the cooling system. Brittle or discoloured expansion tank plastic, no record of water pump or thermostat replacement — budget for a full refresh.
Drive over a speed hump and accelerate firmly. Clunking from the rear warrants a specialist subframe inspection.
Inspect the underside and sill covers for rust. Pay particular attention to the rear jacking points.
Confirm the Takata recall is complete via a BMW dealer before handing over any money.
Run a history check. A car this valuable deserves a PPSR check for finance encumbrances, written-off status, and odometer history before you commit.

A pre-purchase inspection by an independent BMW M division specialist — not a general mechanic — is strongly recommended. Budget $300–$500 AUD for this; it is cheap insurance.

The verdict

The E39 BMW M5 is a genuine modern classic — the last hand-built M5, with an analogue character and a naturally-aspirated V8 note that no turbocharged successor has fully replicated. The problems above are real but manageable with the right specialist and a realistic maintenance budget. Expect to spend $3,000–$6,000 AUD or more per year keeping a well-used example properly maintained. The worst examples — neglected cars with deferred rod bearing work, failed VANOS units, and unaddressed cooling system issues — can become expensive very quickly. Buy the history, not just the car, and use a Carify history check to verify what you're dealing with before you sign anything.