Stuck with 540i Nikasil problem...options?

[Ezgoin]

Hello all, I'm new to this forum, and new to the world of BMW's.

I've wanted a 540i for years, and thought I had found a real peach in this beautiful 95 white/grey 540i from Dallas. I bought the car sight unseen off e-bay (I know, I know), where it was represented as "no problems mechanically". The seller had a spotless record with some 75 vehicles sold on e-bay and not a single complaint. The car is absolutly beautiful with 64,000 miles, but upon delivery had a rough idle and poor low end power. Long story short, the #7 & #8 cylinders have only 90 psi and 75 psi compression and 40% & 50% leakby.

I have been working with the seller, whom I believe knew the car was running less than perfect, yet I don't believe knew the exstent of the problem. He wants to help, but so far has only offerd a $1,000 refund for a problem that will cost a minimum of $7,000 to correct.

I have presented the seller with a proposal whereby he pays 60% of the $7,000 repair estimate, and I would pay the other 40% plus any additional costs incured liike head work etc. which I have no doubt will show up. I also indicatd to the seller that I would pursue legal action based on his false representation of the car if he did not agree to the terms.

My question to anyone who lives in Texas is, do you know anything about TX. law concerning truth in advertising etc.? The car was sold as is, however, I believe the seller still has some responsibility towards honest representation and advertising.

Any input?

[Tommar1]

I'm no lawyer...just a law student. You can go on line to Findlaw.com and do some searches on Texas used car warranty law. I did some brief checking and like most states, Texas has an "implied warranty" of merchantability requirement. However, the problem is that you selected to buy a car unseen which means you were willing to "assume the risk". While you can argue that the risk you assumed was that the car may or may not have problems associated with a used vehicle, you did not assume the risk that the vehicle had a non-functioning engine. Nonethless your best argument is that the car was advertisied as in "excellent working condition" which it is not. You would have to prove that the seller knew the car was not in good working order and furthermore that he actually prevented you from knowing there was a problem. Did you ever ask if there was a problem and did he ever so "no there isn't" Overall, I believe if the car was sold "as is" your options are very limited. I know in Massachusettes you can force a dealer to take a car back within 14 days if it has saftey problems that keep it from passing saftey inspection.

[Bob540iA]

Tommar1,
What did you do on the 540 you were looking at?
Did it have the Alusil engine?

Bob

[Tommar1]

Bob,

I bought the car with the Nikasil engine. I haven't had problems and I love the car. However I think my marraige couldn't withstand a $10,000 engine repair so I'm going to sell the car.

[Ezgoin]

Tommar1,

Thanks for the response! You make some good points, and I'm hoping that the situation is working it's self out as we speak. I have been working with the seller, who I believe is a stand up guy. I do think he knew the car was not runing as well as he indicated, but I don't really think he knew the extent of the problem. He did advertise the car as "no mechanical problems", and that it ran perfectly. In speaking with the previous owners, I was told that the car was idling rough when they sold it, so I think I would have a good argument that he knew it was not running well when he sold it. It might take a statement from the previous owners, but I think that was doable.

I was originally quoted $12K to $13K to replace the engine. This was largely due to the replacement short block costing $9,500! But, for some reason the dealership called me back and said that BMW was now making the complete short blocks available for $1,900. I can't understand how they go from $9.5K to $1.9K, but I'm not complaining. The dealership assured me that it is a complete BMW short block including everything except gaskets worth about $500.

Anyway, the new price is about $7.5K complete and the seller has agreed to pay for half. I'm shocked that he would offer, yet I'm thankful that he has the integrity to do so without litigation. So, I have an appointment next Tuesday to have the work done. With the car being so clean, and now the new engine, I just may decide to keep this one, even though I really want a 98 or newer.

Thanks for your help!

Jeff

[Tommar1]

If you paid $12-$13 for the car and now $3500 for the engine then you're into this for $15,000+ with what amounts to a new engine. If this car was advertisied with a new engine block and everything else the same, would $20K be the right price? I am not very knowledgable about engines, so my question is does this engine block replacement give you a virtual new engine? If so, then overall this seems like a good deal, especially since you're only paying $3500 of it. Maybe I'll have my engine block replaced.

[Ezgoin]

It is esentually a new engine, with the exception of the heads, valve train, and induction system. If you like your car and can find somebody to cover the other half of the engine cost, it probably would be worth changing, if/when you develope this problem.
With all the reserch I've done into this problem, I feel that you can almost bet your car will develop this issue sooner or later! Good Luck!

[Jared at Pelican Parts]

What exactly happens with the Nikasil block? I heard that the inside bores actually wear out due to the sulphur content of US fuel. Is this correct?

[Ezgoin]

As I understand it, what happens is this: Rather than sleeve the cylinder walls of the aluminum block with iron like most manufactures, BMW coated the cylinders with a Nikasil coating which is very hard. The sulfer in U.S. fuels reacts with the Nikasil, slowly eating away at the coating until it becomes pitted and no longer can sustain compression. Once you begin to loose compression the rough idle begins to occur, and if left uncorrected, the engine will continue to loose power, burn oil, and run rougher and rougher as the compression gets worse in each cylinder. It's not like a typical engine that wears evenly. Each cylinder will corrode at a different pace causing a rough running condition.

[Bob540iA]

The problem with the Nikasil engine is well documented in the attached link.

It only affected the V8 (M60 3.0 and 4.0 Liter) engines in 1994 and 1995. In 1996 BMW went to the 4.4 (M62) engine with Alusil block which does not experience this problem.

It is very easy to determine which block you have by looking at the casting number on the block.

You do need to get under the car for this.
It is on the right side directly alongside the 3rd cylinder.

For the 3.0 liter engine the good Alusil number is 1 745 871.
The 4.0 good Alusil number is 1 745 872.

Any other number is the bad Nikasil block.

Again all this and more can be found in the site in the link. It in turn has links to other sites with useful info on this and other e34 problems.

Nikasil Link