The BMW E36 refers to the third generation of the 3 Series, which came after the E21 and the E30. BMW owners have co-opted the term and use it to refer to the various generations of this popular model. The transmission fluid on an E36 equipped with an automatic gearbox should be changed periodically. If it isn't, the transmission can begin shifting roughly or suddenly. Fresh fluid and a new filter can result in a much smoother transmission.
Raise the car up and lower it onto jack stands at all four corners. Lift and support one side of the car, then the other side. You must have the car level to check the level of the transmission fluid. Do not raise just the front or rear.
Put on your eye protection and rubber gloves. Place an oil drain container below the transmission. Remove the drain plug at the left-rear corner of the transmission sump. Let the transmission oil drain out. Reinstall the drain plug with a new sealing ring. Tighten the drain plug.
Remove the small bolts around the perimeter of the transmission sump with a socket. Remove the sump carefully, as there will still be some oil in it.
Loosen and remove all but one of the bolts around the perimeter of the smaller sump located in front of the transmission. Once all bolts but one have been removed, slowly loosen but do not remove the last bolt.
Pull down one corner of the sump and let the oil drain into the oil container. Remove the last bolt on the sump and carefully remove the sump from the gearbox. Wipe up any excess oil that spills under the car.
Clean the insides of the sumps with lint-free rags. Clean the sumps thoroughly, until they are completely free of any oil or residue. Pull the magnet off the bottom of the large sump and wipe it off as well. Clean all of the old gasket material off the edge of the sump.
Remove the three bolts that hold the filter to the inside of the transmission. The filter is a large black canister. Discard the filter. Clean the bottom of the transmission where the sumps mount so there is no gasket material.
Install the new filter with the same bolts that held on the old filter. Inspect the side plate of the transmission to determine what fluid to use for the gearbox. There may also be a sticker on one of the sump plates.
Reinstall the lower sumps. Fill the smaller, front sump with fluid (not so full that it splashes out the top). With a new transmission gasket on the lip of the sump, bolt it in place. Install the larger one in the same way but do not fill it with fluid.
Remove the plug on the transmission fill hole, located on the side of the sump. Place the end of a transmission fluid pump (available at auto parts stores) and pump oil into the transmission until the oil begins to come out of the fill hole. Clean up the spilt fluid and replace the plug.
Start the car and let the engine and gearbox warm up to at least 30 degrees C. Use a household thermometer placed against the sump to determine when the transmission is at the right temperature. This may take up to 45 minutes. If the car is not outside, use dryer vent tubing on the exhaust pipe to vent the exhaust gasses outside. The E36 remains on the jack stands as you do this, so make sure that it is securely supported. If it is supported properly, it should not be a problem to run through the gears, but the wheels will be turning, so proceed with caution.
Sit inside the car with the engine running once the gearbox is warmed up. Hold the brake pedal and then slowly shift the gearbox through all of the gears. It will still be supported on jack stands. Repeat ten times. Turn off the engine. Remove the fill plug. Start the engine again. Fill the transmission again with the pump until it comes out of the hole. Replace the plug and wipe up spilt oil. Turn off the engine.
Lower the car off of the jack stands. Take it for a test drive to make sure the transmission is operating correctly and shifting smoothly.