BMW Z3 Transmission Warning: Sensor or Bigger Issue?

Hey there! I had very similar issues with my BMW Z4 (2004) last year. The symptoms you're describing match exactly what I experienced, transmission warning lights, limp mode, and those nasty grinding noises during shifts. Initially thought it was the temp sensor too, but when I took it to the garage, they found the transmission fluid level was critically low. They did a thorough inspection and discovered a slow leak from one of the seals. It turned out to be quite serious since running low on transmission fluid can cause permanent damage to the gearbox. The fix involved replacing the faulty seal and refilling with the correct BMW transmission fluid. They also cleaned the transmission cooling system while they were at it. The whole thing took about a day to fix, but it was worth it. The car's been shifting smoothly ever since, no warning lights or limp mode issues. If you're experiencing similar symptoms, I'd strongly recommend getting it checked soon to prevent any permanent transmission damage.

Thanks so much for sharing your experience! That's really helpful to know about the transmission fluid leak, definitely sounds similar to what I'm dealing with. Quick question though, do you remember roughly how much the whole repair set you back? Also, has everything stayed running smoothly since then, or have you noticed any other issues pop up? Just trying to get an idea of what I might be looking at cost-wise and if I should prepare for any follow-up problems.

Hey again! Just wanted to follow up and let you know how things turned out. Finally got my car sorted, took it to a mechanic and you'll never guess what they found. Turns out it was actually the faulty transmission oil temperature sensor causing all that drama! They also spotted the gearbox oil was running way too low, just like what happened with my Z4. Total bill came to 365 € to get everything fixed up properly. Bit of a hit to the wallet, but totally worth it. The car's been running like a dream since then, absolutely no issues at all. Those grinding noises are completely gone, no more warning lights, and the transmission's shifting smooth as butter now. Been about 3 months since the repair and honestly haven't had a single problem pop up. Really glad I got it sorted when I did, mechanic said leaving it too long could've caused some serious damage to the gearbox. If you're still having trouble with yours, definitely get it checked out sooner rather than later. Trust me, it's worth spending the money to fix it properly! Let me know if you need any other info about what they did during the repair. Happy to help!

Thanks for the detailed follow-up! Finally got my Z3 checked out yesterday. You won't believe it, but my story turned out quite different. The mechanic found multiple issues, not just the temp sensor. The main problem was actually a worn-out clutch pack and some damaged solenoids in the transmission. It wasn't cheap at all! Had to shell out nearly triple what you paid, but at least the car's running perfectly now. No more grinding, warning lights are gone, and the shifts are buttery smooth. The mechanic was super thorough and even showed me all the damaged parts. Funny thing is, during the repair, they discovered my previous mechanic had used the wrong transmission fluid! That probably contributed to half my problems. Really glad I switched mechanics, this new guy really knows his BMWs. Thanks again for encouraging me to get it checked out quickly. You were right about preventing further damage. Now I can finally enjoy driving my Z3 again without worrying about every gear change!