Hi everyone. I'm a newbee here and have enjoyed many of your posts and threads. I have a question concerning my 1999 328 (automatic) that continues to baffle me...

After the E46 has been sitting overnight, it dumps a nice puddle of oil (approx 12" in diameter) once it's started and put in reverse with the brakes on (i.e. idling in reverse while stopped). The leak continues while in motion in reverse, but appears to taper off. Then, once put in drive, the leak stops. The leak also does NOT occur while idling in park.

I'm sure the leak is engine oil and not tranny fluid, as the puddle is brown/black and not red in color. Any suggestions?

I think you are going to have to find out where the oil is actually coming from. I would not attach too much importance to the color. After being in use for a while tranny fluid may not be red...

The best way to locate an oil leak is to throughly clean the engine and transmission (from above and below) so that there is no oil anywhere on those. Then you can find the source of the leak by duplicating the conditions of the leak, and examining the engine & transmission.

I would not attach too much importance to the color.

Second that! Depending on the model and year, BMW put several different types of ATF into E46 cars. My 2000 323i had golden-brown Esso fluid in it before I changed it recently.

Are you sure the oil isn't pooling onto the underbelly pan and spilling forward onto the ground as you drive in reverse??? Remove the pan and inspect.

thats sucks