Which Diagnostic Tool for a BMW E36


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Your BMW E36 is your pride and joy. It is, after all, a classic Bimmer that is quickly gaining cult status around the world. To ensure its longevity and trouble-free running, as well as avoiding expensive service and repairs from workshops, you can carry out regular diagnostics on your own. You don’t need to be technically trained or an experienced mechanic to do this. A bit of interest in the workings of your E36 along with the desire to save some money is sufficient. But, of course, you will also need a BMW E36 diagnostic tool. So let us show you what to look out for and give you some useful background knowledge in the process.

Which is the best BMW E36 Diagnostic Tool? There are three kinds on the market. One is the external diagnostic device, the second is software that you install on a laptop computer, and the third is the smartphone app. What are the advantages and disadvantages of each type? Which one is best for you? We answer these, as well as other questions in the following article.


With the right diagnostic tool, you can save yourself up to several thousand euros per year. Furthermore, since you will be doing the diagnosis yourself, you no longer need to go to a workshop for a diagnostic scan. You can also recognize defects and problems with a proper BMW E36 Diagnostic Tool at an early stage and have them addressed before they cause larger and more expensive issues.

What Can You Actually Do with a BMW E36 Diagnostic Tool?

In principle, diagnostic tools (external devices, software, and smartphone apps) read error codes from the control units in the vehicle and reproduce them in plain text that even a relative automotive beginner will be able to understand. However, since you will not understand the plain error codes (which look like this: P03488), the tool helps you understand and interpret the errors by providing a simple explanation. For example, you would receive the following description: “Outside temperature sensor: The input signal of the sensor is too high,” and you can rectify the issue accordingly. Most diagnostic tools can also delete stored error codes after being read out, therefore resetting the error memory and ensuring that old codes are not flagged after the issue has been resolved. An advanced app such as Carly even goes one step further. The Carly app shows the result of the analysis of the error codes in a traffic light system. If it is green, the vehicle is fine and requires no further action. If orange is displayed, some defects require attention or action. If you see red, there is an error that must be quickly rectified to avoid serious damage.

What Exactly Are Error Codes, and How Are They Structured?

A modern vehicle is constantly scanned and monitored by its onboard control units. Fixed values in the control units are compared with actual real-time values, and deviations are recorded. Error codes are accordingly generated if they vary from certain parameters. In most cases, these errors are of minor importance and can be ignored. As a driver, you will not notice anything. However, when a serious error occurs, these are indicated to the driver through a warning light and audible warnings if applicable. In many cases, you can avoid major problems if you carry out regular diagnostics on your vehicle.
There are basically two categories of error codes: general (international standard) and manufacturer-specific codes. In total, tens of thousands of error codes are possible. However, all codes have the same structure. They consist of 5 characters. The first digit is a letter and designates the area in which the error occurred: B = Body (body) / C = Chassis (running gear) / P = Powertrain (drive, engine, and transmission) and U = Network (OBD interface).
The second digit defines whether it is a standard error code (“0”) or a manufacturer-specific code (“1”). The third digit further limits the area of the error: 0, 1, and 2 represent the air and fuel metering control, 3 signifies the ignition system, 4 is for additional emissions control, 5 pertains to engine idling control, 6 is the onboard computer and additional output, 7, 8 and 9 are the transmission control and A, B and C are the hybrid drive. Finally, the last two digits denote the actual error, with the numbers 00 to 99.
Only specialized tools — typically diagnostic apps — can read and interpret both standard error codes and manufacturer-specific ones as well. So, diagnostic apps for BMW are particularly suitable for your BMW E36. However, our favorite tool, the Carly app, is way ahead of the pack here and is available for a bunch of manufacturers and models.

The Three-Way Battle: Diagnostic Device vs. Software vs. App

We now present the three-way battle: diagnostic device versus software versus app. You can see for yourself which suits your requirements best and buy accordingly.

External Diagnostic Device

For many years, external diagnostic devices reigned supreme. Practically all workshops work with professional-level standalone diagnostic devices. These devices can easily cost several thousand euros. Devices for regular users can be bought for less than €20 but will offer little in the way of features. A decent device will cost at least €100. Standalone diagnostic devices can vary widely in compatibility and features. Some will come equipped with large, color touchscreens, others with small numerical ones. Some will connect to the vehicle via cable, and others will work with Bluetooth. Some support only one manufacturer, and others will support multiple manufacturers. Either way, you have a different device that you will need to carry around. The final piece of the puzzle is that the degree to which you can update the internal software on these devices varies widely. Automobile manufacturers are always introducing new models with new features and therefore new error codes. If your diagnostic device has not received a relevant update from its manufacturer, you may not be able to read these models.


Let us be honest here, software for a laptop is the worst option in our point of view. You will have to carry your computer around whenever you wish to get a diagnosis, which is very impractical, and you may not want to use your expensive laptop in the garage. You will also have to purchase the relevant software and rely on the software provider to issue regular updates. They may even charge for updates which you will have to pay to ensure proper functionality. And software can become obsolete quickly. The one main benefit is that a large laptop screen can clearly display information and show more than a smaller screen.

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Smartphone App

Apps for smartphones are the future. They are versatile, flexible, and offer enormous advantages over the other two options. In a nutshell, apps are:

• Always up to date due to quick and free updates.
• Practical, because you always carry your smartphone with you.
• User-friendly, as they are designed from the outset to be that.
• Cheaper than the other two options, and basic versions can be free.
• Have a more extensive set of options.

With a powerful app, you can not only read out the error codes via this BMW E36 diagnostic tool but also venture deeper into its systems, with activities such as coding, performing service resets, or reading real-time data. But, of course, you will need an adapter for this avenue too. For that, we will show you what is possible with the Carly app.

All tools are connected to the vehicle via the OBD2 interface, which is our next topic.

What Is the OBD 2 Interface?

OBD (On-Board Diagnostics) is a standard developed in the 1990s installed in all new gasoline-powered vehicles from 2001 and all diesel vehicles from 2004. Initially, only all exhaust-gas-related systems were checked using this standard. This is because the OBD standard was born in California over concerns of excess air pollution due to automobile use. So the development of emissions standards and onboard systems that continually monitored the emissions of vehicles began, and they signaled faults via a lamp in the dash or instrument cluster. This alerted the driver to emissions systems faults that could be checked and rectified.

Since this standard (and the interface it used) proved to be very stable and practical, it was naturally used for other purposes. As a result, an OBD2 socket has been in every vehicle since then. On your BMW E36, this socket is in the driver’s footwell on the left-hand side next to the door hinges behind a cover plate. This is where you plug in the OBD2 scanner that is required for all three methods of accessing the onboard computers and reading errors, among other things.

The scanner serves as an interpreter between the diagnostic tool and the control units in the vehicle. It communicates in both directions, ensuring that everyone understands each other. Therefore, the device should be chosen carefully, as cheap scanners from websites can be like a poor translator and can even cause damage to your vehicle’s systems.

OBD3 Is Already Being Planned

As we stated, OBD was initially about emission-related systems. This is still a priority today. OBD3, therefore, goes one step further and reports errors in the exhaust system directly to an appropriate authority. If you do not have the error rectified within a certain period of time, there is a risk of being slapped with a fine. This offers an additional degree of environmental protection by actively ensuring that substandard vehicles are not allowed to run for long without being repaired. Data transmission takes place via the data SIM cards built into almost all new cars, which are also used for navigation and emergencies. So far, the system is being developed in the USA. Whether it will also come to Europe remains to be seen, but it won’t replace the need for a BMW E36 diagnostic tool.

What Are the Control Units in the Vehicle For?

Vehicles are mobile computer networks. Modern vehicles have multiple control units. Each control unit is its own mini-computer and is responsible for a specific system. The climate control system, for example, has its control unit, central locking, and body functions have their own unit, and so on. On cars with more special features and equipment, more control units must be present. Newer vehicles can even have a hundred control units. The control units are connected to each other, to the systems, and to the OBD2 interface via a data highway or bus, which can even be fiber-optic cables on high-end models.

The chips in the control units carry the fixed parameters for the assigned system. If deviations between these parameters and the actual data are measured, an error code is generated and saved. If possible, measures to correct the discrepancy are also initiated. If this is not possible, a warning is issued.

Cabling in Cars — Then and Now

In the 1980s, there were few to no computers in cars. Control units were a rarity. Therefore, around 200 meters of cables were present. Nowadays, a modern vehicle has 1 to 1.5 kilometers of cable — some even up to 8 kilometers. Cables in the past were thick copper affairs, while modern ones utilize advanced engineered materials and are thinner and lighter.

How Does It All Interact with Each Other?

Now, we know all the devices, systems, and interfaces involved. But how do they work together? Imagine that you have the Carly app installed on your mobile phone. You also plugged the Carly Universal OBD Scanner into the OBD2 socket of your BMW E36. Now you want to read out the error codes. You call up the corresponding menu item in the app and select the option to read out the error codes. A corresponding request is now sent to the OBD2 scanner via Bluetooth, for example. This, in turn, translates the request into the language understood by BMW control units and sends the request via a data bus to the control units in which the error codes are stored. Little by little, the error codes are sent back to the Carly Scanner which now translates the data into the form that the app can understand and forwards them to the Carly app on your smartphone via Bluetooth. All of this happens in a fraction of a second. In the end, the app translates the incoming error codes into plain text and explanations, and you can then read them on your smartphone’s display.

What Are the Costs of a Diagnosis?

The costs of a diagnosis can vary widely depending on which tool you work with or whether you have the diagnosis made in a workshop.


The workshop is the first port of call for most novice users when the check engine light comes on. A workshop can read and erase the fault memory. If you take your BMW E36 to a workshop, expect costs between €30 and €100 for reading the error codes. Best practice dictates that you should read the error memory at least once a quarter. So, annual costs of €120 to €400 can be expected. Don’t forget that you must take the car to the workshop, leave it there and get it later. Organizing that can be a pain.

External Diagnostic Device

A mid-range external diagnostic device will cost between €50 and €75. Don’t forget, you need an OBD2 adapter as well, and a decent one should cost around €30. You are now equipped to make as many diagnoses as you wish. Let’s assume you stick to once per quarter and have a service life of five years for the device and adapter combo. Your diagnosis cost would be €4.50. If you step it up and perform a diagnosis every month, the cost per diagnosis is less than €1.


Looking at a cost-per-diagnosis for an app is hardly possible, as apps offer many other functions such as coding too. Coding is an activity that can easily cost €100 or more at a workshop, depending on the nature of the task. Some apps offer a basic version for free, while others charge annual membership fees varying between €40 and €70. An OBD2 scanner is necessary here as well, so factor in around €30-€100 for that. Apps have a practically unlimited lifespan as they receive continuous updates, and you can transfer them to your new phone when you upgrade. So, a straight cost comparison cannot be made, but rest assured, apps will come out as the most cost-effective once the additional features and benefits are considered.

What Else Can the Carly App Do?

In addition to diagnosing the BMW E36, the Carly app can do much, much more. The range of functions is mind-blowing. You can get the Carly Universal OBD Scanner for €59.90 (plus shipping) on the official Carly website, and the app costs between €21 and €80 per year. You get a lot of features for that, which we’ll take a look at next.


Sounds like computer programming? No, it’s not. Coding is merely the adjustment of certain vehicle parameters to your personal preferences. Think of it as personalizing your car. For example, you can choose whether the turn signal should flash or not when you lock or unlock the vehicle or whether the window lifters should be active when the door is open. Admittedly on older models such as the BMW E36, the coding possibilities are limited, but newer models offer much more customization.

Service Functions of a BMW E36 Diagnostic Tool

Changing the oil on your BMW E36 is now a breeze because, in addition to doing the physical change, you can use the Carly app to update the service interval and notify the vehicle that the oil has been changed. The same thing goes with replacing the battery and registering it with the vehicle. For diesel-engined vehicles, the diesel particulate filter (DPF) regeneration can also be selected, although this doesn’t apply to the BMW E36 diagnostic tool.

Carly Used Car Check

A useful function that is only available in the Carly app is the Carly Used Car Check. Imagine that you want to buy a used BMW E36. There is a real risk that the mileage has been manipulated, as up to a third of used vehicles have undergone this. So how can you check if the mileage is genuine or not? Simply connect the Carly Universal OBD Scanner and Carly app to the used car and select the Carly Used Car Check option. Carly checks all control units for mileage and reports any deviations in the final report. You can never be ripped off again, thanks to this BMW E36 diagnostic tool!

Many other functions complete the range of the Carly app, and they are too numerous to list. So check out the Carly app and enter the world of Carly!

What Is the Future Direction of Development?

Let us give you a peek into the crystal ball. What will be possible in a few years? All car manufacturers are working on digitizing vehicles, especially self-driving cars. Regardless of if a car is self-driving or driven by a human, they will all communicate with their surroundings and other road users. It will be possible to obtain data on the condition of the road (wet, slippery, snow), call up environmental data, and recognize traffic jams even earlier. Traffic jams can be largely mitigated in the future through real-time communication with other vehicles, exchanging speed and position data continuously. In addition, the number of road accidents will be largely reduced, as intelligent onboard systems intervene in dangerous situations, taking over braking and steering to avoid or largely minimize a collision.

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Cars will connect to smart homes too. If your vehicle detects that you are returning home, for example, it can send a message to the smart home system to turn on the lighting and set the temperature to your preference. If there is a supermarket on your way, your refrigerator could send an alert to your car and alert you that you need to buy milk.

Sensors in the car constantly scan the surroundings and can therefore detect pedestrians and other sources of danger with plenty of time. In addition, countless assistance programs (many of which are already in use today) such as parking aids, brake assistants, or starting assistants on slopes will make life easier for the driver.

Development in these areas is vast and increasing exponentially. We cannot even fathom what may come in just ten or twenty years.


Diagnostic devices for your BMW E36 are plentiful, you just have to find the right one for you. Once you have decided between the three major types, evaluate which style fits you best regarding functions on offer, ease of use, and cost. Your selected tool should be able to read the manufacturer-specific codes as well as the general ones.

Again, we think getting an app is the best decision. They offer a world of options, good prices, and great user-friendliness. And when it comes to apps, Carly stands out as the winner, as they offer such a wide range of functions. Coding is particularly fun, and the used car check can help you avoid buying a mileage-tampered vehicle. Furthermore, the Carly app can be downloaded free of charge to enable you to evaluate it before opting for the full, paid version of the Carly app.

Keep in mind, that every car has different software and modules built-in. Therefore specific features will vary with every model.

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