BMW Lawsuit Alleges Automaker Concealed Transfer Case Defect in 2019-2025 Vehicles

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A proposed class action lawsuit claims that BMW has concealed a critical transfer case defect plaguing a handful of 2019-2025 vehicle models and refused to cover repair and replacement costs for drivers whose warranties have expired.

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According to the 74-page lawsuit, the faulty transfer cases can cause an affected BMW’s clutch system to improperly transmit torque from the transmission between the front and rear wheels. When this occurs, the filing says, the car may jerk or shudder during driving, especially when shifting gears, navigating turns or driving at low speeds, overall hampering the ability of a consumer to operate the vehicle safely.

The complaint stresses that a transfer case is designed and built with the expectation that it will last for the life of the vehicle. When the BMW transfer case defect manifests, the suit says, BMW will require a consumer to replace the transfer case fluid, which can reportedly cost between $250 and $1,300 when fluid replacement is not covered under warranty.

Even after transfer case fluid replacement, many BMW drivers continue to experience the problem and are subsequently told that they must replace the transfer case itself, the lawsuit says, noting that no warning lights or messages appear when the transfer case is damaged, meaning the issue is difficult to diagnose until it’s too late.

The class action lawsuit alleges that BMW has been aware of the transfer case problem in the vehicle models at issue (listed below) since at least 2018, based in part on its own internal bulletins and standard pre-sale testing. The case claims that when drivers have contacted BMW about the transfer case defect, the automaker “disavowed all knowledge of the problem” and refused to fully reimburse them for repairs and replacements, “which typically costs anywhere from $7,000 to $13,000.”

BMW appears to cover transfer case-related issues for cars under its New Vehicle Limited Warranty, the case details, but despite its apparent knowledge of the defect, the company does not cover services for cars under its Certified Pre-Owned warranty, Extended Service Contract, or those whose warranty has expired.

Per the complaint, the following class vehicle models, all of which are equipped with an XDrive transfer case, excluding any M-series variants, are equipped with faulty transfer cases:

• BMW G01 (X3 Sports Activity Vehicle);
• BMW G02 (X4 Sports Activity Coupe);
• BMW G05 (X5 Sports Activity Vehicle);
• BMW G06 (X6 Sports Activity Coupe);
• BMW G07 (X7 Sports Activity Vehicle);
• BMW G12 (7 Series Sedan);
• BMW G14 (8 Series Convertible);
• BMW G15 (8 Series Coupe);
• BMW G16 (8 Series Gran Coupe);
• BMW G20 (3 Series Sedan);
• BMW G22 (4 Series Coupe);
• BMW G23 (4 Series Convertible);
• BMW G26 (4 Series Gran Coupe);
• BMW G30 (5 Series Sedan);
• BMW G32 (640i xDrive Gran Turismo);
• BMW G42 (2 Series Coupe);
• BMW G45 (X3 Sports Activity Vehicle);
• BMW G60 (5 Series Sedan); and
• BMW G70 (7 Series Sedan).

The plaintiffs, a group of BMW owners across the United States, all claim to have experienced the transfer case defect to some extent in their class vehicles, under differing degrees of warranty coverage. The plaintiffs claim to have paid anywhere from $175 to $2,800 to either replace the transfer case fluid or the case itself, the complaint relays.

Unfortunately, not all the plaintiffs’ vehicles were cured of the defect, as some reported the problem still continuing while others claim that the issue grew even worse, per the complaint.

The lawsuit also claims that BMW has yet to issue any recall, offer an extended warranty, or even inform class vehicle owners and lessees of the possible premature transfer case failure problem.

“Instead, BMW has concealed and continues to actively conceal the Transfer Case Defect,” the suit argues.

The BMW transfer case class action lawsuit looks to cover all United States residents who are current or former owners and/or lessees of any of the class vehicles listed on this page.

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