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Discussion Starter #1 (Edited)
The following article in the May 2007 edition of European Car magazine talks about the advantages of installing an aftermarket differential. They replaced the stock 3.46 differential in an E36 M3 with an aftermarket 3.64 diff with 40% lockup. This is only a 5% change vs the 8% change with the 3.91 Dinan on the E60 M5.

The straight-line acceleration was noticably improved, as opposed to some results that have been posted here. The on-track experience compares well with what MRichmond has reported.

In order to see the difference with going to a shorter gear, we got a Diffsonline 3.64 gear with 40 percent lock-up installed on a 245 wheel hp M3 sporting a Eurosport High Performance OBD-II cam kit we tested earlier (se ec Feb 2006). With revs getting to the sweet spot of this cam kit – between 5500 to 7000 rpm – quicker, it was surely a faster car. And shifting up still keeps the engine well within its powerband. The set-up I s stretable, with a 3000-rpm cruise at 60 mph in fifth gear.

The downside is more shifting and greater fuel consumption. But in straight-line acceleration and especially on track, the gains are noticeable. CCA instructor/car junkie and owner of this car, Jonathan Lawson, says: “As far as in town and freeway drivability is concerned, I’m still glad I opted for the 3.64 over the 3.46. I had numerous people saying it would be too high-strung for freeway use, but even after a few seven-hour drives, I don’t’ find that to be the case. The revs are obviously higher, but you get used to it or just knock your cruising speed down by 5 to 10 mph. Not a bad thing, tickets-wise. You do use more gas, though.
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“On track is where you really benefit. At Willow Springs, with the new differential, I was getting better traction out of every turn. The fact that most of the front straight is now done in fifth gear without running out of breath is magical, and I’ve noticed up to a 10-mph gain. The closing rate on similar cars is astonishing, especially with a slight tow. I can’t wait for the next track weekend at a more technical course.<O:p</O:p
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“The E36 M3 is already a great car out of the box. Throw in a decent suspension, the Eurosport OBD-II cam kit, and the Diffsonline 3.64:1 differential with 40 percent lock, and, well, the car went from being a nice, quick car to the perfect track day car, in my opinion. I haven’t been this happy with my car since I drove it off the lot in 1999.”
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At this power level, the absolute dream set-up would be a 3.73 rear end with a Euro-spec six-speed transmission. Sweet. <O:p</O:p
 
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