The largest thing the e36 lacks is good alarm LED placement. Hidden on the console does nothing to deter theft or break-ins. Dash and mirror mount LEDs do. This DIY will explain how to install and wire a blinking LED in your mirror. This install used a varad blinking red LED with built it flash adjustment and relay for alarm option. Aprox $5-10 depending on where you shop.
Phase 1: The mirror.
Start by removing. This is done by rotating the arm 45 degrees either left or right. Now take the mirror to a place you can drill a 5/16 hole. Metal shavings will fly everywhere, so be prepared. Then slide the holder in. Depending on how well you drilled the hole, the fit might a little loose. The wires will keep it in place, but you can always use a dab of silicon to hold it in place too.
This is also a good time to remove any parking stickers attatched by the previous owner. Now slide your LED in through the back. and get ready to route the wires. The next part is optional. I hate wires, so I hid mine by cutting a pattern of the mirror and covered them with a 2mm black sheet of a neoprene-ish foam thing from wal-mart. With your wires in place you need a place for them to go. You can run them over the headliner or drill a hole in it. Up to you. I drilled a hole. Run the wires and reattatch the mirror.
Phase 2: Wiring.
Obviously, from the picture above, you can see the sunroof panel and light panel need to be removed. Use a flathead screwdriver and pry them loose. Once they're free you'll need to cut some of the pink insulation off the light wire loom to give you more room to tap. There are three wires you need to grab on this unit for it to blink: 12V constant, 12V Switched, Ground. If you wire it into your alarm, you need a 12V constant and the ground will go to your accessory wire. Also, to fit the wires through the hole you have to cut them loose of the relay and reconnect them on the other side. Once that is done, you can connect the 3 (2) wires. The red LED wire will go to the red/white striped wire for constant 12V. The black wire will go to the brown wire. Both of these are on the light panel. the Switched 12V is different. You want to grab the red wire on the sunroof switch. When using this as your switched 12V, the light does not activate until you open the door, instead of when you turn off the car.
When connecting the wires, keep space in mind. Wire taps are bulky and usually don't connect well. Again, I learned the hard way. They work reliably about a quarter of the time. To save space and ensure a strong connection, use a razor and cut all the way around the wire twice, then make one lateral cut and peel the insulation off. Wrap the LED around the wire it's connecting to and secure it with plenty of electrical tape.
At this point, it should light up if the ignition is off and the door is/has been opened since the ignition was turned off. If it doesn't at first, try opening the door. If it still doesn't, check your wires.
yes, it is that bright.