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After changing the battery on my E36 cabrio 1997 the alarm was activated, but having no remote key for the car I turned to the internet in order to get the necessary instructions for disarming. I searched for many hours until, finally, i found instructions for disarming for later BMWs-but it worked for me so it may help others to know the procedure.

Very simple. Firstly open both doors and boot lid. Turn ign key fully on to last position, prior to starting, and disconnect battery. Wait for 11mins, but do not close doors or alter position of key. Reconnect battery strap and leave vehicle for a further 15mins so system can reset. After 15 mins have elapsed turn the key further onwards in order to start engine. Leave running for a few secs, then off. Hey presto,alarm disarmed.

I have read quite a lot of well intentioned articles about disarming the E36 alarm which has included- removing glove boxes,isolating alarms, grounding pink wires, pulling out wiring harnesses...lets hope this contribution helps someone avoid a lot of unnecessary hastle.
 

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To whoever is googling for a solution to this issue, I would like to attach the following statement: the solution described in the post above doesn't work.

I just tried it and when I was done, the alarm went off again. It just waste of time.

If you have an e36 with a working alarm, just disable it while you can. The owner manual describes how to disable the alarm. But once the alarm goes into alert mode, it's very hard to disable. Even my local BMW garage couldn't. It started 6 months ago when I had to replace the FOB battery. Since then, any door that opens, closes, when I start the engine (and once even while driving normally) the alarm goes off. I disconnected the horn but still the warning lights blink for 30 seconds each time.

My solution now: sell the car. I am going to get rid of it for a couple of hundreds quids because there is no way I can fix this. I drop the ball.
 

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BMW E36 316I BUILD DATE 21st May 1994 ALARM RESET
Open all doors, bonnet and boot lid.
Put ignition key to position one in ignition (First click)
Disconnect Battery at negative earth lead
Short positive battery lead to earth for 15 minutes to discharge all capacitors in ECU etc.
Remove shorting lead from battery
Reconnect battery at earth lead with key still in ignition at position one for 5 minutes.

Note - My key fob has no buttons to arm / disarm alarm. Only central locking by key in door.
 
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