The coolant level sensor should be in the bottom of the expansion tank. I think they are a bit finicky though. AFAIK the face lifts (mine anyway) no longer used the sensor because I think they had too many customer complaints about the light coming on.

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1988 325is (purchased new) sold
2004 X5 3.0 2005 X3 2.5
2008 X5 3.0 (new to me)