It sounds like you may have a failed navigation computer. Is "GPS Malfunction" the exact error message that you are seeing in the service menu.

Typically, if you are getting something like this, the internal satellite receiver module is dead, or you have a bad antenna connection. The CPO support is a coin toss. Sometimes, you will get a claim rejected if it is deemed an "accessory" by BMW. Before you spent any real cash, I would check the GPS antenna cable connection. If that looks sound, you could buy a new GPS antenna and plug that in to the nav computer to see if it fixes it.

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2000 E38 750iL Highline Edition, Upgraded with the lastest 2006 X5 Electronics
MKIV Navigation, 16:9 Display, Bluetooth, TV/Video with Backup Camera, Sirius, and Aux Input