Thanks for all your reply. Tempted to source a used E70 X5 rear diff, however the majority of these would be around similar age and will probably break soon.

I've decided to take it back to the dealer and have it replaced as they offer 24 months warranty on parts and labour as I'm planning to keep the car for a while. Apparently you can replace a stronger diff, especially you are planning to do a lot of towing and 4WD.

Seriously I'm pretty disappointed at the quality of E70 X5, will try to write a letter to BMW HQ seeking reimbursement for the cost of repair.

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'07 X5 3.0d - Black Sapphire Metallic / Camel interior
Specs: Sport pack, Executive, 7 Seats, OEM 336, Hifi
Mods: Aero Kits, Titanium grilles, 4.8i exhaust, Tinted, ///M Footrest, OEM Sport pedals, OEM Rubber mats, OEM Sunshades, LCI Taillights