[Technical question] Why would damage occur when being towed?
 

On the manual's towing section it says

"Do not exceed a towing speed of 45 mph/70 km/h and a towing distance of 90 miles/150 km, otherwise the automatic transmission may be damaged"

Obviously this wouldn't apply when using a conventional flatbed tow truck, but it got me asking why the automatic transmission may be damaged when pulled while in Neutral.
My guess was the transmission cannot be cooled down properly when driven with the ignition off and in neutral for too long.

Anyone know the answer?

The driveline isn't lubricated when towed with the wheels on the ground, hence the need for a flatbed.

Fully agree, but to add some detail....very early designs of automatic transmissions had an oil pump driven off the output shaft of the transmission. These days, automatics only have an oil pump driven off the input shaft (engine side). Thus, with the engine not driving the transmission there is no pressurized oil lubricating the transmission, but only splash lubrication.

I still like when I saw a tow truck *try* to hook a 2000-2003 X5 by the front wheels only and drive off, he didn't make it far and the truck hit the ground! Thanks to his lack ow knowledge and my being too far away to stop him in time I got to change a transfer case and front driveshaft due to stripped splines. (and on the tow truck companies dollar)

Ah~, so it wouldn't be advisable to go down hill in neutral even with the ignition on. I liked doing that 'cause I thought it saves some fuel while doing so. Never did I think it could damage the transmission and transfer case.
I'll use neutral only when going through the car wash tunnel from now on.

*waits patiently for criticism about using car wash to begin
:popcorn:

Being a former tow truck driver, I always check every new vehicle I own as to towing restrictions so that I know in advance if I ever break down. My 2003 was rated for 30 mph/50 kph maximum speed, 95 miles/150 km maximum distance, with one axle raised. No slings permitted (related only to body damage, and they aren't common anymore anyways), so you needed to use a wheel lift, but BMW did expect owners to be towed with only one axle in the air, up until the X-drive models came out in 2004. Even with the 2004 models, using dollies under the non-lifted axle allows safe towing without a flat deck.

Your customer's vehicle may have been in park, or the transfer case or splines may have been already damaged, not sure, but he should have been able to tow it according to the manual. As a tow truck operator, I used to check every owner's manual if the vehicle wasn't in my AAA towing guide book, as it transferred liability to the vehicle owner from me. Saved my employer from writing cheques.

I'll skip the car wash comments, since I use them too (touchless though) :rofl:

Coasting in neutral down a hill won't save you any significant amount of fuel, since the fuel injection cuts fuel flow on over-run. You are also adding wear to your transmission, as noted above. It won't affect your transfer case, since the transfer case doesn't know the difference.

More importantly, it is unsafe. You have three types of control of your vehicle; steering, braking, and acceleration. Putting the vehicle in neutral while moving takes away the last one of those, acceleration, if you have an impending accident. That is the reason it is also illegal in most jurisdictions (not sure about your state).

Note that I am talking about a non x-drive X5, no clutches in the transfer case to allow give, just planetary gears. With the X5 in neutral there is still a physical connection between the front wheels and the rear wheels.

Speaking of Neutral gear, I also like to put in neutral and use parking brake during long stops at traffic lights. This wouldn't put extra wear and tear to anything would it? Just wanted to make sure since the topic came up. Thanks.