Correct, lack of preventative maintenance - most people neglect to change the Diff oil (to save £10), and then get all upset when they receive an unexpected £1,000 bill.
120d can suffer the same fate, but it has a much bigger/stronger Diff as standard, so tolerates being neglected significantly better. I'd still recommend regular-ish oil changes, every 50k is sensible.
The 120d has a bigger/stronger diff and perhaps consequently may not have earned the same reputation for failure, but BMW say that their diffs and gearboxes are lubed for life, so if the car has a FBMWSH, it's unlikely to have had them changed.
I wouldn't discount one because of that item, just keep looking until you find the one that suits your needs, just be mindful of the items that can fail and make the decision with your head.
Do stick with the earlier M47 motor though - no chain-snapping concerns and no DPF to block up...
I think they 'upgraded' (not) to the N47 in the Spring of 2007.
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