Easily one of the most frightening experiencing for any car owner is noticing smoke coming from under the hood. While engine fires are undoubtedly possible, they're reasonably rare, and smoke or steam visible from under the hood usually has another source. There are two potential and unfortunately relatively common culprits for late-model BMW owners.
1. Valve Cover Gasket Leaks
Your engine bay contains numerous gaskets that serve a critical role in keeping fluids such as motor oil and coolant contained. These gaskets go through countless heating and cooling systems throughout the life of your car, causing them to become stiff and brittle over time. This process is often known as plasticization since the result is inflexible and plastic-like rubber.
Plasticized rubber will lose its ability to seal and, eventually, may crack and allow for leaks. The valve cover gasket is a common source of problems due to many BMW engines' high internal oil pressure. BMWs are known for many gasket leaks, including the infamous oil filter housing gasket leak, but valve cover gaskets can often produce a unique symptom: smoke.
The position of the valve cover gasket tends to route oil leaks, even relatively small ones, towards the exhaust system. Since exhaust components are extremely hot, this oil will often burn off when it comes into contact with the exhaust manifold or another part of the exhaust system. Even relatively small amounts of oil can produce large quantities of smoke, often creating a fairly frightening situation.
If you notice smoke coming from close to the passenger-side firewall and you can smell burning oil, there's a good chance you have a valve cover gasket leak. The leak is rarely critical, but the burning oil creates a potential fire hazard. As a result, you'll usually want to fix this problem as soon as you can.
2. Cooling System Failure
Older BMWs such as the E46 were prone to severe cooling system failures, but some newer models still have thermostat or water pump problems. When any part of the cooling system fails, there's the potential for it to release high-pressure coolant steam. This steam is scalding, so you should avoid coming too close.
Unlike a valve cover gasket, a coolant leak is a critical problem that can result in extreme damage to your car's engine. Never continue to drive your vehicle if you notice steam from under the hood or if the low coolant warning light comes on. Instead, shut the engine off as soon as it's feasible to do so, open the hood, and call for a tow.
Whatever the cause, smoke or steam from your engine bay is never something to ignore. The safest option is to avoid driving your vehicle at all and have it towed to a BMW auto repair shop.