The original coolant reservoir caps were faulty, and did NOT let pressure out as they should have when overheating.

This does not occur as long as the system is within normal operating temperature but as soon as some component (like the pump or thermostat) fails and the car overheats, the pressure will come out from the weakest link in the coolant chain which often is the heater core or, like in my case, the radiator since I did not have any heat on.

These caps are replaced absolutely FREE OF CHARGE so for God's sake go and upgrade yours if it has a "top hat" before you blow up your heater core or radiator! The cap is same for all e32: 730,735,740,750 plus L models and apparently some other Bimmers as well. (how's it with the 5ers?)

I went to the dealer's with the cap; the lady on the counter had obviously no idea what I was talking about and said she would check the files, but the owner happened to stumble on the scene, saw the cap in my hand, said "just a moment" and returned with a huge plastic bag full of caps, gave me one, threw the old one away, took my (Belgian donor car's) VIN and the whole thing cost me zero $ and 2 minutes of my time.

If I had done this earlier I would have saved over $200 on the radiator.

Here's what it says on the "Home of SBC" page. Great pages but unfortunately no longer updated since the owner bought a mitsubishi... What a shame...

Still driving around with the original expansion tank cap? Recall campaign no. 98V-178 calls for a replacement cap, since the original doesn't release pressure when called for. The result is, instead of the cap letting out steam from an overheating engine, the pressure stays inside and bursts the weakest part of the cooling system, which unfortunately is the radiator inside the car. Expect the mechanic to charge around $1.000 plus parts for a new radiator, or do the replacement yourself (like I did). Some people actually consider it wiser to let BMW replace the cap (no charge) BEFORE the damage is done. Go figure...!
Original cap part no.: 1 712 836
Replacement cap no.: 1 742 231

(pic here)

Replacement cap on the left. The original has a 'top hat', whereas the replacement cap is completely flat but has a warning written on it.