I have a 1990 525. When it is cold it go into reverse and shifts perfect but after driving for around 10 minutes it starts to act funny, shifting hard and shifting up and down.. Plus in has no reverse at all... Also there is a red light on the right side of the dash that flashes when cold then stays on when warmed up.... What should I check first????

Take it to a dealer. Trannys are more complicated then you can even imagine.

Dealers have a way of saying " it needs a new one"

Yes they say that because they dont rebuild anything. Everything is replaced with a new part. If you want a tranny specilist try cottmann or however you spell it.

Check whether it is a ZF of GM trans. GM manufactures the 4L30E trans in Salzburg Frnace, this unit was used in 525's. A good independant, franchised or not, can fix either type of tranny.