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Every time I have my '00 Bonneville SSEi key in the ignition in the ON position, all the dashboard lights come on for a moment which I understand is normal but the "SERVICE ENGINE SOON" light stays on, but then once I start the engine, the "SERVICE ENGINE SOON" light goes off. Is there something wrong with the engine? Is the sensor working properly? I also noticed that it often stalls and is hesitant when starting.

The lights sound normal. You may want to check your fuel pressure, and your fuel pressure regulator. Pull the vacuum hose from the fuel pressure regulator. Check for any fuel, or smell of fuel in the line.

When was the last time the plugs and wires were changed?

I'm with Matt, check over this maintenance list, if parts of it are ignored, it can cause driveability issues.

Brand Suggestions are in the parentheses.

• 1987-2005 Bonneville / Buick 3800 Maintenance List
  
  Run Seafoam through gasoline and intake every 5,000 miles. One pint of Seafoam in a half tank of fuel is a good mix. The intake is optional, but recommended.
  
  Grease: Ball Joints, Tie Rods Every 8-10k ( Green Grease recommended)
  Air Filter Every 15k (Amsoil EaA, Purolator PureONE)
  PCV Valve Every 30k
  MAF Sensor Element Cleaning/TB Cleaning Every 50k viewtopic.php?f=48&t=1661
  Fuel Filter Every 15-25k (Purolator, AC Delco, WIX)
  Spark Plugs Every 30-50k (NGK TR55 or Autolite 605) (Never Bosch)
  Ignition Wires Every 30-50k (Napa Belden, AC Delco, Autolite Pro, NGK) (Never Taylor or Bosch)
  Oil & Filter Every 5-6k or Every 6 months (Mobil1 or Amsoil)(Mobil1, Purolator PureONE, Amsoil EaO or WIX) (Never Fram) viewtopic.php?f=45&t=214
  *Conventional Oil Every 3k/3 months(Pennzoil with a WIX (Napa), Delco or Purolator filter)
  Transmission Flush Every 15-20k (Always make sure filter is changed when flushed)
  Cooling System Flush Every 25-50k or 3-5 Years (Peak or Prestone Green Coolant Only) (Never Dexcool)
  Oxygen Sensor Every 80-100k (30k for non-heated) (AC Delco or Denso) (Absolutely never Bosch) viewtopic.php?f=48&t=794
  Accessory Belt Inspect every 15k, replace every 100k, or as needed
  Cabin Air Filter Inspect and Replace every 15k, or as needed in dusty conditions. (Note: 00+ Only)
  Evap Core Cleaning Whenever Needed (Note: 99 and older only) viewtopic.php?f=45&t=2432
  
  *Special Considerations*
  All 3800s, LG3, LN3, L27, L36, L26, L67 & L32, especially important on vehicles factory installed with orange Havoline Dexcool Antifreeze/Coolant: http://www.dex-cool.net/
  Lower Intake Manifold Gasket Replacement, every 80-100k (ignorance of this can allow coolant to enter your engine oil, this happening can cause irreversible lower engine damage, requiring replacement of subject engine)
  
  Series II, Naturally Aspirated, RPO:L36:
  Upper Intake Manifold Plenum Replacement, Every 80-100k (ignorance of this can allow coolant to enter your intake manifold, possible damage to occur can be hydrolock, irreversible damage to emissions devices, misfires, etc. Most times, engine replacement is required if ignored long enough.) viewtopic.php?f=53&t=1061
  
  Series I, II, III RPO Code L67 & L32:
  Change Supercharger Oil; Every 30-50k. (Intense Racing or GM Dealer) viewtopic.php?f=56&t=1690
  Supercharger Belt; Inspect Every 15k, Replace Every 100k or as needed.

I don't know 100% if this applies to the 00 PCM's, but I can speak towards this SES light and how it was used in the past on computer controlled engines.

THE FOLLOWING INFORMATION IS FROM OLDER CARS AND MAY NOT BE 100% ACCURATE FOR A 2000, BUT IT IS ONE POSSIBLE EXPLAINATION

On older engines, the SES light turns on to indicate a trouble code. One of the codes the SES can report is a 13, no crank signal. When the engine is not running, the crank signal is missing and therefore the SES light is indeed reporting a condition it sees, no signal from the crank sensor. This is a normal condition. When the car is started, the PCM sees the crank signal and the SES light turns off since the condition it is reporting no longer exists. Again, this is normal and expected. So, why when you scan the car does it not report that you had a code 13 for no crank? That's because this code is a temporary code. The PCM will never store a 13 since it is will occur every time the key is set to run and the engine is off. Ironically, this makes troubleshooting a bad crank sensor a real pain, because if you truely do hae a crank sensor problem in the future, the car doesn't know the difference between a real problem and a key on engine off condition.

I know on OBDI cars when you did the ol paper clip into the ALDL to get codes, if it blinked a 13 at you it means all is good. But Likeamojay, yours isacting completely normal, no worries. You might wanna check your fuel pressure at key on and also during cranking, and check all your maintanance items before trying to diagnos further.