Alright, now that we’ve talked about overland things for the past few weeks, I’m sure those of you who are here for ‘performance’ cars and ‘project’ cars are ready for something that appeals more to your wheelhouse. So, let’s leave the overland things alone for a while and kick off the next mini-series: affordable project cars in 2023! This week, to kick things off, we’re focused on the BMW E46 3-series, as it is experiencing a serious glow-up here in the early 20s.
You’re probably thinking, “what does he mean, affordable project cars in 2023? NOTHING is affordable right now!” Well, that’s where you’re wrong, kiddo. New cars are finally coming back down to MSRP (who would have ever been excited about paying sticker!?) and the used car market for anything that isn’t 80s or 90s ‘retro’ is also settling. New cars are dumb, so let’s talk briefly about this 80s and 90s popularity before I dive into why the E46 is going to be the new hotness on the scene in the near future.
For the past few years, E30 and E36 prices have gone CRAZY. The E46 M3 has, too, but that’s beside the point. The bog-standard E30 and E36, even in ‘undesirable’ specs, are fetching hefty prices. What you could pick up for a smile and a handshake less than a decade ago has become quite literally a better investment than Bitcoin. E30s and E36s, in any state and any trim level, are effectively unaffordable for a rational person looking to have some fun in a rear-wheel drive, straight-six, manual-transmission equipped Euro car. This brings me to the E46.
Now, plenty of my friends (I’m looking at you, Ais) will tell you the E46 has always been popular. Hell, in my high school days, it was the rich kid car of choice. Shortly after, they were preferred over the E90 by many of the old-school BMW folks as ‘the last analog BMW.’ Nowadays, the E46 has become (don’t hate me, Ais) the Altima of BMWs. You see them absolutely clapped, generally automatic and weak-specc’d, rolling around with body damage. But here’s the kicker: that’s not a bad thing anymore.
You can still pick these up CHEAP. I’m talking sub-$2000 cars for automatic 323is and 325i pre-LCI cars. I know many of you are making grossed-out faces at the thought of an automatic base-model E46, but hear me out on this one. You’re not buying it for the engine that’s in it from the factory (unless you manage to snag an M54-powered 330ci). Same with the transmission.
Let’s work the numbers real quick: a project “shell” will run you anywhere between $1,000 to $2,500 for something in “better” condition. A ZF 5spd or 6spd swap with pedals, driveshaft, and clutch kit will probably be about the same. Toss in a junkyard M54 pulled from an E83 X3 or E53 X5 3.0i (or the rare 330xi that gets junked) and you’re basically in a car that is ready to be BEAT on for under $5k. Some assembly required, of course, and you will want to do some maintenance while you’re in there, but hey. Find me something fun, RWD, basically made of Legos, and affordable to run for anywhere near that price. It’s got more power than its E36 predecessors, definitely more power than a USDM S-chassis Nissan or anything else considered a ‘starter’ drift/track car. Plus, the E46 is still fairly analog, other than the fly by wire throttle and a few small tidbits here and there on later year models. It’s effectively bulletproof when maintained. It’s got a ton going for it.
So, I clearly think the E46 non-M cars are about to make a comeback. In fact, my sources and constant eye on the project car market says they’re already making a comeback. Maybe that’s obvious just because they’re around twenty years old now and that tends to be rock-bottom of the market. At least, until people start scooping them up and making them cool again. But that’s kinda my point – if you aren’t thinking about what’s the next hot car to have, you’re behind the eight ball. My point is, these are becoming desirable again.
The E46 was, for the past few years, the ‘poor man’s BMW’ option since it’s too new to be considered a classic and too old to command any sort of market value. They’re the cheapest rear-wheel-drive platform you can get into that aren’t completely rusted into the ground or just an econobox. The E46 has the potential to be cool, and I’m here to tell you that you need to look at it a bit differently than you have all these years. Stop seeing it as the plasticky bastard-son of the E36. Start seeing it as a potential for style and performance that will give you the same sort of driving pleasure as the more expensive older options without being annoying to work on like modern BMWs. If you don’t, someone else will. And then the E46 will gain popularity and price you out of the market. So what do you do about it? Go pick one up. Today. The next steps are assembly and creating a real parts list, which is what I’m about to give you.
First, as we mentioned, you’re going to need to prepare yourself for A LOT of work. It will probably be something you won’t see real benefits from until next season, but starting now will give you the ability to space out big ticket parts and let you spend warmer, longer, spring and summer days working on getting it ready for a winter of hardcore assembly.
Next, start hunting for a deal on something that isn’t just completely rotten. You can find base-spec E46 sedans all day long in the $1,000 ballpark, especially high-mileage examples with the 2.5 and an autotragic gearbox. Who cares? All that’s going in the trash (or sold on marketplace to recoup your expenses). In the best case, you’ll find something that is running but won’t pass e-check if your state does that, or maybe it’s been hit in the front or the interior is in shambles. Don’t shy away from an E46 that looks ROUGH if you can get the right price on it. As long as most of what you need is there (and I’m talking bare-bones need,) then jump on it. You’re going to strip it out anyway.
After you’ve found the right candidate for your intensive project, it’s time to start assessing as you disassemble. You’ll want to start with anything obvious body-panel wise that needs gone. Ideally, you’ll want to get rid of base-spec bumpers, side skirts (if equipped) and chrome trim if you’re gonna do the piano-black thing. Replica fiberglass bumpers for the E46 chassis are SUPER plentiful and Alpina, AC Schnitzer, BBS, M3, etc. options won’t run you too much unpainted. Done right, you can likely sell anything good you’re pulling off the car for about what you’ll pay for the parts themselves. Just remember, this budget build is going to require you to do a lot of the work, like trimming, fiberglass work, sanding, priming, etc. on your own, so just be prepared for Replica stuff to fit like crap unless you put the time into it.
BMW E46 3-Series Exterior Parts
While pulling the exterior apart, you should also work your way through the interior. Seats, door panels, speakers, carpets, everything should come out. Start with a clean slate, right? Most of that stuff should just get tossed unless it’s in good condition and you’re going for an OEM-plus sort of vibe. But if you can, sell anything that isn’t totally thrashed. Go for minimal interior upgrades. Like LED Lighting Kits, a VDO head unit (with bluetooth!) if you want to retain the speakers, and delete panels. HARD motorsport makes a few good options for the E46, but it’s pretty much Coupe-centric. Be prepared to do some cardboard-assisted-design and don’t be afraid to take risks with some basic plastic delete panels done yourself. Pull everything that you can out of the car, make delete panels, and just clean up the interior. It doesn’t have to be complete, just don’t leave it looking like the inside of a spaceship from an 80s dystopian future with cables and shit everywhere.
BMW 3-Series Interior Lighting Upgrades
Shop Steering Wheels for your BMW 3-Series
Then, you should be staring at a pretty stripped-out project car with a solid visual direction to head in. In terms of drivetrain, keep it easy. ZF 5spd swaps are easy enough to come by and probably won’t cost any more than your platform did, so as long as you budget around half of your cost to cover the pedals, driveshaft, gearbox, and clutch kit, you’ll be fine. If your original transmission was in working order, you might be able to recoup some of the loss by selling it or scrapping it for weight. For the engine, it’s going to be best to do one of two things. Either leave your M5X where it is and tackle basic maintenance, or rip it out in favor of an M54B30 if you can find one. The second option is obviously more expensive, but you’ll definitely appreciate having the added performance over the smaller displacement M5X cousins. Especially with some Turner Motorsport Power Pulleys and the recently-released M5x Intake Systems. However, if you leave the M52 that’s probably sitting between the strut towers installed, it will take less time for you to get everything completed. Just remember to do your maintenance. Things like the VANOS (if equipped), PCV system, cooling system, o2 sensors, fluids, and filters will likely need some attention. Of course, we have all those in handy kits that come with everything you need to do the jobs from start to finish on a budget, so no worries there.
BMW E46 Dual Vanos Repair Kits
BMW E46 3-Series Engine Maintenance Kits
Finally, you’ll want to address your suspension, brakes, and wheels. For suspension, grab Turner Motorsport monoball upgrades as you need to replace ball joints and bushings. ECS adjustable coilovers and rear trailing arms will allow you to go low on a budget while retaining the factory alignment specifications and they won’t break the bank, either. Assembled by ECS brake service kits include pads, rotors, and wear sensors for a budget brake setup that’s as good or better than stock, and ECS wheel stud conversions will let you run a few different setups for wheels when you get to that point.
Speaking of wheels, you’re going to have a ton of options with the E46. 17s to 19s in anything from 7.5 to 10 (or wider with overfenders like BigDuckClub) are easy fits. In 5×120 PCD, you’re spoiled for choice. But let me hit you with a few suggestions; OEM BMW options from other cars are, in my opinion, the best choices. BBS RKs, RC009s (style 5s), Style 21s, Alpina Softlines, etc are all great options for an OEM-plus look and can still be found somewhat affordably, though the BBS wheel market has gotten pricey lately.
BMW E46 3-Series Tekniform Wheels
Alternatively, our Alzor wheel line and Tekniform wheel line offer entry-level pricing on one end and a flow-forged, higher-durability, lighter-weight option at the other end. Available in styling and fitment that is perfect for whatever aesthetic you’re after in your E46 build, you’ll be happy no matter which way you go with it.
Lastly, it’s just a matter of putting it all together. I know in theory it doesn’t sound like *that* much work, but this project is going to demand most of your time and attention for the better part of a year, if not longer. I’m just saying you need to get started now before everyone gets wise to the cheap E46 build and the scene gets as flooded with them as it has with GD chassis WRX hatchbacks. Just take your time, strip it down to a good starting point, and remember that this is your opportunity to build an E46 exactly the way you want with the perfect mix of performance and affordability. If my math is correct, everything I’ve included in this write up (in today’s pricing) shouldn’t be more than about $7k on the low end or $10k on the high end, depending on some of your wheel/tire choices and how much of your body and paint work you do yourself. All in, a sorted ‘do it all’ daily driver E46 for that budget is effectively unheard of today. You just have to want it.
Speaking of want, I want to say a MASSIVE thank you to @ordinary_e46 who not only allowed us to use shots of his E46 build but also played a big part in the inspiration for writing this article. From all the way in the U.S.A. to you in Denmark, all of us here at ECS Tuning send a heartfelt thanks.
Check Engine Lights!!! I bought a e46 Touring last year from a Dealer, with a light on. I didn’t think much because I was able to drive and thought OK this is good. A year passes, and I’ve replaced all engine plastic bits, and the rest. Well, it all came down to a slight issue with cylinder #3 engine misfire. Diagnosed into a low compression inside piston chamber. This was such a “let down” as I drove this vehicle from one of the country to the next 3 times.
So OBDII Reader/Scanner is required if you are to purchase any older model BMW. Know what codes are being triggered before you buy anything. You will save $16,000 or more. This was the cost of replacing a M54B3.0 egine.
Good luck with your search people!
Oh 100% you should have a BMW-specific scan tool. Our Schwaben BMW Professional Scan Tool lets you do more than just read P-codes. It clears adaptations, can show live data of every system, and even works to actuate electronic systems like ABS pumps and electronic parking brakes etc on newer models! Check it out here: https://www.ecstuning.com/b-schwaben-by-foxwell-parts/professional-bmw-mini-scan-tool/014020sch01a~scf/
I scored a 2004 330i zhp car with only 112,000 miles. Staggered M wheels, M steering wheel, six speed manual. So far I’ve replaced plugs, coils, valve cover and pcv system. Great driver, black on black, all stock. Body in great shape, small wear spot in seat, headliner sagging but minor detail.