The BMW E46 M3 has always been considered one of the most celebrated dedicated performance platforms. It’s powerful, rear-wheel drive, includes a limited-slip differential, was equipped with either a manual transmission or a single-clutch automated manual, and checks all the boxes for enthusiasts. However, as with any high-performance BMW built with cutting-edge technology, there are a few things to look out for if you’re in the market for an E46 M3 of your own. Fortunately, we have a team of experts who have helped us put together a comprehensive guide for you to confidently purchase a BMW E46 M3.
First, it’s important to know some of the most common problems that plague the E46 M3. As luck would have it, we’ve already written an article that details the issues you can expect from the run-of-the-mill E46 M3. Once you’re aware of the rod bearing, VANOS, SMG pump, and other regular M3 failures, you can go into a vehicle search prepared for the worst with a plan.
The E46 M3 was available as either a coupe or a convertible. Both variants were offered with either the standard 6-speed manual transmission or the 6-speed SMG transmission. They’re effectively the same thing, except the SMG doesn’t have a clutch pedal. Enthusiasts tend to prefer the coupe model with the real three-pedal transmission, which is the variant that commands the highest prices. In recent years, prices of E46 M3s dipped to their lowest but never saw the same kind of depreciation as its predecessor, the E36 saw. That might come as no surprise, since the E46 M3 had the S54 engine, which is effectively a beefed-up Euro-spec S50, and was a much higher build quality than its boxier older brother. On the other hand, the E46 M3 has not seen price hikes like the E30 M3 has, so they are still relatively affordable.
Even so, the E46 M3 in coupe form with a real manual transmission will still be north of $20,000 for one worth purchasing. For a twenty-year-old car, that can seem quite steep, but you have to remember the E46 M3 is still considered a performance benchmark to this day. It’s relevant on the street or track, has tons of aftermarket support, and is an extremely desirable car. That brings us to budgeting.
Assuming you are looking at the most desirable version of the E46 M3, you’ll want to set aside about $20k-25k for a well-sorted example in the 90k-150k mile range. While that may seem high, we have some secret insider information for you that justifies the mileage.
Due to the E46 M3’s extremely expensive maintenance items, like rod bearing replacement, VANOS service, SMG pump replacement (if you must have a two-pedal M3), rear subframe reinforcement, valve adjustment, and brake service (for ZCP models), many ‘low mileage’ examples are sold because these services require completing. Owners would rather sell their M3 for a premium ‘because low mileage’ and get out of the car for a hefty sale price instead of forking over close to $10k in parts and labor. For this reason, you need to ensure your prospective M3 has a detailed service history and has had the following services performed in the last few thousand miles:
Rod Bearing Replacement (every 100k miles)
VANOS exhaust cam hub replacement
Full brake overhaul (every 60-80k miles)
Rear subframe reinforcement
Differential mount reinforcement
SMG pump replacement (SMG Model only)
With these services either completed or listed as variables, you can decide to see the car. An E46 M3 with around 100k miles will likely have had all of this completed recently, or recently enough, which is why we suggest going for an example of that mileage rather than looking at something sub-50k miles. You’ll pay a premium for a low-mileage car and will likely still have to dump money at it to bring it up to snuff.
Additionally, the same can be said for the bottom of the barrel examples. Finding the cheapest one you can find is less than advisable unless you’re prepared to do a lot of work. Those $10,000 examples are usually mechanically train wrecks and not worth your time. It’s best practice to get into the nicest E46 M3 you can find that fits your budget and has been well serviced for its whole life.
Next, with a car in mind, that has a clean vehicle history report, maintenance records, and is the right version for you, then it’s time to schedule a test drive and pre-purchase inspection. We suggest contacting the owner and establishing a time to meet at a BMW dealership or your mechanic of choice to thoroughly inspect the car.
The pre-purchase inspection is critical. This is where you will find any leaks in the power steering system, notice any oil leaks, find worn suspension and drivetrain bushings, and can visually inspect many components that can indicate hard-driving or improper care for the M3 over its life. The technician will detail anything he finds with the car, which can either be the green light to test drive it or an indication that you may want to continue searching for another example.
Remember, these are twenty-year-old cars at this point. You’re going to find a leak here, a worn bushing there, and a few places that can use some TLC. Don’t worry too much about those little replaceable things, you can get all the parts you need to do it yourself right here at ECS. Just be aware that parts costs add up. If you’re not prepared for it, then the excitement of buying a new car can be sullied by the need to immediately service it and spend more money.
After the PPI, go over the results with both the technician and the owner. The technician will outline all the issues or potential issues with you, break down the parts/labor cost, and give you a bit of ammo to negotiate your purchase if you decide to pursue this particular E46 M3. If you are ok with what you see and ready to continue, it’s time for the test drive.
Before you take it out on the road, walk around the car. Check out the weather stripping, the paint, the condition of the bumpers, panel gaps, and the condition of the trim pieces. You’ll likely have seen most everything during the PPI, but it’s a good idea to just go over it once more when you’re ready to drive the car.
Areas to check:
Hood strut/hood operation
Inspect quarter panels, wheel arches, and rocker panels for rust if you haven’t already
Check for rust around the license plate, license plate lights, and trunk liner
Check weather stripping around all windows, doors, and trunk
Look for dings, scratches, evidence of bodywork/paintwork
Inspect tires for uneven/excessive wear
Check headlights and tail lights for cracks
Double-check headlight, high beam, indicators, fog lamps, brake lights, tail lights, reverse lights, license plate lights for proper function
Much of this will be covered in the PPI, but it’s good practice to just double-check everything. The technician may only focus on mechanical stuff they can visually inspect under the car, depending on who performs the inspection. After this, you can jump in and check the interior.
Once you get in the car, test the windows. Make sure they operate smoothly and don’t take forever to roll back up. Check the mirror operation and take a look at the rearview mirror. These tend to turn blue as the treated glass ages since they have an auto-dimming feature. If it has the electronic rear pop-outs, test those as well. Look at the condition of the interior. Is the leather worn, cracked, torn, or fading? Are the steering wheel and gear shift in good condition? What about the carpet? Are there original BMW floor mats or some cheap aftermarket ones? Make sure that you don’t have any holes or major stains in the carpet, the seats are all in good condition, and all the electronic seat functions work as they should.
With the interior inspected, start up the M3 and take it for a spin. While on the road, try to do a combination of highway and city driving. Really live with it and do more than just a spin around the block. You want to get a feel for how the E46 M3 drives in all the conditions you’ll expect to drive it.
Give it a good thrashing. The E46 M3 should have a smooth, consistent, and engaging power band all the way up to its 8,500 RPM redline. It shouldn’t stutter or feel like it’s lacking on low RPM power. Feel for any driveline vibrations that could be a bent/imbalanced wheel, CSB, Giubo, or drivetrain mount. Test the brakes. Give them a hearty stomp and make sure the ABS functions as it should. Ensure it doesn’t pull to one side or the other while driving in a straight line or under hard braking.
Once you’ve done that, try and get it stuck in traffic. See if the temperature creeps up. That could indicate a failing water pump, one of the E46 M3’s common problems. Make sure it goes through all the gears as it should and the clutch doesn’t slip, either in the hard-driving you already did or in stop and go traffic. By trying to ‘live’ with the car for a bit, you’ll get a feel for anything wrong with it that you might gloss over in your excitement at the prospect of a new car.
After the test drive, if everything is to your liking and you’ve mentally noted all the potential services the car may need, you’re ready to make an offer! Walk the owner back through the PPI report, bring up any issues you encountered in your test drive, and any faults visually with the M3. This will be your negotiation. Lay out the value of the car as it stands and make an offer. If all goes well, you’ll be taking home a new-to-you E46 M3.