Four decades since its introduction, the BMW 3 Series remains the undisputed king of compact sport sedans. Currently in its sixth generation, its dynasty breaks down easily into three distinct epochs. The first and second generations—E21 and E30, respectively—represent the formative era, defined by simplicity and well-rounded performance, if not outright power. The more recent fifth and sixth generations—E90 and F30—are the embodiment of success and sophistication, proof that sustaining dominance sometimes requires adapting to a changing world.
In between lie the two generations of 3 Series that for many driving enthusiasts epitomize the essence of the BMW brand, arguably at its peak. The third-gen E36 and its successor, the E46, craftily balance power against handling, modesty against refinement. In contrast to their newer siblings, their overall dynamics are still exceptionally analog, their proportions neatly compact. Visually, both the E36 and the E46 still look remarkably contemporary thanks to sleek silhouettes and unfussy surfaces.
Their popularity today is therefore understandable, reinforced by the fact that non-M versions of both coupes and sedans now fall into the realm of affordability by almost any metric. The market is downright flush with decent examples, and prices sit squarely in most enthusiasts’ sweet spot, ranging from around $3,000 to just under $10,000.
What makes a great buy when it comes to either of these 3s? Whether you need a daily commuter or a blank canvas for a performance project, we recommend following our own version of the popular KISS rule: Keep It Simple (but Sporty). In the interest of simplicity, dodge the M3s and the convertibles. Regarding sportiness, we recommend sticking with a six-cylinder engine, a manual transmission and Sport Package. From there, it’s all about condition (i.e. maintenance history) and mileage. Plenty of cars that fit the bill—and every budget—are available.
1992-1998 E36 325i/328i
coupe and sedan
Cheap, but not always cheerful
When the third generation of the 3 Series arrived late in 1991, it marked the first radical departure in the model’s lineage. Outside, it strayed entirely from its two predecessors’ upright greenhouses, counter-swept grilles and linear architecture in favor of a sleeker, more technical shape that was clearly the result of months in the wind tunnel. Inside, it featured a less blocky look with more sculpted surfaces and better integration of optional features.
In the interest of passenger comfort, the new 3 Series grew larger in virtually every dimension, perhaps most notably in the wheelbase, which stretched by an additional 5.1 inches to 106.3 inches. Underneath, the mechanical package was fairly traditional BMW fare, with power coming from familiar-sounding four- and six-cylinder engines. The customarily sporty chassis was enhanced by a new multi-link “Z-axle” rear suspension that improved both ride and handling compared to the old semi-trailing arm design.
The E36 arrived stateside as the 1992 325i sedan, followed shortly thereafter by the 318i sedan. While the 318i carried over the previous generation’s 138-hp 16-valve, 1.8-liter four-cylinder (M42B18), the new 325i finally retired the old two-valve M20 six-cylinder for the four-valve, double-overhead cam M50. Displacement remained 2.5 liters, but the 325i’s output jumped from 168 hp/164 lb-ft to a more brawny 189 hp/181 lb-ft.
The additional muscle under the 325i’s hood was offset by the extra weight of the E36 structure; curb weight was up 166 lbs. to 3,021. But the four-valve head improved breathing at the far end of the tach, giving the new version a more athletic feel.
The new 318i took on similar weight gains but without any power enhancement, leaving it at a performance deficit, particularly given the M42’s notoriously hollow low-rpm output.
Coupe versions of the E36 arrived as early 1993 models, in both 318is and 325is configurations. Those “is” suffixes were a little confusing to those familiar with the E30 coupes of the same model designations, as the “is” merely signified an E36 coupe. If you wanted the sport seats, sport suspension, bigger alloy wheels, etc. that had been standard on E30 “is” models, you had to order the optional Sport Package, just as you did on the sedans. Sport Package’s specific equipment varied from year to year, but it always included front sport seats with adjustable thigh supports, larger anti-roll bars, lower and stiffer springs and dampers and sportier wheels with wider tires.
Also unlike previous 3 Series coupes, which BMW typically referred to as two-door sedans, the E36 coupes now featured frameless doors, just one of the many details that separated them from the four-doors. And while the two body styles looked essentially the same at first glance, the E36 coupe employed a more steeply raked windshield and rear roofline, as well as completely different front fenders, corner lamps and taillights. All the way around, the coupes now focused more on the expectations of performance enthusiasts, right down to their styling.
During the 1993 model run, BMW enhanced the M50 six-cylinder engine in the 325i/is with VANOS variable timing of the intake valves. Output remained 189 hp at 5,900 rpm, but the M50TU’s peak torque of 181 lb-ft (unchanged) arrived at 4,200 rpm rather than 4,700 rpm. Mated to its standard five-speed manual transmission, the updated 325is became 0.5 second quicker from zero to 60 mph, and its new time of 6.4 seconds meant it could outpace the E30 M3 to that benchmark as well as the quarter mile.
For 1996, in conjunction with the move to the required OBD-II diagnostics systems, BMW fitted the E36s with the new M52 six-cylinder, with displacement increased to 2.8 liters. The resulting 328i/is models killed off the 325 designations, at least temporarily. The extra cc’s came from 9mm of additional stroke, which added just 1 peak horsepower (at 5,300 rpm) but swelled torque to 207 lb-ft at an even lower 3,950 rpm. That’s the kind of extra grunt that makes enthusiasts take notice, and it’s one of the reasons 328i and 328is models remain popular today.
The 318i/is twins were upgraded to 1.9-liter capacity thanks to the new M44 four-cylinder introduced for 1996. The 318i sedan carried on through 1998 and was replaced by its E46 successor for 1999, while the 318ti was unchanged through 1999 and discontinued for 2000.
For 1998 and 1999, the E36 coupe and convertible saw the four-cylinder M44 replaced as the entry-level engine by a 2.5-liter version of the M52 six-cylinder; somewhat confusingly, these cars were designated as the 323is and 323i. The new 2.5-liter M52’s output matched that of the older M50TU six for torque at 181 lb-ft, but it came up short where horsepower was concerned, putting out just 168 hp where the older engine made 189.
That’s part of the reason why the 325 and 328 models remain dearer to performance enthusiasts than the less powerful 318 and 323 variants. Additionally, the six-cylinder cars also have more standard equipment than those powered by fours, with the coupes outfitted more lavishly than the sedans. As for which is preferable, it’s hard to argue against the additional torque of the 2.8-liter engine, especially since it provides a significant advantage off the line. Nonetheless, many owners prefer the simpler, less intrusive OBD-I system in pre-1996 325 models, particularly when adding performance upgrades.
One particular version of the 325is commands special respect. In 1994, with the fate of an American-spec M3 yet to be finalized, BMW North America hedged its bets in favor of performance enthusiasts by building what was effectively an M3 tribute. The 325is M Design, better known as the M Technic edition, was mechanically identical to a Sport-Package-equipped 325is but wore the M3’s body kit and 17-inch alloy wheels. The interior featured faux suede upholstery accented with M tri-color cloth on the seat inserts, plus an anthracite headliner. Performance may not have been up to M3 standards, but the 325is M Design certainly looked the business. It is believed that just 150 examples were sold, all in Alpine White with a manual gearbox.
Buying an E36 today
The market is still flush with used E36 coupes and sedans of virtually every configuration. They can be had for as little as $2,000 and seem to top out at about $4,000 for all but the rarest examples, but you’ll need to shop carefully to find one worth keeping.
Even when they’re priced slightly higher, a lot of the cars for sale on Craigslist look like rolling wrecks, with missing trim, peeling paint and a host of problems that can turn a cheap E36 into a money pit. A better source for cars would be the BMWCCA.org classifieds, since club members tend to take good care of their cars, or even word of mouth. You can do a nationwide search by using Cargurus online, but asking your local independent shop if they know of good E36s for sale might yield a car with a known service history for the same price as a car with no records from a stranger.
Overall, the sedans seem to have suffered more than the coupes at the hands of negligent owners. They were cheaper than the coupes when new, and their practical nature made them more likely to be used as daily drivers than as special occasion cars. They’re also more likely to have been sold with the optional four-speed automatic rather than a manual transmission, and most were not equipped with Sport Package.
In our book, a five-speed and Sport Package are the entry point, if only to get the better seats, wheels and anti-roll bars. (The dampers will have been replaced by now, anyway, rendering Sport Package’s other suspension bits moot.) From there we narrow it by engine, preferring the newest six-cylinders over the earlier sixes and the fours, followed by all other specifics, such as mileage and condition.
The entire E36 range earned quite a reputation for unreliability. The quality of everything from electronics (HVAC controls, fuel gauge, instrument cluster, radio) to interior trim (seats, door panels) to chassis components (rear subframe mounts, ball joints, control arm bushings) has been called out for not living up to BMW standards. Nevertheless, people love these cars, in part because they’re such fun to drive and so cheap to get into.
High mileage is common by now, as are multiple owners, but mechanically speaking, a well-maintained E36 can go the distance. As with any BMW, check for a consistent maintenance history, particularly where vital fluids and the cooling system are concerned. Factory water pumps and radiators fail with great regularity—about every 60,000 miles and 100,000 miles, respectively. The same goes for the plastic water neck and thermostat housings, which often give up around the 60k mark. Thankfully, the aftermarket has stepped up with more robust pieces that typically cost less than the OEM parts, and making these repairs is a fairly simple DIY project.
Post-’94 models equipped with variable valve timing will eventually require replacement of the VANOS unit, another weekend project that a handy owner with decent tools can handle. If you’re looking to add power, particularly forced induction, you’ll also need to plan for some chassis upgrades, as the rear subframe has been known to literally tear itself away from the weak rear floor sheetmetal; this tendency is exacerbated on cars with more power than stock, though it certainly isn’t limited to modified E36s.
There’s no end to the aftermarket performance potential, but one way to really enjoy an E36 on a pretty low budget is by racing one in the Spec E36 race series. The program is designed for the six-cylinder cars, with the goal of fielding a grid full of nearly identical (and practically stock) cars in a true driver’s challenge. The Spec E36 series is managed by the National Auto Sport Association (NASA) and is hosted by many BMW CCA chapters, as well.
Cars for sale
Kelley Blue Book prices for E36s range from $1,498 for a 1992 318i sedan in good condition with 130,000 miles to $2,911 for a 1999 328is coupe in excellent condition with 150,000 miles. KBB prices are notoriously low, especially for enthusiast cars, and don’t reflect the appeal of options like Sport Package. Nonetheless, they may prove useful in bargaining with a seller.
For $3,498, roughly the cost of a weekend in Cabo, you could have a 1998 328i sedan with a manual transmission and Sport Package. The Jet Black paint still shines, and the Black leather is in decent shape for having covered 164,000 miles, with the usual wear on the driver’s seat bolster. This E36 is being sold by Dallas Autos Direct in Carrollton, Texas, via Cargurus.com.
Further searching on Cargurus turned up one of the rare 1994 M Design 325is five-speed models just outside of Youngstown, Ohio. Despite the mileage, 163,000, it still looks tidy, even the bolsters on those rare M cloth-covered seats. The dealer, Solid Rock Auto Group, knows what he has, but the price of $6,444 seems fair for something so rare. The Alpine White car also comes with a set of Blizzak-shod winter wheels and a three-month, 3,000-mile warranty.
1999-2006 E46 328i/330i
coupe and sedan
Better, but still not perfect
Starting in late 1998, BMW replaced the incredibly successful E36 3 Series with an all-new model range, again with sedans coming out of the gate as 1999 models while the coupes and convertibles followed in 2000. The E46 lineup was more evolutionary than radical, refining the general form of its predecessor for greater performance and visual impact. In profile, the E36 and E46 had much more in common, but where the earlier model felt narrow and lean, the newer one possessed a visual heft thanks to more curvaceous sculpting. The overall effect gave the E46, particularly in coupe form, a more powerful presence on the road.
The new 3 once again grew dimensionally, adding 1.5 inches in length and 1.5 inches in width on a platform one inch longer between the wheels. Weight went up accordingly, from 3,131 pounds for an E36 328i sedan to 3,197 pounds for the E46 equivalent. Following the lead established by the E36, the coupe and sedan versions of the E46 varied considerably in detail, despite looking like twins on the surface.
To launch the new model, BMW carried over both M52 six-cylinder engines from the E36 , along with the 323i and 328i designations. The M52TU saw power now rated at an even 170 hp for the smaller engine, with torque holding steady at 181 lb-ft. The bigger engine produced 193 hp and 206 lb-ft, though real-world performance gains compared to the E36 version were imperceptible. A year later, 323i and 328i coupes and convertibles arrived, along with the first-ever 3 Series wagon in America. After skipping the E36 generation, all-wheel drive returned to the lineup for 2001, though only in sedans and wagons.
Also for 2001, BMW replaced the M52TU with 2.5- and 3.0-liter versions of the new M54 six-cylinder engine. Dual VANOS variable valve timing on both intake and exhaust cams meant even more flexibility to the powerband of both engines. The 325i nomenclature returned to the 2.5-liter models, eliminating the 323i, and horsepower increased to 184 hp at 6,000 rpm while torque dropped to 175 lb-ft, though peak arrived at a much lower 3,500 rpm. The 3.0-liter version of the M54 in the new 330i boasted 225 hp at 6,000 rpm and 214 lb-ft of torque at the same 3,500 rpm as the smaller version.
The 323i and later the 325i both produced adequate power for a car of 3,200 pounds, in part because of the availability of decent volumes of torque in the midrange, where even the most timid drivers are willing to whip the mule a bit. But the 2.8- and 3.0-liter versions were far livelier, respectively, proving the old adage about displacement.
Throughout the run, Sport Package could be optioned on all 3 Series variations. From 2001-onward, all E46 coupes were fitted with sport suspension as standard, but for all other models the full Sport Package included this as well as sport seats, a three-spoke sport steering wheel and 17-inch alloys. The combination of sport suspension with the 17-inch wheels gave the sport pack-equipped E46 models a decidedly firm ride.
The one letdown was the power steering assist in some early examples, especially compared to the rest of the otherwise fantastic chassis. Some E46s had steering that was overboosted and vague on-center; as for which cars, it’s almost impossible to determine without a test drive. Even then, feel is subjective.
As the E46 range was nearing the end of its run, BMW threw performance enthusiasts a bone in the form of the Performance Package. An option on 2003-’05 330i sedans and 2003-’06 330Ci coupes and convertibles, the package known by its internal code “ZHP” upgraded the engine with an additional 10 hp/8 lb-ft, swapped the five-speed gearbox for a six-speed (a five-speed auto could be optioned from 2004-onward), then fitted the car with staggered-width 18-inch M-badged Style 135 alloys, extra chassis stiffening, lower suspension and an M Tech II body kit, plus a load of special trim details inside, including Alcantara on the steering wheel, seat bolsters, shifter and parking brake boots and “cube” trim on the dash and door panels.
Like the E36 325is M Design, the ZHP 330s were budget M3s. The power increase was negligible, but the ZHP offered performance enthusiasts a compelling option to the more expensive M3 right off the showroom floor. Unlike the E36 special, the ZHP was an ongoing option package rather than a specific run, and plenty of these cars were built. They aren’t nearly as rare, but because they offered real performance enhancements the ZHP models are still highly regarded today, and the premium prices asked by their sellers will reflect that.
Trouble is, not all ZHPs were created equal. Cars that substituted regular leather for the Alcantara trim exclusive to the ZHP negated what made the interior special, and those ordered with the automatic rather than the exclusive six-speed sacrificed another of the ZHP’s major attractions. The cars are old enough now that their other strong suit, their suspension, will be worn out, so make sure the dampers were replaced by real ZHP items if this work was done. Otherwise, a ZHP is no different than any other E46 with the 3.0-liter M54 engine, and it’s hardly worth paying a premium for some fairly ordinary wheels and a negligible power increase.
Buying an E46 today
Though the E46 is considered more reliable than its predecessor, many of the E36’s maladies carried over—notably, the cooling system weaknesses and inadequate body structure where the rear subframe mounted up. While the aftermarket stepped up for the cooling problems, the structural issue in the rear became the subject of a class action lawsuit in 2009. BMW compensated owners who had paid to have their damaged subframes repaired and issued a recall on all affected E46 models entitling then-current owners to a free inspection and no-charge repair on those found to be damaged. That campaign expired in 2010, so prospective buyers should always look for previous repairs before purchasing. If it needs one now, you’ll be on the hook for the work.
Another recall involved the taillight harness on 2002-’05 sedans, which could overheat and fail due to inadequate wiring. Other electrical gremlins include power window regulators that fail frequently; to be fair, virtually every German car from this era suffers from short-lived regulators, so this is not exclusively a BMW problem. Nevertheless, life with an E46 will eventually mean windows that don’t move.
In addition to being somewhat dull in the response department, the E46 power steering system also has a reputation for flaking out. Pump failures are fairly common, so it’s critical to check fluid levels and keep the reservoir from getting low. But more concerning is the fact that some early models exhibited an “overboost” situation, making the steering exceptionally light and even less communicative. Again, a test drive will reveal this.
And of course with VANOS comes VANOS failures. Eventually you’ll probably need to budget for a replacement to keep the valve timing in check. Without the ability to optimize engine breathing, you’ll rob the engine of its sweet spot.
Service issues aside, there are plenty of great E46s in the marketplace. Automatics were dominant, but finding a good manual-equipped example isn’t usually too difficult. The ZHP models are popular with enthusiasts, but don’t overpay for one that doesn’t have the right equipment or that’s been heavily modified; there’s a beauty in the balance of that chassis setup that usually gets lost the second it’s modded. Of course, there’s also the option of building a true road racer for the Spec E46 series, organized by the same folks that put on the Spec E30 and Spec E36 racing series.
Cars for sale
Kelley Blue Book prices for E46s range from $2,267 for a 1999 323i sedan in good condition with 150,000 miles to $8,731 for a 2006 ZHP 330Ci coupe in excellent condition with 116,000 miles. As for E36s, KBB prices tend to be on the low side, especially for enthusiast models.
If there’s any doubt about the desirability of the ZHP performance package, look no further than this Jet Black-on-Black 2003 330i sedan beauty. Sure, it’s 13 years old but it’s hardly broken in, with just 87,000 miles on the clock. Although it has all-leather seats, it does have the six-speed manual, Alcantara steering wheel and other bits, plus Xenon headlights and a set of winter wheels. Offered out of Chicago on the BMWCCA.org classifieds, the car has obviously been well cared for by a conscientious BMW Club member, and while the asking price of $14,500 is steep, it should have no problem finding a new home. Make an offer.
Coming up on 15 years and 125,000 miles, this Topaz Blue 2002 330Ci coupe looks incredibly fresh. Even the Gray leather on the driver’s seat bolster is unspoiled. The brown wood trim—signifying Premium Package— is the only detail that looks out of place on this five-speed manual and Sport Package-equipped coupe. $6,995 from Epovo Auto Group in Chantilly, VA, via Cargurus.com