E46 M3 Buying Guide

We’re big fans of the E46 M3. For us, it’s arguably the best looking of all M3s, and we’re clearly not alone – everyone wants one right now. If you’re starting your research into this Munich legend, then get your notepad ready!

So, why the E46?

Today, we’re spoilt by a sea of torque-laden turbocharged cars. Whilst enthusiasts bemoan the loss of a manual, for us, it’s just as significant that – as impressive as they are – engines today don’t require your effort. They have a diesel-like power delivery, and rarely reward you hanging onto every gear. Indeed, doing so would likely result in jail time.

In contrast, the E46 M3 has an 8,000 rpm redline (it is half of a McLaren F1 engine, remember), gear ratios suited for driving, rather than meeting emissions targets, and a level of performance you can enjoy without raising eyebrows.

But of course, being an M3, the E46 has two personalities. It can be the quiet, comfortable compact executive it’s based upon, or with provocation you can make it dance on the throttle with the infamous buzz-saw S54 engine note filling the cockpit. It can fulfil either of those duties with the kids in the back, and can take the luggage too.

You may also have noticed the E46 happens to be arguably the best looking M3 of them all. With perfect proportions, swollen arches and a timeless cabin, we believe it hasn’t been bettered.

Which E46 M3 should you buy?

Well, that’s easy. Budget aside, the M3 CSL is like comparing a standard 911 versus a 911 GT3. On paper, it shouldn’t be as transformative, but we believe it’s almost misleading to use ‘M3’ in its title, as it is so far removed from the standard car.

That’s not to say the standard M3 is an underwhelming car by any stretch, but if you’re coming from a modern car with hyper-sensitive steering, huge tyres and zero bodyroll, it takes a little time to readjust.

So surely the M3 CS is the perfect compromise? Well, perhaps yes. Does it justify the additional outlay over a regular M3? We think not. Whilst it benefits from the steering rack from the CSL (the Z4M also uses it) which is very much worthwhile, the wheels (which are half an inch narrower at the front compared to the CSLs) and upgraded CSL brakes do not make enough of a difference, for us. In comparison, the CSL brake setup is also eye-wateringly expensive to replace, unlike the regular M3.

Otherwise, the CS does get you the M-Track mode and the lovely alcantara steering wheel from the CSL, but it does not replicate the race-car ambience of the real deal – the CSL’s Recaro seats and lashings of carbon fibre really do make the car feel special.

In terms of model year changes, you may be already aware of the mild-facelift for cars built March 2003 onwards. The most notable change was LED rear lights, but the eagle-eyed will notice the boot-lid handle changing, and little trim changes. It also meant you could build yourself a CSL replica, as Silver Grey was now a colour option, taking over from Steel Grey (which is what the CSL concept car was finished in).

There were slight differences over the years to the infotainment systems, but given their age now, your only priority should be condition. And, whilst we love ‘em, the common issues the E46 M3 suffers with can damage your wallet far more than a set of facelift taillights.

Really, the important choice is manual or SMG. Certainly, the manual carries a premium, and perhaps rightly so, but it is worth noting that this isn’t one of the finest manual gearchanges in existence (although, it can be improved with a short-shifter). Nevertheless, the manual provides the level interaction you can’t get from the SMG. However, despite its lower speed truculence, we find the latter fun to use, requiring some miles to master.

Are the horror stories true?

A lot is written about the potential issues with the E46 M3, but it’s important to consider everything in context. It’s a car that has remained relevant – and talked about – since its launch and, given over 85,000 E46 M3s were made (1,200 CS and 422 CSL), naturally there’s more talk about what’s gone wrong, rather than what’s never broken.

That said, we’re old enough to remember an E46 M3 at one point was available for less than £10,000. With that kind of buying budget, some corners were invariably cut, and as a result not all cars were given the love they needed.

As with any 20-year-old car, good signs are a documented service history, and a lower owner count. It seems less relevant if it’s still running 20 years later, but if you’re in the market for a collector-grade E46, then some would walk away if there was no evidence of the Running in Service which should happen by 1,200 miles.

It’s such a prominently discussed subject that you have likely already heard of the weakness of the E46’s boot floor cracking. For early owners, BMW replaced the boot floors for cars less than 10 years old, but that was on the basis cracks were spotted.

It is worth noting that this is a problem that will happen. Ignore anyone who says they have had the boot floor inspected and it was “fine”. This is simply kicking the issue down the road. Likewise, late E46s were not recalled, but the problem still existed.

Not all repairs are the same. With the problem being talked about, naturally more people came out of the woodwork to say they could solve it. In reality it’s a 20-hour job, and at their age is a problem worth doing in tandem with a more general restoration of the underbody.

I’m afraid we’re not quite done there, as behind those generous arches sits inevitable rust issues. Unless the car is a low mileage, dry-use only car, it will suffer from corrosion in the front wings, and the rear wheel arches will go from the leading and trailing edges. This is due to them being double-skinned, allowing water to collect.

Front wings aren’t too costly – a few hundred pounds and still available from BMW. However, the rear quarter panels are welded in and are consequently much more work. If the job is needed, a competent bodyshop should remove the U-shaped joining to prevent the issue from reoccurring, otherwise it’s not unusual to have to do the job more than once. 

Looking at the CSL? Then you’re in luck, as the rear arches on the CSL were rolled for more clearance and are therefore unlikely to rust. Given their values, in general a CSL is likely to have lived a more pampered life.

What does affect all of the M3s – including the CSL – is rusting of the rear springs, due to their design. We’ve had to replace a set on a CSL with under 30,000 miles that spent a lot of its life inside and dry, so it’s something worth looking at MOT records for. With higher mileage cars rear trailing arm bushes will be wearing; hard to detect without getting underneath the car, but you can look for uneven tyre wear.

Otherwise, when it comes to corrosion it’s the same issues as pretty much any car of this age. We would strongly recommend get any car professionally inspected as it would cover all of the above. 

Mechanically, these are reliable cars. Generally, it’s around the 80,000 mile mark that you tend to hear of issues occurring. The differential should get a service at this point; whilst not like clockwork, the diff shouldn’t make any noise.

Underneath the bonnet, the clever Vanos variable valve timing system is more reliable than on the E36, but still has issues. BMW replaced weak bolts with stronger upgraded ones, but BMW specialists have gone further in re-designing elements of the Vanos system to help make them virtually bullet-proof. 

Very early cars suffered from crank bearing failures, but these should all be sorted as it was an official BMW recall. However, whilst some theorists believe the problem is over-hyped, many look to have their rod bearings replaced before the 100,000 mile mark.

Otherwise, head gasket failure is not unknown at around the same 80,000 mile range. It’s also worth checking all of the radiators are in good shape. The oil cooler is situated directly behind the lower bumper grille, so dark patches may indicate a leak.

Moving onto the gearbox, both the manual and SMG are broadly the same, hence why doing a manual conversion is relatively simple. Naturally, with more complication comes more opportunity for things to go wrong. We believe the SMG is great fun, and the issues reported are often over dramatised – it’s normally a cheap relay rather than the more expensive hydraulic pump. Look out for cars which have the CSL gearbox map; it brings crisper upshifts and more fruity downshifts. 

What are the running costs like?

In terms of servicing, the E46 M3’s service intervals are:

• Oil Service
• Inspection I
• Oil Service
• Inspection II
  

You should be notified by the onboard computer when each service is due, which is influenced by driving style. 

The Inspection 1 is an oil and filter change, top up of other fluids, replacement of the pollen filter and a more in-depth check over of the car. 

The Inspection 2 – which is meant to be every 60,000 miles – engine oil, gearbox oil and differential oil replaced, together with the air filter, pollen filter and spark plugs. Finally, all 24 valve clearances are checked – and adjusted if necessary.

A main dealer will charge over £1,000 for an Inspection 2, so often owners will use mileage as an excuse not to get it done, despite the age of their cars.

Otherwise, it goes back to the E46 now being a potentially 20-year-old car. This is where it’s worth paying more for cars with evidence of the preventative maintenance jobs. Rather than getting all too excited about cars fitted with replica CSL parts, instead look for receipts of servicing and preventative maintenance. For example, common oil leaks are from the oil filter housing, Vanos oil line, the front main seal, oil pan, and rear main seal. See jobs like this being done provides reassurance it’s been a well looked after example.

If you’re looking at an SMG car, the pump was once a dreaded failure. Now, the mechanism is now available separately so isn’t as expensive to sort. 

Where are values heading?

As we type here in late 2023, the cheapest E46 M3 coupe for sale on Autotrader was just over £11,000. It’s an SMG car in silver, with none of the “big” jobs done. Want a manual with a bit more history? Then your budget needs to double, ideally. Still, with CSLs now going for a minimum of £75,000, the 40,000-mile timewarp Carbon Black coupe we sold for under £30,000 was great value. 

Many cars have been messed around with now, so finding a low mileage, standard car is closed to difficult. Not many can resist CSL-style modifications, and given the standard diamond cut wheels corrode, replica CSL wheels are particularly popular. Find a good example and look after it, and you will easily see your money back.

Struggling to find the perfect E46 M3? We have an extensive network, and can help in the sourcing and funding of collector-grade cars. We even take in Part Exchanges. Get in touch for free advice and friendly chat.