Buying guide: BMW M3 E46

As far as I’m concerned, the E46 3 Series is one of the prettiest saloons that BMW has ever made. It’s a car that simply looks great from every angle. The styling is neat, functional yet purposeful and, however you choose to view it, there just isn’t an ugly aspect to be seen.

Arguably, things get even better with the two-door version; always the more sporty option, with that extra measure of desirability and road presence. Sitting at the very top of E46 coupé range was the M3; the fastest, most exciting BMW E46 you could lay your hands on and, even today, a machine that remains an oh-so tempting proposition.


But what are the prospects of buying a good one nowadays? Have the values bottomedout and, in addition to the purchase price, what’s a new owner likely to have to pay to get any problems sorted? Has the E46 M3 already become a plaything for those with very deep pockets, or is it still possible to buy and run one of these exciting cars successfully on a reasonable budget?

Of course, even by today’s standards, the E46 M3 is still a very quick motor car and, with that wonderful straight-six engine, decent brakes and suspension, plus predictable and confidence-inspiring handling, it remains more than capable of embarrassing plenty of much newer machinery. However, with the first examples now well over 15 years old, how have these once expensive, top-of-the-range cars coped as they’ve passed through the hands of successive owners, fallen out of the main dealership servicing network and racked-up mileages well into six figures, in a great many cases?

Launched in 2001, the E46 M3 coupé remained in production for just four years, although the convertible version continued for a little longer. The latter had an electrically-operated canvas hood with a glass rear window, but weighed about 100kg more than the standard car.


The more powerful, limited edition CSL appeared during the summer of 2003 but, by Christmas of the same year, production had ended. Consequently, just 422 examples of this desirable model found their way to the UK, almost guaranteeing collectable status from day one.

The CSL was 110kg lighter than the standard model, and boasted 360bhp, a carbon fibre roof panel, uprated steering rack, wider track, pretty alloys, Alcantara steering wheel, lightweight seats and a higher capacity engine ECU, known as the MSS54HP, and an M Track mode. A final throw of the dice for the E46 M3 saw BMW release the CS version towards the end of production; a kind of half-way house between the standard model and the CSL.

All E46 M3s were fitted with a six-speed gearbox, either manual or the more complex, electro-hydraulic SMG version, offering paddle shift and change speed settings. So, in essence, the choices today’s E46 M3 buyer has are relatively simple – coupé or convertible?; manual or SMG auto?; standard model or limited edition? However, the situation beneath the surface is a good deal more complex, and there are plenty of mechanical issues to be considered before parting with any cash.

This incarnation of the M3 has the potential to be a bank-breaker for the unwary. Rushing into a purchase is just about the worst thing you can do, unless you’ve got pots of money and don’t mind spending it! What follows is our guide to the primary pointers that buyers should bear in mind and, where better to start than with the car’s beating heart?


Overall, the 3.2-litre, normally-aspirated engine fitted to the E46 M3 is a great motor. It represents the ultimate incarnation of the tried and trusted straight-six unit, and is designated S54B32 in this form. It produced 343bhp and redlined at just under 8,000rpm. An ‘HP’ version was used in the CSL, featuring a high-flow carbon fibre air intake, twin Vanos system and lightweight exhaust manifold, which combined to boost the output to 360bhp.

On the plus side, many regard this M3’s engine as the ‘safest’ of the M power plants, in terms of mechanical failures. But that’s not to say that it’s immune from trouble, because it most certainly isn’t.

Given the age of these cars – and the hard life that so many of them have led – the reality is that engine trouble often lies just around the corner. Cars that have been abused by careless owners, drawn into ownership by the temptingly low prices of a few years ago, are suffering now. That all too common cocktail of sub-standard maintenance, cheap consumables and generally rough, unsympathetic handling, has left many examples with an expensive hangover!

The first thing to do during a pre-purchase inspection, is to listen to the engine being started, and to do so from in front of the car, with the bonnet open and the engine cold. Be on your guard for any nasty-sounding mechanical knocking or rattling.

One of the common, engine-related failings is con-rod bearing shell damage, often caused by the use of poor quality engine oil. Any knocking from these parts is a sign that there’s been metal-to-metal contact between the crankshaft journal and the bearing shell.

This can be very expensive to put right as fitting replacement bearings, and maybe even a re-ground or new crankshaft, is a complicated and time-consuming, engine-out job.


Another major concern relates to the condition of the Vanos unit, which controls the variable valve timing, although there’s no obvious way of confirming this without mechanical investigation. While a Vanos fault may trigger the dashboard warning light – and the storing of an appropriate fault code – this isn’t always the case.

A generally ‘flat’ and lack-lustre engine is another indicator of Vanos unit problems but, unless you’re already familiar with how things should feel when all’s well, then the chances are that you’ll be none the wiser.

Many things can go wrong inside, but one of the most common is that one of the two oil pump drive lugs snaps off, resulting in a noise. The Vanos system still runs and achieves oil pressure with one lug, and therefore isn’t disabled, unless the broken lug falls out of the oil pump and gets caught in the timing chain, causing mechanical damage.

The only way to check for this problem is to remove the rocker cover and have a look. This is something that should be covered at every Inspection 1 and 2 service but, regrettably, it doesn’t always happen in practice.

It’s a random failure, although tends not to affect engines that have covered fewer than 70,000 miles. Putting it right is expensive; a new exhaust camshaft hub from BMW costs about £850, a replacement oil pump disc (available from independent suppliers) adds £150. A complete new Vanos unit from BMW costs about £2,000.


The head gasket is another, increasingly common cause of trouble with this engine. It’s a metal, multi-layer gasket, but it doesn’t fail in the ‘traditional’ way. The fact that the gaps between the cylinder bores are very narrow (due to the large, bored-out capacity of this engine), mean that the gasket blows at the narrowest point between the bores.

This doesn’t produce the typical, oil-in- water contamination as found with more conventional gasket failure, instead, compression is lost between individual cylinders, leading to rough running, reluctance to start and a pinking-type noise during acceleration.

This problem can affect any number of cylinders but, most commonly starts between cylinders one and two at the front of the engine, and five and six at the back.

Putting it right isn’t horrendously expensive from a parts point of view, but does require about 14 hours of labour. In addition, any specialist worth his salt will also replace all the O-rings while the head is off and, it may even be that the head itself requires skimming, pressure-testing, welding or renewing.

Realistically, you should budget £1,500 for this job to be done properly. Also, bear in mind that many ‘lesser’ specialists may not have the necessary equipment to set-up the Vanos timing afterwards, to get the engine running properly again.


The choice between manual or SMG should be a simple one, if you let your head rule your heart. While the fancy SMG system is the more desirable and fun to use, compared to the ‘ordinary’ manual, reading on might convince you otherwise.

The six-speed Getrag gearbox used in all E46s is a strong and durable unit that’s well up to the job, and problems with it are rare. However, factor-in an electro-hydraulic control system and you add a whole new layer of complication and potentially expensive reliability issues. But let’s start with the good old manual version.

In terms of issues, a stiff and clonky gear change is just about as bad as it gets. Selecting first gear when the unit’s cold is typically the most awkward, but if you go into second gear first, then select first from there, problem solved!

SMG-equipped cars, on the other hand, can be a different story, which is why the secondhand prices of cars with this system are starting to fall behind the manual version. In practice, high-mileage, SMG-equipped cars bring with them the potential to leave you stranded – without warning – and facing potentially eye-watering repair bills.

You may go to start your car one day and find that the gearbox has locked itself in neutral or, even more inconveniently, first gear. Either way there will be nothing you can do about it because, with no mechanical link between the gear selector lever and the gearbox, there’s no way to manually override the system.

From a repair point of view, the complexity of the electro-hydraulic actuation system means that faults are hard to diagnose for all but the most experienced repairers. The stock solution is to opt for a new hydraulic pump assembly, but this costs nearly £3,000 from BMW. The unit consists of multiple components with a variety of functions. which is why many favour swapping the whole thing in one go. However, some of these components are available separately, so can be replaced by specialists who know what they’re doing.


There’s a cog symbol warning light on the right-hand side of the dash, and seeing this alight heralds nothing but trouble! What’s more, it should never be ignored, even if the car appears to continue driving as normal. Problems with SMG gearboxes are unfortunately common now, and there are all sorts of myths circulating on the internet about how and what to do when failures occur. The bottom line, however, should be to seek experienced, professional help without delay.

Other warning signs include a slowness to select a gear while in ‘manual’ mode, and/ or a flashing gear number indicator on the dash as a change is requested. The delay can be one or two seconds while the box thinks about changing and this, or the flashing indicator light, is a very bad sign.

Unfortunately, putting things right isn’t simply a case of replacing parts; there are other complex procedures required, too. For example, the system has to be electronically bled, and then re-programmed to factory default settings and adapted to account for the different tolerances found in the individual SMG vehicles, which all requires specialist equipment and a deal of knowledgeable experience.


The drivetrain is another aspect of this M3 that takes a real pounding; especially on cars that have suffered track day use and regular, red-line acceleration. If you can hear knocks and clonks coming from the rear end during low-speed manoeuvres (stop/start town driving, parking etc), then there’s wear in the system.

Normally it’ll be worn propshaft and driveshaft CV joints and/or wear in the differential, that’ll be at the root of these noises. Typically, though, this is a condition that gets ignored simply because it doesn’t stop the car from being driven. Some owners will have the noises investigated, but be put off any repairs because of the expense involved.

Component replacement is generally the only solution and, with driveshafts costing £450 each, a new propshaft about £800 and a diff rebuild likely to be anything between £800 and £3,000, it’s not cheap to sort.


The suspension on this M3 model is generally pretty good, although many owners choose to modify the standard set-up, with uprated or lowered springs. This isn’t necessarily a problem but, if cheap components have been used, or the work has been done badly, then steer clear. Any car that’s still on it original shock absorbers is likely to need them renewing but, as they’re gas-filled units, it’s almost impossible to judge their internal condition with them still fitted to the car. These shocks can’t even be assessed by the old-fashioned corner ‘bounce test’ either, simply because they’re just too stiff.

Even very tired units will still provide a decent ride and reasonable handling, but renewing them on a car that’s covered anything over 75,000 miles is likely to result in a noticeable improvement.

One specific problem relates to the rear coil springs, which have a tendency to snap. These are barrel springs, with thicker-diameter steel in the centre section, and thinner portions at the top and bottom, and it’s these narrower, end pieces that can break.

Sometimes you can tell that it’s happened because the car will be leaning to one side or the other. Often, though, there’s nothing to be seen outwardly and, in many cases, owners will be completely unaware.


Like any car that’s over 10 years old, E46 M3s are starting to show signs of bodywork corrosion now. So far, it’s unlikely to be structural, but there are recognised areas where cosmetic rusting can be an eyesore. You can find it bubbling up around the wheel arches and along the bottom edge of the front wing (immediately behind the wheel), where this panel meets the side skirts. There’s a narrow metal strip/seal that separates the two, and this rusts, often initiated by stone chips. Front wings are bolted on, so are relatively easy to replace but, at nearly £500 a pop, they’re not cheap. The rear arches rust, too, at the joint between the wing and the bumper panel.

There’s a folded lip on the inside which acts as a mud trap, with inevitable results. Also, a clipping point for the rear bumper panel is another source of corrosive trouble.

However, the biggest bodywork-related problem with the E46 M3 relates to the rear axle carrier panel, underneath the car. It’s what the sub-frame bolts on to, which is why lots of people refer to it as the ‘subframe panel’. Sadly, this large panel – which supports six out of the eight rear axle mounting points – has proved inherently weak. It’s prone to stress-related cracking that progressively worsens due to the torsional loading being applied by the axle assembly.


The problems start as hairline cracks and, while these can sometimes remain dormant for many years on cars that are used ‘sympathetically’, in cases where the vehicle is driven more aggressively, they’ll become dramatically enlarged.

Due to the rotational forces being applied by the axle assembly, it’s the left rear mounting point which takes the most abuse, and so problems typically start there. If ignored, cracks will develop, spot welds will pop and the panel will begin tearing itself away from the bodyshell.

Ironically, many owners remain completely unaware of this problem as there are typically no obvious signs apart, in the worst cases, from some loss of hard-cornering handling and a bit of metallic creaking.

Spotting the damage is difficult as the cracks start so small and are always covered in dirt. Of course, problems like this should lead to an MoT failure as they’re structural, but often they’re not picked up by the tester. If discovered early enough, it’s possible to deal with small cracks by fitting repair plates, but there’s obviously a limit. If the situation has become too bad, then a new panel from BMW (£750) is the only option. The proper repair of an original panel with minor cracking damage – using mounting repair/ strengthening sections – will cost about £1,500. A complete panel replacement will start at about £4,200.


By now I hope you appreciate that, while the E46 M3 is undoubtedly a superb car – and one that’s great fun and utterly absorbing to drive – it’s vital that anyone contemplating buying one goes into it with their eyes wide open.

In reality, every new owner is going to require a ‘war chest’ in the bank; a stash of £4,000-£5,000 that’s set aside specifically to fund the inevitable work that’ll be needed. You must be prepared for this sort of expenditure, even on cars which – outwardly – appear very presentable.

Lots of M3s have been abused, modified and neglected as far as routine maintenance and servicing are concerned. So it’s perhaps best for new owners to regard what they’re embarking upon as a ‘rescue mission’.

But there’s no question that the effort and expense will be worth it, in terms of the car you’ll end up with.

All M Power cars are always going to be desirable and collectable, and the E46 M3 has already started to scale the value charts. It’s a car that looks superb, drives brilliantly and is utterly manageable on a day-to-day basis, once sorted.

So, if you’ve got the budget available and the desire to step in and save one of these iconic machines, then my advice is to act now. Buy carefully, work with a respected specialist and prepare yourself for a fantastic ride!


As things stand, the E46 M3 is available for an unusually wide range of prices. The model bottomed-out a couple of years ago and values are now on an upward trend, which is great for existing owners, but ever more challenging for those looking to join the fold.

Entry level is now around £6,000, and cars at this price point – despite being a bit tired around the edges – will generally drive pretty well. Never forget, though, that they’ll almost certainly be in need of much of the expensive repair work discussed here.

The majority of E46 M3s are selling at the £8,000- £9,000 mark nowadays. This will buy you a decent example which may have had some rectification/repair work done, although further expense will still be necessary. These cars may require brake work (£1,000 for new discs and pads all round), plus a set of decent tyres (Michelin or Continental) – plenty of owners skimp on tyre choice.

Spend up to £15,000 or so and you’ll be buying yourself a lower-mileage, later example with a lot of documented history. But don’t get too blinkered about low mileage, as these cars are unlikely to have had much rectification work done, so that expenditure may still all be waiting in the wings. Colour and overall condition makes a difference, with the rarer paint finishes like Techno Violet, Imola Red and Laguna Seca Blue commanding higher prices. The least desirable colours are probably Titan Silver and Carbon Black.

The CSL has gone through the roof recently. Just three years ago you could find examples for £22,000-£25,000, whereas now you’d be lucky to find one under £40,000, even with 100,000+ miles on the clock.

An average CSL – with 60,000-70,000 on the clock – is now fetching £50,000+, while excellent examples with low mileages are selling for £80,000 and beyond!

The stratospheric rise of the CSL is carrying the CS version with it as, essentially, this model is the next best thing. Prices are rising appreciably, with good examples now fetching £20,000+.


“I built my car from a strippedout shell and it’s been finished and on the road since July last year. The shell had no engine, gearbox, headlights, or wings, so I had to source all these separately. I put the whole thing together in just over a week, with the engine coming from a Cat D write-off.

“The rear floor was reinforced because of the cracking in the subframe panel around the rear axle mounts, but I’ve yet to tackle anything else on the body. There’s still some finishing to be done to deal with cosmetic rusting around the wheel arches.

“The engine had covered 70,000, so I did change the con rod bearing shells, just to be on the safe side, before fitting it. Everything else remains standard. “I’ve covered almost 15,000 in just under a year, and use the car as my daily-driver. It’s great having a car that allows you to enjoy a good road when the opportunity presents itself, but I have no plans to take it on the track.

“I’d run an E39 M5 for four years before getting this M3, and can honestly say that I find this car far superior in every respect. It’s much easier to live with, fuel consumption is better and I just enjoy driving it so much more. Already I’ve covered more miles in the M3 than I ever did in the M5, which says it all, really.”


ENGINE: Straight-six, DOHC, 2-valve

CAPACITY: 3,246cc

MAX POWER: 343bhp @ 7,900rpm

MAX TORQUE: 269lb ft @ 4,900rpm

0-60MPH: 5.2 secs

TOP SPEED: 155mph

ECONOMY: 22mpg


Many thanks to the staff at Bristol-based Redish Motorsport (tel: 01179 781889,, for their kind help and expert advice during the preparation of this feature.

Of course, even by today’s standards, the E46 M3 is still a very quick motor car.

Perhaps best for new owners to regard what they’re embarking upon as a ‘rescue mission’.

On the plus side, many regard this M3’s engine as the ‘safest’ of the M power plants.

Problems with SMG gearboxes are unfortunately common now.

Arguably, the M3 is the most attractive incarnation of the E46; it still boasts a fantastic road presence.

Vanos issues, blown head gaskets and con rod bearing shell wear are the most common, engine-related problems.

The ultra-desirable, limited edition CSL version has already ‘left the building’, as far as values are concerned.

The interior is generally durable, although tinting fluid from rear-view mirror can leak. Also, be aware that for, some bizarre reason, the warm-up lights on the rev counter of the standard car aren’t linked to oil temperature, but work off coolant temperature instead.

The price of SMG-equipped E46 M3s is starting to fall behind that of equivalent manual versions, simply because of the electro-hydraulic system’s reputation for trouble.

There are surely few cars more satisfying to drive than a well-sorted M3.

The metal head basket blows at the narrowest point, causing compression loss between cylinders.

Beautifully-packaged and awesomely accomplished; the E46 M3 offers the lot!

Rear coil spring on the left, missing its top section. Breakages like this are quite common. … and on the trim strip separating the front wing from the side skirt panel. Cosmetic corrosion can now typically be found on front and rear wheel arches… Left unchecked, the cracking in the rear axle carrier panel can reach epic proportions. Here’s a small crack (arrowed) in the rear axle carrier panel. Normally hidden by layers of dirt, this is how the trouble starts.

The convertible version of this M3 was available right from the start of production but was 100kg heavier than the standard car. Generally speaking, these are a little cheaper than the standard version nowadays, as presumably people don’t find them quite so desirable.


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