Say the name ‘BMW’ to nearly anyone and the first car that comes to mind is likely the E46-generation BMW 3 Series. It’s easily one of the most popular BMWs of all time and is the best selling model generation in BMW’s history. It’s actually difficult to go one day without seeing one driving around. They are immensely popular and there’s a good reason for it. The E46 3 Series is probably the best 3 Series BMW ever made.
But before you go out and plop cash down on a used E46, we’re going to give you some buyer’s advice, so you can be happier with your purchase and have some piece of mind that you bought the right one.
What to Buy
There are several model variants of the E46 3 Series and not all of which should be purchased. For instance, if you live in Europe, the E46 3 Series Compact should be avoided like the plague because, well, look at it. It’s actually not that bad of a car, just hideous. Obviously, the E46 M3 is the best of the bunch, but that’s hilariously obvious and it’s also expensive for a nice example, so we’re going to talk more about the standard 3 Series models. And instead of talk about all of the ones you shouldn’t buy, we’re going to tell you which ones to buy.
BMW 330i – In the US, the E46 BMW 330i didn’t go on sale until 2002. Before that, the top of the line model was the 328i and it wasn’t as good. Take it from someone who owned an E36 328i for many years, the 33oi’s M54 3.0-liter engine is better than the 328i’s M52 2.8 liter. That engine developed 230 hp and was mated to either a five-speed manual or five-speed Steptronic automatic transmission. Obviously, the manual is the better choice, but the auto wasn’t a bad unit at all. The 330i was available in either sedan, coupe or wagon form and all are great looking. In America, there was even the option of the most excellent BMW 330i ZHP, which came with some extra power, a six-speed manual, lower and stiffer suspension, better wheels, better brakes, and better looks. It was the closest thing to the E46 M3 without actually being an M3
BMW 325i – This one might seem sort of obvious if you live in America, as it’s the only other option. However, in Europe, there are several other models, including the 318i, 320d, and various others. And as much as the diesel engines are excellent, as are the smaller displacement petrol engines, the E46 is meant to be driven hard and you need a decently powerful, high-revving BMW inline-six under its hood to do so properly. While the 330i is the better car, the 325i ain’t too shabby, either. With a 189 hp (184 in the US) 2.5 liter I6 engine, paired to either one of the same two transmissions, the 325i is a great way to have fun without getting into trouble. It wasn’t ever particularly fast, but it’s quick enough to put a smile on your face. Just don’t get the 325xi with all-wheel drive, as the added weight and drivetrain loss really sap the fun out of it. And while the 320i is decent, 184 hp is just on the threshold of being too low, so I wouldn’t recommend anything less.
What to Expect
The E46 3 Series was one of BMW’s more reliable cars of this modern era, so you don’t have to worry about too much. However, that doesn’t mean it isn’t without its faults. For instance, when BMW first brought the 330i to America, it had too much torque for its own rear subframe, so it had issues with them cracking and needing to be replaced. BMW fixed the issue after 2003, but earlier models require checking before purchasing. Also, like all BMWs of that time, the water pump was almost always a 100,000-mile failure. So if you’re buying one with that sort of mileage or more (which you likely are considering the age of the car), replacing the water pump is almost a must as soon as the car is purchased. And, while you're at it, replace the thermostat and fan clutch, as they aren’t expensive and need to be removed to do the water pump anyway.
Also, watch out for automatic transmissions over 100,000 miles. At the time, BMW was calling its automatic transmission fluid a lifetime product and claimed it didn’t require changing (a practice that is still done by car companies today). It’s hogwash, ATF needs to be changed every 100,000 at the latest, probably more like 60,000 – 80,000. However, there are a lot of people who never changed it, because BMW told them they didn’t have to. This causes a lot of automatics to fail at around 150,000 – 200,000 miles. Now, another problem lies in the fact that if the car already has 150,000-plus mileage, changing the fluid can actually do more harm than good, as that old fluid is the only thing holding some metal bits together. So it’s a bit tricky, with automatics. If you’re going to buy an auto E46, buy a lower mileage one and have the ATF changed. Otherwise, just buy a manual, it’s easier to maintain, more reliable and better to drive anyway.
How Much to Spend
Not a lot. That’s the simple answer on how much to spend for an E46 BMW 3 Series. Reason being is that there are simply so many of them on the used market, that it’s almost impossible to not find one in good shape with good mileage for cheap. It just takes time and diligent searching.
For a good shape E46 325i, with either transmission and just over 100,000 miles, you shouldn’t spend more than $5,000. That might seem low, but they’re out there and because of how flooded the market is with E46s, they aren’t worth much. For a 330i in the same condition, I wouldn’t spend more than $6,000, maybe $7,000 if it was immaculate and had under 100,000 miles.
However, the E46 330i ZHP is actually worth quite a bit, thanks to its rarity. While the E46 as a whole is extremely common, the ZHP is a rare flower. It was only available in North America and was only sold between 2004 and 2006. Because of their rarity and cult-icon status, these can fetch around $10,000 for good examples. I’ve even seen them sell for $12,000 if they’re in perfect condition with low mileage.
The E46 3 Series is probably the best bet for anyone looking to get into a BMW for the first time. Not only is it incredibly affordable, but it’s also reliable, great looking and represents exactly what a BMW should be. It’s small, fast and fun. It has near-perfect steering, steering that’s still revered today, superb handling dynamics and a perfect blend of comfort and performance. It’s the perfect BMW for the enthusiast on a budget. If you can spare the extra scratch for the ZHP, do it because it’s basically the triple-distilled essence of the E46 3 Series’ excellence.