BMW M3 E46 Review (2000-2006)

What is the BMW M3?

The E46 M3 was the third car in BMW’s M3 dynasty, following on from the race-bred E30 and the subtler and more rounded E36. It was introduced right at the end of 2000, with right-hand-drive production starting at the beginning of 2001, initially just as a two-door coupe. A cabriolet would join the line up later in 2001 but for this generation of M3 there would be no four-door model.

On the looks front, BMW decided to make the E46 M3 stand out from the crowd rather more than the subtle previous generation M3 and added extended wheel-arches, quad exhaust tailpipes, aerodynamic mirrors and an aluminium bonnet with a power dome. Side air vents and a more aggressive bumper design with large, sculpted intakes added to the look, finished off with a discreet rear boot spoiler. It looked right from the word go and there was no chance of mistaking it for anything less than the top dog in the 3 Series range.

The E46 M3 bowed out in 2006 and we had to wait until 2008 for its replacement, the controversially V8-engined E92 BMW M3.

How practical is it?

The E46 M3’s cabin drew on the already excellent cockpit of the regular BMW 3 Series, and added M-specific instruments with a clever illuminated band around the rev counter to let the driver know how warm the engine was and how many revs could be used. Elsewhere there were excellent sports seats and a pretty decent quota of standard equipment. As with many contemporary BMWs there was an extensive options list, too.

Remember that the M3 is practical for such a high performance vehicle, too. The rear seats will fit a couple of adults, and the boot, at a roomy 410 litres, is just as useful as it is on any other 3 Series.

What's it like to drive?

Prior to the E46 M3’s debut there had been plenty of speculation as to what engine would be under the bonnet. Previously, BMW’s M division had claimed that the E36 M3 Evo’s straight-six had already been taken as far as it could go, and there were plenty of rumours that the new E46 M3 would sport a V8 under its sculpted bonnet.

In the end, M did manage to extract extra capacity and additional power from the straight-six. The capacity was increased to 3,246cc and, unlike many of the E46 M3’s contemporaries, the S54 (as the new unit was codenamed) retained an iron block with an alloy head. There were plenty of refinements and revisions over the E36 M3’s engine, and these included reprofiled camshafts, a double Vanos continuously variable valve timing system that operated faster the higher the revs went, and electronic throttle butterflies controlled by a new engine management system. There were also redesigned rocker arms for reduced reciprocating mass and friction, a one-piece aluminium head casting for lighter weight and a scavenging oil pump to maintain pressure during heavy cornering. Peak power was an impressive 338bhp at a heady 7,900rpm, backed up by 269lb ft of torque at 4,900rpm. Power was transmitted via a six-speed manual gearbox, and reached the rear wheels via an M limited-slip differential.

Everywhere else on the car components were upgraded over the normal 3 Series models, with a wider track, stiffer and shorter coil springs and gas-filled dampers front and rear, with separate mounting of top spring and shock absorber anchor points. Anti-roll bars were thicker while there were bespoke forged aluminium suspension components with unique bushings and ball joints.

Larger cross-drilled brakes were fitted but BMW opted against four-piston callipers, which made the car’s brakes one of the few areas where it could be found lacking. For the first time on an M3 there was a traction control setup known was Dynamic Stability Control (DSC), which was developed specifically for the car. It could reduce power and/or brake each wheel individually, to help maintain traction and control oversteer.

Given the success of the previous generation M3 convertible it was a shoe-in that BMW would continue with the soft-top for the E46 M3, and the car made its production debut not long after the coupe in April 2001. Mechanically it was identical to its coupe counterpart but, inevitably, the additional weight of the body strengthening measures and the electric hood blunted the performance slightly – 0-62mph took 5.5 seconds, 0.3 seconds slower than the coupe.

Technology, equipment & infotainment

The E46 M3 was equipped as standard with 18-inch alloy wheels and, as an option, a set of 19-inch wheels were available. As is often the way with manufacturers, the larger set – which were a costly £895 option when new – are perhaps the more visually appealing design, and as a result many owners optioned these wheels when the car was new. However, the 18-inch wheels actually suit the car better in terms of ride comfort and handling. Ultimate grip levels might be slightly lower, but there’s better feedback through the steering and improved balance on the smaller 18-inch set up.

The Sequential M Gearbox in the E46 M3 was a far better option than the automatic that was fitted to the previous generation of M3, but most keen drivers will still opt for the traditional six-speed manual, as it adds another layer of interaction between the car and driver. However, some die-hard manual fans do end up buying a car with the SMG II transmission, and its whip-crack shift speeds do suit the nature of the car. Change quality can be harsh on its fastest setting but a momentary lift of the throttle smooths this out considerably. Cars with the SMG II gearbox do tend to be significantly cheaper than those with manual gearboxes.

BMW M3 running costs

On the face of it the E46 M3 looks to have just about the perfect blend of style, performance and practicality but there is a caveat. While the E46 M3 might be referred to as a relatively affordable performance car, it shouldn’t be viewed as bargain performance car – running costs can be high and returning a cheaper example back to its former glory could be financially crippling.

Fuel economy isn’t too bad, especially on a cruise, with owners reporting more than 30mpg on the motorway. Use the car’s considerable performance though, and that will quickly plummet to 15-20mpg. Annual VED is £330 a year, although some very late examples registered after March 2006 will attract the higher rate of £580 thanks to their high emissions.

Servicing is based on how the car is being driven and which service is due is shown on a service indicator, but we would advise having the oil changed on a yearly basis, especially for higher mileage examples. An oil service will cost between £150 and £200 at a BMW independent specialist while an interim Inspection I service will be in the region of £500, with the most major service, an Inspection II costing around £700. The valve clearances need to be checked and adjusted at every Inspection service.

Brakes tend to be used quite hard on an M3 so expect to change the brake discs on every second pad change – a new set of front pads and discs will be in the region of £500 at an independent specialist with the rears costing £350. A set of tyres will cost between £600 and £900 for a quality brand, and it’s vital to fit decent rubber to a car like this.

BMW M3 reliability

From launch, the E46 M3 earned itself a reputation for durability as well as driver involvement and that remains true today, provided the car has been well maintained and has a full service history. However, like just about any older vehicle there are a few problem points to be aware of.

When the M3 was new, its engine had a less-than-robust bottom end, but a series of recalls from BMW addressed these issues. Models from 2001 and 2002 were affected so it’s worth checking with BMW that these recalls were carried out. Bottom end shells can still wear (more so on machines that are driven for short distances without properly warming up) and will get noisy. It’s best to get them attended to as soon as it’s diagnosed, as failure to do so will result in further damage. It can be done without removing the engine so it’s not as ruinously expensive as you might think.

Other potential engine faults can be blown head gaskets – around £1,500 to replace at a specialist – while faulty coils and crank and camshaft sensors can lead to the engine running rough. There have also been some cases of Vanos variable valve timing failure, but the failure rate is not as high as internet folklore makes out. A new Vanos unit from BMW will cost in excess of £2,500 but there are several companies that will rebuild Vanos units from about £600 to £1,000 depending on the nature of the repair.

Perhaps the biggest concern on an E46 M3 is the tendency for the rear subframe to pull away from the body of the car, cracking the boot floor in the process. Not all cars are affected, but it does seem to be becoming an increasingly common problem. Prevention is better than cure so many owners are fitting reinforcement plates to the floor of their M3s – the cost could be up to £2,000, but it’s a very worthwhile investment to make and prevents the issue occurring in the first place.

When buying an E46 M3 it’s vitally important to have a specialist inspection carried out on a prospective purchase.