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Discussion Starter #1 (Edited)
A Buyers Guide for the E46 BMW
I will be periodically updating this over time.
Lastest update: 03/19/2014​

Thanks to the following Fanatics for contributions and accuracy checks to this post

In the chance that you are on this forum to research the BMW E46 prior to purchase, I wanted to provide you a buyers guide to help you in this decision, for or against. I am no expert and don't claim to be, however I have put many hours in searching for the three E46s (so far) that I have bought and I have done a lot of reading and question asking on this site prior (and after) doing so. I wanted to bring my experience together in one post so that others my benefit from my efforts and the collective efforts of other E46fanatics on this site. This post will be broken down to two sections. The first section will educate you about these cars for this model year of the 3 series otherwise known as the E46. (Sorry for you blokes that are not in North America. My research does not go far beyond the North American Models). So if you don't already know about these cars and what options and features the cars came with, this section will help you navigate through all of that. The second section will let you know what to look for and what one can expect (GENERALLY speaking of course)when looking at these cars via the internet and in person.

It is upon you to fully check a car out for what issues it may have. Every car is unique and will have its own issues and its own strong points so this guide is just that, a guide. There could be issues with these cars too. Because of their age, a lot of the times the owner is getting rid of the car because there is some looming maintenance issue that they do not want to deal with. So be diligent, Do some home work, do lots of reading, do some more home work and then some more reading again! Good luck in your search.

Section One

Brief Facts of the E46
The E46 model year ranges from 1999-2006 in North America and is the 4th generation of the 3 series car.
The E46 was a huge success for BMW in all their markets with their record year in 2002 in which they sold over 560,000 units worldwide.
The E46 was widely considered the performance benchmark of its class due to its huge success.
The E46 design was the product of a US Designer named Erik Goplen.
The E46 succeeded the E36 and was replaced by the E90 in 2006.

Concept Drawings of the E46 by Erik Goplen

Models ,Types, Packages, Engines and Designations
There were 5 body styles available in the E46
  • Sedan (4 door)
  • Coupe (2 door)
  • Cabriolet (Convertible aka Vert)
  • Touring (Wagon)
  • Compact (in non North American markets)
The E46 models-(Last 4 shipped to North America)
  • 316
  • 318
  • 320
  • 323
  • 325
  • 328
  • 330

The Packages

Several Options -(if not all of them) were offered individually. I do not know the facts behind all the options and which ones were or were not offered on an individual basis, but two that I know of for sure are Seat heaters and the Moonroof. So the presence of a option by itself may not necessarily mean that the car will have the package that includes that item. The best way to know what options a car has or had is to get the VIN and plug it into a web site that will tell you what packages and options the car left the factory with. One such site is (this is a Russian site and will need to be translated by your browser. It also requires a registration to pull the info for a specific car.) There is another website that does not require translation or a registration, but I don't remember what it is. I'm hoping someone reading this will either Post or PM me so I can make the change here.

That being said...
There were Several Optional Packages available for the E46 These were "bundled" options that were offered.These are important to know about if you are looking for specific features. There are things to look for when looking at pictures of a car on the internet that may indicate what packages a car has (if it's not already mentioned in the listing) These things to look for are marked with a "NOTE" next to the package name. These in no way are guarantees that the cars have these packages, just indicators that the car MAY have that package because people change parts out all the time.

ZPP-The Premium Package
(NOTE: look for wood trim and a sunroof) see picture below
  • Different wheels and tires (if ordered with the sport package, the sport package's wheels and tires are supplied)
  • A multifunction steering wheel (If it was not already standard on the vehicle)
  • Wood grain interior trim
  • Rain-sensing windshield wipers (not available on the 323; became standard equipment in 2004)
  • Auto-dimming rear-view mirror
  • Power seats
  • Lumbar Support (not available on the 325)
  • Moonroof (Remark: moonroof can also be ordered separately)
  • A very common package

ZSP- The Sport Package
(NOTE: Look for a 3 spoke steering wheel, sport seats. Convertibles and Coupes came standard with a 3 spoke steering wheel, but may not have the ZSP package)
  • 3 spoke steering wheel
  • Cruise Control
  • Sport Seats with better bolstering and adjustable thigh supports
  • 17" Wheels
  • Sport Suspension (firmer springs, lower ride height, and tighter dampers)
  • Less common than the ZPP

A Three Spoke Steering Wheel on the Left and a standard Steering Wheel is pictured on the Right.

ZCW-The Cold Weather Package
(NOTE: look for the heated seat button on the center console, or for the headlight washer device below the headlight)

This package may be somewhat harder to deturmine, at least in my experience, because the only real indicator you may see in a pictures is the heated seats button. You wont see the ski bag and only sometimes will you be able to see the headlight washers. Some cars come with the seat heaters, but do not have the ZCW package.
  • Pass-Through Ski Bag
  • Heated Seats (Remark: Heated Seats can also be ordered separately)
  • Headlight Washers
  • Fold Down Rear Seats
  • Not very common. Most likely will find in regions that get a lot of snow.

ZHP-The Performance Package
(NOTE: look for the "M badge" steering wheel and a Tach with a redline starting at 6,800 rpm. Non ZHPs start at 6,000 rpm)

  • M badges on each Style 135 wheel
  • M badge steering wheel
  • M-Tech body kit
  • 6 speed short throw weighted shifter
  • Available in all standard colors and Motorsports only Imola Red
  • 18" staggered style 135 wheels 225/40-18 in front and 255/35-18 in the back
  • Gloss Black window trim
  • The coupe has clear turn signals
  • Interior with half cloth half alcantara
  • Shorter M-badged shift knob
  • Aluminum "cubed"faux-carbon fiber interior trim (in black or silver)
  • Modified instrument gauge cluster with modified red needles and matte silver trim rings (the 330 have this standard but may not have this package)
  • More aggressive DME tune to increase HP
  • Engine redline increased to 6800
  • Shorter final drive ratio for faster acceleration
  • Fimer springs and dampers
  • Larger anti-roll bars
  • Stronger front control arm ball joints
  • Lower ride height (same as the ZSP)
  • Slightly negative camber
  • Not a common package, however it is a highly sought after package in the E46

Style 135 Wheels

(Note: Vents on the front panels of the car, 4 exhaust tail pipes, 9,000 RPM Tach, "Motorsports M on the dash)

  • Only available in the Coupe and Convertible body style
  • Powered by the S54B32 343hp Engine, aka S54, At the time the highest specific output naturally aspirated of any engine ever made by BMW-(except the McLaren F1 which was powered by a BMW powerplant)
  • Offered with Standard 6 Speed Getrag Transmission-Optional SMGII Transmission
  • 6 independent electronically operated throttle bodies (drive-by-wire throttle)
  • Road and Track Magazine announced the 2006 M3 with the SMG, as it's favorite sports car of all time.
  • Electronically limited speed to 155 mph

A high performance variant of the E46 chassis was designated the M3. This version had a larger, more powerful engine, sportier suspension, a limited slip differential and various aesthetic modifications, The M3 was released in 2001.

Please note, owing a M3 will cost you more. Parts for a Motorsports car are more expensive than their non M counterparts and insurance will also cost you more for a Motorsports car as compared to a E46 equipped with the ZHP package, the closest E46 to a M car.

If any Fanatic that owns a M3 would like to chime in on what to look for in the M3, please do so, or PM me and I can format it and add it to this post giving you credit for that section.

M3 with ZCP-The Competition Package
(Note: Steering Wheel Radio and Cruse control buttons deleted, a 9,000 RPM tach)

  • Cross-drilled brake rotors (enlarged to 13.7 inches in front) with two-piece compound rotors (aluminum hat and outer portion connected by steel pins) Steering ratio reduced to 14.5:1
  • M Track Mode setting for Dynamic Stability Control (raises-but does not eliminate-the threshold at which the DSC intervenes)
  • 19-inch cross-spoke alloy wheels (8x19-inch front, 9.5x19-inch rear)
  • Alcantara-wrapped M three-spoke steering wheel with M Track Mode activation button (audio and cruise control buttons deleted)
  • Specific aluminum interior trim with milled effect
  • Exclusive Interlagos Blue metallic (A30) paint option

Very Rare Package only available for the M3. BMW did not disclose how many of these cars were produced, however I saw on one web site that about 2400 ZCP units shipped to North America. If you see one for sale claiming to be a ZCP, be sure to verify its authenticity.

The E46 M3 Competition Package, known by the internal designation "ZCP", was initially offered in December of 2004 as an exclusive option for the North American market. It was then expanded to other markets beginning with September 2005 production. Available only on the M3 coupe.

No Packages
A car that does not have any packages can be identified by items such as non powered seats and Lack of wood trim on the dash as on the car in the Left picture.

Note the Manual controls on the seat and the electronic controls on this seat with a ZPP or better package.

Please know that there are aftermarket kits to replace the wood trim in these cars, so the lack of wood trim may not be a positive indicator.

Additional Options

A lot of E46s (if not all of them for NA) are "Prewired" for options that the buyer could install at a later time. To see what the car you are looking at is prewired for, look in the trunk on the drivers side on the side panel. (For the Touring, look in the same place) You should see some badges that let you know what the car is prewired for such as this picture.

Going over the options in this picture,

A few cars I looked at already had this option installed. I've seen two types of openers. If its not installed, and you see the badge in the trunk, the car is ready for this option. For the most part, its an easy upgrade that you can do yourself should you choose to do so.

The types, one has three buttons in the rear view mirror on the bottom edge of the drivers side.

The other version is a three button component that can be added to the upper console. Newer garage openers use a rolling code for security reasons. the unit below supports rolling codes as indicated by the White numbers.

If you see one of these that does not have white numbers, that device will only support fixed code openers. You most likely will need the rolling code type as fixed code openers go way back and are not around that much anymore.

Fixed Code-Will not work on a rolling code opener

Beneath the panel where these badges are located (Touring) there is a comparment with a little equipment shelf. (Non Touring, the panel is near where these badges are on the drivers side). It is here a CD Changer can be installed. A cable will be in there that goes up to the head unit, and you can control the changer from the head unit and the steering wheel functions. The BMW changer will go right in. If there is a after market one such as a Kenwood, a little converter box is needed to change the BMW cable over to the Kenwood one. This converter allows for the head unit to still be able to control the changer if its not a factory unit.

The E46 already has anti-theft devices installed at the factory such as fuel cut off, and vehicle immobilization. The "Clown Nose" on the rear view mirror is part of the security system. This is a LED that will flash when the system is armed. The Prewire is for additional items such as a high powered siren and other security items to enhance the factory installed system.

I could not find much on the web detailing this option. What I believe I have found is that this prewire had to go with a BMW phone. There are links on some sites for specific phone models I visited that took me to the site, but the links were dead on the BMW site. Examples were the BMW CPT7000 Cellular Phone and the very old school BMW Cellular "Mayday" Phone. I think this was a Proprietary system in any case. Can anyone chime in and provide more info here? Besides this system, there are some aftermarket upgrades that include bluetooth anyway, a much better option IMO.

BMW Assist
BMW Assist is a cellular based automotive roadside assistance service offered by BMW. BMW Assist is similar to GM's OnStar or Mercedes-Benz mbrace services as they both use the cellular network and Global Positioning telemetry to locate or guide the vehicle. BMW Assist can provide turn-by-turn directions, remote unlocking, vehicle diagnostics, airbag deployment notification, theft recovery and towing or flat tire repair. The service is included free in most new BMWs. After expiration, it can be purchased at a yearly rate.

A car equiped with BMW Assist will have a "SOS" on the rear view mirror in the lower Right Hand Corner.

Open the little cover door and there you will see two buttons.

The most common engines for the E46 (North America) include
  • M52B25 aka M54, 6 Cylinder 2.5L ULEV engine (323)
  • M54B25 aka M54, 6 Cylinder 2.5L ULEV engine (325)
  • M56B25 aka M56, 6 Cylinder 2.5L SULEV engine (325)
  • M52B28 aka M54, 6 Cylinder 2.8L ULEV engine (328)
  • M54B30 aka M54, 6 Cylinder 3.0L ULEV engine (330)
  • S54B32 aka S54, 6 Cylinder 3.0L ULEV engine (Motorsports-330)
I will talk about the ULEV and SULEV more in section two.
There are several other engine variants for non North American markets.

Designations for the cars include three numbers and letter/s code. The first number designates the series; the next two are the engine size in Liters so a 325 would be a three series with the 2.5L engine. The letters you may see are as follows,

i= Gas Engine
x= All Wheel Drive
d=Diesel Engine
Ci-Coupe with a gas Engine
Cd=Coupe with a Diesel Engine
iT=Gas Engine, Touring
xit=All Wheel Drive, Gas Engine, Touring

Note: The " i " actually stands for Injected, however all E46s are fuel injected and you will only find the i on a gas/petrol engine so it is Unofficially accepted to mean gas/petrol engine.

Section two
Why do you want to buy a E46
Ok let's get to the big question, why do you want to buy a E46 in the first place. There are many young people, i.e. high school and college students, that would really like to have one of these cars and understandably so. It's a BMW, these cars look awesome, and are inexpensive to purchase.... HOWEVER be forewarned, they are NOT inexpensive to maintain. To keep a E46 running in great condition will require a annual financal commitment to be north of $2000.00 per year. In all actuality, this really applies to many older cars, not just BMWs. The good news is that with a well maintained E46, you can expect to get a lot of life out of them. Some here have reported cars with over 300,000 miles, and many over the 200,000 mile mark. If you are excited to get one of these cars and jump right to putting money to mods and not toward maintenance, well maybe you should get a Honda. I read a article in a Porsche magazine that was talking about buying used Porsches, they stated that you should have 15% to 20% of the price of the vehicle to put toward maintenance right after you buy it. I liked this advise and really think that it applies to these cars too. You really need to read this forum and study the reasons why I make this statement. I don't want to make this any longer than it already is, and besides it's already been hashed out a lot.
One thing you will need to consider when searching for your E46, is what is your primary intention for the car. Will it be a work vehicle such is my case, will it be a hobby car for the weekend, will it be a Daily Driver or will it be a car destine for the track. The price of the car varies depending on these different needs. You will need to focus your searches for a car according to your intentions. Additional things to consider when conducting your search, are you a Do It Your Self type or one that would rather have someone else work on the car? You will save a huge amount of labor dollars if you can and are willing to do the work on the car yourself. Labor rates on these cars or German cars in general are high.

Things to look for and know before your purchase
Internet pictures say a lot. You can find out a lot of information from the pictures people post, the more pictures the better. Look for the VIN or ask for it if it is not included. That way you can get a carfax (i'll talk about that later) and you can also use the VIN and plug it into a couple websites to find out the most accurate information on the car in question.

The Realoem site will let you know what engine is in the car, production month and year and other info. This site will also allow you to look up parts for your specific car should you end up buying it. When dealing with the BMW dealer, BMW sites and BMW specific programs almost always you will only need the last 7 digits of the VIN. page example

A REAL Valuable tool is to see what options the car left the factory with. To do this plug in the last seven on this site VIN Decoder

BMW Site This is another resource for parts and items specific to the VIN of the car.

Using realoem, you can see if the car has a M54 (ULEV) or a M56 (SULEV) engine
The SULEV engine/car was built with higher emission controls, primarily for the California market because of the higher state standards in place. however the SULEV also shipped to some New England states as well. SULEV cars can be found throughout the country now that the car has been out for several years. My recommendation and the recommendation of a lot of others is to stay away from these cars. The fuel pump is sealed inside the gas tank, so when the fuel pump goes out the entire tank needs to be replaced, a $6,000.00 expense. Not really worth it because that alone is over half of what most of these cars are worth. If you are looking at pictures on the internet or physically looking at a car, these engines can easily be identified by the location of the Oil Filler Cap. The SULEV engine has the cap on the lower left as you stand in front of the car looking at the engine as in the picture directly below.

a SULEV Engine

A ULEV engine will have the filler cap apx mid way up on the Left side as in this picture. The ULEV is the most common of the two.

a ULEV Engine

Dash Board Clues
Look for a picture of the dash board. See if the picture shows the car running as indicated by the tachometer. Look for any information lights that may be lit up on the dash such as the Air Bag light for example. If you see anything lit up (except the seatbelt) this may indicate a problem with the car. Be wary of pictures that cut off the whole dash board while the car is running or pictures of the dash with the key on, but the engine off as the seller may not want to disclose a possible light. A normal dash is pictured below on the Left, one with indicators present is on the Right.

Having a car with these lights lit up may or may not be a bad thing, but it certainly is a price negotiating point. You would want to have the issue checked out further of course.

The Diamond Key
The keys for the E46 have a transponder chip imbedded in the key. This transponder is unique to the car and the car will not start without this transponder. This feature prevents the car from being stolen. Most of the E46 cars were originally delivered to the original buyer with two "Diamond" Keys with built in multi function remotes as in the picture below. However very early models may have come with a different key than the one pictured below.

additional keys also came with the car that did not have a remote but still had the transponder built into them. It's rare to have anything other than a single key with a used car from a dealer or auction house. As with the "Diamond" key, they have a permanent battery inside that cannot be replaced * and that battery is almost always dead given the age of these cars. (the transponder is passive, meaning it will still allow the car to start regardless if the battery is bad or not) A key with a dead battery is a price negotiating point. The only place to get a replacement key is from the dealer (very few locksmiths can and/or will handle BMW Keys). Do not attempt to purchase one on eBay and expect it to work, because it won't, and you will have wasted some money and you wont be able to find someone to cut the key. (Note: there are ways around this, but that is not within the scope of this post, but you can run a search on this forum) A new Diamond key is commonly quoted from the dealer at around $250.00 although some people have reported getting a Diamond key as low as $160.00 from the dealer. In any case, (as far as the car deal goes) the seller needs to provide you with a working remote key, discount the cost of a new one or fork over the cash for a functioning remote key. (*)There are a few places that can replace the battery and refresh the buttons for $40.00 to $60.00, but you have to send the key to them which means you can be without your key for a week or more. I purchased a non remote key from the dealer for $70.00 then sent my Diamond key out for repair. A new key or a repaired one should last you about 7 years.

If you only get one key with the car, GO TO THE DEALER AND GET A SECOND KEY NOW. You need at least two ways to get into the car apart from breaking a window or drilling out a broken lock!! The door lock on the drivers side was not intended for everyday use, this is the remotes job. If the door lock is used as the primary way to unlock the car, you are on borrowed time. At some point the lock linkage will break, and if your diamond remote is not working, you will have to resort to calling a locksmith to break into your car, break a window, or drill out a lock. If your car has the folding down rear seat, you could open your trunk and gain access to your car that way, but if you only have the valet key, this option will not work as the valet key will not open the trunk. So the whole moral of this story is to ensure the dealer provides you with a working master REMOTE key. I doubt they would be willing to loose the deal over a couple hundred dollars to get you a working key.

If you need a remote key repair, there is a member of this site that performs these repairs. I recommend his services. Click this link to make arrangements for repair.>> scottjoh services

Steptronic, Manual, or SMG Transmissions
The E46 had three transmissions available.

1) The Steptronic automatic transmission. This one is quite common. If well maintained, these transmissions are very reliable. There is a normal mode, sport mode and a manual mode with this transmission.
2) Manual. For the ones that want more of a sport type of driving, there are 5 and 6 speed manual transmission out there for the E46. The manual transmission is also a stout device if taken care of.
3) The SMG, or Sequential Manual Gearbox transmission. This one is capable of working as a manual transmission or a automatic transmission. There is no clutch pedal with this transmission. There is a stick in the center console or paddle shifters on the steering wheel with the SMG. You will usually find a SMG transmission in a Motorsports car (M3), but some later model E46s came with a SMG transmission as well. There were two version of the SMG that you can do further resarch on should you choose to find out more about these transmissions. The SMG transmission has had a history of issues and It is the recommendation of many here to stay away from these transmissions. They are very expensive to repair... that is if you can find someone that is willing to even attempt to work on them, besides the dealer that is, and the dealer will charge you out the yen-yang. A transmission replacement or large service would cost you a large percentage of the value of the car, and like the SULEV gas tank, it's just is not cost wise.

To Xi or not to Xi
BMW offered a full time all wheel drive option available in the sedan and the touring versions. Contrary to what some people may believe, having a Xi car does not in any way make it any faster or handle better (except in bad weather).The reason BMW developed the Xi was to answer the desire for a car that would be well equipped for inclement weather and snow. The AWD system for the E46 has largely been taken from the X5 concept. It uses two open differentials and a single speed transfer case. Power distribution is 38 front/ 62 rear giving the E46 the feel of a rear drive road car. The E46 Xi has an additional 17mm ground clearance for snow and ice covered roads. The whole front wheel drive system only adds an additional 220 lbs to the cars overall weight.

Some considerations for a Xi, Maintenance is going to cost more as you have to deal with all the mechanics for a AWD vehicle such as front axles, and front differential for example. For the DIYer, the lower front end of the engine is much more cramped to work in due to the items for the front wheel drive. Ensure a mechanic inspects the inner and outer axle boots for any rips or tears, which is common in any AWD car. You will know when one has torn because you will see grease on the inside of the wheel if it's the outer boot and inside the lower engine compartment for the inner boot. In addition, if you are on a test drive and you make a turn and hear popping noises, that's a good chance the CV joints are dry under a torn boot. To replace the boots is a bit labor intensive and can be a difficult job if you don't have the proper tools. I took mine in to have the boots replaced on the front passenger side. I went ahead and purchased a new axle because it did not cost me anything extra in labor as the whole axle needed to come off anyway.

What to physically look for
Ok now down to the inspection of the car. You can do a visual and a test drive yourself. There is a attatched PDF check list at the bottom of this first post that you can print out and use as a inspection guide. After you take a look at the car, I highly highly recommend you also have a Pre Purchase Inspection (aka PPI) performed from a reputable Independent (aka indie) shop that knows this car. Call around and have each shop explain to you what they will look for when doing a PPI. A good shop will put the car on the computer to read the codes. Make sure the shop will do this. When I called around, some shops said that they would only put it on the computer if the car had the "Service Engine Soon" light on. A good shop will do this regardless if the light is on or not. The car may store codes that don't trigger the light. Look for a PPI to cost you anywhere from $150.00 to $200.00, very much worth it. I purchased my car from another state. The dealer let me take the car to a shop of my choosing when I flew in. In another case, I searched for BMW mechanics near a dealer who I wanted to buy a car from, and made arrangements over the phone to have the dealer take the car to the mechanic that I paid. If you are looking at cars out of state and the dealer does not want to work with you in this regard, I would look elsewhere for a car.

In addition to the PPI you should get a carfax report. They are a bit expensive but can tell a few things about the car. If the car was in an accident and reported, it will show up. Note however, that sometimes people can get in a accident and elect not to contact the police or the insurance in these cases an accident would not show upon a carfax so don't rely or put a whole lot of faith in a carfax. If I saw that a car was reported as being in an accident, personally, I would not look any further at that car as there could be problems with that car that I do not want to deal with. People have reported that a car that has been in an accident and fixed just did not drive like it use to. There are plenty of E46s out there to choose from or wait on, you really dont need that one that has been in an accident, unless you can bargain the price down a lot to make it worth it. but for me, it would have to be a lot. If a person was good about taking their car into the dealer for maintenance and service, a reputable shop will make a entry on carfax so you can see a service history. Also carfax recently launched a new service called "mycarfax" where a owner can record their maintenance that they do themselves directly to carfax. This is a real neat service for the DIYer.

If you really want to do the inspection yourself or want to supplement the PPI, I recommend watching a 3 part video (links below) from Bavarian Autosports on what to inspect in an E46.

For me, when I walk up to a car that I am considering, I have my own personal check list that I use. I have included this check list as a downloadable PDF at the end of this post if you would like to see it. If I like what I see after my personal inspection and feel that I may want the car, only then will I have a PPI done on the car. If you print out or bring up the included checklist, I will go through each line item with an explanation of each of the items on this PDF check list. You will need a powerful flashlight even in the middle of a sunny day to do these inspections. I use a LED flash light that is rated at 250 lumens. The more lumens the better.

Outside Inspection

Oil Filter Housing Gasket for leakage- It's kinda hard, but you have to look down behind the oil filter on the block for oil on the Left side of the engine. This is almost always a issue, at least with the cars I looked at.

Valve Cover Gasket for leakage- look on the Right side of the engine for oil leakage. This area is tight and you have to look carefully.

Spin the engine fan (on an automatic) if it spins freely, the clutch fan needs to be replaced. The fan should stop spinning almost immediately after you hand leaves it.

Oil Filler Cap- I look for a yellowish sludge on the underside of the cap and down in the engine. This sludge is condensation buildup and is an indication that the Crank Case Valve needs to be replaced.

Inspect for Coolant Leaks-Self explanatory. Just look for white residue around cooling components.

Inspect Power Steering-Check around the reservoir and follow the lines, if there is a leak, it will be dirty with oil and dirt.

Under Car behind the passenger front wheel. If you see excessive oil down there, this could indicate that the Oil Pan Gasket needs to be replaced, and/or the valve cover gasket leakage.

Under Body Cover Panels-Look to see if they are present. This has been a point of debate on whether or not these need to be installed. Many believe, as do I, that BMW engineered these on the car for a purpose, and they need to be installed.

Front Struts--With the wheels turned look at the front struts for condition and/or leakage. You will see a oil like seepage on the side of the strut. They will need to be changed.

Turn the steering wheel all the way to one direction. Get out and look at the control arm bushings. Turn the wheel the other way and look at the other side. Although a visual inspection will not necessarily tell you if they are good or not, you will be able to see if they are in really bad shape.

Inspect Rear Shocks-Look for any leakage just like the front struts.
Tail Pipe-Wipe with a white rag to see if there is any oil. If so this indicates a major engine problem.

Rear Differential-Look for any leakage. If possible look at the drive axle boot while you are down here and see if you can spot any tears in the boots.

Tires-Look for any tread problems, uneven wear or other tire issues. This may be an indicator of suspension problems

Car Body-Just look for any excessive blemishes or other damages.

Head/Tail lights-Check for proper operation

Coolant Level-Check for proper level. Use the flashlight and/or the coolant dipstick. If it's real low, be warned that this could indicate a serious issue as well. The worst being a blown head gasket.

Inside Inspection

Turn on Laptop and run PA Soft-Obtaining this software is highly recommended if you are set on owning a E46 BMW. It is not necessary however. PA Soft will let you see all the issues that the car's computer has noted. Some of these issues will make the Service Engine Soon light come on, many will not. The car will store issues that have happened in the past, but not necessarily are a current issue as well. PA Soft will also allow you to customize certain features in the car, one example is you can have the car automatically lock the doors when the car hits 5mph for example. There are many adjustable features you can choose from, and they can be Key Independent, meaning when you use one key to unlock the car, the car will set all the settings for that key including seat and mirror position. When another Key is used, the car will re adjust to the settings for that person. Be sure not to clear any codes unless you purchase the car. Let the codes remain for the next person.

Turn car on-Look at the dash board for any information lights. If everything is ok there should be no lights at all, unless your seat belt is off. Don't let a dealer or other seller bullshit you by saying a fuse needs to be replaced, or they just need to do this or that. If the light is on, there is a problem period.
Inspect A/C-Adjust the temp down to 59 (the lowest setting) and see that the A/C gets cold. Listen to the engine when the A/C compressor comes on. You should notice a very slight draw on the engine and no additional noise, anything else requires further investigation.

Inspect Heat-Adjust the Temp up. (car needs to be up to operating temp) Check to see that the car can heat. Make sure you do not smell radiator fluid from the vents, an indication of a heater core leak. Make the selections for foot air, chest air and top air blowers to ensure the air diverter motor is working.

Inspect Window operation-The E46 is notorious for having faulty window regulators. It is considered a normal maintenance item. The windows should go down and back up without any noises or hesitation.

Press the accelerator-listen for any hesitation in the rev up and any excessive or odd noise from the engine.

Inspect Interior-Look all around the car at the upholstery, linings, plastics, and other items. Make sure there are no excessive wear or tears, stains or other defects.

Open the Moon Roof-It should open fully and close fully without stopping or hesitating. Listen for any noises other than the motor operating.

Electric Seat Operation-Move the seats in the full range of motion on all the different controls to ensure proper operation, there should be no sounds other than the seat motor. Note some cars do not have electric seat motors

Electric Lumbar-Same check as above-Few cars have the Lumbar. You will find them mostly on the 330 models, and late production 325 E46s

Seat Heat-If equipped, check to see that the seat heaters work. There is a bun warmer and a back warmer element. On the full setting you should feel heat in apx 30 seconds. If the seat heaters are broken there is really no fix for them other than replacing the whole seat.

Listen to the engine running-You will want to listen for any abnormal sounds, and feel for vibrations. Just check into anything that you suspect to be an issue

Test Drive

Slow Drive-In a safe place let hands off of wheel and see if car pulls to one side or the other

Slow Drive-In a safe place let hands off of wheel and apply breaks-car should stay straight

Normal Street-Listen for any unusual noise while driving.

Highway-Without letting hands off of wheel, check how the car handles,
noise, vibrations etc

Highway-Without letting hands off of wheel, does the car drift or is there any play in the steering wheel

So in a nutshell, Carfax, your own visual inspection, then PPI. In that order.

If you have very specific needs or want specific options in a car, it may be that you will have to search for your car in other cities, (or wait and watch a real long time in your city for that car to come up). This was the case for myself. I had specifics that I wanted in a car and they just were not available in my city. When I finally did find my car, I flew out to the international airport near the dealer in that city. They actually came to the airport and picked me up. Dealers that advertize primarily on the internet commonly offer this service. If not ask if they can pick you up, it will save you a taxi ride. One thing to be sure of however, is to have a exit plan in place in case you get there and the deal goes South, because if it does go South, they are not going to be willing to drive you anywhere.

A few commonly know issues
Some notable issues with the E46 are a follows.

There were a number of early production E46s that suffered from subframe cracking issues, see this video."]

The above video is an extreme situation. The picture below would be another example of a sub frame crack

There was a class action law suit against BMW in which they settled over this matter and issued a recall. So be sure to look for subframe cracking or ensure a mechanic checks this out. It was more common in the 330 and the M3 cars because they had more toque than the other models, but subframe cracks have been reported on all versions of the E46. What to look for or inspect for when looking for subframe cracks..look underneath the car near the 4 subframe mounts for any tearing. If there is any tearing it's probably best just to walk away from the car. Although this problem can be fixed, it is an expensive repair.

Central Locking Issue (not an issue but normal function you need to be aware of)
In early production E46s up to around 2001/2002 a anti theft feature disables the inside door handles from operation when the car is locked with the diamond key remote. This is a normal function but it is unclear as to why BMW designed this feature into the cars. It has been theorized that a "would be" car thief would not be given the luxury of the use of a door handle if they were attempting to jack a car. Thus the felon would have to crawl through the window if they really wanted to try to steal the car. Once inside the car, the center console unlock button would not unlock the door and the handles were disabled, so to aggravate the bad guy further, they would again have to crawl through the window to exit the car. Whatever the reasoning behind this design feature, it recently resulted in a death of a high school student. Further reading on this topic can be accessed here. (, In later models, BMW changed this feature a bit to not totally disable the inside handles, but you need to know how to operate them and educate your family and friends on what to do should they ever get locked in the car should you buy one.

for the 2002 and 2003 years, BMW has issued a front passenger airbag recall. You can read more about this at this link

Window Regulator Problems
Because of the excessive use of plastic parts that BMW incorporated in this car, many failures occur. One of these areas is in the window regulator/lifting mechanism. The fix is mostly an easy one. You will be able to tell when one is on it's way out by hearing little cracking noises when the window is going up. Another indicator of a failing regulator is a slow window when comparing it to the other window/s in the car. Not really a big deal, but a price negotiating point.

Moonroof Problems

Strut Tower Mushrooming

If you want to look up additional service bulletins and other recalls for the specific car that you are looking at, you can find them at this website w w w.a u t o m d.c o m/recall/bmw_m/e46_mm ( I had to put spaces in between the automd because this forum would not let it make a hyperlink, so to go to that site just type it normal.

CONTINUED ON PAGE 3 post #55 < Click this and it will take you to that post.


730 Posts
Very nice!! A++

28,449 Posts
Great work and great thread. This will help a lot of new people.

Though curious on a few things. Maybe someone knows better than I/we do:

-You say to look for the heated seat button on the console to identify cold weather package. I have heated seats, but no headlamp washers, no ski pass, no fold-down seats. I'm assuming I don't have the cold weather package but do have that heated seats button.

-You say the sport suspension has firmer springs--but do they? I am almost certain the sport package AND ZHP use the same 15mm lower springs, but not sure if they are firmer. I thought it was just the dampers that are firmer. The Grand Kodiak can chime in.

-Back on the ZHP, you say beefier suspension. I think you should clarify--maybe get Alex323ci (TGK) to chime in with specifics. ZHP control arms have solid outer balljoints, larger diameter sway bars (than non sport package/early sport package), and 15mm lower springs (than non sport package). They also have 18" wheels and tires, and a 3.07 differential, and an encapsulated oil pump nut. They have performance camshafts, software, and a different muffler that's sportier looking and sounding.

Just recommendations. It's your thread and I don't have any business modifying it but this is just what I'd address and we can all learn from more info. In the end, it's your choice! Hope you don't mind. Again, good job!

892 Posts
Discussion Starter #9
Thanks everyone for the comments. Ive beek kicking this idea around in my head for a long time, finally got it into a post.

Mango, being that the ZHP is a package that is highly sought after, I should have went into more detail than I did. Thanks for the recommendiation. I will fix that.

28,449 Posts
Thanks everyone for the comments. Ive beek kicking this idea around in my head for a long time, finally got it into a post.

Mango, being that the ZHP is a package that is highly sought after, I should have went into more detail than I did. Thanks for the recommendiation. I will fix that.
Believe me this is a very complicated subject matter and I would not have wanted to be tasked with this thread LOL. So kudos for doing it. :clap: When I got my car, all I knew is I wanted sport wheels/tires, sport seats, xenon, sport bumpers, and a manual. I didn't know what came with what and what cars got what. It can get confusing to pin down the exact details.

167 Posts
Believe me this is a very complicated subject matter and I would not have wanted to be tasked with this thread LOL. So kudos for doing it. :clap: When I got my car, all I knew is I wanted sport wheels/tires, sport seats, xenon, sport bumpers, and a manual. I didn't know what came with what and what cars got what. It can get confusing to pin down the exact details.

THIS. Exactly the things I would not live without when I was searching for mine. Would have been nice to know what ZHP was. I'm just glad I didn't buy a SULEV motor knowing nothing about it.

EDIT: I do not have a SULEV motor and I don't want one lol

500 Posts
Great work and great thread. This will help a lot of new people.

Though curious on a few things. Maybe someone knows better than I/we do:

-You say to look for the heated seat button on the console to identify cold weather package. I have heated seats, but no headlamp washers, no ski pass, no fold-down seats. I'm assuming I don't have the cold weather package but do have that heated seats button.
Mango, many of the options were available a la carte, and the packages were, as the name suggests, bundles of related goodies. Perhaps OP could clarify and say that heated seats are a necessary, but not sufficient condition.

OP, one thing you mentioned that you might be able to expand on is the intersection of the different packages. I think they are additive until they disagree on something, but then there's no clear hierarchy. For example, my car is ZHP/ZPP/ZCW. The seats have the side bolsters and the adjustable thigh supports (ZHP), as well as the adjustable lumbar supports and the leather (ZPP) and the warmers (ZCW). On the material, ZPP trumps ZHP (i.e. leather over alcantara). As to the interior trim, ZHP trumps ZPP (cube trim vs wood).

2,930 Posts
Great work and thanks Jake for making it a sticky.
This should avoid a lot of new posts if someone decide to read the stickies first.

However, OP you missed out on 323. They are the most common cars out there in the used e46 (cheapest e46 to own when new).

Other than that as mango pointed out, presence of heated seat doesnt mean the car has cold weather package. Heated seat was an option and included in cold weather packager with insulated CCV.
Probably add a bit about xi?

Regardless, a great post man. :thumbsup:

892 Posts
Discussion Starter #16
Probably add a bit about xi?
lol thats what I have too, and I didnt even say anything about them.

presence of heated seat doesnt mean the car has cold weather package. Heated seat was an option and included in cold weather packager with insulated CCV.
I will reseach this. it looks as though it was an option all by itself.

2,930 Posts
I will reseach this. it looks as though it was an option all by itself.
Yup it was an option, my seats are sports(default as a coupe) and heated(option) but doesnt have a could weather package.
Cold weather package includes a ski pass through from the trunk to the rear seats including the headlight washers, insulated CCV and heated seats. Thats all I can think of right now.
I wouldn't be able to live without the heated seats when winter hits Colorado :)

3,355 Posts
Very nice write up! Glad it's been stickied.

I would offer the following:

If you are looking at convertibles, the 325 is the only model that offered a manual top. This was a selling point for me, as I've had issues with automatic tops on the E36, and was willing to sacrifice the extra power of the 330 for lower maintenance top.
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