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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.

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.

E46 Concept Drawings by Erik Goplen

Models, Types, Packages, Engines, Designations
There were 5 E46 body styles
  • Sedan (4 door)
  • Coupe (2 door)
  • Cabriolet (Convertible aka Vert)
  • Touring (Wagon)
  • Compact (in non North American markets)
E46 models - last 5 shipped to North America)
  • 316
  • 318
  • 320
  • 323
  • 325
  • 328
  • 330
  • M3
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 www.rubmw.ru (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.

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 - Premium Package
NOTE: look for wood trim and a sunroof
  • 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 - Sport Package
NOTE: Look for 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


standard steering wheel

ZCW - Cold Weather Package
NOTE: look for the heated seat button on the center console, headlight washer device below the headlight, and ski pass-through

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 - Performance Package
NOTE: look for the "M badge" steering wheel and a tachomter 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 tachometer, Motorsports M on the dash
  • Only available in Coupe and Convertible
  • 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.

Owning an 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 an 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 Competition Package
NOTE: steering wheel radio and cruse control buttons deleted, 9,000 RPM tach

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.
  • 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.

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 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.

BMW Universal Garage Door Opener
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, it is an easy upgrade that you can do yourself.

There are two 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 that does not have white numbers it 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

Prewired for BMW CD Player
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.

Prewired for BMW Secuity System
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.

Prewired for BMW Cellular Phone
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 BMWUSA.com 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 an "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 North America engines (all 6 cylinder) include
  • M52B25 2.5L ULEV engine (323)
  • M54B25 2.5L ULEV engine (325)
  • M56B25 2.5L SULEV engine (325)
  • M52B28 2.8L ULEV engine (328)
  • M54B30 3.0L ULEV engine (330)
  • S54B32 3.2L ULEV engine (M3)
I will talk about the ULEV and SULEV more later. There are several other engine variants for non North American markets. Check realoem.com for details.

Designations for the cars include three numbers followed by letters. 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
xi = all wheel drive, gas engine
d = diesel engine
Ci = coupe or convertible with gas engine
Cd = coupe or convertible with diesel engine

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.

Why do you want to buy an 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.

A 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 oil filler cap on the lower left as you stand in front of the car looking at the engine as in the picture directly below.

The ULEV engine has the oil filler cap mid way up on the left side as in this picture. The ULEV is the most common of the two.

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.

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.

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

The E46 had three transmissions available: automatic, manual, sequential manual
  1. Automatic: This one is quite common. If well maintained, these transmissions are very reliable. The Steptronic has a normal mode, sport mode, and a manual mode.
  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. SMG (Sequential Manual Gearbox): 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.
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.

Physical Check
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 (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.
  • Steering 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.
  • 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
  • Run BMW Scanner 1.4 on a Laptop 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.
  • 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.
  • 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.
  • Windows 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.
  • 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 Seats 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 Heating 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. Apply brakes and 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. 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.

Common Issues
Some notable issues with the E46 are as follows.

There were a number of early production E46s that suffered from subframe cracking issues, see this video. This video is an extreme situation.

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
In early production E46s up to around 2001/2002 an antitheft 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. 328i Locking System Causes Students Death

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 inside.

for the 2002 and 2003 years, BMW has issued a front passenger airbag recall. You can read more about this at this link 2002 - 2003 E46 front passenger airbag RECALL

Window Regulators
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.

The thin sliding moonroof cover ofter gets off its tracks. Broken pieces get stuck inside and can cause havoc.

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: www.automd.com/recall/bmw_m/e46_mm

Thanks to the following members for contributions and accuracy checks to this post.



29,904 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!

481 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).

3,010 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:

3,010 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 :)

3,493 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.

2005 330i manual transmission performance package
3,886 Posts
The 323i/ci isn't less common than the 328i/ci, both were in production between 1998 and 2001.

When I found my previous E46 in 2006, a '99 323i, I had no idea what packages it had, but I knew this is exactly what I need.
It later turned out the car had sport package, manual transmission, xenon lights, no premium package (manual leatherette seats, no sunroof), no fold down rear seats, and it even was the right color combo: silver/black. Good luck finding another one with these options today.

841 Posts
if I could add to this:

Canadian ZHP's do NOT get the red gauge needles and cluster showing the increased redline, but the engine DOES redline at a higher rpm (6800?)

145 Posts
The only thing I see that's not 100% correct is the "Designations". The 323 has the 2.5, although those would be correct for the rest of the cars. Also, BMW used to use the "i" to designate fuel injection, but since they are all now fuel injected, the "i" designation is for "inline" engines, not gas engines.

Also, no mention of the ZHP cams in that section, and the sway bar upgrade in the sport package.

But great work on compiling all of this info!

2003 M3 6MT Slicktop
23,379 Posts
I actually pulled my post to let your thread flow better.

Coupes and Convertibles are always later in production than sedans. So although sedans ended in 2005, you'll still get 2006 E46 coupes and Convertibles.

all USA Coupes have the three spoke steering wheel. Regardless of packages.

silver (not polished) gauge rings are not a ZHP exclusive thing, it's a 330 thing for all of them in those years.

your thread seems helpful to someone new, keep up the good work.

29,904 Posts
Correct. E46 is 1999-2006. I had a 2006 E46 =)

Two door varieties, as said, are extended one year for the E46 and E9X as well. Same holds true for older generations too but not exactly sure how far back it goes

873 Posts
The only thing I see that's not 100% correct is the "Designations". The 323 has the 2.5
The first BMW 323 was sold in 1977 as the BMW 323i. Like other cars in the 3 Series, the 323 took its name from its 2.3 liter engine, the largest and most powerful offered in the 3 Series at the time.

The E46 323 does not have a 2.3L engine as expected as BMW broke with tradition by featuring a 2.5-liter inline-6 cylinder engine with the E46 323.

The performance specs between the two cars are almost identical. The M54 2.5 liter engine (325) makes 184 HP but less peak torque than the M52tu 2.5 liter engine (323). What BMW did was tweak the intake and exhaust manifold and tuned the airflow to basically flatten the torque curve. Having more torque higher on the RPM range gives you more horsepower.

1,335 Posts
One thing I constantly see misrepresented in ads is ZHP with ZPP. While it does exist its extremely rare. If I could have found a car with both packages I'd have bought it for the lumbar support- which is something most ZHPs with leather do not have.

29,904 Posts
Looked at it again. Again, nice work. However you state that the ZHP has slightly negative camber. AFAIK, ZHP does not have its own alignment. Pretty sure it shares w/ sports alignment. Look into this and consider it. Your thread, your rules so I won't tell you what to do! ;)

841 Posts
Looked at it again. Again, nice work. However you state that the ZHP has slightly negative camber. AFAIK, ZHP does not have its own alignment. Pretty sure it shares w/ sports alignment. Look into this and consider it. Your thread, your rules so I won't tell you what to do! ;)
My ZHP was stock and had slightly negative camber in the rear. My tires weren't happy about that. First car I ever had with any type of camber, I doubt I would do it ever again. I'd rather save my tires from a premature death.

5,333 Posts
This might help. Mine is a 7/99 production and came with a regular auto transmission.

Although there is no manual shift mode, it is fun to drive.
When gears 2, 3, or 4 are selected, the letter "S" is displayed next to the number - "S4" - and shift points are raised.

Other 2000 328i have the step, so BMW must have switched to the steptronic in the latter half of 99'.

My car also has the round diagnostic connector under the hood.

481 Posts
One thing I constantly see misrepresented in ads is ZHP with ZPP. While it does exist its extremely rare. If I could have found a car with both packages I'd have bought it for the lumbar support- which is something most ZHPs with leather do not have.
I think you can get the lumbar seats and retrofit them, but I'm not sure it's worth the bother. Comparing my ZHP+ZPP seats with my dad's ZSP seats, there's not a noticeable difference in comfort, but his seem to "hug" better. It may be that mine are straight ZPP and not shaped the same way, I don't know. I don't know where in Seattle you are, but if you're curious you can drop by and I can show you what it looks like.

49 Posts
Nice write up. I just got my new old 2001 330xi in November 2013. By what I have been reading I think I was very fortunate (or not) with this purchase.

The car had 147,500 mi, and truly, I think it has everything original, except tires and brake pads. The car looks great, everything the way it looks in the catalog. I took it the dealer to give me a full assessment of what needed to be done:
- Lower control arms and bushings
- Rear springs broken and shocks leaking
- Oil filter housing gasket leak - did it myself!
- Vanos pipe leak - did it myself
- A couple of oil sensors bad and leaking
- Passenger side engine mount worn
- A couple of rims bent - but not too bad
- Rain sensor not working
- Remote key not working - I fixed myself with a non-rechargeable battery
- A couple of power steering hoses leaking but not too bad
- Coolant temperature sensor leaking - I replace the o-ring
- Coolant bleeder screw leaking - replaced
- Bad brake rotors

Good thing is that after I do all this, I'll have a great car for a long time. Bad thing is $$$.

2,402 Posts
The early E46 sport package cars (99/00) have the largest diameter sway bars. They came from the factory with 24mm front sway bar, and a 19mm rear. Compared to the later sport package and ZHP which came with 23.5mm front and 18mm rear. Aside from the M3 of course.

873 Posts
Page 2

The post on page #1 got to the point of too many characters, so I am splitting this up. This section is page 2 of the first post on the first page.

Maintenance and Servicing
I cannot believe the amount of posts I see on this forum board on people who just bought (or are getting ready to buy) one of these cars and will argue with members trying to help them with maintenance recommendations on these cars. They would rather focus on mods, or first perform maintenance that will not really make their car more reliable, and they will argue this until they are blue in the face. The cold hard truth to the matter is that we really don't give a $hit about your car. You're the only one that does. Do whatever the hell you want. We are here sharing and offering our experience and our knowledge so that you will have a better experience with E46 car. If you can't afford the maintenance that is needed, then you should not be considering one of these cars. I have seen over and over again some bloke come on here and post something to the effect, "Hey my car was running in the red on the temp gauge when I was on the highway, I pulled off on the next exit, now my car won't start. Will I get raped if I take this in to the shop to get fixed?" This person just bought a new hood, Aftermarket Air Filter and a cool exhaust system, or they were just barely able to fork out the $4,000 to buy one of these cars and could not afford anything else. In either case they could not or chose not to replace the cooling system. Sorry to say in this situation, the engine is toast. A warped head will cost you something north of $3,000.00 to fix on these cars, possibly more.

mpjgolf1, a member here who owns a dealership that specializes in high end cars has a formula that I agree to as well, and it is this. To have a good E46, you can expect it to cost you about $10,000. So if you buy one for $7,000 you should expect to spend $3,000 after your purchase to get it in good condition. 7+3=10, Or if you buy one of these cars for $3,000, you should expect to spend $7,000 to get it in good shape, so I think you get the idea here. Its not like you have to immediately take your car to a shop, or put it in your garage and drop a load of cash to get it there, you can do it over time as time and money permits. However, the one thing you should do right after you get the car is to replace the entire cooling system if there are no records of it ever being done. This one issue might cause you to lose your entire investment in the matter of seconds. If DIY this yourself, you can expect to spend $300 to $500 in parts. Its relatively easy to do yourself too. That $500 investment is like a little insurance policy, and a lot less expensive than loosing the entire car or having to purchase or rebuild an engine. I recommend the complete cooling system replacement the same week you get the car.

Understand also that I am not saying to do ALL your maintenance before you start putting on the fun stuff, Mix it up as you go along. But like I stated above, the cooling system is a first thing must.

This subject of maintenance however is really for "after the purchase" but it needs to be included here so you can have an idea of what to expect AFTER the purchase. This could be a deal breaker if you know what needs to be done and know what it takes to keep these cars in tip top shape. This is good info to know before you get into the car. It has been mentioned on this forum that in order to have a reliable Daily Driver, you can expect to spend around $4,000 a year. Many have done it with less, some with more. In any case, you will have some work to do with your new car. That is not the scope of this post, but you will need to know that if you do buy one of these cars there are certain things you can expect to do right off the bat for a car that has 75,000 miles or more. Buying mods and upgrades should only be done after maintenance is done...I know, it's hard to put off the fun stuff, but maintenance is the higher priority.

Here are just a few examples of what you should expect to do on your car after your purchase.

Cooling System
First things first, replacement of the entire cooling system. Mango created a post you can read here. E46 COOLING SYSTEM GUIDE - overheating/coolant/etc

Gaskets, Grommets, and Seals
Rubber components in these cars begins to get hard as plastic between 80,000 and 100,000 miles. So expect to change the Oil Filter Housing Gasket (a major cause of oil on your driveway) and the Valve Cover Gasket (a major cause of burning oil smell in your car) There are plenty of YouTube videos on how to do this. There are many other rubber parts that get hard that need to be checked out too. One example are the Air Pump Mounts. There are three of them and they cost around $2.00 each, but the old ones got so hard they flat out break.

Other Servicing
There are many things to do after your purchase (outside the scope of this thread), but to get you started here are a few links.
Save yourself up to $200 and some headaches - Electric... fuel pump
Just bought your non-M E46? Bare essentials maintenance... After Purchase Guide
Soidjake's PA Soft / BMW Scanner 1.4 Vid Tutorial PA Soft

Here is a link to all the Owners Manuals for the E46 models for the North American Market.
BMW Manuals - The Web Page of Kris Linquist

Something you will need to consider is the fact that a small accident could "total" your car. When I say total your car I mean in the terms of insurance. These cars are very safe in many types of accidents. I've seen videos of these cars going over the side of a rocky hill and rolling many times, and the driver walks away. No I mean that insurance companies will total the car in accidents that seem to not be all that bad because of the cost to fix these cars exceeds a certain percentage of the value of the vehicle. E46Fanitic NOVAbimmer is a claims adjuster and has many posts on the subject, you can click on his name to bring up some reading on some of his posts.

Insurance, varies greatly on region, your driving record and other various conditions, but overall Insurance coverage for these cars is not bad. For me it was only a few dollars more than my full size pickup truck of the same year and identical full coverage for my two 325s. However you will have to take into account the rates for the type of car you are considering. I will be using myself as an example Age Group is 40-50. I have no accidents or tickets within the past 10 years. I have the multi vehicle discount, and just my wife as an additional driver, also no accidents or tickets within the past 10 years.

This website and forum
This site is the best resource on the web for the E46 BMW. The people and their posts on this site have educated, instructed, and saved people thousands of dollars over the years. I think that the people here may even know more about this car than BMW does! You can show your appreciation for the education and the time and money this site has saved you by becoming a paid member. It's a nice way to support this site and to say thank you to the community and its not that much. See this link Account upgrades

Disclaimer: I am not an expert by any means. I relied on info and posts from other E46Fanatics and research and my own work that I have done. I am just sharing my experiences so you can make an educated decision whether or not one of these cars is for you. Continue to research this car using the links I provided and do your own internet searches. There are many people on this site that are more educated in these cars than I am, and they are willing to help too. Always use the search feature before asking your question. Chances are high that your question has been asked and answered before, and be sure to thank those that do offer their help.
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