Used BMW E46 3 Series review

Likes

The right examples are likely to be future classics.
Excellent enthusiasts car (mechanically simple and affordable to work on).
In terms of build quality and reliability, arguably some of BMWs best work.
Huge support network and community.

Dislikes

Plenty of typical 25 year old car issues.
Requires commitment to keep them at their best.
Mechanically robust but no Toyota for reliability.
Great examples are getting hard to find.

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See video on youtube

Publish: June 6, 2025

Stuff you should know

In the Australian car landscape, the BMW E46 3 Series has well and truly earned its place as a benchmark, not just within the compact executive category, but as one of the most well-rounded cars of its era. Launched locally in 1998 and sold through to 2006, the E46 was the fourth generation of BMW’s iconic 3 Series and arrived in sedan form initially, with the coupe and convertible joining the range in 1999, followed by the wagon (or Touring, as BMW calls it) in 2000, and eventually the three-door hatchback Compact arriving in 2001. Across this range, BMW Australia offered a generous mix of models, trim specs and drivetrain options, with the E46 carving out a solid reputation for being everything from a comfortable daily driver to a genuine performance machine.

In typical BMW fashion, the E46 was rear-wheel drive, with a near 50:50 weight distribution, and offered with a range of naturally aspirated inline-four and inline-six engines, some of the smoothest and most characterful engines of the time. Transmission choices included five-speed and six-speed manuals, as well as four- and five-speed automatics depending on the model and year. The manuals in particular are a highlight, and are a big reason the E46 is still so beloved by enthusiasts today. Whether it’s a basic 318i or a higher-spec 330Ci, these cars maintained the DNA of earlier 3 Series generations, excellent dynamics, driver-focused interiors, and an understated, timeless design.

Throughout its life, the E46 received a number of mid-cycle updates, the most notable arriving in 2002. This facelift brought in subtle styling changes including updated headlights, taillights and bumpers across the range, a refinement of the interior layout, and improvements to standard features. Some models gained electronic stability control (DSC), revised suspension tuning, and incremental updates to infotainment and trim materials. In Australia, trim levels included the base model, Executive, and Sport variants, with the latter adding lowered suspension, unique alloy wheels, sports seats and other minor upgrades. Individual options were plentiful too, with some higher-end cars packing sat-nav, sunroofs, upgraded audio systems and even factory-fitted body kits.

While the E46 3 Series was positioned as the entry point into the BMW range at the time, sitting below the 5 Series and 7 Series, it never felt like a compromise. It offered a proper BMW experience at a relatively attainable price and still does today. But given these cars are now pushing 20 to 25 years old, the smartest way to approach buying one is with an enthusiast’s mindset. Thankfully, the E46 is a fantastic enthusiast car, it’s relatively simple mechanically, has a massive global support network, a huge aftermarket scene, and parts are widely available and often surprisingly affordable. Plus, it’s a car that rewards good maintenance and careful ownership with an experience that’s still incredibly enjoyable today.

Despite not being perfect, we’ll get to the common issues in the “What Goes Wrong” section below, the E46 is a reminder of how brilliant BMW was during this era. It manages to balance daily usability with proper rear-wheel-drive driving dynamics, and in the right spec, particularly in coupe or Touring body styles, it still looks fantastic. It also offers a legitimate stepping stone to performance driving. While the flagship M3 and ultra-rare CSL models deserve their own spotlight (and they absolutely will get their own cheat sheet), even the regular E46 330i or 325i can provide serious performance thrills without the eye-watering costs associated with full-blown M cars.

Interestingly, values for good E46 examples are holding up remarkably well on the used market. Much like the E30 and E36 before it, the E46 is on track to become a future classic – particularly clean, low-kilometre, original cars. The key is to avoid overly modified or neglected examples, and to focus on those that have a strong service history and minimal wear. If the E46’s legacy continues on its current trajectory, these could soon become not just great enthusiast buys, but savvy investments as well.

What goes wrong

Exterior:

One of the first things to look out for, particularly if the car has spent time in colder climates or near the coast, is rust, and it’s essential to inspect the entire car thoroughly.
While some rust can be relatively straightforward to repair, more serious corrosion can render the car essentially worthless. Pay close attention to the front guards and the wheel arches both front and rear, run your hand along the inner lip of each arch to check for crusty or flaky metal, and look for evidence of poor-quality repairs. It’s also worth inspecting underneath the car, focusing on the chassis rails, sills, and especially the jacking points, which are often damaged from improper use.
Also check for corrosion around the base of the door mirrors, and at the boot lock and rear windscreen surrounds, these problem areas apply across all body styles.
One of the most well-documented issues on the E46 is cracking around the rear subframe. This is a fairly common fault caused by weaknesses in the design of the subframe mounting points and the materials used in the surrounding structure. Interestingly though, many E46s have never developed this issue, at least not yet.
BMW attempted to address the problem during the car’s mid-life update (the LCI or Life Cycle Impulse) with extra spot welds in the affected areas, but subframe cracks have still been reported in both pre- and post-facelift cars. Convertible models seem less prone to this thanks to their inherent chassis flex, and lower-powered variants tend to avoid it as well—most likely due to reduced stress on the rear structure from lower torque outputs.
The subframe issue can be repaired, and there are reinforcement kits readily available online. However, in some cases, the cost of a proper repair may exceed the value of the car, so it’s something to keep in mind, particularly if you’re not deeply committed to the E46 platform. And if the car has already had a repair, confirm that it was done properly and not just patched up.
Owners also report that the door locks tend to seize up unless lubricated with spray grease every few months, and as you’d expect for a European car approaching 25 years of age, the door seals are likely due for replacement.
While inspecting the doors, test the windows, because the regulators are known to fail. It’s a common problem, and unfortunately, not a particularly rare one. Also check that all the electric components work properly.
Depending on the model and specification, these cars can be surprisingly well-equipped for their age, with features like parking sensors, power-folding mirrors, and automatic headlights. Back

Exterior:

One of the first things to look out for, particularly if the car has spent time in colder climates or near the coast, is rust, and it’s essential to inspect the entire car thoroughly.
While some rust can be relatively straightforward to repair, more serious corrosion can render the car essentially worthless. Pay close attention to the front guards and the wheel arches both front and rear, run your hand along the inner lip of each arch to check for crusty or flaky metal, and look for evidence of poor-quality repairs. It’s also worth inspecting underneath the car, focusing on the chassis rails, sills, and especially the jacking points, which are often damaged from improper use.
Also check for corrosion around the base of the door mirrors, and at the boot lock and rear windscreen surrounds, these problem areas apply across all body styles.
One of the most well-documented issues on the E46 is cracking around the rear subframe. This is a fairly common fault caused by weaknesses in the design of the subframe mounting points and the materials used in the surrounding structure. Interestingly though, many E46s have never developed this issue, at least not yet.
BMW attempted to address the problem during the car’s mid-life update (the LCI or Life Cycle Impulse) with extra spot welds in the affected areas, but subframe cracks have still been reported in both pre- and post-facelift cars. Convertible models seem less prone to this thanks to their inherent chassis flex, and lower-powered variants tend to avoid it as well—most likely due to reduced stress on the rear structure from lower torque outputs.
The subframe issue can be repaired, and there are reinforcement kits readily available online. However, in some cases, the cost of a proper repair may exceed the value of the car, so it’s something to keep in mind, particularly if you’re not deeply committed to the E46 platform. And if the car has already had a repair, confirm that it was done properly and not just patched up.
Owners also report that the door locks tend to seize up unless lubricated with spray grease every few months, and as you’d expect for a European car approaching 25 years of age, the door seals are likely due for replacement.
While inspecting the doors, test the windows, because the regulators are known to fail. It’s a common problem, and unfortunately, not a particularly rare one. Also check that all the electric components work properly.
Depending on the model and specification, these cars can be surprisingly well-equipped for their age, with features like parking sensors, power-folding mirrors, and automatic headlights. Back in the early 2000s, this was quite advanced for the class, but at this point, some of those features may no longer be functioning as they should.
If something’s not working, it could be as simple as a faulty switch or a worn stalk, but it might also be caused by a failure of the GM5 module, or General Module 5, which controls a host of body electronics and is known to fail. The good news is that replacement modules and repair services are available, and there are aftermarket options too. Just be cautious if someone has swapped the module from another E46, there have been plenty of cases where this caused more issues than it solved.
If the car has a sunroof and the drainage channels haven’t been cleared regularly, water can find its way inside the cabin and end up damaging the ECU, or DME in BMW speak, which can lead to serious problems, including in extreme cases, the car catching fire. Also check the sunroof operation, like the window regulators, the motors can fail over time. If the entire cassette needs replacing, it’s not a cheap or easy job.
For convertibles, it’s important to keep the folding roof mechanism well-lubricated to ensure smooth operation. If the system seizes or breaks, repairs can be very costly. A quick tip, if the roof seems to function correctly but struggles to close fully or line up properly, that can be a sign the car’s had an accident and been poorly repaired.
And speaking of damage, deteriorated rubber seals, like the one at the base of the windscreen, can result in perished wiper blades, which might explain why someone couldn’t see where they were going in the first place.

Interior:

When it comes to the interior, and considering we’re talking about a car that’s now a quarter of a century old, things actually hold up reasonably well, though, unsurprisingly, there are a few age-related complaints.
Most of the plastics will be getting a bit brittle by now, so don’t be surprised if things like the glove box latch or the clips around the dash and door trims have broken or are about to. The good news is that replacements are generally easy to source and cheap to fix.
Some interior plastics, particularly the soft-touch finishes, can develop a tacky or sticky feel over time, and if the car has woodgrain trim, it’s not uncommon to see fading or cracking.
In warmer climates like much of Australia, the headliner can sag badly, it tends to look like it’s been parachuted in rather than glued in place. The fabric on the A-, B- and C-pillars often follows suit. Again, not a catastrophic issue, and it can all be rectified with a proper re-trim.
If the car’s fitted with leather upholstery and the previous owners haven’t cared for it, expect to see some hardening, cracking, or even sections of leather peeling or flaking off. A full re-trim will sort it out, but factor that into your budget.
Electrically, it’s important to check absolutely everything. Try every switch, stalk, and button to ensure it all works properly. As with the exterior, many issues can come down to simple things like worn contacts or a broken control, but if multiple systems aren’t working, there’s a good chance the GM5 module is the culprit. It’s repairable, and there are aftermarket replacements available, but again, be wary if it’s been swapped with one from another car, as compatibility issues can pop up.
The climate control system also deserves a thorough test, check that the air conditioning works on every fan speed and temperature setting. Faults here can be traced to worn-out blower motors, failing final stage resistors, or issues with the condenser. Fortunately, most of this is fixable without too much stress or expense.
And yes, the factory infotainment system is going to feel incredibly outdated. These cars pre-date the smartphone era, so the original head unit isn’t going to impress anyone. The speakers are also likely past their best. But the upside is that upgrades are easy—modern systems with Apple CarPlay, Android Auto, reverse cameras, and new speakers are widely available and can transform the in-car experience.

Mechanically:

The 4-Cylinders:

The earlier M43 engine is a simpler, single-cam unit, and while it’s a bit old-school, it tends to be the most reliable of the bunch.
The more advanced N42 and N46 engines offer improved performance and efficiency, but they’re also more complex, which can mean more things to go wrong. Regardless of which engine it is, they’re all known for leaking oil—typically from the valve cover gaskets and the oil filter housing.
Timing chain issues are a major concern, particularly chain stretch or wear. If ignored, this can lead to rattles, poor running, and in worst cases, catastrophic engine failure.
The variable valve timing system (VANOS) is another weak point. When the solenoids fail, it can cause rough idling, sluggish performance, and fault codes.
Engines with Valvetronic, BMW’s variable valve lift system, can suffer from faults with the Valvetronic motor or the eccentric shaft sensor. These faults can cause strange throttle behaviour or inconsistent idling.
Cooling systems are also a recurring weak point. Water pumps can fail, and the various hoses, fittings, and reservoirs tend to become brittle with age.

The 6-Cylinders:

If you’re looking at an E46 with a straight-six, chances are it’s one of the M52 or M54 engines. These are great engines overall, smooth, responsive, and fairly robust, but they do come with their own set of headaches.
The cooling system is again a known issue area. The expansion tank, its mounting plate, and the oil cooler thermostat housing are all plastic—and when one of them fails, chances are the rest won’t be far behind. Touch one, and you might find yourself replacing the lot. Radiators can be fragile too.
Water pumps should be replaced with units that use a metal impeller, as the original plastic ones are known to fail.
As with the four-cylinders, valve cover gaskets and oil filter housings are common leak points.
One component specific to the six-cylinder models is the DISA valve. This is part of the intake manifold and adjusts the airflow path to optimise power delivery. Unfortunately, it’s mostly plastic and prone to failure. If it breaks apart, it can be sucked into the engine—causing serious damage. The usual symptoms include power loss, a rattling noise, or fault codes. Fortunately, there are repair kits and upgraded metal versions available.
The dual VANOS units on these engines can also cause issues, particularly with the solenoids wearing out over time.
PCV systems are another weak spot. The positive crankcase ventilation valve can clog or fail, causing rough running and excessive oil consumption. Fortunately, full replacement kits are available and relatively affordable, it’s just a bit of a job to get to, since it’s tucked under the intake manifold.
Oil consumption in general is something to be aware of, these engines can use a bit of oil, which isn’t unusual given their age and mileage, but it can sometimes become excessive.
That said, for all the above, these are still fundamentally good engines. They’re naturally aspirated, there are no turbos or superchargers to worry about, and parts are relatively inexpensive. Thanks to a massive support network and strong enthusiast community, they’re easy to work on, and help is never far away.

The Diesels:

The diesel variants were never officially sold in Australia, but in other markets, they’re actually regarded as some of the more reliable diesel engines BMW ever made.
One major issue, particularly on the M57TÜ engines, is swirl flap failure. These flaps live in the intake manifold and, if they break apart, the resulting engine damage can be catastrophic. Most owners recommend removing or deleting them entirely as a preventative measure.
Turbochargers typically wear out between 150,000 and 200,000 kilometres. Tell-tale signs include whining noises, smoke, and a noticeable drop in power.
Injector issues are also common, failed seals or faulty injectors can lead to rough running, poor fuel economy, and excessive smoke.
The EGR and intake system can clog up with carbon and oil sludge, especially in cars that are only used for short trips.
Thermostats can also fail, causing the engine to run too cool. This doesn’t always trigger a fault code, so it’s often missed, but it’ll hurt your fuel economy.
And while not an engine-specific fault, the automatic transmissions in diesel models like the 330d can wear out. Many are ‘sealed for life’ units, but regular fluid changes at around the 100,000-kilometre mark are highly recommended to prolong their lifespan.

Suspension:

The suspension bushes on the E46 really should be considered a service item. Any well-maintained example on the used market will likely have had them replaced, and if it has, you’ll absolutely feel the difference. An E46 with fresh suspension bushes and either OEM or high-quality aftermarket struts and springs can be an incredibly rewarding car to drive.
That said, be cautious with cars fitted with aftermarket lowered springs or coilovers. In these cases, the front shock top mounts are known to deform or even crack—a condition often referred to as “mushrooming.” Ideally, if a car has been lowered properly, it should also have reinforcement plates fitted to prevent this from happening.
Get the suspension right, and the E46 truly comes alive. The balance, composure, and feedback it offers are still impressive even by modern standards.

Australian model range:

Sedan

318i (1998–2001)
• 1.9L petrol I4 (M43 TUB19)
• 4-speed auto, 5-speed manual (RWD)
• 87 kW (117 hp) / 180 Nm (133 lb-ft)

320i (2000–2001)
• 2.2L petrol I6 (M54 B22)
• 5-speed auto, 5-speed manual
• 125 kW (168 hp) / 210 Nm (155 lb-ft)

323i (1998–2000)
• 2.5L petrol I6 (M52 TUB25)
• 5-speed auto, 5-speed manual
• 125 kW (168 hp) / 245 Nm (181 lb-ft)

325i (2000–2001)
• 2.5L petrol I6 (M54 B25)
• 5-speed auto, 5-speed manual
• 141 kW (189 hp) / 245 Nm (181 lb-ft)

328i (1998–2000)
• 2.8L petrol I6 (M52 TUB28)
• 5-speed auto
• 142 kW (190 hp) / 280 Nm (207 lb-ft)

330i (2000–2001)
• 3.0L petrol I6 (M54 B30)
• 5-speed auto
• 170 kW (228 hp) / 300 Nm (221 lb-ft)

318i (2001–2005)
• 2.0L petrol I4 (N42 B20)
• 5-speed manual, 5-speed auto
• 105 kW (141 hp) / 200 Nm (148 lb-ft)

320i (2001–2005)
• 2.2L petrol I6 (M54 B22)
• 5-speed manual, 5-speed auto
• 125 kW (168 hp) / 210 Nm (155 lb-ft)

325i (2001–2005)
• 2.5L petrol I6 (M54 B25)
• 5-speed manual, 5-speed auto, 6-speed SMG
• 141 kW (189 hp) / 245 Nm (181 lb-ft)

330i (2001–2005)
• 3.0L petrol I6 (M54 B30)
• 5-speed auto
• 170 kW (228 hp) / 300 Nm (221 lb-ft)

Coupe

320Ci (2000–2003)
• 2.2L petrol I6 (M54 B22)
• 5-speed manual, 5-speed auto
• 125 kW (168 hp) / 210 Nm (155 lb-ft)

323Ci (1999–2000)
• 2.5L petrol I6 (M52 TUB25)
• 5-speed manual, 5-speed auto
• 125 kW (168 hp) / 245 Nm (181 lb-ft)

325Ci (2000–2003)
• 2.5L petrol I6 (M54 B25)
• 5-speed manual, 5-speed auto
• 141 kW (189 hp) / 245 Nm (181 lb-ft)

328Ci (1999–2000)
• 2.8L petrol I6 (M52 TUB28)
• 5-speed manual, 5-speed auto
• 142 kW (190 hp) / 280 Nm (207 lb-ft)

330Ci (2000–2003)
• 3.0L petrol I6 (M54 B30)
• 5-speed manual, 5-speed auto
• 170 kW (228 hp) / 300 Nm (221 lb-ft)

320Ci (2003–2006)
• 2.2L petrol I6 (M54 B22)
• 5-speed manual, 5-speed auto
• 125 kW (168 hp) / 210 Nm (155 lb-ft)

325Ci (2003–2006)
• 2.5L petrol I6 (M54 B25)
• 5-speed manual, 5-speed auto, 6-speed SMG
• 141 kW (189 hp) / 245 Nm (181 lb-ft)

330Ci (2003–2006)
• 3.0L petrol I6 (M54 B30)
• 6-speed manual, 5-speed auto, 6-speed SMG
• 170 kW (228 hp) / 300 Nm (221 lb-ft)

Touring

320i Touring (2001–2005)
• 2.2L petrol I6 (M54 B22)
• 5-speed manual, 5-speed auto
• 125 kW (168 hp) / 210 Nm (155 lb-ft)

Convertible

330Ci (2000–2003)
• 3.0L petrol I6 (M54 B30)
• 5-speed manual, 5-speed auto
• 170 kW (228 hp) / 300 Nm (221 lb-ft)

325Ci (2004–2006)
• 2.5L petrol I6 (M54 B25)
• 5-speed manual, 5-speed auto, 6-speed SMG
• 141 kW (189 hp) / 245 Nm (181 lb-ft)

330Ci (2003–2006)
• 3.0L petrol I6 (M54 B30)
• 6-speed manual, 5-speed auto, 6-speed SMG
• 170 kW (228 hp) / 300 Nm (221 lb-ft)

Compact (E46/5)

316ti (2001–2005)
• 1.8L petrol I4 (N42 B18)
• 5-speed manual, 5-speed auto
• 85 kW (114 hp) / 175 Nm (129 lb-ft)

318ti (2001–2005)
• 2.0L petrol I4 (N42 B20)
• 5-speed manual, 5-speed auto
• 105 kW (141 hp) / 200 Nm (148 lb-ft)

325ti (2002–2003)
• 2.5L petrol I6 (M54 B25)
• 5-speed manual, 5-speed auto
• 141 kW (189 hp) / 245 Nm (181 lb-ft)

325ti Sport (2003–2005)
• 2.5L petrol I6 (M54 B25)
• 6-speed manual, 5-speed auto, 6-speed SMG
• 141 kW (189 hp) / 245 Nm (181 lb-ft)

Exterior:

One of the first things to look out for, particularly if the car has spent time in colder climates or near the coast, is rust, and it’s essential to inspect the entire car thoroughly.
While some rust can be relatively straightforward to repair, more serious corrosion can render the car essentially worthless. Pay close attention to the front guards and the wheel arches both front and rear, run your hand along the inner lip of each arch to check for crusty or flaky metal, and look for evidence of poor-quality repairs. It’s also worth inspecting underneath the car, focusing on the chassis rails, sills, and especially the jacking points, which are often damaged from improper use.
Also check for corrosion around the base of the door mirrors, and at the boot lock and rear windscreen surrounds, these problem areas apply across all body styles.
One of the most well-documented issues on the E46 is cracking around the rear subframe. This is a fairly common fault caused by weaknesses in the design of the subframe mounting points and the materials used in the surrounding structure. Interestingly though, many E46s have never developed this issue, at least not yet.
BMW attempted to address the problem during the car’s mid-life update (the LCI or Life Cycle Impulse) with extra spot welds in the affected areas, but subframe cracks have still been reported in both pre- and post-facelift cars. Convertible models seem less prone to this thanks to their inherent chassis flex, and lower-powered variants tend to avoid it as well—most likely due to reduced stress on the rear structure from lower torque outputs.
The subframe issue can be repaired, and there are reinforcement kits readily available online. However, in some cases, the cost of a proper repair may exceed the value of the car, so it’s something to keep in mind, particularly if you’re not deeply committed to the E46 platform. And if the car has already had a repair, confirm that it was done properly and not just patched up.
Owners also report that the door locks tend to seize up unless lubricated with spray grease every few months, and as you’d expect for a European car approaching 25 years of age, the door seals are likely due for replacement.
While inspecting the doors, test the windows, because the regulators are known to fail. It’s a common problem, and unfortunately, not a particularly rare one. Also check that all the electric components work properly.
Depending on the model and specification, these cars can be surprisingly well-equipped for their age, with features like parking sensors, power-folding mirrors, and automatic headlights. Back in the early 2000s, this was quite advanced for the class, but at this point, some of those features may no longer be functioning as they should.
If something’s not working, it could be as simple as a faulty switch or a worn stalk, but it might also be caused by a failure of the GM5 module, or General Module 5, which controls a host of body electronics and is known to fail. The good news is that replacement modules and repair services are available, and there are aftermarket options too. Just be cautious if someone has swapped the module from another E46, there have been plenty of cases where this caused more issues than it solved.
If the car has a sunroof and the drainage channels haven’t been cleared regularly, water can find its way inside the cabin and end up damaging the ECU, or DME in BMW speak, which can lead to serious problems, including in extreme cases, the car catching fire. Also check the sunroof operation, like the window regulators, the motors can fail over time. If the entire cassette needs replacing, it’s not a cheap or easy job.
For convertibles, it’s important to keep the folding roof mechanism well-lubricated to ensure smooth operation. If the system seizes or breaks, repairs can be very costly. A quick tip, if the roof seems to function correctly but struggles to close fully or line up properly, that can be a sign the car’s had an accident and been poorly repaired.
And speaking of damage, deteriorated rubber seals, like the one at the base of the windscreen, can result in perished wiper blades, which might explain why someone couldn’t see where they were going in the first place.

Interior:

When it comes to the interior, and considering we’re talking about a car that’s now a quarter of a century old, things actually hold up reasonably well, though, unsurprisingly, there are a few age-related complaints.
Most of the plastics will be getting a bit brittle by now, so don’t be surprised if things like the glove box latch or the clips around the dash and door trims have broken or are about to. The good news is that replacements are generally easy to source and cheap to fix.
Some interior plastics, particularly the soft-touch finishes, can develop a tacky or sticky feel over time, and if the car has woodgrain trim, it’s not uncommon to see fading or cracking.
In warmer climates like much of Australia, the headliner can sag badly, it tends to look like it’s been parachuted in rather than glued in place. The fabric on the A-, B- and C-pillars often follows suit. Again, not a catastrophic issue, and it can all be rectified with a proper re-trim.
If the car’s fitted with leather upholstery and the previous owners haven’t cared for it, expect to see some hardening, cracking, or even sections of leather peeling or flaking off. A full re-trim will sort it out, but factor that into your budget.
Electrically, it’s important to check absolutely everything. Try every switch, stalk, and button to ensure it all works properly. As with the exterior, many issues can come down to simple things like worn contacts or a broken control, but if multiple systems aren’t working, there’s a good chance the GM5 module is the culprit. It’s repairable, and there are aftermarket replacements available, but again, be wary if it’s been swapped with one from another car, as compatibility issues can pop up.
The climate control system also deserves a thorough test, check that the air conditioning works on every fan speed and temperature setting. Faults here can be traced to worn-out blower motors, failing final stage resistors, or issues with the condenser. Fortunately, most of this is fixable without too much stress or expense.
And yes, the factory infotainment system is going to feel incredibly outdated. These cars pre-date the smartphone era, so the original head unit isn’t going to impress anyone. The speakers are also likely past their best. But the upside is that upgrades are easy—modern systems with Apple CarPlay, Android Auto, reverse cameras, and new speakers are widely available and can transform the in-car experience.

Mechanically:

The 4-Cylinders:

The earlier M43 engine is a simpler, single-cam unit, and while it’s a bit old-school, it tends to be the most reliable of the bunch.
The more advanced N42 and N46 engines offer improved performance and efficiency, but they’re also more complex, which can mean more things to go wrong. Regardless of which engine it is, they’re all known for leaking oil—typically from the valve cover gaskets and the oil filter housing.
Timing chain issues are a major concern, particularly chain stretch or wear. If ignored, this can lead to rattles, poor running, and in worst cases, catastrophic engine failure.
The variable valve timing system (VANOS) is another weak point. When the solenoids fail, it can cause rough idling, sluggish performance, and fault codes.
Engines with Valvetronic, BMW’s variable valve lift system, can suffer from faults with the Valvetronic motor or the eccentric shaft sensor. These faults can cause strange throttle behaviour or inconsistent idling.
Cooling systems are also a recurring weak point. Water pumps can fail, and the various hoses, fittings, and reservoirs tend to become brittle with age.

The 6-Cylinders:

If you’re looking at an E46 with a straight-six, chances are it’s one of the M52 or M54 engines. These are great engines overall, smooth, responsive, and fairly robust, but they do come with their own set of headaches.
The cooling system is again a known issue area. The expansion tank, its mounting plate, and the oil cooler thermostat housing are all plastic—and when one of them fails, chances are the rest won’t be far behind. Touch one, and you might find yourself replacing the lot. Radiators can be fragile too.
Water pumps should be replaced with units that use a metal impeller, as the original plastic ones are known to fail.
As with the four-cylinders, valve cover gaskets and oil filter housings are common leak points.
One component specific to the six-cylinder models is the DISA valve. This is part of the intake manifold and adjusts the airflow path to optimise power delivery. Unfortunately, it’s mostly plastic and prone to failure. If it breaks apart, it can be sucked into the engine—causing serious damage. The usual symptoms include power loss, a rattling noise, or fault codes. Fortunately, there are repair kits and upgraded metal versions available.
The dual VANOS units on these engines can also cause issues, particularly with the solenoids wearing out over time.
PCV systems are another weak spot. The positive crankcase ventilation valve can clog or fail, causing rough running and excessive oil consumption. Fortunately, full replacement kits are available and relatively affordable, it’s just a bit of a job to get to, since it’s tucked under the intake manifold.
Oil consumption in general is something to be aware of, these engines can use a bit of oil, which isn’t unusual given their age and mileage, but it can sometimes become excessive.
That said, for all the above, these are still fundamentally good engines. They’re naturally aspirated, there are no turbos or superchargers to worry about, and parts are relatively inexpensive. Thanks to a massive support network and strong enthusiast community, they’re easy to work on, and help is never far away.

The Diesels:

The diesel variants were never officially sold in Australia, but in other markets, they’re actually regarded as some of the more reliable diesel engines BMW ever made.
One major issue, particularly on the M57TÜ engines, is swirl flap failure. These flaps live in the intake manifold and, if they break apart, the resulting engine damage can be catastrophic. Most owners recommend removing or deleting them entirely as a preventative measure.
Turbochargers typically wear out between 150,000 and 200,000 kilometres. Tell-tale signs include whining noises, smoke, and a noticeable drop in power.
Injector issues are also common, failed seals or faulty injectors can lead to rough running, poor fuel economy, and excessive smoke.
The EGR and intake system can clog up with carbon and oil sludge, especially in cars that are only used for short trips.
Thermostats can also fail, causing the engine to run too cool. This doesn’t always trigger a fault code, so it’s often missed, but it’ll hurt your fuel economy.
And while not an engine-specific fault, the automatic transmissions in diesel models like the 330d can wear out. Many are ‘sealed for life’ units, but regular fluid changes at around the 100,000-kilometre mark are highly recommended to prolong their lifespan.

Suspension:

The suspension bushes on the E46 really should be considered a service item. Any well-maintained example on the used market will likely have had them replaced, and if it has, you’ll absolutely feel the difference. An E46 with fresh suspension bushes and either OEM or high-quality aftermarket struts and springs can be an incredibly rewarding car to drive.
That said, be cautious with cars fitted with aftermarket lowered springs or coilovers. In these cases, the front shock top mounts are known to deform or even crack—a condition often referred to as “mushrooming.” Ideally, if a car has been lowered properly, it should also have reinforcement plates fitted to prevent this from happening.
Get the suspension right, and the E46 truly comes alive. The balance, composure, and feedback it offers are still impressive even by modern standards.