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BMW M3 (E46, 2000 - 2006): review, history and buying guide

The E46 M3 was BMW M division’s most celebrated model at its zenith. Here's why it's one of our top 25 cars of the past 25 years

The E46-generation BMW M3 first appeared on the cover of evo magazine for issue 024. A simple side profile of the car finished in Imola Red, set against a black background. Nobody had driven the car at this point but there was already a big buzz surrounding BMW’s new interpretation of its most celebrated model. ‘Why this will be the best driver’s car BMW has ever built’ the cover proclaimed, unequivocally. Pretty bold stuff, but there are many who would agree with the sentiment to this day.

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That’s the thing about this car. As time goes on it only seems more perfectly conceived and executed. The E46 M3 is the right size, it has the right engine with the right amount of power, it looks right – clean and aggressive but subtle, too – it sounds right, the gearbox is (mostly) right, it has the right amount of technology and driver aids. We live in a complex world but there are some undisputed truths, and one of them is that the E46 BMW M3 is just right. On every level. It’s an eternal benchmark and a moment in time just like, say, a Peugeot 205 GTI or an original Impreza Turbo or Porsche 997 GT3.

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> BMW M5 (E39, 1998 - 2003): review, history and buying guide

So much so, that little bits of E46 will have seeped into your brain. Even if you’ve never been anywhere near one. You don’t have to be an expert to know, for example, that the SMG paddleshift ’box is A Very Bad Thing. That should you ever go looking for one you’d fervently seek out a car wearing 18-inch wheels instead of the near-ubiquitous 19s, which eroded the dynamic polish. You remember that the rear quarter-lights open a few degrees electrically and that, once they’re pushed out, the sharp, metallic sounds of the 338bhp 3.2-litre straight-six are amplified and enhanced all the way to 8000rpm. You probably know that the E46 M3 was the first M-division car with the Variable M Differential Lock, too.

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So why didn’t it win eCoty in 2001? Well, it sort of did. By a pretty big margin it saw off the Lamborghini Murciélago, Ruf R Turbo, Lotus Elise S2, Aston Martin Vanquish, TVR Tamora and many more. On roads draped across the hills of Tuscany the M3 was simply fabulous, and by now we knew so much more about it. The joys of that free-spinning straight-six; the sublime balance of the chassis and the way the clever diff made it so easy to dictate the car’s stance under power; the purity of the whole experience. Only a wedge of carbonfibre crammed with leather, Alcantara, titanium and AMG’s finest V12 thwarted a cruise to the eCoty title. Placing second behind a Pagani Zonda C12‑S is a victory in my book.

Downsides? An oddly elevated driving position, a fat, squishy steering wheel, clumsy throttle programming in Sport mode (luckily it didn’t change anything else so could be left well alone) and the distinctive vertical bounce that it exhibited over difficult surfaces. Oh, and the woeful brakes. Great feel and progression… for one big stop. How could they get this so wrong? Brakes were an M division blind spot for many years and the only real solution was the excellent upgrade offered by AP Racing. Try finding a CSL without it… 

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Ah yes, the CSL. Lighter, more powerful, breathing through the famous carbonfibre airbox, fitted with those gorgeous 19-inch rims and fixed-back seats and going as far as to have a carbonfibre roof. With the kicked-up rear bootlid and deeply cool round inlet on the front bumper, the CSL looks simply stunning. Incredibly, it’s 110kg lighter than the standard car, too. It should have been an instant icon. Yet it fell a little flat. Hampered by the aforementioned SMG gearbox, fitted with extreme Michelin Pilot Sport Cup tyres that provided lots of grip but very little feel (and no wet-weather security whatsoever) and in the context of the second-generation Porsche 996 GT3, the CSL failed to meet our lofty expectations. At eCoty in 2003 it finished a rather humbling sixth. We’ve driven CSLs since and our view has softened, but the gearbox is still very hard to forgive. 

Luckily things were put right with the M3 CS. It took much of the goodness of the CSL, including the revised steering rack, and melded it with the standard M3’s core attributes. And, of course, you could specify a six-speed manual. Drive a CS today and it perhaps feels more special than ever. The engine is sublime. It has wonderful throttle response and is so linear, yet the journey to the 8000rpm cut-out has distinct phases characterised by new noises and the ever-sharpening sense of power. Compared to the digitised, synthesised sounds and deliveries we’re used to today, it’s a whole new world of excitement. It’s a bit of a shock what we’ve now accepted as the norm when this level of mechanical joy was readily available over 20 years ago. The slow drip-drip-drip of ‘progress’ exposed in one lunge into the red. 

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The CS manages to feel highly strung and on the edge but also entirely intuitive and easy to drive. As with the standard E46 M3, it’s an instinctive process. Oh man, the brakes really are crappy, though. And the gearbox isn’t the greatest ever fitted to a sports car. Overall though, it’s a stunning, timeless experience. And one that’s getting ever more precious.

Buying guide

Arriving in 2001, the E46 M3's 3.2-litre straight-six featuring an evolution of the 330Ci’s Double Vanos variable valve timing, while a lightweight crankshaft and graphite-coated aluminium pistons allowed it to spin at 8000rpm. In 2003, the £58K CSL brought 355bhp, a carbonfibre roof, cut-slick tyres and a price tag £20K over the basic car. The halfway-house CS of 2005 was an evo favourite.

The past two decades have been kind to the engine, and with the latest two M3s receiving a turbocharger and even the earlier E92 generation swapping six- for eight-cylinders, the E46 possesses a classic charm that’s been lacking from the M3 badge ever since.

Even in 2024, it’s a peach of a powertrain. It produces a useful 269lb ft of torque from 5000rpm – a high number by today’s turbocharged standards – proving that the engine needs to be revved to offer its sweetest performance, and sounds just plain old lovely. We described the note as a ‘confident howl that pushes all the right buttons’ back in evo 025. 

Sadly, the M3 isn’t bullet proof. Ex-evo editor and general motoring expert Peter Tomalin confirms: ‘pre-June ’03 engines were prone to crankshaft big-end bearing failure; oil supply upgrades should have been sorted under warranty.’ If there’s no history to prove they have, be very wary.

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Good servicing is crucial, including the run-in service at 1200 miles – the cheaper the car, the more likely that corners have been cut. Cracking subframes are another well-known problem, but thankfully easily fixable if caught early enough. If left to develop however, an expensive repair job could be on its way. We advise on listening out for tell-tale clicks when accelerating and braking on test-drives.

Other, less crucial suspension related issues are also fairly common amongst higher-mileage cars these days, but in general, the E46 M3 is a strong runner. There’s no reason why a high-miler couldn’t still be driven hard, just as long as it’s seen regular servicing and is allowed to warm up fully (surely something that applies with any car anyway).

What we thought

‘That 3.2-litre 338bhp straight-six is wonderful, with an effortless reach, ever-ready vigour and a tight-lipped howl spangled with a zingy, metallic edge. It’s unquestionably the M3’s best feature, punching it forward with deceptive ease and loading the rear so you can trim the car’s attitude through the length of a sweeping corner.’ – John Barker

The engine is a peach. It punches hard at any revs without the need to drop a cog or two, rocketing off with that characteristic growl and fizz from as low as 2000rpm. Leave the DSC system on and it barely intrudes; it’s set up to cut in only when the tail begins to shift. Switch it out and you can feel the M diff locking up progressively to keep both rear tyres hooked to the power.

The CSL feels markedly different, with more turn-in bite at the front and more grip at the rear. However, it can be more difficult to sense when the limit of grip has been reached. Suspension set-up is critical to the feel of a CSL and on factory settings things can seem a little numb when pushing those Cup tyres hard, though a small camber adjustment makes a massive difference.

Some owners also suggest a slight increase in rear toe-in, too. This means when test driving potential purchases one car may feel very different to another. Mind you, the salesman’s trick should simply be to thumb the ‘Sport’ button. Your ears will fill with the sound of one of the all-time great induction cries and rational thoughts will disappear from your brain.

What to pay*

Earlier convertible models are the cheapest of the range, with prices rising significantly for low-mile coupes and highly sought after CS and CSL models. *Prices as of March 2024

 BMW M3 (E46)BMW M3 CS (E46)BMW M3 CSL (E46)
Excellent£35,000£55,000£125,000
Good£25,000£40,000£100,000
Average£18,000NA£70,000
Project£9000NANA

BMW M3 (E46) specs

EngineStraight-six, 3246cc
Power338bhp @ 7900rpm
Torque269lb ft @ 5000rpm
Weight (kerb)1495kg
Power-to-weight230bhp/ton
0-60mph5.1sec
Top speed155mph (limited)
Price when new£39,730 (2004)
Price today£9000 - £125,000
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