Which is the greatest generation BMW M3? This is a question that will leave BMW aficionados debating as their lives depended on it. Everyone has their preference and there is no real wrong answer here. The high-performance model that defined the brand is still its greatest product ever.

When debating the best M3, you seldom find the E46 generation outside the top spot. Why? As far as BMW M models go, you'll be hard-pressed to find a purer BMW. Silky smooth power, stunning balance, and undeniable styling - all in one package. Even 20+ years since release, does the dynamic character of the E46 M3 still hold the same value? Well, you're about to find out.

BMW E46 M3 Performance And Capability

When the E36 generation M3 first hit the U.S. market in 1995, many BMW enthusiasts had mixed opinions. In the U.S., the M3-specific S50 engine featured 78 less horsepower than its European equal. Its's styling looked too similar to a base model E36. Compared to the homologation special that was the E30 M3, the E36 M3 didn't give the same feeling.

BMW no doubt heard the outcry from their brand's loyalists. Thus, they made sure that for the new Millenium, the E46 M3 was to be their greatest M-car made yet. From the beginning of development, the E46 M3 had a competitive target: the Porsche 911.

BMW wanted to provide the same level of performance and refinement as the 911 but at a lower price point. To achieve this, they needed to make the best M3 ever. To do that, they had to correct the previous generation's mistakes. This time around all markets would receive the same engine and capability.

The S54 3.2-liter inline-six-cylinder engine that graced the E46 M3 was exactly what this M3 needed. The S54 remains BMW's greatest naturally-aspirated inline-six ever built. Now an icon of the brand, the 333 horsepower of the S54 at 7,900 RPM was almost 100 horsepower more than the E36 M3 S50 engine. It also put out 269 pound-feet of torque at 4,900 RPM leading to a respectable 5.1 second 0-to-60 MPH time. The silky linear power band that encourages you to rev it out is by far, the S54's best quality.

Although far from the fastest M3, the E46 generation was the last to feature a naturally-aspirated inline-six. The E46 M3 had BMW's greatest iteration of their original performance powerplant. The next generation E90 model had a V-8 engine, which many purists didn't agree with. Since then, all M3 models have featured modernized turbocharged inline-sixes.

Yet, none kept the undeniable raw motorsport character of the S54. In stock form, the engine has a particularly raspy sound. This is a make-or-break quality for many M3 enthusiasts. Some down-right hate its tone, others love its unrefined motorsport quality. Aftermarket units can make a big difference in the character of the exhaust note.

However, it wasn't just the engine that made the E46 M3 special. It is a balanced vehicle in all regards to dynamics. The steering feel is the best you may find on any generation 3-series model. The hydraulic rack gives you an incredible sense of the road.

You always know the limits of the M3, because it communicates them so well. Hearing the individual throttle bodies actuate with the press of the throttle is intoxicating. That's only one of the things that you can replicate in a modern sports car. Anyway, you look at it, the E46 M3 is a fine-tuned instrument for driving. Its sense of feel is unlike any other generation M3. It is the complete package, not lacking in any aspect of performance.

BMW E46 M3 Specs

Engine

S54 3.2-liter Inline-six

Horsepower

333 @ 7,900 RPM

Torque

262 @ 4,900 RPM

Transmission

6-speed manual transmission

6-speed SMG-II semi-automatic transmission

Drive Layout

Rear-wheel drive

0-60 MPH

5.1 seconds

Exterior Design

The E46 M3's design harkened back to the motorsport styling of the E30 M3. You can't confuse an E46 M3 with a base model 325i. The E46 M3 has 80 percent unique body panels compared to a standard E46. It was only offered in a coupe and convertible body styles. The M3's hips are wide and flared to stand out from the body. This was the first M3 to feature BMW's now staple quad-exhaust design. 2003 and later models also offer upgraded LED taillights and bi-xenon headlights.

The E46 M3 features some of the best OEM wheel designs of all time. The 19-inch BBS wheels available on the Competition Package are iconic. This package was available only for the 2005 and 2006 model years and originals are rare. Almost every BMW owner has sought after some variation of these wheels for their 3-series. In Laguna Seca Blue with Competition wheels, the E46 M3 is one of the best-looking factory sports cars ever.

Many enthusiasts find the ultra-limited 1,383 unit CSL edition to be the ultimate E46 M3. This variant shaved 243 pounds off of a standard M3 besides a host of other upgrades. Unfortunately, it was never offered in the U.S. Thus, the "best" M3 you can find stateside is a Competition Package.

Exterior Colors

Standard Colors

Alpine White

Imola Red

Jet Black

Optional Colors

Titanium Silver Metallic

Silver Gray Metallic

Mystic Blue Metallic

Carbon Black Metallic

Interlagos Blue Metallic

Dimensions

Length

176.8 in

Width

70.1 in

Height

54.0 in

Wheelbase

107.5 in

Track Width

59.37 in (front) / 59.37 in (rear)

Cargo Space

9.5 cu-ft

Interior Design

While not cutting-edge by any means, the interior of the M3 is a nice place to be. It does everything you need without all the complexities of modern technology. A modern head unit might be a necessity for daily drivers. Yet, if this is your weekend car, you might skip that altogether and enjoy the exhaust note.

Compared to modern sports car interiors, the E46 M3 is very simple. There is no Bluetooth connectivity or infotainment capability. Not a single digital display outside the very outdated-looking A/C and radio in the typical BMW orange. The gray backing with white numbering on the M3-specific instrument cluster is a fan favorite. The RPM backlighting to the 9,000 RPM limit cluster looks too cool.

On initial engine start, this backlighting starts at 4,500 RPM. The engine cannot rev past this limit until it heats up. As the engine heats up, the RPM limiter lights adjust as well. At full operating temperature, the 8,000 RPM redline is finally unlocked. It's almost like a mini-game within the experience of driving.

Yet, the well-weighted leather steering wheel and shifter are quality units. With all its motorsport heritage and emphasis on performance, we can't forget how livable of a car the E46 M3 is. It has functional rear seats and a sizable trunk. Leather seats were the most common option, but cloth seats were available. BMW stuck to the mantra of less is more.

BMW E46 M3 Price, Availability, and Ownership

BMW E46 M3 Price

BMW E46 M3 Coupe

$46,500 (est)

BMW E46 M3 Convertible

$54,500 (est)

When new, the cost of a 2003 BMW M3 coupe was $46,500 MSRP. Convertible models were about an $8,000 premium over the coupe. At the time, the Competition Package was an extra $4,000. Over the course of six years, 85,766 E46 M3s saw production. 56,133 were coupes and 29,633 were convertibles.

You might say the perfect time to have purchased an E46 M3 was a couple of years ago before prices exploded. Over the past five years the average sale price of a manual Coupe is $30,232.. Rare Competition Package models tend to fetch about $10k more than a base M3. That is getting scary close to the original MSRP back when new.

Due to plentiful production numbers, prospective owners have many options to pick from. Yet, with some M3s being over 20 years old now, there are some details to consider before buying one.

If you are looking for the cheapest E46 M3 you can find, it is likely to be an SMG. The biggest topic of debate in the E46 M3 circles is SMG semi-automatic transmissions because compared to modern dual-clutch transmissions it has many shortcomings. It is faster than the offered manual but twice as unreliable. Replacing the SMG can be a five-figure undertaking.

We don't know a single SMG owner who doesn't wish they had a manual instead. So, if you're considering an SMG M3, it is best to find one under 100,000 miles. These models tend to sell for about $5,000 cheaper than the 6-speed manual.

The S54 engine due to its high-revving nature requires a diligent owner. Negligent ownership or questionable service records should be a red flag. Rod bearings are a notorious issue with these engines. 2001 to 2003 model years had a recall related to the engine bearings. If you are considering these model years, make sure to check the VIN to guarantee a completed recall. If the M3 doesn't have it done, that should be an immediate concern.

Interiors can have varying levels of quality depending on previous ownership. Ensure the M3 is authentic by checking it has those unique seats, instrument cluster, and rearview mirror.

Another pitfall of all E46 3-series models is the rear subframe. They have the tendency to crack due to their high load, a design oversight by BMW. Diligent E46 owners install aftermarket reinforcement kits to ensure the frame stays solid. If the M3 you are looking at has this reinforcement done, you can assume the owner cared about the car.

Despite its shortcomings, the BMW E46 M3 is still one of the greatest driver's cars of all time. Many consider it the greatest BMW M3 has ever made. It is a potent blend of all the things that made BMW a standout performance brand. The right amount of modern tech mixed with the right amount of old-school feel.

Is it a better driver's car than the 996 Porsche 911 it targeted? It's hard to say yes. The biggest fault is that the M3 is still based on a 3-series. The M3 has to work around those limitations. The 911 is a better driver in every way because its sole intent in design is to go fast around a race track. Yet, you'll have to pay much more for a Porsche experience.

Even at their current price point, you still cannot replicate the feeling of driving an E46 M3 with a modern M3. The E46 M3 is what a front-engine rear-wheel drive German sports car should feel like.

FAQ

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