Imola Red BMW E46 M3 Coupe

BMW E46 M3 Review as a Daily Driver

The BMW E46 M3. A car I’ve dreamt of owning for years and worked diligently to acquire. Luckily depreciation had been working for me too and the time felt right to take the plunge.

With values being at an all-time low and media coverage starting to surge online, mostly about the amount of car they are for the money, I felt as though the moment was right.

In my head, the only real concern that I had to overcome was the greatly increased insurance and tax burden that I’d have to bear, especially being in my early 20’s.

Imola Red BMW E46 M3 blasting up a British B road.

I’ve now owned the M3 for over 4 years having purchased in 2015. Its been my daily driver for much of that time, and I’ve built a great relationship with the M3 having spent many glorious hours behind the wheel, and a good few on my back laying underneath it.

I’ll go into more detail and expand upon my thoughts about the M3 later on, but so far its truly lived up to my expectations and ticked all the boxes I dreamt it would. It still scares the life out of me when provoked, but it’s also a well designed and comfortable daily to leisurely cruise around in.

Generally, I have commitment issues when it comes to cars, and this one has so far been no exception. Despite all manner of trials and tribulations it’s put me though, I still couldn’t bring myself to part with my “ultimate driving machine”.

I’ve taken lots of pics of work I’ve done, so I’m intending to put together a few write-ups of various M3 fixes, modifications and improvements which I’m hoping might help other owners, or at the very least entertain.

The E46 M3 is not my first BMW. Prior to it, I was lucky enough to own a gorgeous E30 318is which is where I caught the BMW bug. The guy I’d bought the E30 off had done an incredible job of restoring it and it was a real minter inside and out.

My previous BMW E30 318is in gorgeous Laser Blue paintwork.

I loved that car, it’s retro styling completely won me over and it was quite fun to drive.

Unfortunately, I needed to use it as a daily commuter all year round, and after a year of reliable service, I started to be plagued by pesky electrical gremlins. I eventually lost confidence in it consistently getting me to the office on a morning.

I was also starting to really fret about maintaining the condition of it, and each new stone chip cut me deep.

I decided it was the wrong car for the job and parted with it for the M3 as an arguably more sensible daily. In hindsight, this was very questionable logic, but your early 20’s is the right time to make a mistake or two, isn’t it??

I may share my experiences with that gorgeous E30 at a later date in another post, something inside tells me it won’t be my last E30.

Introducing the 2003 BMW E46 M3, as I purchased it

Stock BMW E46 M3 with 18" wheels.

It’s a 2003, Imola Red inside and out, with manual gearbox, complete with the OE spec 18” staggered wheels in shadow chrome.

It also has a solid selection of options specced from factory including widescreen navigation, 6 CD changer in the boot, heated electrically adjusting memory seats, electric rear window blind (a personal favourite), power-folding wing mirrors, rear parking sensors, xenon headlights, three rear headrests, and all the other toys which I believe are standard on the M3 version of the E46 coupe, for example, the auto-dimming rearview mirror.

It narrowly misses out on having all button slots filled thanks to the absent Harman Kardon audio equipment, but that wasn’t essential for me so no great loss. I heard it was mediocre at best anyway…

Imola Red BME E46 M3 leather interior.

I purchased this handsome 2003 M3 in summer 2015 with 86k on the clock, in fantastic original and unmodified condition with great service history. The documentation showed that it’d had a recent clutch change, a new battery, and interestingly an entire new OEM exhaust system fitted by BMW at 61k.

I have a suspicion that it was the common rusty exhaust flange issue which I’m sure I’ll mention again later on.

The only modifications on the car as far as I was aware were mildly tinted windows, Eibach Pro springs and a nifty reversing camera discretely mounted to the rear diffuser.

BMW E46 M3 18" OE alloy wheels in shadow chrome colour.

I’d travelled around a bit with the old man to look at a few E46 M3s before buying this one, and they were all not quite right in some way, generally never in the condition I was hoping for. I was originally after a safe looking Silver Grey example with a leather red interior to add a bit of personality.

As I was travelling to view the one I purchased, I was expecting to be offended by the sheer amount of bright red I was going to see. However, I immediately fell in love after seeing it in person. Imola Red II (paint code 405) is a very beautiful colour in the flesh, a deep rich red compared to most.

Plus the condition of this one did live up to expectations. I couldn’t have been happier to take it home.

BMW's S54 engine under the bonnet of the E46 M3.

My intention was to leave the car more or less stock, and that somewhat prevails, bar a desire to make select tasteful and purposeful tweaks or improvements which don’t stray too far from BMW’s original vision of the ultimate driving machine.

Of course, it wasn’t more than a couple of weeks into ownership before I was greeted by my first problem, and at a particularly inconvenient time forcing me to hand it straight over to a local mechanic.

I traced the unmistakable whiff of diff oil to a small puddle on my driveway under the car. The input seal on the differential had failed. Luckily, nothing major, just an unexpected setback and my first taste of the notorious “M tax” associated with these cars.

Leaking E46 M3 limited slip differential input seal.

I was greeted with by what I considered to be a hefty ~£300 bill for a fairly simple job. The price was quite easily justified by the exclusive oil and friction modifier BMW specify for the fancy limited slip diff they equipped their M3s with.

Little did I know, this was one of the more modest bills I’d be faced with during the coming years of ownership.

Can you daily drive a BMW E46 M3?

This is a big question and one I’d decided the answer was unequivocally “YES” to when I handed over the cash for one knowing it’d be my only car.

More than 4 years later and having driven the M3 almost daily for much of that time, I am feeling a lot more qualified to answer that question now.

Generally, when manufacturers try to produce a car that’s a good all-rounder, they wind up producing a vehicle which is a jack of all trades and a master of none. Comfort and performance are very difficult things to combine and rarely go hand-in-hand.

BMW’s goal when producing the M3 was to take on this challenge and create a vehicle that was perfectly comfortable to drive on long journeys yet with awe-inspiring performance and handling when called for. The “ultimate driving machine” if you will.

At the time of launch, the consensus among reviewers and journalists was that they’d come up with the goods on this challenge. All these years later, in my opinion, the BMW E46 M3 is still a great car to daily drive, at least in my circumstances.

Bear in mind that I have daily driven the M3 through country roads on my commute and through towns and villages in rural England. I only do the occasional long trip down the motorway and the odd detour into city traffic.

In my use case, the BMW E46 M3 performs beautifully as a daily driver, and once the engine has warmed up and you’re out on the open road you really get to enjoy the best of what the M3 has to offer.

You can cruise effortlessly along A-roads in absolute comfort all year round with the luxury of effective climate control through the summer and luxurious heated seats in the winter.

You really don’t have to be pushing the M3 to enjoy being behind the wheel, it can be as relaxing of an experience as you allow it to be.

However, with that wonderful straight-six engine and confidence-inspiring handling, it’s almost impossible to pass up an opportunity to let the car sing. With such readily accessible performance, each adventure up the rev-range induces a grin from ear to ear and it quickly becomes addictive.

Commuting on the same country road route day after day got me into a pleasant routine and the journey to and from work became much less of a chore.

I’d look forward to certain sections of the journey where I’d get my opportunity to open it up a bit each day and get ever closer to finding that perfect line through a series of bends.

I’d regularly find myself taking the scenic route home on summers evenings and I took any excuse to explore more sweeping rural Yorkshire roads, often while my tea sat waiting for me on the table going cold.

Read about BMW E46 M3 Specs in my other article where I go into more detail about them.

Driving an E46 M3 in a City

During occasions where I find myself at the wheel of more modern cars, it always surprises me how light and numb all the controls are compared to the M3. I wouldn’t say the BMW E46 M3’s controls are particularly heavy, but they are compared to a modern hatchback.

I think this trend with modern cars stems from their requirement to be friendly in stop-start city traffic scenarios.

When I have found myself negotiating my way through traffic at rush hour in the M3, I’d be hard-pressed to describe it as effortless, it is certainly manageable, but the car does not shine in this scenario.

Driving the E46 M3 in a city environment.

The S54 engine needs to be revved out to appreciate its true character, and of course, inner-city roads don’t offer much opportunity for this, not if you like having a licence anyway.

At low revs the S54 feels more sluggish than you expect, there is not much in the way of low-down torque, especially when compared to modern turbocharged cars.

Further to this, if you’re used to driving fast turbo-charged cars and like the way they make low down power effortlessly, the E46 M3 with the S54 engine will probably make no sense to you whatsoever.

You must work harder with a high revving naturally aspirated engine like the S54 and keep it on song towards the top of the rev range. This can be very rewarding work indeed however, and if you’re like me, you wouldn’t have it any other way.

I suspect if my commute had been through a city I’d have grown tired of driving the BMW E46 M3 and dealing with the firmer steering, heavier clutch, stiffer gears, and underwhelming low-down torque day after day.

Driving an E46 M3 at night

When driving the M3 at night, the first thing that occurs to you is just how great the xenon headlights are, even by modern standards. Providing they are set up correctly and the two headlight level sensors are fully functioning (ask me how I know) then vision at night time, even in poor conditions with no street lighting, is excellent.

Imola E46 M3 with 18 inch wheels photographed at night.

If your car is equipped with the navigation system, then this can reflect off the windscreen depending on your driving position. The old man complained about this, but I can only put this down to his gangster-inspired seat positioning as for me it’s no issue. You can also switch the screen off if you don’t want the distraction or dim it right down.

All of the lighting on the gauges and displays work on the one dimmer which can be turned right down which is handy when it’s pitch-black outside.

The switchgear and buttons are backlit nicely without being too bright or distracting. The interior lighting in the M3 is a retro orange colour and the arrangement of lights is extremely well thought through. There’s a very dim orange light constantly cast down onto the centre console where the gear stick is, which is a godsend when you need to access the centre console tray for whatever reason.

There are a couple of reading lights which are recessed into the centre ceiling fitting which means a passenger could sit and read a book without dazzling the driver too much.

Driving an E46 M3 in Winter

Driving an E46 M3 all year round through the country on twisty rural roads, you will quickly find yourself learning how to manage a powerful rear wheel drive car with a razor-sharp throttle response in low grip situations.

Here in the UK we don’t exactly have the harshest of winters. An example of British winter driving conditions would be around 0 degrees centigrade with sleet with the odd patch of black ice to be wary of. If you’re not being an idiot and ignoring the road conditions, then the M3 is a fine car to be in.

The traction control, while harsh by modern standards, really does do a great job of keeping you on the straight and narrow when grip is minimal. The ABS system is also very effective when you find yourself coming up to an unexpected junction and need to slam the anchors on, so you really are in safe hands if you’re being sensible.

In terms of cold weather comfort, I’m lucky enough to have heated seats in mine which are absolute luxury through winter. The heated windscreen washers are a great feature too and with the powerful climate control you can set off promptly on a frosty morning without much delay.

The BMW E46 M3’s Quirks

The E46 M3 does have a few “quirks” which can grate on you if daily driven.

Stiff gear selection

Particularly on cold winters mornings when you need to set off straight away, you can find that the car can be a bit more reluctant to go into first or reverse gear.

This is solved by a combination of double-clutching and putting it straight forward into third before then going to select first or reverse. It took me a while, and a gearbox oil change to figure that out, but now it’s down to muscle memory, I almost forgot to mention it.

Some people solve this with various additives, but I think this just shifts the compromise around to a different temperature range.

The engine can also feel a little rough on start-up, particularly while the secondary air pump is running that aids in warming up the catalytic converters to reduce emissions.

E46 M3 Kangarooing

There is also the rare phenomenon referred to as “kangarooing” where the M3 will not pick up smoothly when applying modest amounts of throttle when driving at very low speeds.

This doesn’t happen every time, it must be triggered by a certain set of circumstances. But when it does happen it causes the car to feel as though it jolts or bucks back and forth, as though someone is rapidly flicking an on/off switch on the throttle signal.

When I first experienced this not long after I got the car, I was convinced something was not right. Many other owners have experienced it too, and some maintain that it’s a fault, or down to something like a bad batch of fuel. Others say it’s not a real issue and is exclusively down to clumsy throttle inputs.

After a while and a lot of reading, I learned to avoid it altogether, and if I didn’t know better, I’d say the car fixed itself. Actually, I believe I’ve taught myself to avoid it without conscious thought.

There are scenarios where certain throttle inputs combined with other external factors (such as outside temperature and engine temperature) induce kangarooing, and these are very easily amplified into a vicious cycle by your right foot’s inputs to counteract it.

You can very easily avoid it by lifting off slightly, taking it as a prompt to change gear, or applying a bit more throttle.

Lack of cup holders

Another quirk to note about the BMW E46 M3 is the lack of cup holders. If you’re one of those people inclined to pick up a coffee on the way into the office, prepare to face a challenging problem. There’s literally nowhere to put your cup!

This is a really surprising oversight by BMW considering the E46 M3 is supposed to be an every-day car. It’s not something that’s bothered me personally, but it’s definitely bothered my passengers in the past.

You can buy a replacement centre console which features two holders, which I believe was an option on later model E46’s (probably in response to the complaints). Although if you want to put a tall bottle in there then you’ll find it gets right in the way of your arm, so it was definitely an afterthought.

Limited slip differential issues

The limited-slip diff that the BMW E46 M3 was fitted with from factory is well known for its quirks. While it is considered as an effective differential for putting the power down and uses clever technology to do so (absolutely cutting edge at the time), it wasn’t without its issues.

Many complain of groaning when turning tight corners at low speeds, in a car park for example. This was an issue from launch for the E46 M3 and after many complaints, BMW released a special friction modifier additive for the differential oil to quieten it down.

Generally, this solution did the trick, the only issue with it is the large additional cost when it comes to replacing the oil. As I’ve always had BMW’s expensive oil with friction modifier in mine, I’ve never experienced the groan myself.

What I have experienced though is the other big complaint about these diffs, the notorious diff clunk or thud.

This is an issue that many owners have tried to solve in different ways with varying success. Others just live with it and consider it to be “just another quirk”. The truth is that brand new these cars had some drivetrain clunk as many M-cars do, but over time this can get more and more excessive.

Basically, when you are pulling away or cruising around at low speeds the differential can emit a noticeable clunk when on or off the throttle. It’s a sound which initially implies that there’s slack being picked up in the drivetrain, and with the sound coming from behind, points in the direction of the diff.

From doing extensive reading on the topic there are quite a few potential sources of this issue, a worn guibo (AKA the drive shaft coupler), a worn prop shaft centre bearing, worn differential bushes, worn driveshafts, or excessive play in the differential itself.

Frustratingly one of the key factors in this is the design of the diff with asymmetrical output shafts, usually this leads to additional play in the off-side output and there are very limited options for solving it.

My M3’s differential certainly does clunk, and so far, I’ve been living with it and again teaching myself how to avoid exacerbating it. With some more careful clutch control, you can considerably tame down this noise and be much less distracted by it.

It’s definitely something that I will investigate further and attempt to improve in the future though. Frustratingly a change to Powerflex Black diff bushes only made it louder, so it’s not the bushes.

From reading, there’s a great way to solve it once and for all using an E36 M3’s differential which does not have the uneven driveshafts in its design.

This is also a more traditional clutch disc-based limited-slip diff which offers a sharper response as they do not rely on oil pressure to actuate. The negative to this type of diff is that it requires more regular maintenance if you want it to keep functioning properly.

BMW E46 M3 reliability

The BMW E46 M3 is a very well built, well designed and generally reliable car. After the initial post-purchase hiccup of a leaky differential input shaft seal, I drove the car pretty much every day for a year, through all seasons, all weathers with a mix of cruising and hooning, and didn’t face any reliability issues.

I took lots of opportunities to enjoy my new car and wring its neck properly without any consequences.

You must bear in mind that these are old cars now and things do wear out over time and need replacing, and many of the parts on these cars are expensive and unique to them.

I am opting to ignore the replacement of consumables here such as bushings, brake discs and pads,  as that’s more a cost of running issue which I’ll get to later.

There is some potential for electrical tomfoolery with these cars too and I did experience some troubles with the car’s traction control system for a time. I had a faulty ABS sensor which was playing up intermittently, but by simply switching off the traction control the car was operational until it was replaced which really took the stress out of it.

BMW E46 VANOS System

Another common issue as these cars get older is the VANOS system wearing out and causing the car to run rough at low revs and make nasty rattling noises.

The VANOS system controls the variable valve timing which allows the engine to run better both low and high in the rev range. The result is an improved economy and performance. It’s effectively BMW’s version of Honda’s famous VTEC.

VANOS issues are very common these days with cars reaching and surpassing the 100k mile mark. However, the issue but well documented and not the end of the world to repair. Uprated parts have even been developed to ward away reoccurrences, but this can all still be expensive.

Aside from the above, there a selection of very real and major flaws with these cars which can potentially be catastrophic.

I’ll mention them here and will probably cover them in much more detail down the line. Generally, however, there aren’t that many things that would stop a BMW E46 M3 getting you from A to B.

S54 Rod Bearing Issues

This is an issue which plagues BMW’s high-performance engines. The E46’s S54 engine is affected but by no means the worst offender.

In short, the big end bearings which sit between the rods and the crankshaft wear over time.

Eventually, they wear so much that they can spin, get very hot and disintegrate, potentially causing a lot of damage to the crankshaft while emitting lots of metal into the oil which is then circulated around the entire engine.

As you can imagine, this can cause all kinds of damage and involves a full engine-out strip down and rebuild to fix.

This is a design flaw, it’s the result of BMW engineers really pushing the boundaries of what’s possible with a road car engine, combined with them issuing stupidly long oil service intervals of 10k miles for the engines.

It’s an issue BMW eventually recognised themselves and later M3’s have a revised rod bearing design with different rod bolts (not that it helped much).

I’ve done a lot of reading about rod bearings on the S54 and read probably hundreds of accounts of failure or prevention. This topic has certainly been high on my list of concerns while owning a BMW E46 M3.

I’ve come away with the strong opinion that rod bearings should be treated as a 100k mile service item on the S54 engine. If your M3 has been really carefully warmed up every time and given at least double the oil changes than the service interval commands, the bearings could last much, much longer than that.

But the truth of the matter is, nobody knows how previous owners drove the car.

Do you reckon the guy who bought the car new before anyone knew anything about rod bearing issues went to all that effort??

He probably turned the key and with no mechanical sympathy whatsoever took off like a scalded cat leaving behind a trail of banknotes swirling around in his wake.

If you have any hint that your car has been thrashed and/or used as a track toy, you’ll probably want to be changing those rod bearings as a matter of urgency, even if this is way before you reach 100k miles.

There are quite a few BMW specialists up and down the UK who can undertake this work for you, but make sure you opt for a well-regarded technician who will offer a warranty as there are a few accounts of new bearings being incorrectly installed leading to exactly the issue their replacement is to avoid. I would recommend Mr Vanos who is located in Darlington.

While your engine is apart you would have to be mad not to take the opportunity to replace various other parts including the head gasket which would probably be due at around 100k miles anyway, and various other gaskets, seals and fluids.

You should also consider having the rod bearings and rod bolts uprated to King Racing and ARP items. The cost of all this work is high, and you can generally expect it to run you up to £2500.

It could be a lot worse though. The worst motors for this are by far the S85 V10 engine found in the E60 M5 and E63 M6, and the S65 V8 engine found in the E92 M3.

BMW E60 M5 S85 V10 engine with the two huge plenum chambers.

These cars are a generation later than the E46. They sport some of the most exciting engines to ever be stuffed into road cars, but they are very highly-strung and requiring a rod bearing change every 50-60k miles or so which is just absurd.

E46 M3 Cracked Subframe (RACP) Issue

All E46’s are prone to the cracking subframe issue. Confusingly it’s not the subframe that cracks, but rather the mounting points for it on the underside of the boot floor, known as the RACP (Rear Axle Carrier Panel).

Many standard E46 models have been known to suffer this fate too, particularly the ones with larger engines. But absolutely all BMW E46 M3’s will have this RACP problem at some point, and this is due to all the additional stresses that come with the increased horsepower and that savage throttle response.

Underneath the car, the mounting areas for the subframe on the RACP begin to crack over time, usually starting by the left rear subframe mount, and if left untreated these cracks can spread dramatically all the way around the mounting points.

Fascinatingly, I’ve never heard of an instance where this stopped the car from driving. In fact, many people report absolutely no symptoms at all and then suddenly discover that theirs has cracked badly on inspection.

Either way, looking at some of the horrors that people have found under their M3, it cannot be safe to run one with a badly cracked subframe, and the longer it’s left untreated, the worse it’ll be.

This is another issue BMW eventually owned up to and many cars were recalled and resin was injected between the internal and external skins of the boot floor to solidify and strengthen the whole area.

Sadly there have been quite a few reports that this solution was not up to the job long-term, and eventually, the issue would occur despite this.

The injected resin would then get in the way of more effective welding repairs.

The most recommended prevention to the subframe cracking issue is to strip the rear of the car down and weld reinforcement plates onto the mounting points to strengthen them.

The most well-regarded plates and fitting service (including repair where necessary) are created by a company called Redish Motorsport in Bristol, but quite a few BMW specialists up and down the UK are now well versed on this job. ETA Motorsport based in Kent would be my recommendation and they did a great job of mine when I had it done. Generally, the job costs around £800 all in.

For a complete solution, the reinforcement plates are often combined with bracing above the RACP in the boot, between the suspension turrets to stiffen the whole chassis up and prevent the flexing which is the source of the issue.

You can get top braces which are more heavy-duty and connect the suspension turrets at multiple points, however, these can restrict boot space and prevent the use of those handy split-folding rear seats.

Alternatively, you can get solutions which are not visibly obvious such as the “Vince bar” solution which is welded onto the top of the RACP and does not interfere with the boot space.

The beauty of the reinforcement plates is that if your boot floor is starting to crack (as most are), it’s not too late. These cracks can be drilled either end to stop them int heir tracks, welded back up properly and then the reinforcement plates welded over the top of them afterwards.

This fix can only be done in the early stages, however, and if the damage goes too far then you can end up in a situation where you need to source an entire boot floor from BMW which is eye-wateringly expensive, and that’s before you’ve got a quote from a shop with the necessary skills to install it properly.

As previously mentioned, the RACP cracking issue is one that will affect absolutely every BMW E46 M3.

If you’re in the market to buy an M3, buy one that’s already had the plates installed or factor it into the cost of purchase after thoroughly inspecting to check it’s not too far gone.

SMG gearbox issues

The sequential manual gearboxes on BMW E46 M3’s known as SMG II are one of the biggest pain points for this model.

I have no experience of SMG, having never personally driven an M3 equipped with it, so I can’t go into too much detail about this aspect of M3 ownership. All I can work on is the general consensus of other owners and various accounts that I’ve read.

In theory, these gearboxes sound brilliant, but in practice I think they are far more trouble than they’re worth and many owners grow to loathe them.

M3’s with these gearboxes are definitely faster than manuals, they shift faster than you can, there’s no denying that.

I’d love to try one and I suspect they’re wonderful if you’re doing track work and are trying to set records. But from what I know, they’re not so great when you’re cruising around town and the shifts are unpredictable, clunky and jarring.

Further to this, the SMG gearbox has a lot of potentials to go wrong and they cost a fortune to fix. The most common issue is the SMG pump failing which can leave an M3 car locked in or out of gear and put a complete end to whatever journey you were on.

This can happen completely out of the blue and unexpectedly which would certainly lead to a constant worry for me.

I was never considering purchasing a BMW E46 M3 with an SMG gearbox, even though they are tempting when you see how much cheaper they are compared to manuals.

My advice is to avoid them. Unless you’ve got a specific reason for wanting SMG then they could really spoil your M3 ownership experience.

The cost of running an E46 M3 as a daily driver

Running a high-performance vehicle as a daily driver is often not cheap. The BMW E46 M3 is no exception to this, and while it’s a brilliant daily in lots of ways, the costs can add up over time.

E46 M3 MPG and fuel costs

I’m a bit of a nerd when it comes to tracking my fuel usage and believe it or not I have tracked every tank of fuel I’ve run through the engine in a spreadsheet and recorded the miles driven, miles per gallon, the cars reported MPG figure, the cost of the fuel, the type of fuel and the date. I too consider this extreme, but also fascinating data to look back on.

As of today, I’ve run 5208.72 litres of super unleaded fuel through my E46 M3 since mid-2015. This has worked out to 99 fill-ups of super unleaded fuel, and the car has averaged 23.5 mpg. (Be aware that this is UK imperial gallons, not US ones which are about 1.2 imperial gallons)

E46 M3 fuel usage spreadsheet along with some top-level figures

  • Date range: 09-08-2015 to 12-09-2019
  • Car mileage range: 86507 to 113604 miles
  • Litres of petrol consumed: 5208.72L (1145.76 imperial gallons)
  • Total cost of fuel: £6170.73
  • Average cost to fill up: £62.33 (usually filling up soon after the light comes on)
  • Total miles driven: 27092.4
  • Average miles driven between fill-ups: 273.66 (usually filling up soon after the light comes on)
  • Average MPG: 23.5 (5.2 miles per litre)
  • Average MPG as reported by the OBC: 26.1 (a little more optimistic than the reality)
  • Best MPG: 31.5 (6.9 miles per litre)
  • Worst MPG: 9.3 (2 miles per litre)
DateCar MileageMiles DrivenLitres UsedMiles Per LitreMPGCar MPG FigureCostFuel Type
15/08/20158683532854.336.027.429.5 £62.31Esso Supreme
22/08/201587190354.954.596.529.632.7 £64.36Momentum99
02/09/201587502312.654.565.726.027.9 £61.05Momentum99
14/09/201587805302.954.425.625.326.9 £63.07Momentum99
02/10/201588113308.156.215.524.926.9 £64.02Momentum99
09/10/201588449335.955.746.027.429.3 £63.49Momentum99
21/10/20158874729854.215.525.026.8 £61.75Momentum99
01/11/20158905130458.175.223.825.5 £65.67Momentum99
13/11/20158934229153.715.424.626.4 £60.10Momentum99
26/11/20158962728554.425.223.825.5 £60.90Momentum99
07/12/201589925297.556.165.324.125.8 £61.72Momentum99
21/12/201590221296.157.395.223.525 £60.20Momentum99
05/01/201690519298.257.615.223.525.1 £60.43Momentum99
15/01/201690827307.558.095.324.125.9 £60.94Momentum99
25/01/201691150323.156.715.725.927.9 £59.49Momentum99
10/02/20169146731758.165.524.827 £61.01Momentum99
25/02/201691773305.956.595.424.626.3 £59.93Momentum99
13/03/201692082308.758.585.324.025.7 £62.04Momentum99
19/03/20169222113826.155.324.026.3 £29.95Momentum99
23/03/201692613391.956.486.931.533.2 £60.76Momentum99
05/04/201692904291.454.835.324.226 £59.71Momentum99
19/04/201693260355.458.786.027.529.5 £64.60Momentum99
30/04/201693580320.159.375.424.526.1 £66.44Momentum99
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30/07/201695686335.5546.228.230.6 £60.97Momentum99
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29/10/201698461271.252.565.223.525 £62.49Momentum99
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26/11/201699081309.958.185.324.225.8 £64.85Momentum99
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12/12/201699707308.254.585.625.727.5 £63.80Momentum99
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20/12/2016100149330.256.435.926.628.2 £66.53Momentum99
31/12/2016100341192.538.635.022.724.1 £45.93Momentum99
10/01/2017100657315.654.345.826.428.1 £65.70Momentum99
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25/02/2017101832291.953.515.524.826.5 £62.23Momentum99
04/03/2017102153320.958.765.524.826.3 £71.63Momentum99
28/03/2017102447294.857.835.123.224.7 £68.76Momentum99
04/04/2017102742294.654.975.424.425.8 £65.36Momentum99
10/04/2017103019276.655.475.022.724 £65.95Momentum99
19/04/2017103298279.358.224.821.823.3 £69.81Momentum99
30/04/2017103559260.453.294.922.223.6 £63.89Momentum99
06/05/2017103705146.529.844.922.324.1 £35.18Momentum99
13/05/201710401631159.025.324.025.4 £69.58Momentum99
22/05/2017104317301.756.775.324.225.7 £66.93Momentum99
05/06/2017104596278.655. £64.92Momentum99
18/06/2017104860263.748.685.424.626.2 £56.91Momentum99
04/07/2017105087227. £62.35Momentum99
19/07/2017105366279.257.264.922.223.6 £66.94Momentum99
07/08/2017105653286.957.125.022.824.2 £66.77Momentum99
08/08/2017105929275.656.264.922.323.5 £66.89Momentum99
19/08/2017106136207.240.885.123.024.6 £49.02Momentum99
07/09/2017106432295.957.075.223.624.9 £69.57Momentum99
20/09/2017106716284.158.914.821.923.2 £72.40Momentum99
04/10/2017106997280.656.245.022.724 £68.56Momentum99
15/10/2017107274277.256.884.922.223.5 £68.77Momentum99
27/10/2017107554280.254.795.123.224.6 £66.24Momentum99
13/11/2017107829274.756.294.922.223.6 £68.62Momentum99
25/11/2017108131301.757.235.324.025.2 £66.91Momentum99
04/02/201810837224155.114.419.9  £69.93Momentum99
18/02/201810866028853.935.324.3  £67.36Momentum99
08/04/201810889023055.934.118.7  £69.86Momentum99
29/04/201810913024057.254.219.1  £72.65Momentum99
17/05/201810936523555.714.219.2  £72.37Momentum99
28/05/201810952816337.124.420.0  £48.96Momentum99
17/06/201810974621848.064.520.6  £63.39Momentum99
15/07/201810996121558.533.716.7  £77.79Momentum99
26/07/201811023026958.964.620.7  £78.95Momentum99
04/08/201811038615633.624.621.1  £45.02Momentum99
11/08/201811067528958.714.922.4  £78.61Momentum99
18/08/201811080012527.454.620.7  £36.76Momentum99
02/09/201811100420444.094.621.0  £59.48Momentum99
13/09/201811127226856.994.721.4  £76.88Momentum99
20/10/201811155428256.165.022.8  £75.76Momentum99
10/02/201911177121756.163.917.6  £61.12Momentum99
17/03/201911202825751.415.022.7  £64.21Momentum99
23/03/20191121128441.242.09.3  £51.51Momentum99
10/04/201911231720541.245.022.6  £61.91Momentum99
15/05/201911255623953.674.520.2  £70.79Momentum99
22/06/201911281125553.354.821.7  £68.77Momentum99
03/07/201911302121045.564.621.0  £58.73Momentum99
28/08/201911332630558.985.223.5  £78.97Momentum99
12/09/2019113604278.557.484.822.0  £76.97Momentum99

When hypermiling on a long run with a very light right foot, the BMW E46 M3 is capable of returning over 31 mpg which is really quite remarkable for a 3.2 litre engine. When doing day to day driving on A and B roads with the odd burst of enjoyment you can expect around 25 mpg. If you’re out on a weekend pleasure drive for some fun then you’ll get around 20 mpg.

As you can see, I’m very keen on using the super unleaded fuel provided by Tesco fuel stations called Momentum99. The 99 refers to the 99 RON (Research Octane Number) rating of the fuel which is the highest you can get at commercial fuel stations in the UK.

I think the RON scale is different in the US but it’s quite unclear and going into that would be too much of a digression, so you’ll need to look that one up yourself. Feel free to comment and enlighten me.

The S54 engine found in the BMW E46 M3 is an octane responsive engine, and it’s tuned to run on higher octane super unleaded petrol.

I don’t profess to be an expert on this topic, but from what I understand higher octane fuel is more resistant to pre-detonation, also known as spontaneous pre-ignition, or in layman’s terms, combusting too early in comparison to the position of the piston in its stroke.

This early detonation is known as engine knock and can be quite harmful to an engine and put unnecessary stress on internal components. In particular, it can damage the surface area of the piston.

High-performance engines tend to run higher compression ratios, which means the air and fuel mixture is compressed to higher pressure in the combustion prior to ignition.

The BMW E46 M3 is equipped with a knock sensor which is a sensor that quite literally listens to the engine to detect signs of knocking.

If it detects knock the engine’s ECU computer will then adjust the timing of the spark to protect itself from damage. Which effectively prevents the engine from running optimally, reducing horsepower and efficiency.

It’s also wise to bear in mind that the engine can only react to knock, not pre-empt it. Some amount of knock would have to have occurred for the engine management to step in and protect the engine.

Also, from what I’ve read, the M3’s computer is clever enough to learn what kind of fuel it’s being run on over a period of time, so swapping and changing the octane rating of your fuel might just mean that even when you do put the odd tank of super unleaded in you won’t see the benefit of it anyway.

Of course, many people run M3’s on regular unleaded fuel for years and years without issue. I’d be interested to see how their MPG data compares and work out whether the potential gained efficiency from the extra octanes has covered the cost of them.

E46 M3 Brakes and tyres cost

On a performance car like the BMW E46 M3, you can always expect to spend more money on consumables.

E46 M3 Stock Brakes

While the stock brakes on the E46 M3 get a lot of bad press for being too weak, they are still considerably larger than a standard car’s brakes.

Plus, with the discs and pads being unique to the car, they can really add on some of that M-tax when it comes time to replace.

Silver BMW E46 M3 with standard front brakes parked at a show.

Lots of people want a straight answer on how long BMW E46 M3 brake discs and pads will last, but this is one of those things that really is down to your driving style. If you’re gently cruising around trying to hyper-mile and get maximum MPG, you’ll barely ever touch the brakes and your pads could last 70-80k miles.

If you’re putting the BMW E46 M3 through its paces on the regular and really leaning on the brakes when you do, then the chances are that the OE pads will last something like 15-20k miles. If you only do track work in your BMW E46 M3 then you’ll get an awful lot less than that too.

In that case, you’d probably be counting the number of track sessions you’ll get out of them rather than the miles.

The special M3 floating, drilled brake discs tend to last twice as long as OE pads from my understanding, but when the discs start to get worn on the E46 M3, it can introduce a lot of irritations such as juddering under braking.

E46 M3 Tyre Choices

When it comes to tyres there are a few different schools of thought. The price range can vary massively when it comes to spending money on tyres and a lot of the cost will be dictated by what wheels you’re running.

If you’ve got the M3’s most commonly specced wheels, the 19” style 67 M double spoke wheels with the polished faces, your standard tyre sizes will be 225/40/19 for the front and 255/35/19 for the rear. And you’ll find yourself paying a fair amount more on tyres than those with the base spec 18” wheels.

Two BMW E46 M3's with factory polished style 67 19 inch wheels.

My M3 was equipped with the smaller 18” style 67 M double spoke wheels which luckily I prefer. OE spec tyre sizes for these are 225/45/18 for the front and 255/40/18 for the rear.

People sometimes like to spec slightly different tyre sizes for the different M3 wheels, this can sometimes be due to cost, availability or even the idea that a slightly wider wheel will give more grip.

I personally would suggest avoiding this and going with BMW’s recommended tyre sizes to avoid possible fitment issues or handling compromise.

Some M3 owners are only prepared to spec the best when it comes to tyres, and there is some sense to this. High-end tyres offer quality, safety, predictability and even longer life which can go at least some way toward covering their additional cost.

I am a sucker for a good quality set of Michelin tyres and have run Michelin Pilot Super Sport tyres on the BMW E46 M3 for a while, and compared to the Continental Sport Contact M3 tyres they replaced its night and day. I found I could confidently enter corners twice as fast with the super sports and I’m probably not exaggerating much either!

The sheer grip the Michelin PSS tyres offer on the road is absolutely unbelievable. I can only imagine how good the newer Michelin Pilot Sport 4s tyres are.

This really shocked me considering Continental is a premium tyre manufacturer and those tyres were actually created specifically for the M3.

I must add that the Conti M3’s which came on the car were probably very old and past their best before I replaced them, they were probably much better new, but I don’t believe they would be as good as the Michelin’s.

You must bear in mind that tyre technology has moved on in leaps and bounds over the past 15 years. The Michelin Pilot Super Sport is a sophisticated design that utilises a cutting edge tread pattern and features two different rubber compounds.

The outside edge consists of a softer, stickier rubber compound than the rest of the tyre, so you can lean on the tyres hard through corners and find a lot more grip than you expect to.

There is a counter-argument to the Michelin’s however. The Pilot Super Sport tyre is a far better road tyre than anything that existed when the M3 came out, it’s a tyre which comes standard on many new exotic supercars with far more power than an M3 could ever aspire to possess.

As a result, they can make the M3 a lot less playful in the corners. When you do start to experience slip though, it’s very progressive and predictable. But you do have to be pushing very hard (or stabbing at the throttle) to get the car to rotate with these tyres.

Another factor is that the Michelin tyres are so expensive that you start to think twice about any hooning or otherwise unsavoury behaviour which should be part of the joy of performance rear wheel drive car ownership.

Those who opt to purchase cheaper tyres for the M3 tend to go with Kumho Ecsta Le Sport KU39 tyres which receive mixed reviews in terms of performance. I suspect for day to day driving would be absolutely fine.

The middle of the road tyre is another well-regarded tyre for the BMW E46 M3 and it sits between the Khumos and the Michelins. It’s the Goodyear Eagle F1 Asymetric tyre.

These tyres are highly regarded by almost everyone when it comes to wet grip, many say they’re as good as the MPSS in the wet and not too far behind in the dry, although generally, reports say that they don’t last as long.

To give you a rough overview on BMW E46 M3 tyre costs, you could spend around £350 on a set of 4 Kumho tyres, or double that at around £700 on a set of 4 Michelin’s.

Again, the lifespan of tyres on the E46 M3 is hugely down to how you drive, and also whether you have correct alignment. The E46 M3 can be quite sensitive to alignment and they will absolutely eat through tyres if it’s off, so if you’re going to spend hundreds of pounds on tyres, its recommended that you have the alignment checked each time.

Providing this is correct, with mixed but mostly sensible road driving I’d estimate that the Michelin’s would last you 20k miles and the budget tyres 15k. But you’ll have a lot more grip with the Michelins, if that’s something you’re into.

Another point to make is that all factory BMW E46 M3 wheel set-ups are staggered so you’re out of luck if you’re used to rotating tyres from front to back to even up wear.

Without a doubt, the more expensive, larger rear tyres will wear quicker than the fronts, and this disparity will be very pronounced if you like to partake in past times such as drifting and burnouts.

E46 M3 oil servicing costs

BMW made a mistake with their 10k mile oil servicing schedule for the E46 M3, scroll up and read the section about S54 road bearings for more context on that.

If you want a happy and healthy S54 engine purring away under the bonnet of your BMW E46 M3, you’ll want to be replacing the engine oil every 5k miles or at a yearly interval, whichever comes first.

The weight of oil the S54 engine requires is 10w-60, some people who live in countries with extremely cold temperatures like to run slightly lighter oil weights, but do not do this without extensive research.

If you live in more mild climates then I’d strongly recommend sticking religiously to BMW’s recommended 10w60 oil, the stakes are very high on this one so its best not to take unnecessary risks.

There is one thing BMW recommends which I do not, however. That’s Castrol Edge 10w60.

While Castrol Edge 10w60 (also known as Castrol TWS) was a highly impressive and technological advanced fully synthetic oil at the time, many years later it’s been surpassed.

Having followed many an engine strip down log, from my own experiences, and having discussed with multiple people who are highly qualified on the topic. Castrol Edge tends to leave a bit of a mess behind in your engine.

Over the years it can build up sludgy deposits in various areas around the S54 engine, and while they are mostly harmless, they can impede oil-flow, create additional load for the oil pump, not to mention they’re unpleasant to deal with when you inevitably come to strip the engine down for a rebuild.

The oil capacity for the S54 motor found in the BMW E46 M3 is 5.5 litres (or 5.8 quarts if you’re American). I’m quite sure that oil manufacturers are tactical with their bottle sizes as you can generally purchase larger 4L bottles or smaller 1L ones which aren’t as good value.

Its probably wise to have some surplus oil kicking around anyway, just for safety’s sake. Not that the S54 engine should use much oil at all.

Check your oil level regularly and if you find yourself needing to top up between 5k mile oil changes then it would be cause for further investigation.

As for which oil, I would stick to the following options:

  • Shell Helix Ultra Racing 10w60
  • Fuchs Titan Race Pro 10w60
  • Liqui Moly Synthoil Race Tech 10w60
  • Mobil 1 Motorsport 10w60

Steer clear of any cheap alternatives, the S54 is very demanding on its oil and scrimping will inevitably lead to troubles down the road. Expect to spend around £80-£90 on 6L of one of the above oils.

If you’re daily driving your BMW E46 M3, you’ll probably be doing about 10k miles per year, so you’ll be spending around £170 per year on oil every year.

You’ll also want to be changing the oil filter each time you replace the oil. I believe BMW’s OEM supplier was Mahle and BMW’s part number for a replacement is 11427833769.

However, you can cut out the middle mand and buy the exact same filter directly from Mahle for much less cost, it’s listed as the Mahle OX187. It costs around £9 to purchase and I believe this to be the absolute best oil filter you can get for the BMW E46 M3.

You can save a few pennies and purchase the cheaper alternative from Mann which is another well-respected manufacturer for a pound or two less, but this filter (Mann HU926/4) is definitely not as good as the Mahle I’m recommending, and that’s clear to see just from a visual inspection.

So let’s round that up to an even £190 per year on two oil services, and that’s if you’re doing them yourself. If you are, you’ll find that replacing the oil and filter on the M3 is a nice easy job and the filter housing, in particular, is very well designed.

E46 M3 Air Filter Change

The standard BMW paper air filter certainly works, and I’d suggest replacing it annually if you’re going to stick with these. They cost around £28 from BMW and do the job of preventing the S54 from breathing in dust and particles rather well.

I personally did some reading about air filters and opted to go down an alternative route however, one which could save some money in the long run. (how unusual!)

I was hoping to get the S54 breathing a little more freely and release some more of that lovely induction roar without breaking the bank with a new intake system.

I’d usually go for a tried and trusted K&N filter in this scenario, or even consider a Pipercross panel filter as an alternative. However, during my research, I’d discovered lots of people complaining about running issues following the installation of either of these air filters.

After some investigation, I discovered that the problem with these aftermarket filters is that they’re heavily oiled and that oil can be drawn in and affix itself to the MAF sensor which in turn causes it to take incorrect readings and upset the ECU.

After reading about this I decided to rule both of these go-to filter brands out. I then discovered an alternative by a company called BMC.

The BMC air filter is very similar in design to a K&N filter with the gauze and cotton material but without being so heavily oiled, these are well regarded among M3 owners as one of the best drop-in replacement panel filters you can buy for the E46 M3.

They are claimed to do a better job than the OE air filter and prevent particles as small as 7 microns from entering the engine, the OE air filter only claims to capture particles of 10 microns in size. On top of this, there’s supposedly around 3bhp to gain by installing the BMC filter.

The idea of these type of filters is that you take them out and clean them every so often, and at around £60, it will only take you a couple of years to start saving money you would have spent on OE replacements.

Upon installation of the BMC filter, I felt as though the engine sounded a touch throatier and a little louder, hopefully, that’s not just down to placebo effect. I can’t say it made a huge difference either way.

I’d also be hard pushed to say I could feel any difference in power output, but then again would you really feel a gain of 3 horsepower?

Either way, there are absolutely no drawbacks thus far so I can wholeheartedly recommend the BMC panel filter for the potential to save money if nothing else.

E46 M3 Inspection I & Inspection II services

If you’re looking to purchase an M3 and have done some reading about running costs then you will probably have already heard about the Inspection II service in particular.

The inspection 2 service for an E46 M3 is quite a big ordeal and generally its just a thorough service and consists of the below:

  • Replace engine oil
  • Replace oil filter
  • Replace air filter
  • Replace cabin filter (pollen filter, or microfilter)
  • Replace fuel filter
  • Replace all 6 spark plugs
  • Check valve clearances
  • Replace valve cover gaskets (consists of 2)
  • Replace differential oil
  • Replace gearbox oil
  • Reset OBC service interval

This is supported by a thorough tick list of checks including things such as checking the coolant level, power steering fluid, lighting, all wear part conditions the brake lines and fluid and quite a few less important things as well.

Items such as the valve cover gaskets and specific oils are quite expensive, but the biggest point to note is the valve clearance task.

This task involves waiting overnight for the engine to be stone cold, removing the valve cover and checking the clearance of each valve with a feeler gauge, and then replacing shims for different sized ones where necessary.

The shims themselves are really quite expensive and if you wanted to do this at home you’d end up having to buy a full set for hundreds of pounds as there appears to be no way to purchase them individually.

Of course, there are quite a few hours of labour involved and all in an Inspection II service tends to be around £900 or more.

The inspection II service gets all the press but the E46 M3’s inspection I service is also quite an expensive one.

A common misconception is that the valve clearance check is just an Insp 2 item, however, that’s incorrect, it also needs doing with each Inspection 1, and while you’re at it, you’re instructed to replace those expensive valve cover gaskets again.

Other than this, an Inspection one is an oil service along with that thorough checklist again, so they do tend to come in a fair bit cheaper than an inspection 2 at around the £600 mark.

Luckily these inspection services only come up every 30k miles and alternate between inspection I and inspection II, so your E46 M3 wouldn’t have needed an inspection II until the 60k mile mark according to the BMW’s service schedule.

While I’m a huge advocate of upping your oil service frequency to every 5k miles, I see no reason to increase the frequency of the Inspection 1 and 2 services.

2 thoughts on “BMW E46 M3 Review as a Daily Driver”

  1. Thanks so much for this write up. It’s brilliant, concise and helpful. Hope you’re still enjoying your E46! You may have just convinced me to get one too.

  2. An amazing comprehensive, and unbiased catalogue of relevant information. Extremely helpful, and has convinced me to continue searching for the best convertible I can find.
    Any help would be gratefully received, and rewarded!

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