Future Classics: BMW M3 E46 Review

Screaming, high-revving six-cylinder engine, understated but unmistakeable looks and the perfect balance of power and performance make the E46 M3 a definitive future classic...
19th May 2022
Dan Trent

What is it?


There’s a good argument the third-generation M3, widely known by its E46 internal code, is perhaps peak M. Maybe even peak BMW. A bold claim, perhaps, but if there’s a better intersection of classic style and modern performance we’ve yet to encounter it.

Unveiled at the 1999 Frankfurt show, the M3 E46 took the inspiration of the previous generation E36 model but increased power, performance and technology by significant margins. The all-new 3.2-litre S54 engine was – is still – a masterpiece of high-revving, naturally-aspirated engineering with individual throttle bodies and extensive upgrades to keep up with its sky-high redline. The peak 343PS (252kW) came at 7,900rpm but as much as 80 per cent of the peak 365Nm was there from 2,000rpm, meaning a broad and deliciously exploitable power band. Inclined at 30 degrees, the motor drove the rear wheels through an innovative Variable M Differential and the choice of a six-speed manual or second-generation SMG automated manual.

With a subtle 20mm flare to the wheel arches, a discreet power bulge in the aluminium bonnet and four stubby exhausts under the rear bumper the E46 retains a relatively understated appearance, while having just enough visual muscle to stand out as something special. And this combination is just as appealing now as it was over two decades ago when it launched.

How does it drive?


An engine of that potency could well have drowned out the rest of the M3’s driving experience and, while it’s always core, the car built around it is more than capable of delivering on the promise. In a modern context 343PS (252kW) sounds relatively modest but the performance of the E46 is less about numbers and more about sensations. Compared with more recent M cars the E46 feels delightfully compact and exploitable on twisty back roads, with great visibility and meaningful control weights fizzing with the feedback more recent M3s have since smothered in electronic mush. From the first turn of the key the savage, rasping engine note sets neck hairs tingling, the redline on the rev counter gradually moving as the fluids warm through. The beautifully linear power delivery means it’s much easier to exploit the natural balance of the E46, the commitment required to extract every last horsepower all part of the fun.

The manual is widely prized in comparison to the SMG transmission but, in truth, the shift is a little long in the throw and rubbery in feel in the usual BMW style, and appreciation of the automated gearbox is long overdue. True, it’s unrefined compared with modern dual-clutch or automatic gearboxes but has a character of its own and needs application to extract its best, a challenge an engaged driver will enjoy just as much as the manual.

What's good?


Most of it! As above, the E46 has the perfect balance of size and performance to enjoy at vaguely sensible road speeds and 0-62mph in a little over five seconds is nothing to be sniffed at, even two decades on. This millennial vintage is also the perfect intersection of classic and modern, given it still feels relatively up to date (unless you count the tiny sat-nav screen) and well put together out of quality materials, yet simpler and more driver focused than more modern BMWs. And while the engine may be highly tuned it’s also properly engineered and, like the rest of the car, built to a very high standard. Properly looked after, an E46 M3 is capable of racking up big miles without the interior looking too shabby or the mechanical bits throwing a fit, making it an ideal long-term partner.

What's bad?


The issue of cracked boot floors around the rear subframe mountings is likely the first thing to come up in any E46 buying guide and could prove a very expensive problem. Awareness is now such that most people know about it but, if it wasn’t fixed under warranty or since rectified, it’s still something to look for. Just beware of bodges because it’s a big job to do properly. Rust can be a wider issue on cars that haven’t had the necessary love which, sadly, may be the case for many E46s after they went through a period of affordability for those more interested in hard driving than diligent maintenance. Low mileage, low owner cars with rock solid history files are therefore highly sought after and priced accordingly. Cars with SMG gearboxes can get through hydraulic pumps, clutches and flywheels, especially in town driving, and the transmission isn’t without its faults. For the performance, the standard brakes aren’t all that, either, and many cars will have been upgraded, though this may be an indicator of track use and inspire further investigation.

Which model to choose?


While a convertible like the one driven by Becky is a nice way for four grown-ups to get a sun tan at speed, a coupe will always be the purist’s choice. Manuals are more popular now but, for the reasons stated above, don’t necessarily disregard the SMG without trying one first – it’s an acquired taste but may give you more choice. As the E46 evolved there were two major additions to the range, the celebrated CSL increasing power to 360PS while stripping out an in impressive 185kg thanks to extensive weight savings throughout. The carbon roof is the most obvious manifestation but there are more exotic materials throughout the car, as well as distinctive alloys, a more prominent rear ducktail and an even more aggressive engine note thanks to a giant carbon fibre intake plenum. All CSLs came with the SMG gearbox and are now fetching serious money. It was followed in 2005 by the CS, which cost just £2,500 more than the regular M3 but included various CSL upgrades, including the gorgeous 19-inch wheels, Alcantara trim on the steering wheel, the upgraded brakes and the faster 14.5:1 steering rack (against the 15.4 of the regular car). The CS also got the CSL’s sophisticated mid-way M Track Mode stability control and, for those in the know, is arguably the perfect balance of standard M3 usability and CSL focus.  

Why should I buy one?

Because it might not just be the best M3, it may well be one of the best all-round performance cars in living memory. In everything from looks to performance and mechanical intrigue the E46 M3 nails it all perfectly, with the ability to deliver spine-tingling performance at sky high revs or mooch along in relative luxury and comfort as your mood takes you. A Porsche 911 offers a similar blend of refinement and performance, but the M3 pulls all this off with a more exotic engine and the practicality of any 3 Series. It’s less a case of why should you buy one than why shouldn’t you!

Best buy

A CS in signature Interlagos Blue with the supposedly ‘unfashionable’ SMG gearbox for maximum value for money

Things to look out for

Cracked subframe mounts on boot floor, missing history, rattly engine, mis-shifting SMG gearboxes, general corrosion, accident damage


Engine 3.2-litre six-cylinder petrol
Power 343PS (252kW) @ 7,900rpm
Torque 365Nm (269lb ft) @ 4,900rpm
Transmission Six-speed manual/six-speed SMG automated manual, rear-wheel drive
Kerb weight 1,570kg DIN (manual coupe)
0-60mph 5.2 seconds
Top speed 155mph (limited)
Production dates 2000-2006