Here are some of the things I’ve gleaned from the internet, with some of
my brief personal experiences, now I am in my 6th E46 Coupe, and my 5th M3
Paramount is a good service history, as always stated, but in the case of
the M3 its never been truer. Look for the 1200
running in service, and then stamps at age or mileage intervals, and where
possible look for receipts to back it up, as a stamp is all well and good,
but did it have an oil service or an inspection service. The M3 needs to have
its valve shims checked at various intervals doing the cars service life, so
without having the receipts, you wouldn’t know it had been done.
Head Gasket
An increasingly common problem with the S54 engine is a failing head gasket.
The first symptoms of such often being pinking occasionally while
driving. A compression test will confirm if the head gasket has failed. A
good few may have already been replaced in the life of the car, but that
would have been a long time ago as the cars creep to being 20 years old now.
Vanos Unit
As with the old E36, the Vanos unit can still cause
you issues, look for regular service of the unit in the history if you can,
and once the engine is warm, listen to the unit for any unusual noise, worst
case is the sound of marbles. The unit can be overhauled as a DIY item if you
are skilled and have patience, or there are specialists such as Mr Vanos, who will come and swap it out for a reconditioned
unit, and supply a good warranty to boot. There is lots of information about
the same on the internet, and various kits available and a specialist to give
advice. https://www.mrvanos.com/
Rust on the front wings and surrounding area.
The wings on the E46 generally, as well as the M3 are prone to rust, owing to
dirt getting caught between the inner wing liner and the edge of the wing.

Example here shows the battle has been lost as the rust has broken through.
Plan on taking the inner liner out carefully, as they can get wedged in
there, and when old become brittle and inflexible. Clean out the area, and
treat the area based on how much damage has been created, or how much rust
has started to form. If the rust is showing through on the top side, you may
have lost the battle.
Another area prone to rust is the edge between the wing and the side skirt
as shown below.

Rear Arches.
The same as the E36, watch for trapped dirt that causes the arches to rot out,
as shown in the image below. Again, as with the front arches, cleaning out
any dirt form the arches that can trap moisture and keeping onto of the
underseal is a good preventative measure.

The rot normally starts to show in this area.
Boot Lock.
Paint starting to bubble around the boot lock (where the key goes in) seems
to be common, and I’ve personally seen it on many cars.

Rear Bulb Clusters.
The clips on the rear cluster are delicate and are prone to snapping, not a
big issue, but if they are attached with zip ties or tape, they can rattle.
Rear ¼ Window Seals.
As with the E36, the rear ¼ window seals seem to perish. But unlike the E36
they are about a lot dearer to replace.
Rear Springs.
The rear springs are known to fail, and I can confirm my current car has
recently had a set @ 44K, and my last E46 M3 had to have a set of front ones,
I can only assume if you’re running a set of 19’s with the stiff suspension
setups of the make, they come under a lot of abuse, even if it’s not obvious
you have cracked a coil, the pigtails at the bottom are normally the first
piece to have snapped off.
Mirrors.
The rearview mirror is an auto-dimming unit, and
usually be tested by covering the sensor in the front of the unit, which
should cause the glass to darken, if not the sensor may have failed, and
another common fault is for the LCD to leak in the unit, which should be visible,
like a broken calculator screen. The wing mirrors are also common to
delaminating, and they generally look a mess. There are companies such as “mirrorjohn” who provide a fixing service for the
rear-view screen, and great value replacement wing mirrors class. https://www.mirrorjohn.com/
Door Seals.
The E46 coupe generally as an issue with its door seals, as they can move and
get damaged over time, wear out or just split, and as they carry a heated
element, they are expensive to buy and were well over £400 each last time I
checked. The M3 seems to have an issue that the trim separates from the seal,
thus looking a mess.
Trim.
Over time the glue on the fabric covering the interior trim panels deteriorates
and the cloth comes away, usually around the front A-pillar trim, or the rear
C-pillar trim, it can be glued back down, with the correct fabric glue, but
new panels are still generally available, and they are not too expensive to
give the interior a refresh.

Example of before and after A-Pillar trim repair.
Windscreen trim
Over time the windows screen trim can dry out, and crack, and this seal is
supposed to stop water for running down the bulkhead, and again as it's not
expensive, and a simple job to change, it's worthwhile looking at to freshen
up the car, and prevent water ingress.
 
Before and after.
Steering wheel
If the car is now over 100K and 15+ years old the leather on the steering
wheel will have seen better days.

There are many companies out there offing retrimmed wheels, or they will
retrim your own, leaving you without your steering wheel for a couple of
weeks, but the prices range from £150 –£250 and above if you have a custom
effort.
Another option is to try a leather repair kit and tidy it up yourself, its cheaper, and jeeps the car original, and best of all,
you don’t even have to take the steering wheel off.

Thanks to https://leatherrepaircompany.com/
Their kits start at £25. A bargain for the results.
Noisy Diff.
The diff’s on the E46 M3 can make a scrubbing noise when making tight slow
turns, like reversing out of a car park space. The latest BMW supplied Diff
Oil can help to quiet this down.
Badges.
The M3 has BMW roundels on the boot, wheels and bonnet, and M3 badge on the
Boot and Engine. They all fade or corrode over time, making the car look
unloved, these used to be cheap items, but they are on the rise as the cars
get older. Check the condition and
factor this when viewing your potential new car.
Oil Pump Connecting Rod Bearing Kit - The Major Factory Recall.
There was a service recall for the Oil Pump Connecting Rod Bearing Kit, if
the car you are looking at was subject to the recall, ensure it was done, as
well as the running in service @ 1200 miles.
Quote from the net "The problem has been identified as contamination of
the engine lubricating system during assembly in combination with
unfavourable tolerances in the engine oil pump for the M3 coupe/convertible
produced from October 2001 through February 2002”.
OEM Alloys
If the car came with 19 inch OEM alloys they are usually diamond cut and
lacquerer, and as such are prone to corrosion and peeling once the protective
lacquer is compromised. Having them refurbished to the same OEM standard is
more expensive than the common power coating, which of course is an option if
you just want to smarten them up, and again, there are only so many times you
can refinish a diamond cut alloy, as the process actively removes metal from
the rim, something to consider if you want you M3 looking OEM fresh.
Alloy Wheel upsize options (from Net)
Yes, the correct upsize is 245/40/18 front and 275/35/18 rear for 18"
wheels and 245/35/19 front and 275/30/19 rear for 19" wheels. Many have
done this on both stock and lowered cars without any rubbing issues.
SMG Additions.
I have been very lucky with the E46 SMG so far, but they can be problematic.
From my internet research and recent personal experience I can advise
watching for the Cog Warning, which could be any generic SMG error, which in
my case was the Gear Position sensor, which tells the ECU what gear the car
is in I guess, and these are just shy of £300 plus fitting, which can be done
DIY, and there are some good articles on the net, but my Indy did a good job.
Then you need to have the adaptations ran using the BMW software, again
dealer or Indy with INPA or similar can do this. My advice is to get BMW to
run the diagnostics, so you know where you stand
The salmon really can also fail, which is a cheaper fix, but to get to it
you need a Torx T25 screwdriver, and its located in
the fuse box under the bonnet top right-hand corner
Also check the SMG Fluid levels, as if they drop the car can spit out
gears, and if you have assess to BMW diagnostics,
check the pressure of the SMG pump is working parameters, again a lot of info
from this specifically online.
As many car owners have ODBII diagnosis tools, it may be worth having a
look at the fault codes on the car you look to buy to see if they are any
error message hanging around, as I bought a car once that got a fault 5 miles
into the drive home, and it kept coming back, so the owner had obviously just
cleared it before my test drive, so be wary, on BMW's warning lights can mean
cash needs spending.
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