Ultimate BMW E36 M3 Buyer’s Guide & History

If you are an M3 fan on a budget, there is no better model to go for than the E36 M3. Prices for E30 and E46 models have gone pretty crazy over the years, but the E36 M3 still remains fairly affordable (although they still aren’t cheap).

While buying an E36 is a good way to get on the M3 ladder, you need to be careful. These cars aren’t cheap to maintain and as such there are plenty of them in less than ideal condition. That’s why we have created this E36 M3 buyer’s guide that will give you all the information you need to know to save you from buying a lemon.

How To Use This BMW E36 M3 Buying Guide

We have included lots of information in this guide, so make sure you use the table of contents below to skip to the section you want to read (or just read it all).

To begin with we will be looking at the history and specifications of BMW’s second generation M3. Following this we will be covering the buyer’s guide portion of the article and then we have more general car buying advice at the end.

The History of the BMW E36 M3

With the E30 M3 being widely successful, BMW decided to introduce a new model in 1992. It was based on the much bigger, heavier and more luxurious E36 3 Series that launched in 1990.

As the new M3 was based on this larger platform, BMW’s M Division had to go with a slightly different design philosophy. Gone was the lightweight road racer and in its place was a more refined, powerful sports saloon that was even available with an automatic transmission.

While the E36 M3 was heavier and larger than its predecessor it was still faster larger thanks to a new engine. BMW replaced the old four-cylinder engine with a powerful six-cylinder 3.0-litre power unit that produced 286 horsepower (213 kW) in European trim and 240 horsepower (179 kW) for the North American market.

With all this extra power, the E36 M3 could go from 0 – 100 km/h (62 mph) in around 5.6 seconds, a whole second quicker than the E30 model. Top speed also increased over the standard E30 M3 to a limited 250 km/h (155 mph).

On the outside, the E36 M3 was much more conservative than the track orientated E30. The rear spoiler was now an option rather than standard and the large flared wheel arches were absent. A chin spoiler, side skirts, new wing mirrors and a deep rear diffuser were fitted to improve aerodynamic performance and to differentiate the M3 slightly from the standard E36 model.

One of the biggest developments for the new model M3 was that it was now available in right-hand drive, whereas the previous model was only available in left-hand drive.

1994 BMW E36 M3 Sedan

With the conclusion of the E34 M5’s production run in 1995, BMW decided to introduce a four-door sedan version of the M3. Intended as a slightly more refined and comfortable model, the M3 sedan featured a softer suspension setup.

The more luxurious, comfortable theme continued on the inside with burr walnut wood trim covering the centre console and other pieces of trim. BMW also fitted more comfortable, softer seats and ‘M Contour II’ 17-inch alloy wheels with wider tyres on the back.

1994 BMW E36 M3 Convertible

A convertible M3 model made a return in 1994. To create the convertible, BMW had to strengthen the car’s chassis to accommodate for the lack of a roof. This lead to a weight gain of around 100 kg, bringing the total to a hefty 1,560 kg.

With this in mind, the convertible M3 was pitched as more of a laid back cruiser than a true blooded sports machine. While it lacked the option of a rear spoiler, the car was offered with polished versions of the 17-inch ‘M Double Spoke’ alloy wheels.

1994 BMW M3-R

In 1994, Australian buyers had the option to purchase a special edition model known as the M3-R. Fifteen of these cars were produced in order for BMW to race in the Australian Super Production Series.

The car was he most powerful production version of the E36 M3 available with an output of 322 horsepower (240 kW). BMW entered four of the cars into the race series, while the other eleven were made available to the general public.

1995 BMW E36 M3 GT

As the standard E36 M3 was not introduced as a homologation special like the E30, BMW had to introduce a another version that could meet the requirements for the FIA-GT class, IMSA GT class and endurance racing.

This new car was labelled the M3 GT and it received some lighter weight and aerodynamic components, along with slightly more horsepower. From the outside, the GT was almost undistinguishable from the standard M3 apart from the new front splitter and rear spoiler.

While the outside was very similar to the standard M3, the inside was radically different with racing style seats, carbon fibre trim pieces and “BMW Motorsport International” badges.

Under the bonnet the M3 GT received a new oil pump, ECU and cams, which increased power to around 295 horsepower (220 kW).

Only 356 E36 M3 GTs were produced by BMW, making it one of the rarest M3 models in existence. All GTs were given a ‘British Racing Green’ paintjob and the UK received an allocation of 50 of them. The M3 GT was only sold in Europe.

1996 Updates to the E36 M3

An updated version of the E36 was revealed in September 1995 for the 1996 model year. BMW threw out the old 3.0-litre engine and replaced it with a new 3.2-litre six-cylinder power plant that was built on the knowledge gained from their partnership with the McLaren F1 racing team.

With more displacement came more power. The E36 M3 now produced as much as at 321 horsepower (239 kW) and 320 Nm (236 lb ft) of torque. This meant that the 0 – 100 km/h time was reduced to 5.2 seconds, however, the top speed was still limited at 250 km/h (155 mph)

BMW mated the larger engine to a six-speed manual transmission for European cars, up from a five-speed for the previous year model. A sequential manual gearbox (SMG) was added the next year as an option and the automatic transmission was available on M3 models outside of the United States

The SMG transmission received high praise for its fast shift times and operation in performance situations, but it was criticised for its everyday drivability.

1996 BMW E36 M3 Compact Concept

While you can’t buy it, BMW did produce a compact version of the E36 M3. It was fitted with the same 321 horsepower six-cylinder engine as in the standard model, however, it weighed nearly 150 kg less!

The higher power to weight ratio meant that the Compact Concept had incredible and uncompromising performance. Sadly, despite considering the car for production, BMW only produced one model to celebrate the anniversary of the German ‘Auto Motor und Sport’ magazine.

1998 M3 Evolution Imola Individual

For the 1998 model year in the UK, BMW produced a limited run of 50 special edition models known as the M3 Evolution Imola Individual. Under the bonnet the car remained unchanged but it did receive some special exterior and interior styling features.

On the outside the car was finished in Imola red, while the interior featured Nappa leather & Amaretto seats in the same colour and anthracite seats. BMW also gave the special model an M3 GT Class II rear spoiler, front class II corner splitter extensions, electric seats, and double-spoke polished alloy wheels.

1995 M3 Lightweight

From the E36 M3’s launch, racing teams in the United States called out for a special homologation model that could compete in motorsport. BMW answered their calls in 1995 when they launched the M3 Lightweight.

In the name of weight saving the air conditioning, radio, leather seats, tool kit, sunroof and more were removed. BMW’s engineers also removed the under-bonnet insulation and fitted special low weight carpet. In total they managed to shed 91 kg (200 lb) off the standard M3.

Along with reducing as much weight as possible, BMW also gave the car a suspension upgrade with shorter springs, a new front strut bar and a lower cross-brace. The car also received a new bodykit and 17-inch wheels.

All M3 Lightweight cars were finished in Alpine White paint and they were given Motorsports flag decals on the left front and right rear corners of the car. It is believed that around 125 of these Lightweight models were produced.

Motorsport

The E36 M3 competed in a number of different motorsport series including the German ADAC GT Cup and the FIA GT Championship. In the America, the M3 won four races in the IMSA GT Championship in 1996 in the GTS-2 class. The following year the E36 managed to take eight race wins in the same series and then another five the next year. In Australia the M3 competed in the Australian GT Production Car Championship.

For more info on the history of the BMW M3 check out our article here

BMW E36 M3 Specifications

ModelBMW E36 M3
Year of production1992 – 1999
LayoutFront-engine, Rear-wheel drive
EngineS50 / S52
Cylinders 6
Capacity3.0-litre/3.2-litre
AspirationNaturally aspirated
Power

(hp)

240 – 322 horsepower (179 – 240 kW)
Torque320 – 350 Nm (236 – 258 lb ft)
Transmission5-speed manual

5-speed automatic

6-speed manual

6-Speed SMG

Weight1,460 – 1,560 kg (3219 – 3439 lb)
0 – 100 km/h (62 mph)5.2 – 5.5 seconds
Top speed250 km/h (155 mph)

BMW E36 M3 Buying Guide

With all that out of the way, let’s take a look at what you need to know about buying an E36 M3. We always recommend that you try to inspect any E36 M3 in person or get a reliable third party to do so for you. You should also try to bring a friend/helper with you as they may notice something you missed.

Another tip is to arrange an inspection for the morning when the engine is cold and the ambient temperature outside is lower. The main reason we recommend that you do this is because a warmed up engine may be hiding a number of serious issues.

Try not to inspect a BMW E36 M3 in the rain or when it is wet as water can cover up problems with the bodywork/paint. If you do view an M3 when it is wet, try to go back for a second inspection.

How Much Should You Pay for an E36 M3?

This is a difficult question as it depends on so many different factors from the model to the condition and more. As this is the case we are not going to tell you exactly how much you should pay for one.

However, if you do want to get a rough idea of how much you need to spend, you should go on your local auction/classifieds websites or check with dealers to see if there are any E36 M3s for sale. By doing this you will be able to find out how much you need to spend in your local area or country.

BMW E36 M3 Inspection Guide

In the following section you will find everything you need to know about inspecting a BMW E36 M3, from the engine to the brakes and more. The E36 M3 is expensive to maintain, so many of them have been looked after poorly. It is important to take your time when looking for an E36 M3 and don’t rush into any purchase.

Checking the VIN

You should inspect the VIN (Vehicle Identification Number) when you get the chance. The VIN can tell you quite a bit of information about the history of the E36 you are looking at. You can also enter the VIN on a check-up website or service to see what comes up (you can do this on your phone while you are inspecting the car).

You should be able to find the VIN in the following locations:

  • Lower corner of the dash on the driver’s side
  • Inside the driver’s door jamb near the door latch
  • On each body panel of the car (you can use this to check if any body panels have been replaced at any point)

This guide gives you a good rundown of what the different numbers of the VIN mean.

Engine & Exhaust

To start your inspection of a BMW E36 M3’s engine, lift the bonnet/hood and take a good overall look at the engine bay. Remember to keep an eye out for any broken components, leaks, signs of overheating and modifications.

A spotless engine bay can be both a good and a bad sign. It may mean that the owner is fastidious, but on the other hand it may also be a sign that they are trying to hide something like a big oil leak.

Check the engine to see if it is cold. If it is not and the owner has not driven to the inspection point, it may be a sign that they have pre-warmed the engine to hide an issue.

Once you have done that the next step is to check the fluid levels. Remember to check them both before and after a test drive to make sure they are roughly the same height (a slight change in some fluid levels is usually normal).

Fluid levels that are either too low or too high are a sign of a badly maintained M3, so watch out. If the fluid levels are not at the right level it may lead to premature wear of the components or even total engine failure.

When Should the Oil/Oil Filter Be Changed on an E36 M3

The engine oil and oil filter should be changed regularly, so check the service history to make sure this has been done. Oil is not changed regularly it can breakdown in the presence of contaminates and become diluted. Below we have put together some information on when to change the oil.

Engine Oil

It is recommended that you change the engine oil at least every 5,000 km (3,000 miles) for non-synthetic and every 10,000 km (6,000 miles) for synthetic. This is the maximum distance you should go and many owners like to change the oil much more frequently. If you want to be more “scientific” you can send your used oil to a lab to be tested. They will let you know if the oil can go longer between services.

Best Engine Oil for a BMW E36 M3

E36 M3s produced up to early 1999 original came with BMW 15W-40 (Mineral Based Dino), while those produced at the end of 1999 came with BMW Longlife 5W-40 (Synthetic). Pretty much any good quality oil ranging from 0 – 15W-30 – 40 will work fine. Lighter weight oils perform better in cooler temperatures, while heavier weight ones are better in hotter climates.

Oil Filter

It is usually recommended that you replace the oil filter with every oil change. A good option for an oil filter is this one from Mahle. Other oil filters will work, but you do need to be careful as a poor quality ones can lead to engine problems.

Checking the Oil

Always make sure you check the condition of the engine oil (and other fluids for that matter). Metallic particles or grit in the oil is a major issue and if you find this problem move onto another E36 M3. Another thing to watch out for is a frothy dipstick as it may indicate a failing/failed head gasket.

Oil Leaks on a BMW E36 M3

Below we have put together some information on common oil leaks you can find on an E36 M3. Leaks can be very expensive to repair, so take your time when looking for them.

Valve Cover Gasket

This is the most common area of oil leakage on an E36 M3. The gaskets typically dry-out over time and become very hard.  Really bad valve cover gaskets can leak onto the exhaust manifold and cause black smoke to rise from the engine bay.

If you do notice an oil leak, inspect the valve cover when the engine is cold. You can run your finger right below where the valve cover and head join at the rear of the engine. Any signs of fresh oil indicate a leak.

Valve cover gaskets aren’t too expensive to replace but there is a little bit of work involved to get them on and off.

VANOS

The VANOS Solenoid and oil hoses are a major source of oil leaks on an E36 M3. The Vanos is hydraulically operated on a pressurized system and overtime the oil feed line starts to weep oil.

Oil enters the VANOS from a valve that is actuated by the solenoid. Eventually the solenoid O-Ring gasket will go bad and cause a leak that appears very similar to an oil hose leak.

It is quite easy to diagnose this problem as you can see the oil hose and solenoid when you open the bonnet. Unfortunately, while it is easy to diagnose this problem, fixing it is another story.

The official way to fix this oil leak is to remove the intake manifold. This will give you enough clearance to replace the VANOS feed hose, however, those with small hands may be able to replace the oil line without going through this time-consuming step.

The parts to do this job are not expensive but the labour will be. If you are looking at an E36 M3 with this problem make sure you get a hefty discount.

Oil Filter Housing Gasket

A leak from the oil filter housing gasket is quite common on higher mileage E36 M3s. When this gasket goes bad it will leak significantly more oil than the valve cover gasket. The reason for this is because the oil housing is pressurised, whereas the valve cover leaks because of gravity.

Replacing the Oil Filter Housing Gasket is quite a bit of work as you need to remove the main serpentine belt and the alternator. You then need to loosen the power steering pump to get enough clearance to remove the filter housing.

CCV Valve

Probably the most common source of oil leaks after the valve cover gasket. It is usually recommended that you get this valve replaced every 160,000 km (100,000 miles) or so.

The valves job is to recirculate the oil in your M3’s engine. If this valve is failing it can lead to some pretty significant oil burning problems, so it should be fixed as soon as possible.

To diagnose this problem, look for blue smoke from the exhaust, high oil consumption and a very strong vacuum in the valve cover. You may also hear the CCV making a loud nose (will sound like it is coming from under the intake manifold).

Thankfully, this is not a major issue as a replacement valve is not too expensive and the intake manifold does not need to be removed to replace it.

Other Leaks

The four leaks we have listed above are the most common you will find on an E36 M3. However, there are some other leaks that you should be aware of:

  • Oil pan drain bolt leak – usually caused when the bolt and washer is used for too many oil changes
  • Oil pan gasket leak – an absolute nightmare to fix and most owners just leave it
  • Main shaft seal leak – to find this leak, shine a light behind the crankshaft pully to see if there is any oil
More on the VANOS System

The VANOS system is roughly equivalent to Honda’s VTEC variable camshaft technology. E36 M3s started off with a single VANOS operating on the intake cam only, but 3.2-litre models featured a twin VANOS system that operated on both the intake and exhaust camshafts.

Along with leaks, the symptoms of a failing VANOS are as follows:

  • A rattling sound that is similar to marbles in a can
  • Poor idle
  • Reduction in bottom-end power
Oil Pump Problems

Like the cam timing, the oil pump on an E36 M3 is chain driven. The sprocket that it runs on is attached by a 19 mm nut that can eventually loosen. An application of Loctite can fix this problem. Not a major issue, but something to be aware of.

Inspecting the Cooling System on a BMW E36 M3

Remember to inspect as much of the cooling system as you possibly can. The cooling system on these cars is known to be headache-inducing and coolant leaks can be annoyingly common. If the cooling system fails on an E36 M3 (or any car for that matter) it can be catastrophic, so check it thoroughly!

Check the service history and with the owner to make sure it has been regularly maintained. Here are some of the main components that make up an E36 M3’s cooling system:

  • Radiator – removes heat from the water/coolant
  • Thermostat – sends water/coolant that is hotter than the target temperature to the radiator to be cooled
  • Water Pump – belt that is driven from a pulley. Pushes water/coolant through the engine
  • Overflow or Expansion bottle – removes air from the system and provides a filling point
  • Coolant Lines – hoses that allow water/coolant to remain contained as it moves through the engine/cooling system

It is important to check the system both before and after a test drive. The main reason for this is that problems may start to appear as the engine warms up. Additionally, if the coolant height changes drastically you know there is a problem (however, a slight change is to be expected).

An expansion tank that is warped or cracked can be a sign that the vehicle has overheated at some point.

Water Pump

Another problem is that the bearing in the water pump is known to fail. If the water pump is near the end of its life you will hear the bearing and you many even notice coolant coming out at the front of the pump behind the pulley. If the problem is really bad you may even notice that the fan/fan clutch is wobbling.

The original one can be replaced with a metal one that will last longer. Original water pumps should last around 120,000 km (75,000 miles).

Here’s a guide on how to replace the water pump.

Heater Core

There is a common joke among E36 owners that BMW designed the E36 heater core first and then built the car around it. This wouldn’t be a problem if the heater core was reliable, but unfortunately it isn’t.

It is not uncommon for the heater core to leak coolant, which can lead to overheating. If the car you are looking at has this problem, expect a very large repair bill if you do decide to buy it.

It can be difficult to tell if the heater core is leaking or having some sort of other issue. A smell of coolant in the cabin when the engine is on or wet carpet on the passenger side can indicate this problem. Additionally, if the car is overheating it may be caused by the heater core.

What Coolant for a BMW E36 M3?

It is always important to use the right coolant as the wrong stuff can lead to some pretty nasty results. As this is the case, try to find out what coolant the owner/seller uses in their E36 M3.

It is recommended that you use genuine BMW’s own Coolant/Antifreeze, however, some other aftermarket options are available as well. If you do decide to change the coolant with something else it is important to flush the system completely.  

To change the coolant you will need the following:

  • Large drain pan – at least 11.5-litre (3 gallon capable). These engines hold a lot of coolant.
  • New coolant (listed above) – M3’s will need 11.1 quarts of fluid.
  • Funnel

Remember to check the appearance of the coolant. Brown or muddy coolant is an indication of poor maintenance. If you see any oily bubbles in the coolant you should move onto another E36 M3.

Does the E36 M3 have a Timing Chain or Belt?

Thankfully, the E36 M3 uses a timing chain instead of a belt. The chain will last pretty much forever, but many owners do recommend replacing the tensioner/tensioners at some point (around 160,000 km or 100,000 miles).

Checking the Spark Plugs

If possible, try to get a look at the spark plugs. The condition of the spark plugs can tell you quite a bit of information about the E36 M3 you are looking at. Check out this guide out this spark plug analysis guide for more information.

When do the spark plugs need changing on an E36 M3

It is usually recommended that you replace the spark plugs every 50,000 – 100,000 km (30,000 – 60,000 miles) or so, however, this does also depend on what type of plugs are being used. Additionally, some owners prefer to change the plugs earlier than this, just to be on the safe side.

If the car has travelled further than the distance stated above and has not had the plugs changed it is a sign of poor maintenance.

What spark plugs does a Mazda 3 MPS Use?

There are a few different options for spark plugs which we have listed below:

  • NGK BKR6EIX – highly recommended
  • NGK BKR6EQUP
  • Bosch Platinum +4
  • Bosch FGR8KQC
Inspecting the Exhaust System on an E36 M3

There are no real common faults with the exhaust system on these cars, but it is important to check for the following:

  • Black sooty stains – Indicates a leak which may require expensive repairs
  • Corrosion – May or may not be a problem, but watch out for it. Any signs of significant corrosion are a major problem and you should probably walk away from the vehicle. Rust on the exhaust may also be caused by accident damage
  • Cracks or accident damage – Can be a sign of a careless owner
  • Dodgy repairs – Bodge jobs on the exhaust are a major issue, and they can be expensive to put right

If the exhaust system is in a bad way it will be expensive to replace. Keep this in mind when looking at an M3 and if you want to buy one with a bad exhaust make sure you get a good discount.

Aftermarket Exhausts for the E36 M3

There are a range of aftermarket exhausts available for the E36 M3 from the likes of Eisenmann, Stromung and Supersprint. If you are looking at an E36 M3 with an aftermarket exhaust make sure it is from a good quality brand (check reviews, etc.) and has been installed correctly.

Smoke & Vapour from a BMW E36 M3

Smoke or vapour from the back of an E36 M3 can be a sign of a serious issue, so remember to check for it before, during and after a test drive.

Small amounts of vapour on engine start-up are to be expected, especially if the ambient temperature outside is cold. If you notice lots of smoke or vapour move onto another E36 M3. Below we have listed what the different signs of smoke indicate:

White smoke – This is usually caused by water in the cylinders and could indicate a blown head gasket. If the smoke smells sweet, it is probably coolant.

Blue smoke – Can be caused by wear to the pistons, piston rings, and/or worn valve seals. To check for blue smoke, ask a friend to follow you while drive the vehicle and take it through the rev range. Alternatively, get the owner to drive the car for a bit and watch out the back. Blue smoke on start-up and overrun is a sign that the car has been thrashed. May also be sign of a worn CCV valve.

Black smoke – Usually occurs when the engine is running too rich (burning too much fuel). The first things you should check is the air-filter and other intake components.

Overheating and Blown Head Gaskets on a BMW E36 M3

We’ve already discussed overheating a bit, but below we have listed some signs to watch out for. Remember to watch out for past and present overheating problems. Fixing an overheating M3 can be very expensive and we would personally avoid any car with the problem.

  • Coolant leaking externally from below the exhaust manifold
  • White smoke from the exhaust pipe (especially if you see lots of it)
  • Bubbles in the radiator or coolant overflow tank
  • An engine that overheats
  • Oil that is white and milky
  • Fouled spark plugs
  • Low cooling system integrity
  • Engine oil that smells of coolant
  • Sweet exhaust smell

Don’t forget to check the temperature gauge. If it is on the low side, there may be an issue with the thermostat. If it is on the higher side, it indicates that the cooling system is struggling. However, the cooling gauge can be a bit temperamental, so don’t trust it completely.

Starting Up a BMW E36 M3

It is always a good idea to get the owner/seller to start the car for you for the first time. We recommend this for two main reasons:

  • You can check if any smoke or vapour exits from the exhaust
  • If the owner revs the car hard you know to move onto another E36 M3

When the key is turned in the ignition the car should jump into life. Hesitation or failure to start indicates a problem that could be something simple like a bad/flat battery or a much more serious issue.

What Is the Correct Idle Speed for a BMW E36 M3

Once the car warms up the idle speed should be around 750. Don’t worry too much if the idle speed is slightly higher when the engine first starts. Additionally, make sure you turn on the air conditioning, electronics and lights to see what happens to the idle speed. You will probably find that it increases slightly, however, the car should not stall.

Rough idling can be caused by a number of issues including problems with the VANOS system. We wouldn’t necessarily rule out an M3 with idling issues, but the problem needs to be investigated further.

Ticking Noise from the Engine

A slight ticking noise from the engine is usually caused by the tappets/lifters. An oil change can often fix this problem, so it is not a major issue to watch out for.

Compression Testing a BMW E36 M3

While you don’t have to do it, a compression test is a good way to find out the health of an engine. However, doing a compression test on an E36 M3 will only tell you that a problem is present and not necessarily what the problem is.

Compression readings should be around 180 – 205 psi. The most important thing with a compression test is that the numbers between the cylinders don’t deviate too much (all within 10% of each other).

Even if you do not intend to do a compression test we recommend that you ask the owner/seller if you can get one done. If they refuse it may be a sign that they are trying to cover something up.

Buying a BMW E36 M3 with a Rebuilt Engine

Owners get their car’s engines rebuilt for a variety of reasons from wear caused by high mileage to performance reasons. There is absolutely nothing wrong with getting an engine rebuilt but pay extra attention to any E36 M3 with one. This is because many owners will get a cheap rebuild done just to sell the vehicle.

If you are looking at an E36 M3 with a rebuilt engine, try to find out who did the work and see if they are reputable. If the owner has done the work themselves you should be extra cautious. While there are plenty of competent home mechanics out there, there are even more who have no idea what they are doing.

It is usually better to buy BMW M3 with a rebuilt engine that has done a few more miles. For example, a rebuild that has already travelled 10,000 km is a safer bet than one that has only travelled a couple of hundred kilometres.

You should also determine the reason for the rebuild and how work was done. Was it a full rebuild or just a top or bottom end rebuild?

If the car overheated a complete replacement head was probably needed, but the bottom end may have been fine. On the other hand if the car had massive oil consumption issues, knocking or something else the bottom end may have been toast, but the head may have been fine.

Transmission & Differential

There are a few things to watch out for when it comes to the transmission on these cars. The 5-speed manual fitted to earlier E36 M3s is known to have a problem with fifth gear. If you shift into fifth gear when the car is not warmed up properly and then try to shift back to neutral, the shifter can get stuck under the fifth gear gate.

This will usually solve itself after around 20 minutes if the engine is left running. Most E36 M3s had this problem fixed under warranty or through private mechanics, however, there may still be some out there.

With both manual transmissions remember to check for any synchro wear (grinding, graunching, etc.). While they aren’t known for the problem, synchro wear can occur with repeated hard driving. If the E36 M3 you are looking at has synchro wear it may be a sign that it has been thrashed.

Automatic E36 M3s

The ZF 5-speed automatic gearbox doesn’t have a bad reputation for reliability, but BMW claimed that it had ‘lifetime’ lubrication. As we all know this was nonsense and the transmission fluid should be changed at some point.

If the automatic transmission fluid gets too low the gearbox can slip when you slow down. Alternatively, it may stick in third or fourth or one of the other gears. The problem can be fixed by turning the car off and on again, but changing the transmission oil seems like a better long term solution.

The SMG gearbox was the first automatic transmission available for the E36 outside of the United States and like the normal auto gearbox it can pop out of gear or drop into neutral if the oil level is low.

Another problem with the SMG transmission is when the warning light comes on following the ignition off and the transmission will not return back to neutral for a restart. BMW does offer a solution, but it is extremely expensive (need to replace the pump). Another option is to find a specialist who can fix the sensor/electronics at a much reduced cost.

Transmission Mounts & Other Problems

The bushes for the transmission and differential mounts will wear over time, as will the flexy-disc that supports the driveshaft torque. If the transmission has lots of play (manual cars) the bushes may be worn out.

Testing the Clutch on a BMW E36 M3.

Below we have listed some ways to check the condition of the clutch on an E36 M3. A clutches lifespan will depend on numerous factors from how hard the car has been driven to what sort of power it is running.

Clutch Engagement – The first step is to make sure the engagement is good. To do this put the E36 M3 you are inspecting into gear on a level surface and let the clutch out slowly. It should engage around 7 to 10 cm (2.5 to 4 inches) from the floor. Engagement that is early or too late indicates a problem.

Clutch Slippage – The way to check for this is to shift into a gear that is too high for the speed you are going. Once you have done this, plant your foot on the throttle and watch the revs. If the engine speed goes up but the car doesn’t accelerate the clutch is slipping. Here are some things that can cause slippage

  • Worn clutch
  • Clutch covered in oil
  • Clutch cable is too tight and is not releasing properly

Clutch Drag – Get the M3 on a flat surface and press the clutch pedal to the floor (do this while you are stationary). Rev the E36 hard (once it is warm) and see If it moves. If the car does move, the clutch is not disengaging when you shift and parts will wear prematurely.

Replacing the clutch can be an expensive job so make sure it is in good condition. It is also a good idea to replace the following with the clutch (they are usually part of a new clutch kit):

  • pilot bearing
  • trans bushings
  • slave cylinder
  • throw out bearing
  • pressure plate
  • fork spring
  • fly wheel bolts
  • starter if the mileage is high

E36 M3 Body & Exterior

It is always important to take your time when inspecting the bodywork and exterior of an E36 M3. Here are some things to watch out for.

Rust

The E36-generation 3 Series is known to suffer from rust, so keep an eye out for it. Rust problems can be more apparent on M3s that have experienced one or more of the following:

  • Spent time in countries or areas that salt their roads
  • Spent time in countries or areas with very harsh winters
  • Lived by the sea for significant periods of time
  • Always been kept outside (never garaged)
  • Accident damage (stone chips or more significant damage)

We wouldn’t necessarily walk away from an E36 M3 with rust issues, however, you need to get a good idea of the severity of the problem (rust is always a bigger problem that it appears on the surface). Move onto another E36 M3 if the car you are looking at has significant amounts of rust.

Where Does Rust Occur on an E36 M3

Rust usually occurs in the following locations, however, it can still appear in other places as well, so check the body thoroughly.

  • Boot (under the carpet and on the rear panel to the outside of which the number plate is mounted)
  • Front wings (water collects on the inner lips)
  • Rear quarter panels (notorious for rusting quickly)
  • Jacking points (If there is any rust here the car is probably not worth your time)
  • Front anti-roll bar mountings
  • Rear suspension (BMW used thin metal for the damper mounts and other areas)
  • Windscreen (particularly where it meets the roof)
Rust Repairs

While you are inspecting the bodywork, you should also keep an eye out for rust repairs. Look for any areas that may have been resprayed or repaired and check the service history. Additionally, check with the owner, however, remember that they may not be 100% honest with you.

Use a magnet on steel sections of the car or a coating gauge thickness tool such as this one to find any areas that may have been repaired.

Accident Damage on a BMW E36 M3

Remember to watch out for any signs of accident damage. The E36 M3 is a fast car and many of them have been in accidents. It can be very hard to fix accident damage properly, so keep an eye out for the following:

  • Misaligned panels or large panel gaps – Check that the bonnet lines up correctly and fits as it should. Additionally, check the bonnet catches as if they look new the car has probably been in an accident. You should also check the doors, tailgate and the lights for any damage or signs of past damage. If the panels are uneven it could suggest an accident has occurred.
  • Doors that drop or don’t close properly – If the doors drop or don’t open/close properly the E36 M3 you are inspecting may have been in a crash.
  • Inconsistencies such as waving, rippling or different coloured panels – This is a good indication of crash damage or rust repair.
  • If the bonnet/hood looks like it is popped when it is not – This can be a sign that the E36 M3 you are looking at has been in an accident or that the owner is careless.
  • Bent or broken parts underneath the car – Check to see if everything is straight underneath the vehicle and watch out for any replaced parts. Take a good look at all the suspension, steering and exhaust components for damage.
  • Rust in strange locations – Could be a sign that the E36 M3 you are inspecting has been in an accident or has some other problem.
  • Paint runs or overspray – This could be a factory issue or a sign of a poor repair.
  • Missing badges or trim – can be due to repair work (body shop couldn’t find replacements) or a number of other things (stolen, etc.).
  • Nonmatching VIN labels – VIN labels that are different (or a lack of BMW labels at all) is a sign of accident damage. Alternatively, it may also indicate that the car is stolen.
Convertible Roof

The soft-top roof on convertible models is operated by three motors and a load of microswitches, and as such they are ripe for failure. Leaks, creaks, and rattles are also common on open top versions as the E36 M3 was originally designed as coupe rather than a convertible. Think very before purchasing a Convertible model!

Suspension, Steering & Chassis

These cars are getting pretty old now and as such many of the suspension and steering components on them will be well past their prime if they have not been replaced. If the bushes are shot OEM replacements are available, or alternatively, polyurethane ones are available.

The rear trailing arm bushes eventually wear and are a bit of a nightmare to replace if you don’t have the right BMW tool. There are some DIY solutions to getting them out, but if you can find the original tool it makes it a lot easier (alternatively, just take the car to a BMW specialist).

Lots of E36 M3 owners like to replace the original steering rack with one from a Z3, as it is a lot quicker. If the car is lowered move onto another E36 M3. BMW spent a lot of time setting this car up and lowering it will ruin the ride and destroy the cars resale value.

  • Dipping and swerving when the brakes are applied
  • Excessive Rear-end squat during acceleration
  • Tipping during turns
  • High speed instability
  • Excessive vibration coming through the steering wheel (could indicate alignment issues or failed ball joints)
  • Delayed or longer stopping distances
  • Uneven tyre wear
  • Excessive tyre bounce after hitting a bump
  • Leaking fluid on the exterior of the shock/strut
  • Sagging rear suspension – usually caused by bad bushings in the rear
  • Knocking or creaking sounds during a test drive (don’t forget to drive in a tight figure 8)
Chassis Problems

One of the biggest areas to watch out for is the chassis itself. There are a number of weak points that may require welding and/or serious repair. The rear shock towers are mounted on extremely thin metal with just two nuts to hold them, which means cracks are common. Many owners install reinforcement plates to fix this issue (check to see if this has been done).

Another problem area is at the back around the rear trailing arm bushing pocket. Once gain the metal is very weak leading to cracks and possibly even tears. Worn bushings can make the problem even worse, however, reinforcing the area should solve the issue.

Wheel Alignment

Don’t forget to check that the M3 you are inspecting drives straight without you having to correct the wheel. If you do have to correct the steering wheel it indicates that the wheel alignment is out. Alternatively, it may be a sign of other issues such as accident damage.

BMW E36 M3 Brakes

Thankfully, there is not too much to worry about when it comes to the brakes on an E36 M3. The brakes should be more than adequate for road use, however, if they feel weak or spongy then there is a problem. Watch out for the following:

  • Pad life (use a little mirror or you may be able to use your phone)
  • Pitted, scored or grooved discs
  • Corrosion
  • Modifications
  • Any leaks in the brake lines (get a helper to press on the brake pedal while you inspect the lines)
  • Brake fluid level in the brake fluid reservoir
  • Brake fluid changes every 12 – 24 months
During a Test Drive

Don’t forget to test the brakes under a variety of different braking conditions (light & hard) to make sure they work properly. If you notice that the car pulls to one side it may have a sticking/seized caliper. A seized caliper can occur if the car has not been used for a long period of time. Another indication of this problem is if you hear a loud thud when you pull away for the first time.

Another problem to watch out for is juddering/shaking through the steering wheel when the brakes are applied. This is usually a sign of warped discs/rotors and often becomes first apparent under high speed braking.

Loud bangs, knocks or other strange noises when the brakes are used should be investigated closely as they may signal some expensive bills on the horizon.

Wheels & Tyres

Four different alloy wheels were fitted to E36 M3, depending on the age and model. We have listed these below. Note: there are lots of replica wheels out there, so this mini-guide should give you an idea of what to look for.

  • Early coupe models – 17-inch 7.5J DS1 double-spokes (Style 22) wheels wrapped in 235/40-17 Conti SportContact tyres
  • Saloon/Sedan or Lux package models – ‘Soccer Ball’ alloys (Style 23) in staggered 17-inche sizes (7.5 front, 8.5 rear) with 225/45-17s up front and 245/40-17s at the back
  • 1996 to 1999 coupes – staggered DS2 ‘Sunflower’ double-spokers (Style 39) with 225/45-17 front tyres and 245/50-17 rear tyres
  • Lightweight & Convertible models – 17-inch Style 24s with same-size 235/40-17s (Convertible had 225/45-17 and 245/40-17 tyres)

Curbed or scuffed wheels are a sign of a careless owner and can be a pain to fix. If the wheels are aftermarket, check with the owner/seller to see if they have the originals. Check the tyres for the following:

  • Amount of tread
  • Uneven wear (Can be a sign of alignment or suspension issues)
  • Brand (they should be from a good or well-reviewed brand)

Interior

Many of the trim pieces fitted to the E36 M3 are weak, so keep a lookout for any broken or damaged parts. The door cards can fall out or sag, so make sure you check them.

Check the seats for any scuffs, rips or stains, especially around the bolsters. While the seats can be reupholstered, it can be an expensive job, especially if all of them need to be done. If the interior is in really bad shape it is a sign of a poorly maintained car.

If the seats move during acceleration and/or braking it is incredibly dangerous and will lead to an MOT/WOF failure. 

Remember to lift the carpets and check around the windows for any leaks or dampness. If the car is a convertible or has a sunroof check the roof for any leaks as well.

Additionally, check the steering wheel, gear shifter, pedals, and other trim pieces for wear as they can indicate how far the E36 M3 you are inspecting has travelled. Excessive wear for the mileage could be a sign that the vehicle’s odometer has been wound back (or the car may have just had a very hard life).

You can tell if a smoker has owned the vehicle by taking a goof whiff of the interior and by looking at the headliner above the driver’s seat. If there is a stain or it is a slightly different colour than the rest of the headliner, then a smoker has probably owned the car at some point.

The door handles, window regulators, switches and motors are all known to fall. It is important to make sure the windows operate properly as they are part of the full closure alarm system.

Remember to check that all of the warning lights come on when the car is turned on. If the warning lights do not appear the owner may have disconnected them to hide a problem.

Additionally, check that the headlights, rear lights, indicators, etc. work as intended. You will need to get out of the car when you are doing this or get somebody to help you.

If the air conditioning doesn’t work don’t let the owner convince you it just needs a re-gas. While a re-gas will often fix air conditioning problems, it could be a much more expensive issue.

Modifications for the BMW E36 M3

There are a truck ton of modifications available for the E36 M3, however, most engine ones are a waste of time. Bolt-on power upgrades are expensive and usually only add a little bit of power. Forced induction kits are available for those looking for a significant power increase, but they will accelerate wear.

The best modifications for the E36 M3 are mild suspension upgrades, good tyres and possibly a Z3 steering rack.

3.0 vs 3.2-litre E36 M3?

There is quite a bit of debate between E36 owners on what the better engine and model is. The 3.2-litre is slightly faster as it has more power and the final drive ratio is slightly lower, however, the downside is that the six-speed manual transmission is a bit less reliable.

The 3.0-litre E36 on the other hand is often regarded as having the wrong gearing for motorway driving. Additionally, the ecu setup can be a pain as it is a twin bosh unit, one for spark and fuel one for VANOS. The evo is better here as it is a single box siemens solution so easier to get to talk to diagnostics.

At the end of the day there really isn’t much difference between the two models and we would choose either if they were in good condition.

General Car Buying Advice for a BMW E36 M3

How to Get the Best Deal on an E36 M3

This information applies to both dealers and private sealers. Knowledge is power and it can save you a lot of money when purchasing a vehicle.

  1. Research, research, research – Prior to starting your hunt for an M3, figure out what specs and condition you are happy with. Is a highly modified E36 M3 okay or are you looking for something completely original? Do you want a low mileage example or are you happy with a car that has travelled far?
  2. Shop around – It is always best to shop around a bit before you make a purchase. Don’t limit yourself to one dealer or platform (or even location). If you open up to more shopping options, it will make it easier to find a good BMW E36 M3.
  3. Test drive multiple cars – Don’t just take one E36 out for a test drive and then buy it. Drive as many M3s as you can. This will give you a good idea of what makes a good and what makes a bad E36 M3.
  4. Adjust your attitude – Never rush into a purchase. If you are desperate to buy a car you are more likely to get ripped off. Take your time looking through all the different E36 M3s available and then go check out the promising looking ones
  5. Use any issues with the car to your advantage – Take a mental note of any issues you find with the vehicle. When it comes to discussing the price, use these problems to try and drive down the price. For example, if the car needs new tyres or brake pads make a point of it and try to get the seller to reduce the price.
  6. Don’t trust the owner – While some owners/sellers are honest about their cars, many will lie to get a quick sale. Take in what the owner has to say but back it up with a thorough inspection.
  7. Go between sellers/dealers – If you are looking at multiple BMW M3s, let the owner/seller know. This way they will know that you have other options and they may try to undercut the price.
  8. Be prepared to walk away – If you are not happy with the deal, simply walk away. You may miss out on the car or the seller may get back to you with a better offer.

Mileage vs Condition 

Mileage vs condition is always a hot topic for debate, but we feel that it is always better to buy on condition and then on mileage. There are lots of low mileage, poor condition E36 M3s out there, so don’t discount a one with a few more K’s.

Lots of owners make the mistake of believing that they are preserving their car by not driving it. In reality, this is completely false and not driving a vehicle can actually do more damage than good. Short distance trips are not kind to the engine in a BMW E36 M3 as it does not have time to warm up properly and get lubricated.

Rubber seals and plastic parts will fail regardless of mileage and can even deteriorate quicker on cars that don’t get used often. Letting a car sit will not prevent rust or stop the electronics from failing.

Mileage will never decrease with age, so go out and drive your car!   

Service History and Other Documentation

It is incredibly important to check any vehicle’s service history and any additional paperwork that goes along with it. The service history will give you a good idea of how the E36 you are inspecting has been maintained. In addition to this, receipts and paperwork for modifications can help you determine whether they have been done by an experienced tuner or a bad one.

If the owner can’t or won’t let you see the service history, you should probably pass on the vehicle. A complete service history will only add value to any BMW E36 M3 and will make it easier to sell the car in the future.

Additionally, you can check websites such as CarFax (USA) and CarJam (NZ) for more information about the car you are thinking of purchasing. These sort of websites can be incredibly useful, but there is usually a cost associated with them.

Questions That You Should Ask the Seller/Owner 

  • How often do you drive the car?
  • When was the last service and who was it serviced by?
  • How much oil does it use?
  • What oil do you use in the car?
  • What parts have been replaced (engine, catalytic converter, etc.)?
  • When were the coils, spark plugs, leads changed?
  • What’s the compression like?
  • Has the VANOS been replaced or serviced
  • What modifications have been made to the vehicle?
  • Has the vehicle overheated at any point?
  • Has the car been in any major or minor accidents? Is so, what repairs were made?
  • Is there any money owing on the car?
  • Have you got any information on the previous owners and how they treated the vehicle?
  • Is there any rust?
  • Has rust been removed at any point?
  • Has the car been used for track use at any point?
  • When were the brake pads replaced and have the calipers seized at any point in time?
  • Where do you store/park the car usually?

There are loads more questions you can ask the seller, but we feel these are some of the most important.

Things That Would Make Us Walk Away from a BMW E36 M3

Here are some things that would make as walk away from an E36. While you may be happy with a vehicle with these problems, we are not.

  • Overheating problems
  • Significant Crash Damage
  • Money owing on the car
  • Stanced
  • Modifications with no paperwork or carried out by a poorly reviewed tuner
  • Excessive amounts of power
  • Bad compression
  • Bad resprays
  • Significant rust problems
  • Big leaks
  • Engine swaps with non-standard engines
  • Significant track use
  • Major engine or transmission issues
  • Owner who is not forthcoming with information (could be trying to hide something)

Notes on the Owner 

The owner is one of the most important things to think about when viewing any vehicle. You need to ask them plenty of questions when inspecting their E36 M3 (however, don’t trust their answers completely). Remember, it is your problem if you wind up buying an absolute lemon. Here are some things to watch out for.

  • How long have they owned the vehicle? If it is less than 6 months it tends to suggest that the car needs major work done to it that they can’t afford. It also could be a sign that they deal cars as well.
  • Do they thrash the car when it is cold or continually launch the vehicle? If so, you are better to walk away.
  • Why are they selling the vehicle? Could be a genuine reason or they may be trying to offload their problem onto an unsuspecting buyer.
  • What sort of area do they live in? Is it a good area or a complete dump?
  • How do they respond when you ask them simple questions?
  • Do they know anything about the BMW E36 M3 and the model they are selling?
  • What can they tell you about previous owners?
  • Do they have lots of cars on their drive? If they do it may mean they are a dealer.
  • What is their reaction when you ask them about money owing on the car? Tell them you are going to do a check and see how they respond.
  • What is their reaction to you asking for details for HPi check?
  • How do they react if you ask to do a compression test on the vehicle?
  • How do they respond when you ask them to show you the service history and paperwork for the car?

If you get a bad feeling about the owner, you are better off moving onto another E36 M3

Concluding this BMW E36 M3 Buyers Guide

While the E36 M3 is not as sought after as some other M3 models, it is still a great car. This guide should cover most of what you need to know about buying one. Remember, these cars are expensive to maintain and as such there are many examples out there that have not been looked after properly. Take your time and you should be able to find your dream E36 M3.

Useful Links

https://www.bimmerforums.com/forum/forumdisplay.php?63-1992-1999-M3-(E36)

https://www.bmwcca.org/forum/index.php?forums/e36-m3-1995-1999.43/

https://gist.github.com/anonymous/edba4e061b56e44fba183f166cc4da74 (service manual)

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