Faults:

Front suspension bushes.

Exhaust failure.

Air con fail (condenser).

Heater failure.

Massive oil consumption due to worn valve seals.

Head removed to find piston cylinders disintegrating - engine was scrap.

General Comments:

I've had a variety of issues with this 318i Touring, which was a lovely car to drive and my wife's favourite of her own cars to date. Unfortunately, the glowing reviews seen here and elsewhere for the 2-litre 318i Valvetronic engine are somewhat rose-tinted.

Engine failure is inevitable on these motors due to the poor design and vastly optimistic service intervals. I would advise all parties to steer clear of the 318i versions.

Fortunately, I have a workshop and the wherewithal to sort this by engine transplant, which is my next job for the winter - I've bought a 320 with rusty bodywork to swap the running gear over - but it's far better to buy a reliable 320 or 325 from the start. The E46 BMW Tourings are good cars as long as you avoid the diesel engines and the four-cylinder petrols.

Faults:

Right rear window regulator failed.

Oil filter housing gasket leaking.

Automatic climate control fan speed module failed.

Valve cover gasket leak.

Headlight washer pump failed.

General Comments:

I bought this car in early 2013 from the original owner after a long search. Despite what these cars are "supposed" to sell for, I could not find one that was much less than 120% of KBB value unless I wanted one with a branded title or 200,000 miles. I had been looking for three months when this one came up on Craigslist. I called the owner and left a message while I was looking at another BMW. He called me back and said he had someone who wanted to look at the car at 9:00 the next morning. Given the duration of my quest, I told him I'd meet him at 8:00!

I asked the seller if there was any room on the price, and he said, "Nope. Four people after you want to look at the car today." This was a one-owner, adult-owned, dealer-maintained car that had never been in an accident, and I figured it was worth the money. As the old saying goes, "there is nothing more expensive than a CHEAP used European car".

Sheesh. I just went ahead and paid him.

Be prepared to pay for a nice 3-series of this vintage. Having said that, after owning the car for nearly two years I can understand why they are so popular on the used car market. BMW really got it right with the E46 (BMW's internal designation for this platform). Acceleration, even with an automatic and the "small" engine, is quite brisk. My car has the Harmon-Kardon sound system, but the exhaust note produced by the relatively small inline 6-cylinder engine is so fantastic I find myself turning the radio down. BMWs are known for their excellent handling, and these cars are no exception. You can throw it into most any corner with confidence. If you screw up, the stability/traction controls help correct for you. But unlike many more modern performance cars, these systems don't try to drive the car FOR you. Combine this with stop-on-a-dime four wheel disc brakes, and 27 MPG city fuel economy, and you have a great package. It is a pure car, IMHO one of the last pure "Ultimate Driving Machines" made by BMW, and it doesn't have as much of the whiz-bang electronic gadgetry that dulls the experience of so many luxury sports cars nowadays.

As far as maintenance goes, every car will have its list of needs when it gets to be around a decade old. Certain deficiencies in the original design will come out and begin to manifest themselves as common problems. The E46 is no exception. BMW likes to use a lot of plastic in its cooling systems, so there can be some issues there. The radiators, coolant tanks, fittings, etc, tend to crack with age and use. If you are looking at one of these and smell/see coolant leaking under the hood, chances are you will have to spend a few bucks to bring it back up to spec. The water pumps are also known to fail dramatically, and a cooling system failure can easily be an engine-killer. This is not an engine that tolerates being overheated. Few repairs on these cars are expensive if you do the work yourself and get parts online. If you go to the dealership, things will get expensive in a hurry.

The window regulators are famous for failing on these cars. They are about $60, and are not terribly difficult to change. No more difficult than other cars. The sunroof and shade can also have problems. The module that controls the fan speed for the climate control will fail on earlier examples of this model. The part is not expensive, but is a little tough to access. Some suspension bushings wear out rather quickly, but this is the price of admission for a car that handles like these cars do. The steering should be razor sharp on the E46. If it is not, then the car is likely due for lower control arm bushings at the very least. Not hard to replace, and not too expensive if you shop around. There is certainly no danger associated with worn bushings; the car will just handle like a regular car instead of a BMW. Some early automatics are known for losing reverse gear because of a defect in the reverse gear drum.

Overall, this generation of the 3-series is excellent. It is a nicely constructed car, and does everything well. Mine has 100k, and feels like it only has about 20k. If you want more performance, step up to a 330i, or better yet, the vicious M3. But the 325i is going to be more than enough car for most people.

I really can't recommend it highly enough... but buy the right car! If the car doesn't have a stack of maintenance records with it, have a Pre-Purchase Inspection done at a reputable German car shop.