You probably all know that the E36 BMW M3 is one of the most engaging rides out there. As a person with a medical background and car enthusiast I can only say that if you cannot have fun in this car, I will refer you to one of my psychiatrist friends (after I check to see if you have a pulse though). It's also the most fun you can have with your clothes on unless you drive naked.
But before the fun starts, you have to remember--you have to pay to play.
There are many issues with the E36 bodied M3. I have learned all of these issues the hard way and want to share my knowledge to save a lot of the pain. After all, some of the cars you will be considering are over ten years old. I will outline these issues in general categories.
A. Paint--If any car needed 3M clear bra, this was the one. The paint WILL get sandblasted no matter how good it looks from a distance or how slow someone has driven the car. The relatively flat front profile of the car creates a huge area of paint that can easily be chipped. This includes the metal grille surround, front air dam, leading edges of the front fenders, the hood, and the side view mirrors. These will all cost, conservatively speaking about $2K or so to remedy, unless your cousin runs the local Macco. Although everything looks great in pictures, have the seller send you photos of the areas listed above in dark light with FLASH. All the paint defects will pop up magically. Price accordingly.
B. Headlight covers--the headlight assembiles on this series of cars is crap. The plastic lenses, like the paint gets messed up. The plastic gets so foggy that sometimes you have to wonder if the headlights are on at all. The solution to this is to get the European ellipsoid assembiles. They have glass covers that are more resistant to pitting and are replaceable if they get damaged. A xenon (HID) upgrade is highly recommeded as well, although you should make sure to get a kit that is 50W because the 35W kits will make the "low beam light failure" warning come up on the on board computer. This is really annoying, but is a good trade off for proper lighting (especially at really high speeds).
C. Windshield--will also be pitted heavily, especially on older cars.
D. Wheels/tires--watch out for CURB RASH! Unfortunately many M3 owners have more money than brains. They happen to park by feel--feel being the sound of one's rims scraping against the curb. The tires are low profile and lips of the rims are pretty prominent, which leads them to be easily damaged. Refinishing wheels costs about $200 per rim. You can also get them on ebay, but make sure you do not buy fake ones. Check the rear tires--they wear out pretty fast.
E. Collisions--each body panel has a BMW factory sticker with the VIN number on it. If it just says BMW DOT, the panel has been replaced. Ask the seller for these pictures as well.
A. As far as I know, my major beef is with the Recaro style seats that are found on both the standard M3 and the luxury package. Although they look different, both are especially succeptible to side bolster wear due to the aggresive bolstering which hints at the car's performance potential. All I can say is that it looks really nasty, but is probably par for the course. You can get the seat leather replaced for about $1K. Check the BMW magazines for outfits that do this. This is more of a warning of what to expect than anything else.
B. Glovebox door can sag--not an issue with my car.
C. As with any car, look for nasty spills that have been covered up or are not readily visible (under floor mats, the seats, between the seats, etc.) This is probably out of your control if buying on ebay, but hey you got to be prepared.
D. On rough pavement, interior noise can be quite annoying. There are lots of body rattles and "booms" like the ones you hear on ghetto cars with bad sound systems in even worse cars. Car is nice and tight on smoother pavement however.
E. Climate control display has a habit of burning out. There are services on ebay that will fix this. Climate control units have been known to fail entirely (ie AC on all the time) and costs $400 to replace.
F. OEM stereo--a real POS. Display drops pixels quite a bit. If you want to keep the stock look, I would spring for the BMW/Blaukpoint CD43 head unit ($700; $400-$500 on ebay).
G. On board computer (OBC) display--watch for dead pixels as well.
H. Make sure all switches illuminate. I've had problems with the illumination for the headlight switch and the cigarette lighter switch; make sure that the glovebox flashlight still holds charge.
I. Check spare tire. It should be full sized on a genuine BMW M rim.
3. Mechanical--Due to the performance orientation of the car, it is clear that many of these cars have been mistreated and put away wet (or at least have had the potential to have been). Try to get a feel for the seller. Is he some punk who has trashed the car and can no longer afford the tickets? Some whipped guy who has to "sell his baby" because there is a real baby on the way? You have to get a feel. Use your instinct. Not all M3's and M3 drivers are created equal. Regardless, there are a lot of common sense and esoteric things you need to know about this car.
A. Engine--routine manintenance recipts. They don't have to follow BMW's overly draconian maintenance schedule, but it doesn't hurt. Remeber, you are dealing with the bottom end of exotic cars, so a little more attention to things like oil changes, filter changes is warranted. Presumably, wear and tear will be greater because of the performance capability.
B. Thermostat failure--it is known to happen, so make sure it has been changed. Fortunately, they stick open when they break so at least your car will not overheat.
C. Water pump--this is CRUCIAL. Make sure this has been replaced regardless of model year (although I have been told that 1998+ models have improved impellers that do not break and melt). This is a known flaw. Items B&C may as well be done together because special tools are required to remove the fan clutch.
D. Mods: All I can say is try to get a car that is as stock as possible. This is getting increasingly difficult. To me, the only real legitimate brands to use on BMW are ACS, Dinan, Alpina, Racing Dynamics (the ones that come to mind that at best will not hurt resale). Please note that a lot of these mods do not improve performance, but will actually detract from it. Remember, if a Ferrari or Lambo does not need a spoiler, yours probably does not need one either.
E. Brake light switch--there is some little plastic part that gets broken that is attached to the brake pedal. The OBC will let you know. Annoying little problem. Make sure it has been replaced.
F. Check engine light--this is the bane of a lot of bimmerphiles, in my opinion. I would strongly suggest getting a Peake research diagnostic tool. You will find that most check engine warnings are for some esoteric thing like "exaust temperature threshold cylinders 2,4,6" that don't really mean anything. Definitely do not buy a car if a check engine light is on and has not been resolved and reset.
G. Maintenance lights--there is a series of green-yellow bars that appear underneath the spedo when you turn on the car. These are supposed to indicate when you should take the car in to get raped by the dealer. If maintenance has been "performed" as specified in the ebay auction, all the bars should be illuminated. These lights are reset either by the dealer or the aforementioned Peake tool (a really good investment for DIYer's).
H. You may want to get a X-brace for the underside of your car. A nice OEM BMW part that would be nice to have in a used model.
I. Inspection. If you can, have the typical inspection performed. Make sure to check compression, suspsension parts, etc. Recent smog certification a plus.
4. How to spot a fake M3--for some reason, a lot of people want an M3, but somehow just get a regular 3 series and put on all these M3 parts. I could never figure this out because we are talking about a $13K or so car. There should be M badging on the door sills, on the shift knob (in later models), on the side trim, on each of the wheels, and on the trunk decklid. The seats should have the bmw tricolor on them (imola red, interlagos blue, and laguna seca blue). There is an M on the instrument panel. The engine cover will obviously say BMW M Power. The rear bumper has a diffuser to smooth out airflow, and the front has a more aggressive bumper with mesh or slat opening as well as a lower lip to force air over the hood and create downforce. The mirrors should be the M signature clamshell style, with two stalks and a a somewhat triangular mirror (they are not that big, so be prepared). The steering wheel should be stiched with the Motorsport tricolor as well. Later M3's 1998-1999 have the three spoke steering wheel with tricolor and M logo at the 6 O'clock position. A worthy upgrade in my opinion as the standard four spoke wheel is just nasty and obscures the instruments. Any deviance from these specifications will not win you best in show at Westminster.
5. Conclusion--The BMW M3 is a wonderful daily driver. What other car can you go 139 MPH (electronically limited) with 4 of your friends in relative comfort, while carrying groceries and still be able to go from zero to sixty in 5.6 seconds. The car is built very well and the engine should last to at least 200K miles WITH proper and consistent maintenance. You should be able to find a competent BMW mechanic who will treat you like a human being. The car is also relatively easy to work on provided that you have jack stands. With regular maintenance and attention to what the car is trying to tell you you will have years of driving pleasure ahead of you. The car's steering is telepathic. The engine is docile around town, but when you want to rev to 5000 rpm, the car screams and you wonder if you are driving the same car. I will end of the following note however: owning this car is like having a second girlfriend--there is a lot of maintenance and pains in the asses to endure, but when the ride is good, it is REALLY good.
Contact me with any questions. Good luck.