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1999-2005 BMW 3-Series: BMW's Iconic Sports Sedan

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by John Rettie March 2009

BMW's "Ultimate Driving Machine" slogan is one of the best known and longest running ones in the auto world. It is also one of the most accurate.

It is perhaps most appropriate when applied to the BMW 3-Series.

Anyone who enjoys driving cannot fail to like the BMW 3-Series. It is no surprise that it is also the most popular car in its class of entry-level luxury cars and much sought after as a used car.

There are very few cars on the market that have such a solid reputation that they are regarded as the benchmark for all competitors. BMW's iconic 3-Series is one. Ever since the first 3-series was introduced in 1975, the entry-level luxury car has been the car by which others are judged.

The fourth generation 3-Series (known by BMW aficionados as the E46) first appeared in 1999 and, in keeping with the previous model, was only marginally bigger yet delivered increased performance, better fuel economy and further refinement in ride and handling. It was available as a two-door coupe or convertible, as well as a four-door sedan or station wagon.

During the first two years, it was named the 323 with a 2.3-liter inline six-cylinder engine or 328 with a 2.8-liter version. The high performance M3 coupe had a 3.2-liter engine. In 2001 the engines were enlarged, and the models became the 325 and 330 models with a 2.5-liter and 3.0-liter engines, respectively.

A mild change in the exterior occurred in 2002 when the car received different headlights and new bumpers. The chassis was also improved for even better handling.

The fourth-generation 3-Series featured here was replaced by a new model in 2007, but it could no longer be called BMW's entry-level car as the smaller 1-Series finally became available in the US in 2008.

Test Drives
1. 2003 BMW 330Ci Coupe
   Automatic, 18,250 miles  
   Asking price $18,999 (February 2009)
   Owner: Rick, male, age: mid-40s

It was almost impossible to tell that this smart-looking black two-door 330Ci coupe was not brand new. Rick, an airline pilot, bought the car through BMW's tourist delivery program, which meant he saved a few thousand dollars and got to drive his brand-new car in Europe before it was shipped to California. Since then he has only driven it on weekends and says he has rarely driven it in the rain and even kept it out of the direct sun as much as possible.

He seemed reluctant to sell it but wanted to put the money into some home improvements. "I'll probably end up buying another one after that," he said. Apart from a slight stickiness when opening and closing the passenger door, he said there was nothing wrong with the car and that he had not had any problems with it.

If he hadn't told me about the door I would not have noticed — I'd have put it down to tight sealing, a positive thing. On the road the car drove beautifully, although the ride was on the harsh side because of the low profile sporty tires, which also produced higher tire noise.

All in all this immaculate 330Ci would make an ideal buy. "It's like getting a new BMW for price of an old one," said Rick.

2. 2004 BMW 325xi AWD Sedan  
   Automatic, 44,300 miles
   Asking price $17,450 (February 2009)
   Owner: Erin, female, age: 28

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Erin, a pet minder by trade, is another happy BMW 3-Series owner who does not really want to sell her car but needs the money. She sums up her two-year ownership experience: "Needless to say, the car drives like an absolute dream. It is so smooth and powerful. I've driven many similar cars (Audi A4, Lexus, Mercedes), and nothing even comes close to the ride of the BMW. Even though the engine is entry-level size, the power is more than enough to satisfy anyone's speed needs. The all-wheel-drive is excellent. I owned the car for over a year in Jackson Hole, and I never slid on the ice once — and anyone who is familiar with Jackson knows that we have brutal cold, snowy, icy winters. It handled perfectly even in the worst conditions."

She goes on to say, "Nothing has broken or needed repair other than normal wear-and-tear, which was covered by my extended warranty. I haven't paid out of pocket for anything to be fixed."

When I drove the car, it felt especially solid, partly because of the all-wheel-drive system that makes the steering feel just a little tighter. Overall the car was in great condition, although it needed a little detailing, and there was a slight ding on one of the passenger doors that had just occurred when it got bumped by another door in a parking lot. Erin planned to get it repaired in a few days time.

For anyone looking for a sporty car for use in or out of "snow country," this BMW would be great buy. It also includes the cold weather package.

3. 2005 BMW 325 Convertible
   Automatic, 38,000 miles
   Approximate value $23,000 (February 2009)
   Owner: Heiko, male, age: 28

One of the great things about the BMW 3-Series is the variety of different models available to suit many needs. While some want a utility type station wagon and maybe all-wheel-drive, there are others who look to this model for pleasure.

Heiko is one of those guys. His dream car has been a 3-Series convertible, and he found a four-year-old one to his liking a few months before we test drove it.

He was happy with the car, although he was disappointed to discover after he had purchased it from a nearby dealership that the car had been in an accident, which was not disclosed. The driver's door had been repaired, but when it rained water seeped inside. He took it back, and the dealership did at least fix the door to stop it from leaking, but it did leave him with a smidgen of disappointment.

It might seem odd that this 28-year-old engineer opted for an automatic transmission, but as he wanted to drive it in the sun with the top down, he was happy not to do the shifting. "The M3 is the sports car, and then you need a manual transmission," was his retort.

It just shows that BMW is smart to market so many variations on a theme — it's no wonder the car remains the most popular entry-level luxury car in the U.S. Shop around, and you can find one to suit your needs and driving style.

Market Overview
Throughout the six years this 3-Series model was on sale, it continued as the top-selling entry-level luxury sedan. Other companies, notably Lexus, tried hard to unseat the 3-Series from its sales crown but were unsuccessful.

Undoubtedly it is the combination of taut driving characteristics coupled with good engineering and a classy finish that provides such a great ownership experience. The 3-Series might not be as soft and opulent as some of its competitors, but that is a positive attribute for those who enjoy driving.

Not surprisingly, enthusiasts love the 3-Series, and this is amply reflected in the many accolades the car garnered during the period. For example, the 3-Series has been on Car and Driver's "Ten Best" list every year from 1992 through 2009.

Unlike many other models in this competitive segment, which are only offered as sedan, the 3-Series was available in four body styles with a choice of three different engines, and each one was offered with manual or automatic transmission.

The most popular style, accounting for approximately two-thirds of sales during the period, was the four-door sedan. The two-door coupe, two-door convertible and station wagon were each purchased by about 10% of 3-Series buyers. The high-performance M3 was sold in even smaller numbers. Likewise the xi all-wheel-drive model was also sold in limited numbers and was offered only with the sedan or station wagon body styles.

Overall just less than one-third of the 3-Series were delivered with a manual transmission, which is an exceedingly high ratio for a luxury car. Not surprising, considering the car is a sport sedan loved by driving enthusiasts.

The odds are good that even if you buy an 8 or 10-year-old BMW 3-Series you'll find it is as solid and delightful to drive as a brand new model. German engineering and BMW's particular reputation at making sporty yet refined cars continues to shine long after the car has left the original showroom. That was certainly my experience as I drove the three cars featured.

Overall it appears that this generation of the 3-Series had few problems, and if there were any concerns, they were taken care of under warranty.

Of course this means that the price of a used 3-Series, especially in excellent condition with a good history of maintenance, will likely be higher than a similar car from another company. But if you want to enjoy a driving experience that few other cars deliver, a used BMW 3-Series might be just the ticket. And, of course if you look after it, the BMW 3-series should continue to retain its value better than other cars.

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1999-2005 BMW 3-Series: BMW's Iconic Sports Sedan - Autotrader