Used E36 BMW 3 Series from 1992

When a continental car reaches its 20th year birthday its value starts to do an extra steep slide down the depreciation ruler. This is because all finance companies will stop providing financing for the next owner due to its age thus making it very difficult for any buyer to take-up ownership. A cash buy makes the car less desirable in the used car lot as dealers prefer not to have their cash tied-up in stock. There are however a small number of credit companies that will offer some margin of financing of between 40 to 60% with a high interest rate from 10% a year upwards. This pushes the value of the car further downwards and unless it is a rare collectable or classic, very few buyers will have the financial means to make a purchase. This is when a potential buyer holding enough cash can strike a bargain and the seller sadly has to swallow higher losses.  
Now the 1992 BMW 3 series, which is know as the BMW E36 has seen this severe fall in value. The E36 was the replacement to the very popular E30. Its design was a big jump forward in body styling with different proportions and styling breaking out of the classic boxy design brief established by the BMW 2002ti. From all angles the E36 saloon was just slightly larger than the E30. All this extra size accounted for more passenger room; a much stiffer body structure and 50/50 weight distribution that also produced less wind noise and improved aerodynamics. Its interior was also fresh without carrying any of the E30 knobs and switches. It came with MacPherson struts in front and a “Z-axle” in the rear, replacing the trailing arm in the E30. The base 318i still used the trusty four-valve four-cylinder engine from the E30 cranking out 138 horsepower, but the six-cylinder engines were all new. A new dual overhead cam 24 valve aluminum head, inline six-cylinder engine produced 189 horsepower in the 325i. This contributed to a 0-60 time of just 6.9 seconds, which was impressive in its day. In 1993 the BMW VANOS variable valve timing system, was adopted by the M50 6 cylinder and made for a more impressive and wider torque curve. By 1995 the 2.5-liter in the 325i and 325is, were replaced for the larger 2.8-liter version putting out 190 horsepower, just 1 horsepower up from earlier 189 horsepower engine. This was not that significant however the torque rating went from 181Nm at 4,200 RPM to 207Nm at 3,950 RPM, which was the biggest difference that could be felt behind the wheel. There were also some slight visual changes for the 1996 model year as well.
At launch in 1992 and the years to come, local distributor Auto Bavaria managed to sell a healthy amount of these E36 BMW’s in all engine versions. The 318i surprisingly was not the top seller; instead it was the 6-cylinder versions where true BMW aficionados knew of BMW’s engineering expertise in producing some the smoothest in-line 6 engines. This week however my advice goes to the base 318i E36 cars as they are starting to look really tempting in the used car lots. A decent 1992 car with some recent maintenance history, no serious accident affecting the chassis and with all trim still intact will fetch just RM20,000. The older E30 318i that shares only its engine will fetch RM15,000 which is quite surprising. Normally when a model change takes place the outgoing version will lose a lot of value, however with the E30, there is still a strong following and even surprising, many owners have sold their E36 to purchase the E30. The reasons are simple. Even though the E36 was a complete new car, it came with poor build quality and trim that did not test time well. This is why prices have dived. When you find an E36 that you want to buy you need to first check the interior trim. All the door panels have trim clips that break after a few years leaving the panels to be loose. They also start warping if constantly parked in the sun. The glove box will not close tightly and creaks are common when driving over small bumps. Check the seats for cracks (if leather) and wear (on the drivers seat and pedals especially). Most previous owners would have possibly done a complete re-trim of the interior in new leather. Roof lining will be sagging and all interior rubber linings would have shrunk a little, leaving gaps for water to seep in. 
Open the bonnet and get the car started and you should hear a smooth sounding engine. If noisy, rattly and smoky, it could be expensive to fix. All BMW engines need high-grade engine oil so check the dipstick for a clear smooth palm oil like colour. Check the coolant bottle, if you see cappuccino colour water then there could be trouble. Check for signs of water leaking and even more important oil or power steering fluid leaks. When you start the car for the 1st time make sure the engine is cold, the air conditioning is switched off and then after it has warmed up for about 15-20 minutes move it away from the parking lot to check for oil or water marks on the floor. Then only switch on the air-conditioning during your test drive. Junk yard half cuts are easy to source and they cost anywhere between RM3,000 to RM12,000 (for a reasonable M3) depending on type and year. If you find a used E36 with excellent trim and body but a tired engine, then a junkyard engine swap will be best.
Maintenance and running costs are relatively low and similar to a 1st generation Mercedes C-Class, but you need a mechanic that knows BMW’s inside and out. A short test drive on an open road to at least 90km/h, a couple of tight ‘U’ turns and some speed bumps is enough for you to be convinced if the car is worth its asking price. Happy hunting.