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Saturday, June 10, 2023

Doug's Domain

Doug Vetter, ATP/CFI

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Doug's 1998 BMW 328is
Long Term Ownership Review

(Image: Right rear view taken one summer morning)
16 years, 255000 miles, and counting!
Last Updated 12/2/2014

General Characteristics

There's so much good to say about the E36 series BMW, but I'll try to keep it to a few important points:

Engine and Transmission

The 328's real triumph, they work together simply and wonderfully, like a pair of accomplished dancers, smoothly shifting the car even when seemingly incredible demands are made by its driver. This is German engineering at its best.

Fit and Finish

I read a review in which the Corvette was tested head-to-head against a BMW M3. In spite of the fact that the Corvette had a slight edge in the performance tests, the reviewers still chose the BMW over the Corvette. Why? The BMW's fit and finish was considered light years ahead of the Corvette. If you want a car, buy a Chevy. If you want a finely crafted machine, buy a BMW.


BMW is well known for its suspensions so it's no surprise that the E36's stock sport suspension is simply outstanding. It absorbs bumps and isolates the body as it should and yet it keeps the tires in contact with the road and communicates with the driver in a way lesser cars are simply unable to duplicate.

Over the course of ownership of the E36 I have dabbled with both a 2001 VW GTI and a 2005 Acura RSX. The suspensions on both vehicles were woefully inadequate as compared to that of the E36, and this is particularly striking considering that the E36 was designed over 20 years ago. BMW's competitors are still playing catch up.

Anti-Spin-Control (ASC) / Traction Control

BMW's first generation traction control system, which reacts to excessive differential RPM between the front and rear wheels by reducing throttle, helps keep this car's rear in check. It also has the side-effect of reducing wear on the rear tires, since this car definitely has enough torque to spin the wheels around every corner if you have a lead foot.

However, traction control is not to be confused with stability control, which marries a yaw-rate sensor with four-wheel independent control of the ABS braking system. ASC does not prevent the rear end from stepping out at times where traction is minimized in general, i.e. in wet/snowy conditions, or when the vehicle is equipped with either worn tires or tires inappropriate for the conditions. As a result, driving experience matters when you drive an E36.

If you have experience driving other rear wheel drive cars or high performance vehicles without stability control and know how to handle a car in oversteer then you'll find the BMW easy to handle. If you lack this experience, however, you would be well advised to attend a Performance Driving School to learn how to handle a sports car. In fact, this is good advice for all drivers regardless of what you drive or whether it is equipped with electronic nannies.


While the next generation E46 brakes stop a bit better than the E36 (or at least they seem to "grab" a bit more aggressively), the E36 BMW brakes are light years ahead of any domestic vehicle and it's not hard to understand why -- BMW brakes are designed for munching miles on the autobahn at 120MPH+, while most domestic vehicles are clearly designed for our misguided 55MPH speed limits.

The brakes have worked consistently throughout their useful life, are easily modulated and have never warped. Of course your mileage may vary, particularly if you do more city or performance driving than I do.


My car came with the "premium" sound option. In this system, the head-unit and CD changer are made by Alpine, while the speakers and amplifier are made by Harmon Kardon. It was never an audiophile-grade system and I knew that going in, but it has been adequate for my needs.

In year seven one of the midrange drivers failed due to dry rot and I decided to replace all of the OEM speakers with aftermarket units. This upgrade improved the frequency response but did little for dynamic range since that is most limited by the OE amplifier. In year eight I had to replace the headunit with a BMW remanufactured unit because the volume control failed and in year thirteen the CD changer started to skip more frequently so I replaced it with an iPod adapter. More recently, in year fourteen the headunit volume control began to fail again and I discovered that the OE headunits are no longer available from BMW. For this reason I plan to replace the headunit and amplifier with aftermarket equipment sometime soon.


(Image: odometer at 200000 miles and counting!) I can sum up the negatives of a BMW in one word: maintenance. By far the number one problem with BMWs, aside from their initial cost, is the cost of maintenance. Of course, this makes a BMW no different than a Porsche or any other high performance sports car but I make the point because I get a lot of mail about this subject.

If you're thinking about buying your first BMW and you come from a world of Honda and Toyota ownership, consider for a moment whether you would freak out at the notion of spending a few thousand a year in maintenance costs on your car. If so, you would be well advised to steer clear of any sports car, including a BMW. For those willing and able to pay to play, read on.


The car eats tires every 25K miles. This is more of a function of the tire and driving style than the vehicle but it's worth mentioning particularly if you intend to drive the car to the tune of 20K+ miles a year like I do. I effectively go through a set of tires every year.

Due to different wear patterns (front tires wear on the outside edges while the rears wear at the center, and the rears always wear faster than the fronts), tire rotation can negatively affect handling. For this reason BMW advises against rotation unless it is done at intervals of 3000 miles or less. Since this would get very expensive if you pay someone to do it, or just time consuming if you do it yourself, it's just cheaper and easier to put four new tires on the car when the rears are spent -- even if the fronts appear to have some life left in them. This sounds wasteful until you realize that many high performance tires tend to make a lot of noise when they reach about 1/2 of the original tread thickness, particularly when mounted on the front of the car, so by the time the rears are spent I'm tired of hearing the "wow wow wow" of the front tires at speed and I'm all too happy to replace them.

Keep in mind that the greatest enemy in any modern rear-wheel-drive sports car is worn tires. Don't scrimp on tires or you'll wind up in the weeds.

A good set of high performance summer-only Michelin tires is $1000. Tires destined for a BMW should be road-force balanced. Expect to pay $30-$40/wheel. If you were asleep in math class that's $1200 for a set of tires properly mounted and balanced. This job is not a DIY task so you're at the mercy of the local dealer or independent shop.

Many people new to BMWs and rear-wheel drive cars in general think that BMWs are ill-equipped to handle snow. Nothing could be farther from the truth assuming you equip the car with winter tires and accept the reality that a sports car with a lowered suspension will naturally suffer clearance issues in deep snow, which I define as more than five inches in this car.

If you must drive in a winter climate and you can't afford a second vehicle more appropriate for the conditions like the X3, I recommend you maintain two sets of wheels, one equipped with summer-only tires as required to extract maximum performance in the warmer months and another set with winter tires to enhance traction when you need it most. All season tires are a compromise. They provide neither maximum performance in the summer nor maximum grip in the winter, and thus cripple the car year round. After doing my own comparison between all season tires and dedicated summer and winter tires, I'll just say that I'll never buy another all season tire again if I can help it.


Front brakes are usually spent in 30K while the rears usually need attention at 60K. Brake fluid should be flushed every two years per BMW's recommendations, though every year is better.

Note that a brake job on a BMW involves replacement of rotors along with the pads because the parts are designed to wear equally, and by the time the pads are spent the rotors are at or near minimum specs.

Also, cutting BMW rotors is a fool's errand. Don't do it. BMW rotors are cheap, so there is no excuse NOT to replace them outright. If you try to cut corners here you'll wind up pulling the brakes again shortly.

The average four wheel brake job at a dealer is $1200. If you DIY parts run as little as $350.


The car is equipped with struts in the front and shocks in the rear. BMW officially recommends the struts be replaced every 100K. I was forced to replace both front struts at 55K because I blew one of them out and BMW recommends replacement in pairs if they have been in service more than 20K miles.

Shocks should be replaced every 72K miles. The shocks may last longer than that but the shock mounts should be considered suspect at 72K as they are a known weakness of the 3 series vehicles of this vintage. This also applies to the E46, incidentally.

One thing is sure: these critical suspension components must be replaced on a regular interval or handling will slowly degrade to the point that you put the vehicle at risk when you need it to perform at the limit.

Expect to pay a dealer $1500 to do struts and shocks on this car. An independent BMW shop should be able to do it for less. I advocate DIY suspension work only if you have the right tools and work environment, and are somewhat experienced in working on cars as very real danger is involved if you screw something up. If you choose to DIY, OE struts and shocks can be had for around $800.


Many people new to BMWs find it hard to believe that the E36 automatic transmission is made by a French division of GM. It was built under exclusive agreement with BMW but that agreement has since expired and a version of this transmission is found in currently-shipping GM vehicles. The latest ZF transmissions are better all-around automatics than this GM part ever will be, but you have to understand that its design is 20 years old. It was ahead of its time and it's still a fine transmission.

People say these transmissions are good for 150K miles or more and I have to believe that provided the fluid and filter are replaced on a regular basis. BMW tries to sell the idea of "lifetime" fluid, but they're on crack (well, unless "lifetime" is defined as 100K miles). In my opinion, the fluid and filter should be replaced at 18K miles and then at 36K intervals thereafter. This dovetails with BMW's maintenance schedule before they implemented "free scheduled maintenance" on more modern vehicles. The problem for prospective owners of high mileage cars is that it's very likely that the fluid has never been replaced, so you take some risk in replacing it later on. The theory is that the detergent qualities of new fluid can free deposits that can clog the valve body and this can cause more problems than it solves.

While I'm on the subject I'll point out that one of the most frequently asked questions I receive in email is "if you had to do it all over again, would you still buy the automatic?" The answer is YES. This is a street car that serves as a daily driver and while I enjoy driving a stick and consider it mandatory for track use, I do not wish to row a stick on the commute. Like many things in life this is a personal choice. If you're thinking about writing me to spout some dogma about the sacrilege of owning a BMW without a manual transmission please do us both a favor and stop while you're ahead.

If you need to replace an automatic transmission, expect to spend around $2500 for the parts alone, the reason being that the only acceptable replacement is a BMW OE remanufactured unit available exclusively from the dealer. Book labor is 10 hours, or $1300 at the dealer. Independents will often charge a lower labor rate but don't be surprised if they charge book labor, as many do. Either way, you're looking at a $3500+ expense. Compare and contrast that with a clutch job ($1200) and the eventual replacement to address worn synchros and there really isn't that much difference in the per mile expense of owning a manual vs. an automatic transmission. Ultimately it comes down to a personal choice and what you intend to do with the car.

The manual transmission does have one significant advantage over the automatic; it's a lot easier to replace the fluid on a manual than an automatic. If you tend to keep your cars a long time, prefer to do your own maintenance, and don't have a long commute the manual is probably the better choice.

Spark Plugs

BMW originally provided simple copper electrode plugs with the car when it was new. Those plugs were usually toast after 30K miles. BMW now sells and recommends a platinum equivalent for which the recommended replacement interval is 100K miles. My experience has shown that 72K miles is a more practical interval. The M52 engine is surprisingly finicky when it comes to the type and health of the spark plugs in use so I advocate only BMW NGK plugs.

BMW OE plugs are expensive but worth the price of admission. Figure about $100 in parts. Book labor is around an hour so it's relatively cheap to do this and keep the car idling and running smoothly. This is also easily within the reach of a DIY technician provided you have the correct tools.

Cooling System

The E36's cooling system works very well and is surprisingly light for its size due to its extensive use of aluminum and composite materials. However, that's where the praise ends. Expect to do a complete cooling system overhaul on these cars at 75K-100K miles as preventative maintenance. While experienced technicians will correctly note that some components of the system are more reliable than others (I got over 100K miles on most of them) you put the engine at risk of an overheat when one of them fails. Since the labor involved to replace some of these components is shared it just makes sense to do everything at once.

Of all the cooling system components the thermostat typically fails first, and more frequently. I only got 60K miles out of my original unit. It's replacement was still going strong at about 60K miles later when I replaced it as part of a total cooling system overhaul. A classic sign of a slowly dying thermostat is a temperature needle that fails to reach the 12 o'clock position after the car has been running (on the road...not idling) for about 10 minutes. This is a relatively benign failure mode, hence the reason you can stretch the replacement interval a bit.

The water pump is infamously unreliable beyond 80-120K miles. It's hard to be more specific regarding a service interval because there have been three revisions of the water pump throughout the life of the E36 and they each fail for different reasons. A high quality "high flow" water pump is available in the aftermarket. It's a fine piece but it's twice the cost of the OE pumps. Do the math on that before you consider buying it.

The radiators usually crack where the hoses connect. This is due to the use of plastic in the design. An all-aluminum replacement is available in the aftermarket which is essentially a BMW OE part with the plastic parts replaced with nicely welded aluminum components. It's a fine piece but it's not cheap, and the part is still subject to the usual corrosion issues that may cause the radiator to fail, albeit after a longer time in service. If your vehicle serves double duty on the track this and the high-flow water pump are essential upgrades but for a street car I don't think the math makes sense. Incidentally, the expansion tank attached to the radiator is also known for its dramatic failure mode (think explosion) so it should be replaced at the same time as the radiator.

You can extend the life of all cooling system components as well as the engine block by flushing coolant every two years as BMW recommends. Doing a partial flush every year would be even better.

Note that I've never seen the temperature gauge on this car go beyond the vertical (12 o'clock position), so if you ever do see the needle steaily rising or the coolant temperature warning light illuminates you are advised to IMMEDIATELY (and safely, of course) pull off the road, turn off the engine, and call a flatbed. Resist the urge to say "well, I'll just pull off at the next exit". If you ignore this advice the resulting damage to the engine will make a cooling system overhaul look downright cheap.

If you do a complete cooling system overhaul at a dealer expect to spend $1600 in parts and labor. The same rules regarding independent shop labor apply here, but the parts are a significant part of the expense. If you choose to DIY, figure around $500 for parts.

Engine Oil Changes

Engine oil changes should be done every 4500 miles or half the interval recommended by the service indicator lights. I use BMW 5W-30 synthetic primarily because it dramatically improves starting performance in the winter months. I don't bother switching to a thicker oil in the summer months because this is one less thing to worry about and my engine doesn't make any inappropriate noises that would indicate the need for a thicker oil.

Note that BMW 5W-30 meets the LL98 standard required for the M52 engine. 5W-30 is a bit of a misnomer as oil analysis has proven this oil to be close to the high viscosity limit for a 30 weight oil. In other words it's closer in performance to a 5W-40 oil. Use of 5W-30 is recommended by BMW to improve fuel economy. Older engines, however, may benefit from the use of higher viscosity oils like BMW's own 15W-50, particularly in the summer. If you hear valve tapping / ticking coming from an older engine for several minutes following start, try an oil change and a few sustained revs past 4000 RPM before writing it off as needing valve train work. By the way, Mobil 1 5W-30 does NOT meet the LL98 specification and is in fact too thin for use in the M52. Mobil 0W-40 is approved, however.

Dealer costs for an oil service can now exceed $200. Oil services are, fortunately, easily within the reach of DIY in which case the parts are usually $50.

While my experience with BMW engines has been outstanding I advocate all normally aspirated BMW engines be placed on an oil analysis program once they have 150K miles in service as this may help diagnose engine problems before catastrophic damage occurs. The cost for the program is reasonable, particularly if a sample is taken at every other oil change. Keep in mind, however, that the value in oil analysis is evaluation of the data trends and trends are only helpful if samples are taken at a routine interval PRIOR to any suspected engine problems. If you wait until you suspect something is wrong to get serious about oil analysis you have waited too long.

Cost Analysis

(Image: E36 Cost Graph)I conveniently define the total cost of ownership (TCO) to include all expenses necessary to purchase and maintain the vehicle in "like new" condition. I specifically exclude insurance, loan servicing, fuel and body work to repair damage from crashes or other "random acts" so that the numbers may be more easily compared to other contexts. Using this criteria, I've found my total cost of ownership for the 1998 E36 BMW to be $87000 over 14 years, or about $6200 / year. Not cheap by any standard, but not out of line with other vehicles in its class either.

Note: I stopped reporting financial data in 2013.

Yearly Updates

2001: Looking at the maintenance cost graph, take note that the low maintenance cost in 2001 occurred because I drove a second car and thus put very few miles on the BMW. That pretty well demonstrates my observation that if you don't beat the hell out of the car it won't necessarily hammer you in maintenance costs.

2002: This year's tab was higher because the car came out of retirement to serve as my daily driver after I sold my second car and I decided to do a bit of preventative maintenance in addition to brakes, tires, etc. I had considered trading the car in 2002 before I did this work, but my finances dictated I stay the course.

2003/2004: In spite of a couple surprises the costs were pretty representative of what it takes to run a BMW as a daily driver to the tune of 20K+ miles a year. The average seems to be around $2500-3000/yr. Keep in mind that this with full maintenance including costly inspections performed by the dealer. If you use an independent technician or negate inspections you could probably realize better numbers.

2005: I replaced some big-ticket items including what I hope to be "once in a lifetime" items like the transmission ($3700) and A/C condenser ($800). On the more routine side of things, I had to do tires as well ($800). If I hadn't needed to replace the transmission, I could point out that maintenance costs were actually down slightly this year, following the trend started in 2002.

2006: Unfortunately this year was not the statistical aberration I hoped it would be. You don't need to have a doctorate in math or finance to figure out that maintenance tab of $7200 is a lot of money to spend on a car worth about the same amount on the open market but it's not exactly fair to take that number at face value. This year was harder than usual to quantify for several reasons:

If I massage the data accordingly, the true cost for 2006 came to no more than $6000, which is about what I spent in the prior year.

2007: Total costs dropped to a more modest $4100. Of this amount, more than $2000 could be considered discretionary or cosmetic (a steering wheel and airbag upgrade alone amounted to $1100), and $500 was attributed to tools, mostly for work I expect to do in the coming years to further isolate myself from the dealer technicians and their ever increasing labor costs. The eye opener of 2007 was that I saved $600 sourcing parts and $2600 turning wrenches myself, which produced a DIY dividend of $3200.

2008: I realized savings of over $600 in parts and a whopping $1900 in labor, for a total DIY dividend of $2500. Had I not worked on the car myself total costs this year would have matched last year ($4100). Instead, I'm $2500 richer and more confident in my DIY skills. Interestingly, I managed to achieve this despite some changes in my life that have made DIY work on the car a greater logistical challenge. My hope is to remedy this as soon as real estate prices return to earth. Needless to say, there is a fully equipped shop (including a lift) in my future. And it won't come soon enough given the local dealer's labor rate is now an astounding $128/hr.

2009: I needed to spend just over $2500 on new catalytic converters and another $2500 split between tires, a HVAC blower motor, as well as some preventative maintenance. This reversed the trend of decreasing maintenance expenses started in 2006, but I did manage to produce another $2500 DIY dividend, again involving roughly $2000 in labor savings and $500 on parts.

2010: I pulled the entire rear end out of the vehicle for an overhaul, replaced engine accessories and fixed a variety of smaller issues. So while this year's $7200 spread across $5500 in parts and $1700 in labor matched what I spent in 2007, I managed to save an equally impressive $5800 consisting of $1700 in parts discounts and $4100 of sweat equity. Just so I don't catch you off guard and cause you to fall off your chair I'll let you do the math on the total effective costs of ownership this year (hint: $7200 + $5800).

2011: I continued my restoration efforts. I first replaced a severely cracked driver's door panel and overhauled the associated latch and lock systems. I then completed an "upper" interior overhaul which involved the installation of a new parcel shelf, headliner, and sunroof cassette. And for the second time in the car's history the secondary air pump failed. By the end of the year I managed to wrack up a record parts bill of $7900, yet paid only $325 for labor, which demonstrates not only the degree to which my DIY skills have advanced but the extent of my neurosis. My efforts this year saved $1225 in parts and $2950 in labor, for a respectable DIY dividend of $4200.

2012: I took the car out of service for two months to conduct a front suspension overhaul that extracted roughly $4700 from my wallet while simultaneously gifting me approximately $3000 in labor saved. Amazingly enough, aside from a few other small items the car ran largely without issue for the remainder of the year while I attended to more pressing issues in my life.

2013: My 15th year of ownership. The car went to the body shop to address rust forming on the front window frame. I also wound up having to replace the muffler and side view mirrors and decided to use parts from the M3 because they looked and functioned better than the originals.

2014: The odometer flew past the 250000 mile mark. I spent a good amount of time developing a custom DSP-based audio system replacement for the factory equipment, installed a new passenger side door panel, and brought the car to the body shop once again -- this time to paint effectively everything below the roof. The car looks brand new again, at least from the outside but the interior is a different story. That will be addressed in 2015.

The engine oil analysis is tracking what appears to be thrust bearing wear so it's anyone's guess as to how much more service I'll get from the engine. I'll be overjoyed if it hits the 300K mark which, at my current rate of mile munching, should be in about three years. My hope, however, is that I'll retire the vehicle from routine service before that which will allow me to rebuild the engine at my leisure and finally give this hard working lady a long-deserved rest.

The average annual maintenance cost over the first 14 years of ownership is $3500, but the average over the most recent five years is $5500. In my opinion the latter figure realistically reflects the cost to maintain an old BMW driven 20000 miles a year because the first four years of free scheduled maintenance skew the numbers.


If you've read this far I know you're saying to yourself "this guy is totally nuts for keeping this car...he could buy a new car for less money". If that were true and it were all about the money I might agree with you but this is my reality:

  1. With the possible exception of the 1M (which was produced in such limited numbers as to be considered unobtainable), I don't like any of the new BMWs. Too much complexity (who needs turbos when the normally aspirated S54 produces 330HP?), lower end-user serviceability (no dipsticks, no drain plugs, have to connect the factory diagnostic equipment merely to change the battery, etc.) and too many quality problems (high pressure fuel pumps, anyone?). I want a technologically simple, normally aspirated, relatively lightweight, high performance vehicle. That is apparently too much to ask of BMW these days.
  2. I don't exactly want to drop another $25K on a $50K BMW to make the payments reasonable. I see no point in leasing vehicles either.
  3. I like having no fixed car payment. Given the relationship of maintenance costs to mileage and the fact that we are still in a very fragile economy, it's nice to know that if I stop commuting for any reason my maintenance costs drop to near zero. A bank would want their payment regardless of my personal circumstances.
  4. I'm receiving a valuable education in automotive diagnostics and repair at a fraction of the cost (both in terms of time and money) of a formal school. And you never know when or where a particular skill set may come in handy.
  5. When I add up the costs of a new car with the insurance required to protect its higher value, the numbers are frighteningly familiar. I could either buy a new Honda and bore myself to death on the commute or drive one of the world's great sports cars that I proudly maintain myself. It's not exactly a hard choice. I'll keep the E36.


BMWs are very fun to drive but expensive to own. Still, everyone needs a passion or a hobby and from my perspective a BMW is a lot less expensive than ailmony or a psychiatrist.

If I had to do this all over again I'd do a few things differently:

It's important to note that maintenance costs have risen about 75% since 1998. I also routinely put over 20000 miles on the odometer every year. If there is any silver lining to the high cost of maintenance it's that most of it is directly related to mileage so if a BMW is put into service as a weekend car vs. a daily driver it's safe to say the maintenance cost will be somewhat lower than I have documented.

When I look back at my decision to buy a BMW those many years ago I had no idea what I was getting myself into -- both from the perspective of maintenance costs and how owning a BMW would fundamentally alter my expectations for what a car can and should be.