The third-generation 3 series, introduced in 1991, was a radical step forward from the E30. The design was completely new, with much improved aerodynamics. Gone was the open grille that still adorned the contemporary E34 5-series. The six-cylinder engines (M50) were all new, employing four valves per cylinder. Top engine was the 325i with 192hp. Besides the entry-level 316i and 318i (M40) four-cylinders, the sixteen-valve 318iS (M42) was also carried over from the E30.
The E36 was offered as sedan, touring, coupé and convertible. The coupé and convertible feature completely different sheet metal, being lower and longer than the sedan. In 1994, the shorter compact was added as entry-level model. As a cost-cutting measure, the E30’s simpler rear suspension was used. Available engines were the 1.6l (316i), 1.8l 16-valve (318ti), and the detuned 2.5l (323ti), with the latter two models once again using the ti moniker that was used on the Neue Klasse and 02. The compact sold well in Germany, were it was popular as second car for the wife. The E36 compact also provided the platform for the Z3.
The E36 did not receive a major facelift during its production run. In 1993, small bubbles were added to the headlights and mirrors to deal with wind noise. Slightly enlarged kidneys and the addition of a third brake light followed in 1996. There were some changes regarding the engines. In 1993, the chain-driven M43 replaced the belt-driven M40, and the M42 was succeeded by the M44 in 1996. The six-cylinders were updated in 1992, with one of the changes being the introduction of variable valve timing for the inlet valves (single VANOS). For the 1995 model year, the M50 was replaced with the M52 series, with the top engine being upgraded to a 2.8l (albeit with only one extra hp) and the introduction of a new 323i, actually a 2.5l engine detuned to 170hp (top engine in the compact, as mentioned above). The M52 block was cast in aluminium, resulting in a significant weight reduction.
The eight-valve four-cylinders are nothing to write home about, although I considered the 316i compact I once owned to be adequately powered. The 318iS is a bit quicker at 140 hp, but the performance gap to the top engines is bigger than with the E30. The 325i and 328i do 0-100 km/h in less than 8 seconds and have a top speed approaching 240 km/h.
Top engines offer serious performance. Most modern amenities are available, and prices are still low. If you can get an original 325i or 328i in good condition, now is the time to buy.
Low prices and high performance mean that many have been treated poorly. Modifications are plentiful. Quality may also not be what you might expect from a premium brand, with both rust and disintegrating interior being an issue.
328i sedan, which is lighter than the coupé and better proportioned. If you are on a budget, consider the 318ti or 323ti compact.