BMW "M" car market values have steadily been on the rise with some examples such as the E30 M3 breaching six figures! So what is the cause of their new momentum in the market?
Old cars are always getting more expensive, but some are rising faster in value than others. While BMWs have always had a place in the market, BMW M-cars have appreciated the fastest. This price spike is most apparent in BMW’s analog era—a term I use to describe the years BMW produced the greatest driver’s cars.
TV shows and YouTube clips have spent hours explaining and displaying that older cars were just more fun than their newer iterations. New cars dampen the experience with electronic safety controls, increased weight and size, and numbing driver sensations in trade for comfort. BMW may claim to be “The Ultimate Driving Machine,” but the brand hasn’t been immune to safety regulations and the increased demand luxury. The analog era, in our opinion, were cars that stuck to the core ideology behind the Motorsport badge, despite increased regulation.
To understand why analog era M-cars are appreciating at the rate that they are, you first must understand what drives the market. You do not have to look far, because it is in their slogan; BMW’s are the ultimate driving machines. And people want in on the experience.
BMW’s M-division (officially BMW M GmbH) began as a racing development team, beginning with the 3.0 CSL in 1972. The CSL’s motorsport success led to their second project, the M1, and later their first vehicle formally available, the Euro- and South Africa-only M535i. The M range continued to develop and conform to regulatory standards, but the last true M-car was the E46 M3 in 2006. During this time, they stuck to a simple formula; a big, race-derived motor, matching sport suspension, and power to the rear wheels. These remain the most authentic, uncorrupted, and raw M-cars to date.
The market demand is most apparent in M3 lineage, which includes some of the most engaging performance sedans. It began during the 1980s, when Mercedes-Benz was dominating DTM racing circuits with their 190E 2.3L 16-Valve Cosworth. BMW had enough of seeing their arch rival’s 3-point badge on the podium and set to work on taking the throne.
The CEO of BMW at the time, Eberhard Keuenheim, deployed BMW’s motorsport division “M” to build a car that would put down the pesky 190E. There was one small catch. The rules of homologation racing required manufacturers to build 5,000 street legal units of these racing cars to prevent manufacturers from making single purpose track monsters instead of race oriented street cars.
So, BMW took their standard 3-series and completely revised the body and drivetrain. They used the straight 6-cylinder engine from their M1 supercar, lopped off 2 cylinders, bolted up an improved suspension, upgraded the brakes, designed some boxy fenders, and gave it a rear wing. The final step was to slap on an “M3” badge on it and voilà, we have one of the best driver’s cars of all time. Due to the high demand for the M3, the intended 5,000 units was quickly exceeded, BMW ending up producing 16,000 units!
What makes the M3 and M-cars in general exceptional is that they are essentially DTM racing cars that pass emissions and safety regulations. Today, M-cars are pulling in market premiums, with M1’s now $1,000,000, and mint E28 M5’s and E30 M3’s going for six figures.
The M1, E28 M5, and E30 M3 are seen as the M-car holy trinity as they are directly responsible for catapulting BMW’s “M” brand. They are the first and most distilled M-cars that were ever built. They were so damn good to drive, that people actually did. These cars did not sit in collections or museums, they were out racking up miles on the roads. This makes it very common to see the majority of the M3’s and M5’s produced with some degree of modifications and 100,000 plus miles on the odometer.
In today’s market, a well-kept, all original, E28 M5 with 50,000 miles or less is almost unheard of. Not surprising when you also take into consideration that BMW only made a touch over 1,300 units for sale in North America. It is a car that has the performance, limited production, is the first model of its generation, and there is very scarce market availability of quality examples. A textbook recipe for investment grade automobiles, with significant current and future market potential.
This is trickling over into the other examples as well. Compare the price of something like a late 1990’s Z3 M-Coupe to what they were selling for 5 years ago. An S52 M-Coupe would have cost you about $18k for a really nice example with low mileage. That same car in identical condition today would sell for around the $30k mark or, in other words, about a 67% increase in market value. Not too bad for a BMW that is nicknamed the “clown shoe”.
The good news, is that the investment boat has not set sail yet. While prices are rising, they are still relatively affordable when compared to competitors. For example, the M6 was the first M-car available in the US in 1987. It featured a modified M1 motor, fully leather wrapped interior, and acclaimed styling for over $58,000 when it was new. The hot M6 was also exclusive, as just 1,767 cars were sold in North America. Today, Hagerty prices them at just $33,000 on average.
The analog M-car model range offers everything a car guy wants in a sports car, without having to compromise on conveniences like a proper trunk, reasonable ride height, reliability, or cabin space. They possess an unrivaled racing pedigree and performance while checking all the boxes for a very usable daily driver. This holistic relationship of engineering and design are why analog M-cars set the bar, which is why the window to buy is slowly closing.
Authored by: Marc Patterson
Edited by: Yousif Memon