After having lived in New York City for a few years, I moved to California and was faced with the exciting prospect of purchasing my first car. There really was no question that it would have to be a BMW - for me, these cars really do represent the ultimate in driving experiences and the best sedans in their respective classes.
Given budget restrictions (less than $20,000) and a strong preference for the E36 series (the 3-series sedans from 1991 to 1998) I eventually ended up buying a 1997 328i. The car is everything I had hoped it would be - it is a pleasure to drive, and the 2.8L 6V engine provides plenty of power. If you are considering the 318 as well (which has a 1.8L 4V engine), I would definitely recommend spending the extra dough and going for the 328. You won't regret it! The car also has an excellent styling, inside and out.
I had purchased my car on www.ebay.com - I would recommend checking out the listings on the site to give you an idea of whats out there. You can really find some great deals on good, quality cars. Also check out the following useful sources:
www.carpoint.com - offers detailed reviews and reliability ratings (the 1997 328i gets s 5 out of 5!)
www.hotbimmer.net and www.bimmerforums.com are two BMW enthusiasts sites that can provide you with a wealth of information before, and after, your purchase.
I am very happy with the 1997 328i, and would strongly endorse it to anyone. As some other reviews mention, the interior can be a bit bland for some, but it is a inconsequential overall. Also, maintenance, as for all luxury vehicles, will cost you money - since the original OEM replacement parts from BMW can be pricey and the dealers hourly rates often hit $100 (varies by dealer - my dealer - Crevier BMW in Irvine, CA is $97/hour). But you can buy self maintenance guides (like the Bentley guides series) and do the small work yourself. Also, going to german car specialists who are not authorized BMW dealers can save you a lot of money on maintenance! Just check out the BMW forums I had listed above for info on locating local mechanics and dealers.
My two cents - hope you find it helpful!
Amount Paid (US$): 17000
Condition: Used
Model Year: 1997
Model and Options: ASC, wood trim, leather, keyless entry & alarm