The only person that can really answer this question is you. So put your science hat on and ask yourself: 'what do I need a car for?' Do you use it for commuting to work every day and shuttling kids around? In which case, do you need something that's reliable and economical? Or are you just popping to the shops and doing the occasional long journey. You said it yourself that you love the car - so presumably it's the cost of the annual MoT that's hurting you? But any car will require running costs to be spent on it. If you opt for a 'better' E36, you're buying an unknown quantity and could still end up spending more than you want on it. If you buy a 1-series then you'll still be spending money (on the purchase cost of the car, and if it's over three years old you'll still have to MoT it). Cars don't last forever - their parts wear out and have to be replaced just like anything else. I suspect that, at the back of your mind, your also wondering if you could start to see some kind of return on your investment as the E36 starts to head towards classic status and therefore appreciate in value. That's a long game to play and the 316 will probably be one of the last to see any bump in values.