If you want a BMW that goes faster buy one with a bigger engine.  It's not
like there isn't a load of choice from the sweet 320i (V6) to the gut
wrenching 760i 48v V12

I've had a 1995 318i , 125 Km ,automatic, for the last 6 months now, and
there are a few things that I have done that improved performance:
1. I put in a K&N air filter
2. I noticed a big difference changing fuel used from regular to high-test
premium. Now I only will use premium.
3. The baffles in my stock muffler are shot, but this probably helps with
performance, although I find it too loud. I'm going to replace it with a
stock cat-back exhaust.
4. What surprised me the most was I noticed some fine hairline cracks in the
ignition coil-pack casing. I bought a Bosch replacement because those cracks
are a sign that the coil pack will fry soon. When that happens, it will cook
your DME computer module, and to replace that can cost $1000, or more. Once
that coil-pack was replaced, I had such a vast improvement in
performance...the plugs were getting the proper amount of voltage. I would
suggest you have a close look with a magnifying glass, and good lighting,
and if that coil-pack casing looks stressed at all, replace it immediatly,
before more damage will be done. They are NOT expensive...I got mine for
$150 CDN, and it only takes five easy minutes to change it yourself.
5. Here's something to check that may save you future electrical problems,
including a fire. My wires were starting to fray, and I did the repair. See
this link: http://forums.bimmerforums.com/forum/showthread.php?t=79896
6. If your idle is a bit erratic, remove and clean the ICV (idle control
valve). You will find it under the intake manifold. There are some good
sites on the internet for this and other DIY procedures. Here's a link that
is very helpful:
http://www.bimmerdiy.com/e36 .

That should get you started. You will find that, like all cars, there will
problems with yours. I find the 318 very easy to work on, so you can do a
lot yourself, but don't be afraid to take it to a dealer, if you are unsure
when a problem does occur. Their shop rates are quite reasonable, although
the parts can be very expensive. At least you can get a diagnosis from them,
and you may be able to do the repair yourself. There are many good BMW
forums on the net, with lots of good tips and advice from other owners. That
has been my greatest source of info, but there is also an embarrassment of
riches....too much info, can lead you down the wrong path. That's why I
still will use the dealer's service foreman. I have got to know him fairly
well, and he has given me lots of great FREE advice.
Finally, my 318i automatic is a great car, it's not a 6 cylinder, but it is
reliable...don't get too hung-up on trying to get more performance out of
your car, than is possible. You could regret it. Your car was made by BMW
engineers, with more experience and technical skills and equipment, than you
will ever have. They designed the engine to give the best performance that a
4 cylinder could give. If it ain't broke, don't fix it.
I learned this myself, but it sure took me a long time follow that rule.
take care and happy motoring.

I've had a 1995 318i , 125 Km ,automatic, for the last 6 months now, and
there are a few things that I have done that improved performance:
1. I put in a K&N air filter
2. I noticed a big difference changing fuel used from regular to high-test
premium. Now I only will use premium.
3. The baffles in my stock muffler are shot, but this probably helps with
performance, although I find it too loud. I'm going to replace it with a
stock cat-back exhaust.
4. What surprised me the most was I noticed some fine hairline cracks in the
ignition coil-pack casing. I bought a Bosch replacement because those cracks
are a sign that the coil pack will fry soon. When that happens, it will cook
your DME computer module, and to replace that can cost $1000, or more. Once
that coil-pack was replaced, I had such a vast improvement in
performance...the plugs were getting the proper amount of voltage. I would
suggest you have a close look with a magnifying glass, and good lighting,
and if that coil-pack casing looks stressed at all, replace it immediatly,
before more damage will be done. They are NOT expensive...I got mine for
$150 CDN, and it only takes five easy minutes to change it yourself.
5. Here's something to check that may save you future electrical problems,
including a fire. My wires were starting to fray, and I did the repair. See
this link: http://forums.bimmerforums.com/forum/showthread.php?t=79896
6. If your idle is a bit erratic, remove and clean the ICV (idle control
valve). You will find it under the intake manifold. There are some good
sites on the internet for this and other DIY procedures. Here's a link that
is very helpful:
http://www.bimmerdiy.com/e36 .

That should get you started. You will find that, like all cars, there will
problems with yours. I find the 318 very easy to work on, so you can do a
lot yourself, but don't be afraid to take it to a dealer, if you are unsure
when a problem does occur. Their shop rates are quite reasonable, although
the parts can be very expensive. At least you can get a diagnosis from them,
and you may be able to do the repair yourself. There are many good BMW
forums on the net, with lots of good tips and advice from other owners. That
has been my greatest source of info, but there is also an embarrassment of
riches....too much info, can lead you down the wrong path. That's why I
still will use the dealer's service foreman. I have got to know him fairly
well, and he has given me lots of great FREE advice.
Finally, my 318i automatic is a great car, it's not a 6 cylinder, but it is
reliable...don't get too hung-up on trying to get more performance out of
your car, than is possible. You could regret it. Your car was made by BMW
engineers, with more experience and technical skills and equipment, than you
will ever have. They designed the engine to give the best performance that a
4 cylinder could give. If it ain't broke, don't fix it.
I learned this myself, but it sure took me a long time follow that rule.
take care and happy motoring.

To easily remove and clean the ICV on your 318, here is the site I used, and
the link that will tell you exactly how to do the procedure on a 318. The
pictures and instructions are excellent.
http://forums.bimmerforums.com/forum/showthread.php?t=454501

A K&N filter is a waste of money.  The stock intake is fine.  The chips
will give you a very marginal improvement (barely detectable) at the
expense of requiring premium (highest octane) fuel.  Save your money and
put a supercharger on it when you have enough $$.  Best bang for the
bucks for the 4 pot motors.