Generally, you're still in college and have $x in student debt with at least another full year (senior) to go for your undergrad degree. What is your desire for a BMW? How much credit card debt do you have? Are you responsible for paying your student loans back later?
I'm assuming you have some credit card debt since most college kids do. Likewise, I'm going to assume that you're paying your student loans back. $25/hr isn't that much. Even assuming that your parents float you spending money and such, your internship money + your current job doesn't get you too far and you'd be basically working for your car and tuition. You mention modding the 135i so how much additional discretionary income do you have or do you rely on your parents for?
I'd say either suck it up and keep the E46 or get rid of it and downgrade. You're in college. Instant gratification in the short term isn't going to help you get ahead once your out of school. Decide now how much debt you want to start your adult life with. Depending on your degree and such, the way the economy has been going, things may not be as easy as you hope upon graduation.