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Is your car payed off? If not I would spend the money to pay the car off before making upgrades. If you are looking for cheaper alternatives than 100 dollars to fix a dent I don't know where you would go. 100 dollars seems pretty cheap. Especially for someone who is saying they want to make a ton of upgrades.
Also what makes the X1 not have proper rear wheel drive? I am not a fan of the current three series but if you feel that is better go for it. I doubt many of your complaints will be solved. I find the 3 series sedan ugly inside and out. Looks more like a Toyota than a BMW but get what makes you happy. Perhaps you mean the 3 series wagon which is actually decent looking.
Trading in a car that you only have had two years seems like a bad financial decision but it is your debt. Maybe you should try another brand if you do.
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