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A few things haven't been mentioned:
1. The BMW has 74k miles on it.
2. The BMW is not stock (coilovers and square wheel/tire setup)
3. The Fiesta ST is VERY well tuned and is quite fun to drive.
With respect to the handling and steering comments: The fiesta ST steers very well, and while a stock, new M3 does as well, all it takes is some FLCAB or RTAB wear or being out of alignment to throw that out the window. MF makes it a point to comment along these lines.
The increased scrub radius of wider front tires will also hurt steering feel, and while the overall handling capability MIGHT be better with the coil-overs, it's very likely that steering effort build and response linearity is actually worse.
This is simply one face of the typical "here's my budget, what should I buy" debate.
I'm a test driver in the auto industry, and I'm willing to bet that most professional evaluators would agree with Matt Farah's conclusion given these two cars.
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