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OP, driving someone else's car without permission is really a disgraceful and illegal act - regardless of whether the car owner is an enthusiast or not. Moral issues aside, both he and you could have been screwed if he drove it and crashed it, let alone if he killed someone with it. As such, you have sincerely let him know the potential danger of becoming a criminal (car thief and a murderer) if he does not ask for permission again next time, saying that you'll just report the car stolen under similar circumstances.
After that's been described, you have to punish him for his immoral actions - that's only fair. I don't know what would be the best way, but if I were you, I would propose him to pay for an overall inspection at the dealer as well as the break-in oil change at minimum, that is, if nothing is broken. I would describe this as an important part of enjoying a car of such caliber. If he drove it, he has to understand and carry-out the responsibilities and costs associated with driving it. No one in his right mind should expect to drive someone else's M3 without some sort of compensation.
Of course, I think you should only try to have a gentlemanly conversation about this in a calm way, and get him to agree to your reasonable proposal. There's no use of arguing or fighting about it. If he doesn't agree to this, then either take legal action by accumulating whatever evidence you can, etc. if it really really means a lot to you (b/c this will take a lot of time and effort), or just consider him a dirt of the world and forget about it - you'll get over it. If he agrees, that would be respectable of him (and unexpected for this day and age), so give him another chance to develop your trust to be a friend, that is, if you're interested.
Hairy situation, but I don't see much tangible damage here. As a young professional, you'll learn a lot from this, so all I see is your gain in life experience from here on. Good luck.
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