Intermittent starter spinning but pinion not engaging flywheel

Just bought a Z4 and first thing in the morning the starter spins but does
not engage flywheel. After it does eventually start it is ok for the rest of the
day. I did notice the battery feed to the solenoid has been arcing on the
solenoid body due to being hard against it with faulty terminal insulation. I
have moved it away and the problem still exists. I'm wondering if it has
damaged the solenoid or whether the problem is the starter pinion cog with
it being dirty or damaged. Any help appreciated.