So you’re in the market for a used BMW? In this post I’ll share with you what I think is an incredible undervalued buy on the used luxury German market right now. This car also happens to be one of the best BMW’s ever made: my all-time favorite BMW, the luxurious and reliable E39 530i. In this post I’ll go over why the E39 is the best used BMW to buy today in 2020.
First, let’s chat about the glorious piece of engineering that is the E39. I have created over 100 DIY videos on this fourth generation 5 series sedan over the last five years of creating on YouTube, so it is fair to say I know them pretty well.
My E39 buyers guide here outlines exactly what to look for when considering the purchase of one of these fine machines. A midsize sedan, this five series was available in 525i, 528i, 530i, 540i and M5 configurations here in the US. Manufactured from 1995 to 2004, the model years available in the US began in 1996 and ended in 2003.
I would argue the best option for balance of power, reliability, cost of ownership and initial purchase cost is the 530i. This has the 3.0 liter gasoline M54 six cylinder engine with both manual and automatic transmission options available.
Going with the sport package over a base model gets you an M-tech sport steering wheel, M-tech sport suspension, 17” two piece BBS wheels, shadowline black exterior trim and sport seats. All together this creates a wonderful package that can be had for anywhere from $1,500 USD to $16,000 USD for the finest examples on Bring a Trailer. On average though, expect to pay $3000 to $5000 USD for a nice example.
The 525i has a smaller 2.5 liter engine which has slightly better fuel economy, but much less power. The automatic transmission on these is more troublesome and known for dropping the ability to reverse due to a defect in the design. I would avoid all 525i’s unless it is a rare 5-speed manual transmission, like the one I rescued in July 2019 here.
The 540i has the M62 V8 which is again more powerful, however maintenance is more difficult to perform and the V8’s of this generation have wear issues with the timing chain guides. It’s only a matter of when, not if, they begin to fail, requiring thousands of dollars and many hours of work to tear down the engine to repair correctly. This is not an experience you want to have. The V8 models also suffer from an antique style steering box setup with recirculating ball setup akin to the model T Ford of yesteryear. No one wants this either. However, the 530i has a wonderful rack and pinion steering that is just sublime to steer through your favorite local apex.
The E39 build quality is also the high point in the golden era of BMW design. The doors are heavy and close like the door of a bank vault. This analogy is often mistakenly used on lesser, inferior models like 90’s and 00’s Mercedes. The slam of a closing E39 door is worthy of the bank vault analogy. Furthermore, dual sets of inner and outer door seals on each door seal out virtually all road noise and wind. Quiet conversation via hands-free phone is possible in its cocoon-like interior.
The 530i is relatively inexpensive to maintain and easy for the DIY enthusiast to repair without needing to lean on his local mechanic too much. This keeps overall repair costs low compared to newer models. The parts are 1/3 or 1/2 the cost of E90 maintenance items, for example.
For those reasons, you should be looking into buying an E39 530i right now in 2020 before they begin going up in price. Many sellers tend to be long term owners who want to trade up to a newer model, only to realize they’ve made a huge mistake and regret giving up the E39.
The Rare Family E39 Touring Wagon
The E39 was also imported into the US in small quantities in the touring model, also known as the family wagon. Though wagons have long since lost their appeal in the US market in favor of giant SUV’s, the wagon is still very popular across Europe. This is primarily due to VAT tax structure and the very high cost of fuel abroad relative to the US.
The E39 touring model was available in 525i, 528i and 540i models. Again, the 99/00 model year 528i is the one to look for, in my opinion. This has essentially the same M54 engine (M52TU) double vanos motor with robust transmission and powerful 2.8L engine. Again, I would avoid the V8 model with the issues it would have, and same issues with the underpowered 525i with failure prone transmission.
The only downside to the early pre-2001 model year 528i touring is that it will not have facelift updates to the bumper and headlights with angel eyes. Though, the engine and transmission combo more than make up for this as headlights are easily updated to later units.
Is the E39 a good first car?
Today the youngest model E39 is at least 17 years old, which is about how old my first E30 was when I purchased it in 2003. While I wouldn’t recommend an E30 for a first car today due to lack of safety features and the amount of maintenance they need, the E39 is a great modern classic for a first car. It will fit the budget of most young people looking for a car and is relatively reliable as far as classic BMW’s are concerned.
While my first car was an E30, I would definitely suggest looking at the E39 platform for first time drivers with a lower end budget of $1,500 to $4,500 USD. You’ll find some fixer uppers at the low end, and clean daily drivers at the upper end of that price estimate. With about 230 horsepower and four doors, these cars are very versatile and have enough power to be safe getting on the modern freeway.
Many young people look to the 335i twin turbo E90 3 series for a cheap first car, but that is a bad idea for two reasons: no young person needs a 330-380 horsepower car to learn the limits of driving while decision making with an underdeveloped prefrontal cortex. As a 32 year old new dad, I can say that the need for speed does slowly fade over the years. Secondly, the complexity of repair and cost of parts in a 335i will slowly bankrupt all but the wealthiest owners who can pay for constant repairs.
So there you have it, the E39 is the golden goose for most German car enthusiasts out there, young and old. Get yours before prices start climbing; Bring a Trailer auction data suggests they’re already on the rise.