E39 M5: A Modern Classic's Rising Value

When the topic of BMW's golden era in the late 1990s and early 2000s arises, a few iconic models immediately spring to mind. The quirky and agile M Coupe, the perfectly balanced E46 M3 – these are undisputed legends. However, as Christoph Waltz aptly put it, "Don't forget the cream." In the context of early 2000s BMW performance, the E39 M5 stands as the undisputed crème de la crème of executive sport sedans.

This raucous-sounding, smooth-riding, and timelessly elegant machine wasn't just a performance benchmark; it was also a commercial success. BMW produced more E39 M5s than its two predecessors combined, ensuring a healthy number of these exceptional cars are still available to be cherished. Now, with almost two decades having passed since their 1999 debut, high-quality, well-preserved examples are beginning to command significant sums. While the E39 M5 has long been a favourite among enthusiasts and a regular fixture on auction sites like Bring a Trailer, 2018 marked a turning point, solidifying its status as a serious collector car. As elite, collector-grade examples fetch ever-higher prices, the values of even more commonplace E39 M5s are likely to follow suit.

The E39 M5: A Munich Mic-Drop

Arriving in 1999 for the 2000 model year, the E39 M5 heralded a significant milestone for BMW's M division: the introduction of its first V8 engine. This wasn't just any V8; the 4.9-litre, naturally aspirated S62 powerhouse delivered a formidable 394 horsepower at 6600 rpm and 369 lb-ft of torque at 3800 rpm. A true screamer, it revved enthusiastically to its 7000-rpm redline, propelling the stately German sedan from 0 to 60 mph in under five seconds. Featuring variable valve timing for both intake and exhaust camshafts, coupled with individual throttle bodies for each of its eight cylinders, the S62 is widely regarded as one of the finest engines ever to emerge from Munich.

However, the M5's brilliance extends far beyond its magnificent engine. It was exclusively offered with a six-speed manual transmission, a robust iteration of the unit found in the BMW 540i. Even by today's standards, the chassis feels remarkably stout and athletic, offering a rewarding driving experience with just a hint of controlled body roll. The interior is a masterclass in purposeful design, impeccably assembled with high-quality leather, wood, and plastics. The seats provide firm, reassuring support, cradling occupants in comfort. Back in 2000, Car and Driver fittingly declared it "the most desirable sedan in the world."

Simply put, from 2000 to 2003, the E39 M5 reigned supreme as the ultimate executive sport sedan. While the Mercedes-Benz E55 AMG offered potent performance, it lacked the M5's refinement. The Audi RS6 was a formidable contender, but it was hampered by a comparatively heavier curb weight and significantly lower production numbers.

Running Changes and Refinements

While the E39 M5 is undoubtedly a stellar machine, early examples weren't entirely without their quirks, which BMW diligently addressed through running changes. Initially, prior to November 1999, the S62 V8's Variable Active Nockenwellen Steuerung (VANOS) system lacked a crucial screw in the solenoid cover. This omission could lead to noticeable vibrations and potential damage to the solenoid. In 2000, for most 2001 model-year vehicles, BMW rectified this by incorporating a shutoff valve for the VANOS accumulator. This ingenious addition prevented oil from escaping the system, thereby reducing noise during startup.

Further enhancements were made in 2000, with BMW fitting different piston rings to mitigate oil consumption and switching the recommended oil from Castrol 5W-30 to 10W-60. The E39 M5 also gained a reputation for carbon build-up, particularly in the secondary air injection passages. To combat this, BMW widened these passages in September 2000 (affecting the 2001 model year onwards). This modification facilitated faster warming of the catalytic converters and leaner running during startup. Additionally, 2002 M5s benefited from a less noisy diaphragm spring in the pressure plate.

A notable potential issue across the E39 M5 range concerns the timing chain. The plastic guides for the chain's tensioner, much like BMW's notoriously brittle plastic cooling components, can degrade and fracture with age and use. Should this occur, the timing chain could jump a sprocket, leading to more severe and costly damage.

Later is Often Better

Due to the continuous improvements implemented by BMW, alongside the introduction of several desirable niceties for the 2001 model year, the final three years of production are generally considered more desirable than the initial 2000 model year, despite its status as the best-seller. The mid-cycle refresh for the 5 Series in 2001 brought about significant visual and functional updates, including the now-iconic angel-eye headlights, updated taillights, a thicker three-spoke M steering wheel, a revised grey instrument cluster, and an improved navigation and media system.

In the US market, approximately 10,000 examples were sold, representing nearly half of the total global production. Titanium Silver and Carbon Black were the most popular exterior colours, followed closely by standard Black and Le Mans Blue.

E39 BMW M5 Prices on the Ascent

Over the past two and a half years, E39 M5 prices have seen a substantial increase. Examining 2001 M5 models, examples in concours condition (considered #1 condition) began a notable climb in September 2016, averaging around $42,500. This upward trend accelerated dramatically, with values soaring from $45,000 in January 2017 to just under $70,000 by May 2018. Excellent condition (#2 condition) examples have mirrored this growth pattern, with current average prices for cars in this condition sitting at approximately $47,500.

Generally, the 2003 BMW M5 is the most sought-after variant, partly due to its lower production numbers and the benefit of all factory improvements made throughout the model's lifespan. High-profile sales have significantly boosted the M5's profile. For instance, a 2001 M5 with a mere 27,000 miles, tuned by Dinan, fetched $72,000 on Bring a Trailer. However, the most remarkable sale was a museum-grade 2002 example with ultra-low mileage, which achieved an astonishing $176,000 at Gooding & Company's Pebble Beach auction in August. This extraordinary figure is undoubtedly encouraging more E39 M5 owners to bring their cherished vehicles to market.

Our data also indicates a significant surge in interest surrounding the M5 over the past year, evidenced by a 51% increase in insurance quotes from 2017 to 2018. Furthermore, the M5 is attracting a broader demographic of buyers, indicating its appeal transcends generational boundaries. As more examples are expected to enter the market in the coming year, catering to an increasingly engaged pool of potential buyers, we anticipate prices will continue their upward trajectory.

The E39 M5's V8 Powerhouse

The heart of the E39 M5 is its legendary S62 V8 engine. This 4.9-litre, naturally aspirated masterpiece produces 394 horsepower and 369 lb-ft of torque. When the E39 M5 debuted, its closest competitor, the supercharged Jaguar XJR, produced a mere 326 horsepower. The E39 M5's enduring appeal, however, transcends mere statistics; it lies in its sophisticated blend of performance, handling, and luxurious comfort. Even after over two decades of automotive evolution, many consider it a high-water mark for both BMW and the sports saloon segment as a whole.

A Record-Breaking Sale and Market Disparity

The exceptional nature of the E39 M5 was underscored by a recent sale: a 2003 BMW M5 with just 3,157 miles from the final year of production fetched a staggering $199,990 (£144,600). This price point significantly exceeded the current #1 condition (Concours) value of approximately $108,000 (£78,000) according to Hagerty's US Price Guide. This transaction, while extraordinary, prompts reflection on the current market for these vehicles.

The car in question, presented in Carbon Black with Silverstone sport leather and a six-speed manual transmission, was a pristine, unmodified example. Sold by Enthusiast Auto Group (EAG), a respected dealer known for its high-quality inventory, the car's immaculate condition and provenance undoubtedly contributed to its premium price. However, the substantial sum raises questions about whether this represents the broader market trend for E39 M5s.

The price disparity becomes even more pronounced when considering the UK market. While Hagerty's UK Price Guide does not yet list the E39 M5, the US Condition 1 value converts to roughly £78,000, which is considerably higher than typical excellent condition examples sell for in the UK. Recent listings show a black 2009 model (erroneously listed) with 32,900 miles for £41,995, and a 2002 car with 52,000 miles for £34,990. Another 2001 model with 60,000 miles was slated for auction. While these cars have higher mileage, the significant price difference highlights a divergence between the US and UK markets, making the £144,000 sale price, even with low mileage, seem exceptionally high.

This leads to a crucial question: would you opt for such a high-specification, low-mileage E39 M5 for that price, or would you consider other BMW models? For less than half that amount, one could acquire a top-tier E39 M5 and still have ample funds left to purchase another desirable BMW, such as an E24 M6, an M Coupe, or even a rare Lime Rock Park M3.

What Made the E39 M5 So Special?

The E39 M5, which debuted in 1999 with a starting price of around $71,000 (approximately $126,000 in today's money), followed the established M5 formula: fast, practical, and luxurious. However, it elevated the performance aspect significantly by introducing the first V8 engine to an M car – the S62. This all-aluminium, naturally aspirated 4.9-litre engine, featuring BMW's double VANOS system and individual throttle bodies, produced 394 bhp and 369 lb-ft of torque, enabling sub-5-second 0-60 mph times. While these figures may seem modest compared to modern supercars, they were supercar-rivaling at the time. The E39 M5's exclusive offering of a manual transmission allowed drivers to fully exploit the engine's 7,000 rpm redline and savour its exhilarating exhaust note.

The car's handling was another significant strong point, building upon the already excellent E39 standard chassis. Most chassis components were replaced with aluminium, enhancing both lightness and rigidity. Upgraded anti-roll bars, steel ball joints, and revised shock valving allowed the E39 M5 to carve through corners with remarkable agility, despite its considerable size and weight.

What truly cemented the E39 M5's appeal was its ability to seamlessly blend exhilarating performance with everyday practicality. It comfortably seated five occupants in a well-appointed interior, offering high-quality leather and wood trim options. Long journeys were a pleasure, thanks to its refined ride and comfortable cabin. The styling was equally brilliant, arguably representing BMW's pinnacle of saloon car design. Its characteristic boxy, period-correct lines, which would later disappear from 5 Series generations, were subtle yet purposeful. Subtle indicators of its performance capabilities included quad exhaust pipes, 18-inch alloy wheels with a staggered setup, and the coveted M5 badges. These enhancements, while understated, clearly distinguished it from M Sport models of the era, perfectly embodying the M5's ethos. Given its overall package, it's no surprise that the E39 M5 is held in such high regard by automotive enthusiasts.

Common E39 M5 Maintenance and Costs

When considering the ownership of an E39 M5, it's essential to be aware of potential maintenance costs. As with any performance car of its age, certain components are known to require attention. The user u.nanimous on an E39 forum highlighted a common sentiment: "pick one up for $2K and it will need $8K of work, or pay $8K and it still needs $2K of work, so either way it's a $10K car." This illustrates that the purchase price is only part of the overall cost of ownership.

Key areas that often require significant investment include:

• Cooling System: The entire cooling system, including the radiator, water pump, thermostat, and hoses, is a common area for replacement due to age and material degradation.
• Suspension Components: Bushings, ball joints, control arms, and shock absorbers can wear over time, impacting handling and requiring replacement.
• Brakes: While standard, high-performance brake pads and rotors will eventually need replacement, and the cost can be higher for M-specific parts.
• VANOS System: The VANOS system, while brilliant, can develop issues, potentially requiring rebuilds or replacement of specific components.
• Clutch and Flywheel: For manual transmission models, the clutch and flywheel are wear items that will eventually need replacement.
• Timing Chain Guides: As mentioned earlier, the plastic timing chain guides are a known weak point and can lead to catastrophic engine failure if not addressed proactively.

The cost of ownership can vary significantly based on whether the car is a daily driver or a garage queen, and the quality of parts and labour used. Regular driving is often recommended to keep components lubricated and to identify and address wear items incrementally, rather than facing a large bill for a comprehensive overhaul.

Frequently Asked Questions

Q1: How much power does a BMW E39 M5 produce?
The E39 M5 is powered by a 4.9-litre naturally aspirated V8 engine (S62) that produces 394 horsepower and 369 lb-ft of torque.

Q2: What transmission was available with the E39 M5?
The E39 M5 was exclusively offered with a six-speed manual transmission.

Q3: Are later model E39 M5s more desirable?
Yes, later models (2001-2003) are generally considered more desirable due to running changes and refinements made by BMW, including updated styling and improved components.

Q4: What are common issues with the E39 M5?
Common issues include wear on timing chain guides, potential VANOS system problems, and the need for comprehensive cooling system and suspension overhauls due to the car's age.

Q5: Why are E39 M5 prices increasing?
Prices are increasing due to the car's status as a modern classic, its exceptional performance and handling for its era, its timeless design, and a growing appreciation among collectors and enthusiasts.

Conclusion

The BMW E39 M5 has firmly established itself as a modern automotive icon. Its potent V8 engine, engaging manual gearbox, sophisticated handling, and elegant design combine to create a truly special driving experience. As values continue to climb, it's clear that this executive sport sedan is not just a car to be enjoyed, but also a shrewd investment for those who appreciate automotive history and performance engineering at its finest. Like a perfectly crafted Bavarian pretzel, it's best to savour these rising stars while they're still within reach.