Most luxury SUVs are big, expensive and not terribly fuel-efficient. That's just the nature of the beast. But for those who want the style and sophistication of a premium European brand in a vehicle with agile handling, decent fuel economy and proportions more akin to a Subaru Forester than a Chevrolet Tahoe, BMW offers the X3. Although the Bavarians have branded the X3 as a Sport Activity Vehicle or SAV, we'll just call it a crossover SUV for simplicity's sake. Built from the same platform that supports the 3 Series sedan, the X3 attempts to mimic some of the ride and handling characteristics of the 3 but in a vehicle that is ultimately more versatile. Toss in the X3's xDrive all-wheel drive, and you can take the X3 to places that the 3 Series can only light up with its headlights from the safety of the paved road.

Why You Want It

You could buy a Subaru Forester or Honda CR-V and get more interior space and better fuel economy, but we suspect you're looking at the X3 because of its BMW heritage. Mercedes and Audi didn't offer anything this small until late in 2009, leaving the X3 all on its own. If you want this car for its status, its ability to tackle deep snow and muddy horse trails and its nimble size, you'll be pretty happy with your choice. If, on the other hand, you're looking for BMW performance at its best, the X3 offers up a mixed bag. Earlier models come up somewhat weak on horsepower and feature a rather stiff ride that some have described as kidney jarring. The X3's rear seat trends toward the smaller side, as does its cargo compartment. But if you're not concerned about additional passengers, the rear seats can be folded to make a nice, level load floor. Cool features like the available panoramic glass moonroof are nice touches, as is the standard manual transmission, a feature unavailable on any of the X3's competitors (that's if you can locate one).

Notable Features & Options

The 2004-10 BMW X3 had a long run with numerous changes to its engine lineup and options. Standard on all models is BMW's xDrive all-wheel drive, electronic traction and stability control, hill descent control, AM/FM stereo with CD, tilting and telescoping steering wheel, automatic climate control, an eight-way power driver's seat, cruise control and 17-inch alloy wheels. Standard safety features include front side impact and front and rear side curtain airbags.

The X3 3.0i gains a panoramic glass moonroof and rain-sensing wipers. Options vary by year and include leather seating, five- or six-speed automatic transmission, heated seats, heated side mirrors, HID Adaptive Headlamps, front and rear park distance control, heated steering wheel, rear side impact airbags, DVD navigation, premium audio and power lumbar support. A number of packages are also offered including the Sport package that adds 18-inch wheels, sport suspension, sport seats, three-spoke sport steering wheel, and additional exterior add-ons.

Model Milestones

2005 - A DVD rear-seat entertainment system with dual headrest-mounted screens is made available.

2006 - The 2.5-liter engine is dropped from the X3 lineup.

2007 - A new 260-horsepower 3.0-liter engine is added, and a new six-speed Steptronic automatic transmission replaces the previous year's five-speed transmission. Enhancements to the X3 interior and exterior, as well as its optional equipment list, round out the changes.

2008 - A new Sport Activity Package brings 18-inch Star Spoke alloy wheels, side running boards, a leather-wrapped steering wheel and rear privacy glass.

2009 - No major changes.      

2010 - The X3's panoramic moonroof is made optional.

Engines and Performance

From 2004-06, the X3 2.5i was powered by a rather weak 2.5-liter inline-6 engine producing 184 horsepower and 175 lb-ft of torque. A six-speed manual transmission netted EPA fuel ratings of 15 mpg in the city and 22 mpg on the highway. The figures are identical for the model with five-speed automatic transmission. Optional from 2004-07 is a 3.0-liter inline-6 found in the X3 3.0i, with 225 hp and 214 lb-ft of torque. Fuel economy for this model isn't far from the 2.5i, rated at 15/23 mpg with the manual transmission and 14/21 mpg with the automatic. In 2007, a new 3.0-liter engine is introduced with 260 hp and 225 lb-ft of torque. Fuel economy numbers are 18/26 mpg for the manual and 19 /26 mpg with the new six-speed automatic. All model years and engines recommend, but do not require, premium unleaded gasoline.

As for the X3's driving dynamics, we can say it handles like a BMW should, but its ride is harsher than anything we've experienced in this segment. Things are jarring enough with the base model, but toss in the sport suspension and 18-inch wheels, and the X3 seems to telegraph every bump and blemish it encounters directly into the passenger cabin. Perhaps it's the tall eight inches of ground clearance that is the problem, but the X3 just never feels settled in the curves. Some suspension revisions and the incorporation of xDrive into the Dynamic Stability Control program in 2007 somewhat lessened the rude ride. However, if it's a driver's car with wagon-like space you seek, we'd say a 325xi sport wagon is a better choice.

Recalls, Safety Ratings and Warranties

The National Highway Traffic Safety Administration has issued the following recalls for the 2004-10 BMW X3.

2004-06 - A recall was issued for a possible problem relating to the front airbags. Wear can occur to the front seat sensor mat, possibly resulting in the front airbag becoming deactivated.

Recall repairs are required by law even if the vehicle is out of warranty. Your dealer can check to see if the repairs were performed, and if not will fix the car at no charge to you.

As for safety, NHTSA did not crash test the 2004-10 BMW X3, but the independent Insurance Institute for Highway Safety did and gave it top scores in the offset front end crash test, the side impact crash test and the roof strength test.

BMW offers a four-year/50,000-mile comprehensive warranty on the X3, fully transferable from the original owner. BMW also offers a Certified Pre-Owned program for late model vehicles with less than 60,000 miles. To qualify, the car in question must pass a rigorous inspection program by a trained BMW mechanic. Once cleared, the vehicle receives a CARFAX vehicle report and is given a two-year/50,000-mile limited warranty once the factory four-year/50,000-mile warranty expires. With the two warranties combined, you'll be covered for up to six years or 100,000 miles, whichever comes first. As with any warranty, standard wear and tear items such as brakes, wiper blades, suspension parts and regular engine maintenance items (belts, hoses, spark plugs) are not covered by the warranty. For a complete list of what is and is not covered, visit BMW's website at http://www.bmwusa.com/Standard/Content/CPO/Warranty2.aspx.

Word on the Web

We and a number of our fellow test drivers found the X3's ride harsh and unforgiving, but owners don't quite see things the same way. There are not a lot of X3 enthusiast sites out there, but postings on more mainstream BMW sites were generally positive. Early 2004-06 models seem to have the most complaints, mainly about lack of power on the 2.5i. Consumer Reports seemed to back this up, giving the early X3 models average to less than average marks but moving the 2007 and newer models into the better than average category. 

Competitive Set

Lexus RX- The Lexus RX330/350 is the polar opposite of the X3. The ride is buttery soft, as is the suspension and handling, and its interior is lavish and bright as opposed to the dark and somewhat austere décor found inside the X3. There is also a hybrid model for those seeking better fuel economy.

Infiniti EX- Infiniti's EX is a lovely little SUV that gets overlooked far too often. It has a powerful yet fuel-efficient V6 engine, a stunning interior and competent handling that, while not BMW quick, is more than sufficient for the way most people drive.

Jeep Grand Cherokee- In Limited and Overland versions, the Grand Cherokee outshines the X3 in luxury appointments, off-road ability and power (you can get a V8). Jeep's somewhat weak resale values can also help you get a really good deal on a new model with fewer miles.

AutoTrader Recommends

Our recommendation is to shoot for a 2007 or newer X3 3.0is. The newer engine is more robust, the repair and reliability ratings are better and the ride and handling are slightly improved over the original 2004-06 models. Plus a new X3 will likely qualify as a Certified Pre-Owned vehicle, potentially saving you some money should expensive repairs arise down the road.

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Joe Tralongo started in the industry writing competitive comparison books for a number of manufacturers, before moving on in 2000 to become a freelance automotive journalist. He's well regarded for his keen eye for detail, as well as his ability to communicate complex mechanical terminology into user-friendly explanations.

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