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The five series is BMW’s second best-selling model after the three series. The mid-level executive sedan takes a more luxury approach when compared to the sport sedan nature of the three series. The 1995-2004 E39 five series is no exception. The executive sedan is the fourth generation five series, and the 540i is one of the top trim levels, coming in only below the M5. Enhanced luxury features, traditional Bavarian engineering, and an engaging driving experience build on BMW’s “ultimate driving machine” moniker. Today, it is no surprise that interest in the E39 is even greater than at its introduction. With so few original and clean examples left, it is likely on its way to becoming a collectible.

The E39 BMW 540i strikes the perfect combination of both performance and luxury. A standard aluminum 4.4-liter V8 produces 282 horsepower and 325-pound feet of torque. In contrast, 2001 and newer U.S. market cars have 290 horsepower. The DOHC engine features VANOS variable valve timing, and fracture-split forged connecting rods. Power finds its way to the rear wheels via either a five-speed ZF automatic or a heavy-duty Getrag six-speed manual. A four-link “Z-link” rear suspension is similar to the system in the corresponding vintage 7-series. It also saves weight by utilizing aluminum in its construction. Fuel economy is what one would expect in a V8 sedan of this caliber 15 city and 23 highway.

The performance and handling abilities of the E39 BMW 540i are something most consumers would expect to find in a much smaller car. The 3,600-pound 540i reaches 60 in only 5.7 seconds with a 14.3 second 1/4 mile at 96.9 mph. The top speed of the BMW 540i is 156 mph. Upfront, a double-jointed Macpherson front suspension ensures that the 540i is as competent in turns as straight lines.

Technology in the E39 BMW 540i is also abundant. Safety is at the forefront, earning the E39 the highest “G” rating across the board in government crash tests. A strong safety cage protects occupants from cabin intrusion. Standard dual front airbags and side-impact airbags for both the front and back seat protect occupants in any situation. The E39 is also one of the first cars to implement curtain-style airbags specifically for head protection in side impacts. Altogether there are eight airbags in total. The 540i also comes standard with pioneering high-intensity xenon headlights.

The original MSRP of the E39 BMW 540i is $53,300. Consumers could find extremely cheap clean examples for well under $5,000 only a few years ago. However, the E39 is going through a mild resurgence, as 1990s cars continue to increase in popularity rapidly. Now that the kids of the 1990s can finally afford their childhood dream cars pricing of 1990s luxury cars is vastly changing. Clean manual examples of E39 540i can now fetch as much as $72,000 at auction for an ultra-low mileage car. While generally well-maintained vehicles with 100,000-150,000 miles regularly sell for $10,000 to 15,000. Manual cars command a 15% premium over their automatic counterparts. Overall the BMW 540i E39 is an excellent sedan with sporting prowess and long haul comfort, and it is no surprise to see that the market is finally recognizing it as a genuine classic BMW.

M Sport Package:

The M Sport package, a $4,100 option in 2003, elevates the 540i with many parts from the M5. While the M-Sport package was introduced on ’02 models, it was the ’03 M-Sport package that included the full M-Technic body kit and M-tech II suspension
The M-Technic body kit includes M-tech side skirts and front and rear bumpers, producing a look very similar to that of the period M5. The package also includes the M5’s black rubber body moldings that wrap around the entire car

The M-tech II suspension features the front struts, rear shocks, and rear springs from the M5. The front springs (unique to the M sport) are softer than the M5 to maintain a level of comfort that 540i customers appreciate. These springs feature a more progressive (variable) spring rate compared to the springs on the regular 540i. Sway bar stiffness is also increased by 10%. Overall, the ride height is lowered by 23mm, and ride quality slots in between the regular 540i and the M5

The package also includes 18in Style 37 “M Parallel” wheels, M-sport steering wheel, “M” badged shift knob/door sills/footrest, and exterior door trim. The headliner is changed to anthracite (from the usual white)

Martin Birkmann, BMW E39 product manager, reckons the M Sport can lap the Nurburgring 20 seconds faster than the non-M sport 540i
In the real world, the ’03 M Sport does a better job of masking the 540i’s 3800 lb weight in the corners. Where the ’02 M Sport would understeer, the ’03 is more effective at handling weight transfer. It can settle into corners quicker, carry more speed through the corners, and achieve a faster corner exit speed by providing better feedback to the driver when back on throttle

In the end, it’s the M-tech II suspension that truly sets the ’03 M-sport apart from the base 540i and ’02 M-Sport when pushed to the limit. One period road test claimed that this was BMW’s best attempt yet at combining ride quality and handling performance (in 2003)
Converting a regular 540i to the M-Tech II suspension will cost $2500 in OE parts alone, although the aftermarket can provide acceptable, cost effective options