I will stand by the point that the E39 is one the best cars BMW has churned out of it's factory- sure, it's dated now, but other than lack of Bluetooth or a decent nav system, it's still a modern machine. The M5 is the paragon of the E39 models for obvious reasons.
Hey LeVel! Der Stig (and the others) are totally right.
The E39 m5 (aka "the Beast") is an incredible car...I've had the privilege of owning and driving some great rigs over the years - a few of them were 'cost no object' (Porsche GT, Ferrari 335 with FIVE valves per cylinder...Porsche Carerra 4s) and hands down the M5, specifically the e39 m5 is my all time favorite.
I own one in Alpine white and you'll have to pry the keys out of my hands with a crowbar to get it away from me. It IS a very modern machine even today...in so many ways. Other than maybe distance activated cruise control and touch navi), there's not much that the new cars have over the e39 m5.
Find a clean one and then go spend a few hours in it. Alone. City and Highway recommended if you can do that.
The navi isn't the best, but you CAN upgrade to the latest version and 3D maps. You can also upgrade to Bluetooth quite easily and comparatively inexpensively (comparison of course being the cost of the 335i.)
My neighbor has a beautiful black 335i and it's incredible in it's own right. He's got the Dinan software and I must admit, that it's a pretty wicked little sleeper. But the e39 m5 is STILL a KILLER - even bone stock. And he openly acknowledges this.
But we both respect each others cars.
The VANOS situation "can be" an issue if you know what to look for and how to deal with it. Truth be told, it's an overblown myth perpetuated on the forums.
You'll love the e39 m5 because of it's practicality - just last night I was moving some shelving home from Home Depot (mine has the fold down rear seats option) and was thinking how much I love that feature and the fact I can fit FIVE full sized adults in my car.
The power....ah yes - the feeling of real V8 power. The s62 engine is STILL one of the best... if not the best powerplants M Gmbh has ever produced.
In fact, look at the new M turbo engines coming out in 2010, they are back to 8 cylinders - same basic block as they've used for years and is also in the e39 m5. THe 'x42/x52 and /62' basic engine block... the "m62" is such a reliable balance of racing bred engine and send your mother - in - law to get milk please combination....
Don't be scared about it being an "old" car. Many people on the street still think it's a new car. And people who know cars - will come up to you and talk to you about your e39 m5. Design is a relative and personal consideration. Ask yourself - do you like the look of the e39 or the 335 series?
Chris Bangle did things to the sheet metal on the new e60 m5 that many aren't lovin'... and talk about the way the e39 m5 looks in comparison.
Further thoughts on the "old" point for minute - there's not too much be worried about if you buy one intelligently. People who took care of them did so with a passion and care that this car deserves. Those who didn't should never have owned one in the first place.
If you've never owned or spent any time around the e39 m5 - there are a number of things you should know. Things like brakes are very expensive - you just can't get away from that. And some option packages are more desirable than others (aluminum trim vs. burl walnut trim). Some cars have mods that you might not want - others have mods that I think are "no brainers" like Dinan's stage I or II software.
Anyway, I could go on and on about these things and other points you should know if you're gonna' get one. If you're interested in a better understanding of the E39 M5 - check out the
M5 Video Guide.
Good luck!
P.S. Buy the m5!!