A Steal -- And Still Fun To Drive

BMW's new X3 is practically a twin of the X5, with a price tag $10,000 less.

How's this for a deal? BMW took its wildly popular X5 sport-utility vehicle, added a bit more legroom and cargo space, and boosted the fuel economy. Then it knocked more than 10 grand off the base sticker price. The result: a new compact SUV, the X3.

Given the success of the X5, it was only a matter of time before BMW came up with a less expensive one. But who would have guessed they would be nearly the same size? (Hint: The five-year-old X5 is up for a redesign so it can fit a third row of seats.) I looked at them side by side: The X3 is four inches shorter; it has a deeper crease on the sides, a higher window line on the back. The X5 has dual exhausts; the X3, a single one.

Sure, you're not going to get the same level of power or standard equipment in the $30,995 X3 2.5i, the 185-horsepower starter model. But step up to the $36,995 3.0i, the one I drove, and you get the same six-cylinder, 225-hp engine that's in the base X5. You also get the same sporty BMW feel, with precise steering and surefooted handling. It's the most agile SUV I've ever driven.

That said, the BMW twins are not true SUVs. Despite eight inches of ground clearance and a nifty descent control that lets you safely crawl down hills, the X3 -- like the X5 -- is not really meant for off-roading. Instead, it's designed for what most SUV buyers want: all-wheel drive for bad weather, a high seating position, and a rugged, macho look.

Critics knock the X3 for its austere interior, but most BMWs tend toward the spartan. The big, simple gauges are taken from BMW's Z4 roadster. The X3's optional navigation system ($1,800) isn't the usual big screen in the center console: It cleverly hides away in the top of the dash until you need it.

Here's what I don't like. My car came with the $1,500 Sport Package. That means specially bolstered sport seats in front, 18-inch chrome wheels, and a different suspension. But that suspension is overly taut, giving the X3 a choppy ride even on smooth highways. I didn't try the standard model, but I suspect most drivers would be happier with it.

Even small upgrades at BMW cost a pretty pfennig. An automatic transmission is $1,275, and leather seats run $1,450. Side air bags for rear passengers cost $385. (They're standard in the front.) You can buy a cheaper SUV, or one more ready for the rough-and-tumble. But if you're looking for a daily hauler that's sporty and practical, it's hard to find an SUV more fun to drive than the BMW X5. Er, make that the X3.

By Larry Armstrong

    Before it's here, it's on the Bloomberg Terminal.