We leased a 2005 X3 and loved it so much, we leased a new 2008 when the first lease was up. I wanted to post this review because many people post because they have an axe to grind. Both X3's we owed were excellent. The 2008 has been completely perfect, no flaws or repairs in 22,000 miles. The new 3.0si engine that was put into X3 beginning in 2007 flat out rips with 260 HP. Handling is great, yes it is a little stiff but you are rewarded with a SUV with 50:50 weight distribution and very sporty handling. If you want a cushy floaty ride, numb steering, and 30 MPG, look elsewhere.
Adaptive xenon headlights swivel in the direction you are turning. Rain sensing wipers. Fast shifting 6 speed auto tranny. Heated seats that also warm your lower back. The new 3.0si motor. Drives like a BMW should. I actually like that this SAV is based on the older E46 platform.
Gas mileage with the new engine is better than the 2005 engine, but is still not stellar. The Bluetooth hands free phone system is terrible.
Here is an update to the above review. Our lease expired, and we bought the X3! It is a keeper. We did have the valve tapping noise at 36K miles. After two attempts to fix the noise by "bleeding" the valves, the head was replaced with the updated version. Problem solved!
Nothing is perfect. You have to give the service guys a chance to diagnose and fix the problem. BMW warranty and service is the best in the industry. If you have a problem, they will fix it. I have used several dealers in the San Diego area and they were all good. BMW of SD is awesome. If your dealer is not helpful, take your business somewhere else.
We now have almost 45k miles. Still on the original tires. Front brakes were redone at 40K under warranty. We have added roof racks and a tow hitch. This is very versatile vehicle. We love this SAV!