BMW 7-Series E38 buying guide

The last of the ‘traditional’ 7-Series before the advent of the radical E65, the E38 generation launched in 1994 comes from the era before BMW’s range expanded to fill every available ‘premium’ niche. This was a time where your BMW came in three flavours, all of which were different sized versions of the same mould.

Although the E38’s appearance was a gentle evolution of the previous E32 shape, the car had been completely re-engineered under the skin and ushered in a host of high-tech kit to take the game to Mercedes: voice-controlled satnav. electronic stability systems and onboard TV monitor made it a natural for its starring role in Tomorrow Never Dies.

The car was replaced in 2001 by the bold new E65 but its radical styling and controversial new iDrive control concept weren’t well received by the, ahem, older buyers in this segment and the result was that sales of the outgoing model increased slightly just before the axe fell, as buyers sought to grab one of the last of the old-style Sevens.


You’d be kidding yourself if you don’t admit a sneaking longing for the mighty 750i, but although the big V12 is an understressed engine and generally very reliable, it’s never going to be a sensible choice however you dress it up: the official combined fuel consumption is just 20mpg and in daily use that’s likely to be closer to 18mpg, which is no better than an old XJ12.

The V8s M60/M62 make a more sensible choice and with the 730i and 740i pretty evenly matched on economy, the 740i gets the nod for its extra 100lf/ft torque. Problems to watch out for include failed alternators on the later V8 and V12, which are a water-cooled design and tricky to fix, while the leaky pipework from the power steering fluid cooler to the pump can be cured with a stronger pipe clip. Oxygen sensors are a common failure, while catalytic converters can collapse internally too: if the engine feels strangled and won’t rev past 4.000rpm then thump them with your hand. If they rattle then they’ve had it.

The closed fuel tank breather system can also suffer when its charcoal canister behind the rear nearside wheelarch gets blocked up – typically after the car is run low on fuel. It’s not a problem in itself but it can create a vacuum in the tank which will distort it to the point where it can split around the seams.

V8s blowing smoke may not be terminally worn but may simply need the crankcase breather oil separator valve replacing. The later 735i and 4.4 740i can suffer from the plastic guide for the auxiliary timing chain failing, which will make a terrible noise.

The big issue though is the Nikasil problem, affecting all 728is and V8s produced before March 1998. We’ve covered it many times before but essentially on cars built before February 1998 (usually wearing an N or P registration plate) the nickel/silicone coating of the cylinder bores tended to erode and cause poor compression. High oil consumption and a rough idle are the symptoms but BMW UK’s Customer Services can tell you whether your car ever had a new engine fitted under warranty.

Nikasil issue apart, the sensible choice is the 728i which is the only E38 you can really consider running on a tight budget. The revvy 193bhp motor was better suited to the 3-Series than the big Seven but it can manage 30mpg and was even available as a manual. It’s a pretty reliable unit but if the car seems to be running cold or hot then suspect the electronic thermostat and the viscous fan coupling. On all models the temperature needle should point straight up with a warm engine.

On all engines, cooling needs to be spot-on so walk away from a car which shows any signs of having boiled over in the past. Also check the state of the coolant hoses, as the V12 in particular generates a huge amount of heat and they can get very brittle. The plastic radiator pipe elbows can also crack.


It’s all pretty straightforward BMW underneath, although the weight of the E38 means it suffers more than the smaller cars. At the front end, squeaking or oddly stiff steering can be due to the track rod arms which will go ‘dry at the centre joint, while a low-speed rattle from the suspension will most likely be the anti-roll bar drop links which are a quick and easy DIY fix.

Failed lower balljoints at the rear end can create a noisy squeak and will need a special tool for replacement, while odd camber of the rear wheels can be down to worn upper control arms.

Just like the 5-Serles you might experience the familiar shimmy from the front end which is generally down to the bushes in the reaction arms and it pays to buy quality parts here – If the thread on the balljoint is fractionally too long then it will foul the bottom of the damper on cars with the electronic EDC set-up.

Most of the parts you might need will be available from the likes of GSF and Euro Car Parts but we’d advise going for the better quality options wherever possible.


The E38 had a pretty uneventful life. Launched in the UK in 1994, it was initially available as the V8 730i and 740i, plus the V12 750i, now upgunned to 5.4 litres and 326bhp. In late 1995, an ‘entry level’ model was introduced in the shape of the 728i with the long-serving M52 straight-six engine. At the same time the V8s were upgraded to the new M62 engine, becoming the 735i and the 4.4-litre 740i, while the automatic gained the ‘manual’ Steptronic feature.

The E38 received a facelift in 1999 with revised headlamps, indicators and wheel designs and a new M Sport spec was added in March 2001, bringing M parallel wheels, revised seats and athracite headlining among other features. By the end of 2001 though it was all over as the last of the 330,000 E38s was produced, with the very last few cars wearing 2002 registrations.


The E38 was galvanised from the start and most had a pretty pampered life for their first few years so a rusty one is still a rare sight.

Big old cars can look tatty pretty quickly though and it pays to get the hosepipe into the wheelarches to sluice out all the crud. Scruffy sills can be covered up neatly by fitting the plastic covers as found on the post-’99 facelift cars. The later clear/ red rear light clusters will also update the styling: aftermarket units are available new from around £80 a pair.


Your E38 experience can vary dramatically when you get inside, largely depending on how much kit the original owner specified.

Early E38s came with the smaller 4:3 sat nav screen while the later cars received the 16:9 widescreen monitor, but the later DVD-based system was never offered on the 7-Series. If the system doesn’t work though, use it as a bargaining point as it can easily be upgraded to the later DVD drive which means you can update the map disc too.

Elsewhere, expect to find faded pixels in the instrument cluster displays but these can be fixed at reasonable cost – see www.

On the subject of electronics, fit the biggest battery you can find and disconnect it if you leave the car for any length of time – like the E36. these cars will flatten the battery if they’re left for a couple of weeks and a booster pack can easily send a spike through the system and cause all sorts of problems. Electric seat adjustment which doesn’t work can usually be traced to seized pivots or a chafed or broken wire which requires only basic electrical troubleshooting.


It’s rare to find a manual E38 and if you do then it will be a 728i. This means that most cars out there run the familiar ZF five-speeder (ZF5HP). Dip the fluid to get an idea of its condition: black and burned-smelling spells trouble. Despite the label telling you the unit is sealed for life, that life can be usefully extended by having a specialist renew the fluid. Assuming all is essentially well with the box, any odd behaviour can often be cured by having the software in the electronic control module upgraded to the latest BMW spec: any independent specialist with the Autologic kit can do this for you at modest charge.


As with all BMWs of this age you can expect the odd seized calliper but the V8 callipers are shared with the E39 5-Series and the X5 so exchange units are available from the usual sources.

As with other BMWs, check the metal brake lines for corrosion, especially behind the rear wheel: they’re a common MoT fail point, so attack them with a wire brush and paint before they become an issue.

What to pay

As you might expect E38 prices are all over the place, with a big gulf between the scruffy high-mileage cars with patchy history and the cherished late Sport models.

You’ll pick them up for well under £1,000 and we’ve experienced a 750iL bought for just £800 which wanted for nothing more than a couple of suspension bits. That’s a reflection of the low demand for the thirsty V12 though and the 728i and 740i command stronger money. Having said that, you can find 740is for as little as £800. Expect to pay £2.500 for a presentable example of either, with anywhere from 90.000 to 120,000 miles showing, while £3,000 should be enough to secure a really nice Sport. Post-facelift cars in general start at around the £1,900 mark.

Don’t get too hung up on mileage with these cars: it pays to buy on condition and a 120.000-mile car with good history from an enthusiast owner could well be a better buy than an 80,000-miler with scruffy bodywork, faded dash pixels and clonking suspension.

Tech Spec

Model BMW E38 728i 730i 735i 740i 740i 750i
Engine 2793cc R6 M52 2997cc V8 M60B30 3498cc V8 M62B35 3982cc V8 M60B40 4398cc V8 M60B44 5379cc V12 M72
Power (bhp) 193 218 238 286 286 326
Torque (Ibf/ft) 206 214 255 295 325 361
0-62 MPH (secs) 8.6 9.7 8.2 7.4 7.0 6.8
Top speed (mph) 142 146 151 155 155 155
Economy (mpg) 28 26 24 24 23 20

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Jean-Claude Landry
Jean-Claude is the Senior Editor at, and, and webmaster of He has been a certified auto mechanic for the last 15 years, working for various car dealers and specialized repair shops. He turned towards blogging about cars and EVs in the hope of helping and inspiring the next generation of automotive technicians. He also loves cats, Johnny Cash and Subarus.