BMW E38 7 Series: Full Buying Guide

AFFORDABLE LUXURY  E38 7 Series: Full Buying Guide

Buying guide: E38 7 Series If you fancy an uncomplicated yet accomplished and affordable, luxury saloon, then the third-generation 7 Series deserves your serious consideration.

Reactions were mixed when the third generation 7 Series arrived in 1995; there were mutterings in the motoring press that it was disappointingly similar to the E32 it replaced. Some even considered it little more than a facelifted version of the previous model, but BMW knew different. In fact, familiar though it may have appeared, the E38 was a completely new vehicle. It had always been BMW’s intention to keep the overall look broadly similar to the successful and desirable E32, as the men in Munich saw no need to rock the styling boat.

The belief was that the market at the top-end of the saloon range was a very conservative one, so the designers were determined to build on the success of the previous model, rather than sweep it aside and create something riskily different. It proved to be a wise strategy, and customers loved the new car.


The subtle external changes masked the improvements that were made across the board with the E38; it was a car that did virtually everything better than its predecessor. It was a really solid car from the outset and that’s certainly stood it in good stead as the years have passed. A good range of engines, reliable gearboxes and a very well put together bodyshell endowed this 7 Series with the sort of staying power that makes it a great used buy now. What’s more, it’s the last of the pre-electronics-dominated models, making it a relatively practical proposition for those owners with DIY ambitions.

The car’s overall build quality means that high mileage shouldn’t be something to avoid like the plague. It’s not uncommon to come across 728i models with two or three hundred thousand miles on the clock, and still going strong. Given that this was the entry-level model, this speaks volumes about the overall quality of the design.

Unfortunately, values have dropped to such a level that an increasing number of people are now concluding that it’s simply not worth spending any money on their cars, so they’re being driven into the ground and then scrapped, which is a terrible shame.

However, for those in the know – like all of us – the great news is that there’s probably never been a better time to pick up a tidy, well-maintained example for relative peanuts, safe in the knowledge that, with a little TLC, you’ll be getting a luxury motor car that’ll just run and run.


The absence of mechanical and electronic complexity on this generation of 7 Series means that, by and large, putting things right isn’t going to demand walletcrushing expenditure. Nevertheless, these were expensive cars when new, and represented the pinnacle of what BMW had to tempt the well-heeled company executive. So good quality, on-going maintenance is important but, then again, it is with any car.

But the fact that the E38 doesn’t bristle with electronic control units and complicated, CAN bus wiring systems, means that the sort of problems owners are most likely to encounter, can be dealt with in a relatively straightforward and affordable manner. There are always exceptions, of course but, as a general rule, decent, sympathetically-maintained cars should present few horror stories.

What’s important to avoid is being drawn into the old trap of imagining that, just because you can buy an E38 for £3,500, you’re going to be able to run it properly on an absolute shoestring. This isn’t the case, and a car that’s been bought for that sort of money is likely to require a degree of sorting out to bring it back to the required level. The cost of doing this, in reality, can easily match what you’ve paid for the car, so it’s important to bear this in mind when buying.

New owners should be prepared to replace items such as worn suspension arms, brake discs, radiators and tyres, but this shouldn’t really come as a surprise. Given their age and the miles that most will have covered, allowances must be made for wear and tear-related issues. But once things are back together, keeping a regularly-used E38 in top-notch running order shouldn’t be a dramatically expensive undertaking. It’s quite a DIY-friendly vehicle, so maintenance costs can be minimised in that way, and the general solidity of this 7 Series will reward vigilant owners with years of enjoyment.


The bodyshell itself is generally pretty resilient in terms of corrosion. The design was good, mud traps aren’t a problem and so rust working its destructive way out through body panels rarely occurs on this car. Any corrosion you do find is likely to have originated as the result of badly-treated – or ignored – stone chips. These can affect the leading edge of the roof, the front of the bonnet and the front wings. The metal sunroof panel can be another vulnerable area, so is worth checking, too.

It is possible to come across examples with bubbling rear wheel arches, but this is nowhere near as bad as you typically find on similarly-aged E39s and E36s. The only time that you’re likely to have anything structural to worry about is on cars that have spent their lives in coastal areas, or in cases where vehicles have been carelessly jacked and the protective underseal layer has been breached.

For this reason, it’s still advisable to get any prospective purchase up on a ramp so that it can be properly inspected. Other ‘cosmetic’ areas to check include the rear edge of the front wheel arches, where they join the sills (common to all BMWs) and sill panels around the jacking points. More generally on the exterior, check the condition of the rubbing strips down the sides of the car, which can be expensive to replace if they’re needed, as can electrically-operated folding mirrors. Damage to the windscreen should be assessed too, as this is another expensive item to replace.


The E38 7 Series was available with a number of different engines during its production life – straight-six, V8 and V12. The pick of the bunch is probably the late 740i, with the 282hp, 4.4-litre V8 engine. This is hardly any less economic than the smaller-engined versions, but offers more power and torque.

But the 728i is probably the most reliable option (especially the cars dating from 2000 onwards) although, with a power output of just 190hp, some regarded it as a little underpowered. Having said that, no 7 Series of this age can ever be regarded as a ‘racing car’; these vehicles were designed as luxury cruisers, intended to waft their occupants along in refined comfort, which is exactly what they are great at doing.

The early 730i and 740i models, powered by the M60 V8 engine, were affected by the use of Nikasil coating material, which was intended to minimise cylinder bore friction. Unfortunately, the coating was found to degrade in the presence of the sulphur found in cheaper fuels, causing serious internal engine damage. But, after BMW’s rapid switch to the M62 motor, this issue disappeared. As far as the V8 engines are concerned, one of the biggest potential headaches can be caused by the water-cooled alternator, which fails on a random basis and is expensive to replace (£540 inc VAT – £750 fitted – from Bosch, £693.60 inc VAT – £903.60 fitted – from BMW). Rocker cover gaskets can also give problems, and it’s a three-hour job to replace both sides.

Bearing shell wear can be another problem, with the worst case scenario being that they become worn enough to generate big end knock on revving, and necessitate a bottomend rebuild, at least. Internal engine wear can also produce piston slap, which isn’t easily rectified – a full engine strip would be required to sort that out. Buyers should organise a cylinder leakage or compression test, if they’re worried about this.


The timing chain runs through plastic guides which can sometimes break, allowing the chain to rattle or, in the worst cases, jump a sprocket or two. Serious issues caused by this problem are rare, though, although replacing broken guides is a big and expensive job – even though the items themselves are cheap to buy, there’s a lot of dismantling required to get at them. Water pumps also fail (on both six and eight-cylinder models), producing a constant rumbling noise – from under the bonnet – as they deteriorate. Replacing them is relatively cheap on the M52 straight-six unit, but more expensive on the M62 V8 (£288 inc VAT fitted and £485.93 inc VAT fitted, respectively), as it’s a more involved job. Sticking with the coolant theme, there’s an electric water valve located at the back of the engine, which regulates the hot and cold water flow to the car’s heater.

BMW E38 725tds 728i 730i 735i 740i/740iL 750i
ENGINE: M51D25 I6 turbo
M52B28, I6 M60B30, V8 M62B35, V8 M60B40/M62B44, V8 M73B54, V12
CAPACITY: 2,497cc 2,793cc 2,997cc 3,498cc 4,398, V8 5,379, V12
POWER (hp/rpm): 143 @ 4,400 190 @ 5,300 215 @ 5,800 232 @ 5,700 282 @ 5,700 320 @ 5,000
TORQUE (lb/ft): 181 @ 3,500 214 @ 4,500 236 @ 3,300 310 @ 3,900 360 @ 3,900
0-62MPH (secs): 9.3 7.9 6.9 6.6 6.5
TOP SPEED (mph): 140 145 151 155 155
WEIGHT (kg): 1,745 1,725 1,840 1,895 2,055
MPG: 27 26 23 22 20


This can have a tendency to stick in one position or the other, so that the supply to the heater becomes either continuously hot or cold. This is easy to check for inside the car, by making sure that the heater can blow both hot and cold air once the engine is warm. While a replacement valve is pretty painless to fit, the cost of the part itself – at £376.76 inc VAT (£490.76 inc VAT fitted) – certainly isn’t!

Just about the only other issue you’re likely to encounter under the bonnet of any E38 concerns the radiator which, on this age of vehicle, is something of a weak link. These units have an aluminium core and it’s corrosion along the bottom edge that causes the trouble. Once this becomes sufficiently advanced, the bottom of the core begins to sag which, in turn, pulls the core out of the plastic end tanks, causing coolant leaks. Removal of the engine undertray will allow a visual inspection of the base of the radiator and, when it’s sagging, it’ll do so very obviously (sometimes by as much as 10cm!).

The M73 V12 engine used to power the 750i models is a level up, in terms of complexity and maintenance requirements, compared to both the straight-six and V8 units. Cars fitted with it tend to be rarer, very well-equipped and a bit more expensive, as a consequence. The sheer size of the engine restricts access to just about everything; even something as apparently simple as changing the spark plugs becomes a hideous ordeal! So, while it’s certainly a lovely engine that suits the car beautifully, owners must be prepared for larger bills, even for routine maintenance work.


Inside the car, it’s essential to take your time testing that everything works properly, starting with the air conditioning. This is a generally reliable system, but it’s obviously important to check that it actually blows cold, and also that the air condenser’s fan (right at the front of the car) cuts in and out when necessary. These can burn-out due to becoming clogged by leaves or other debris forced in through the kidney grilles, and are expensive to replace (£528.79 inc VAT, £654.79 inc VAT fitted).

Check that all the windows operate properly, as the regulators and/or their control packs can fail. Overall, though, the electrics inside this 7 Series are very reliable. Satellite navigation was an option, but the original, CD-based system is very antiquated by today’s standards. The system switched to a DVD-based format very late in the E38’s production life, and got a wider screen as well. These are much more usable, so worth having if you find a car with it.

Unfortunately, water leaking into the boot (on the nearside) can drip on to the sat nav control unit, which is obviously bad news. In fact, there are a number of other control units in that area, so water leaks here can cause a lot of trouble.

On the dashboard there’s the usual problem of pixel failure on the screen under the dials, and on the display for the radio and air con in the centre console. But replacing/repairing these isn’t terribly expensive these days.

Elsewhere inside the car, check for any undue wear on the driver’s seat (‘fat cat’ fatigue!) although, generally speaking, the leather used was of a high quality and has proved very durable. But it will almost certainly have been neglected, so will benefit from a clean and feed. Also check the operation of the electric seats, if fitted.


In terms of the running gear there’s usually very little to worry about on the E38. The automatic gearboxes enjoy a good reputation for both durability and reliability. However, it’s always worth changing the oil on ‘new’ vehicles, just to be safe.

Brake judder can be quite a common issue. The weight of these cars, and the size of the engines used, mean that the front end can take a pounding. Front brake discs wear quite quickly, as do suspension bushes. When on a prepurchase test drive, dab the brakes and listen for clonks. Also feel for a sensation of wheel movement through the steering wheel. Thankfully, brake discs and pads are reasonably priced (except on the 750i).

Be on your guard for squeaking from the rear, too, which will indicate that the suspension bushes there have run out of grease and will be wearing. Fortunately, given that the car is so quiet and refined overall, these sorts of noises should be very obvious. Even by today’s standards, a well-sorted E38 should provide an extremely peaceful and relaxing ride. Remaining under the car, catalytic converters can fail on V8-engined cars.

The cores break up and create a rattle which can be detected when knocking them by hand. Replacement cats are expensive, at £800 each inc VAT fitted, so this is something to watch out for. Finally, while you’re underneath, take time to inspect the fuel tank. The E38 is fitted with a metal one, meaning that corrosion and consequent leaks are a potential problem. Check the seams carefully for any signs of rusting and be suspicious of petrol smells. Replacement tanks are only available from BMW, and costs a whopping £1,552. inc VAT and fitting.

So there it is; the E38 isn’t a desperately hard car to buy. Generally it’s not the sort of vehicle that gets abused, and most will have led a relatively pampered life, certainly in their early years. There are still good ones to be found, in tidy condition, with decent service histories and just a few previous owners. Numbers are declining, though, as more owners shy away from the problem of relatively large repair bills on a car that’s worth relatively little.

In terms of bang for your buck, though, there are few options to match the E38 at present. In short, if you desire an affordable, refined, comfortable, good-looking and prestigious saloon, then you’ve found it!

WITH THANKS I’m very grateful to Andy Walker, who runs independent BMW specialist Walkers Autotech ( for his kind help with the preparation of this feature.


Prices are all over the place for the E38. However, as a general rule, it’s better to pay too much for the right car than too little for the wrong one.

At the very bottom of the market, you can find a scruffy 728i for less than £1,000 while, at the other end of the scale, you can pay £15,000 for a 750i V12, a low-mileage 740i V8 or a special, long-wheelbase or Alpina version.

In terms of the centre ground, though, £5,000-£10,000 will buy you a decent example that’s been well looked after, has good history and clean bodywork. As always, a comprehensive service history is a real plus point, but it can be especially important to ensure that maintenance standards haven’t been allowed to slip in more recent times.

Thankfully, the E38 7 Series isn’t the sort of car that naturally attracts young, motoring tearaways, so it’s unlikely that a search for cars will throw up examples that have been mechanically abused. The only real danger to watch for is mechanical neglect resulting from inadequate maintenance and penny-pinching corner-cutting.


1995 E38 initial models include 730i/730iL, 740i/740iL and 750i/750iL. V8 models use a Nikasil bore coating and subsequently suffer internal wear issues. Standard equipment includes dual-zone climate control, electric front seats, six-disc CD changer and sat nav

1996 728i and 735i models introduced. V8 models upgraded to M62 engine and capacity on 740i increased to 4.4 litres

1997 Head-protection airbags introduced and the 750iL enjoys marketing coup as it features in the James Bond fi lm, Tomorrow Never Dies

1998 LCI occurs and includes revised styling for head and tail lights, 735i and 740i engines get single Vanos, 728i gets dual Vanos, Sport Package introduced, DSCIII becomes standard

1999 750i gets electric cat for faster warm-up

2000 6.5in sat nav screen introduced, radar-based cruise control becomes an option

2001 Cosmetic changes include body-coloured side skirts and bumpers plus clear indicator lenses. Sport package made available for 750iL

Sleek good looks and a strong road presence – even for the non-Sport versions – characterise the E38 7 Series.

One of the secrets of the E38’s fine ride and high levels of refinement was the small wheels (by today’s standards). The 16in rims on this car, and the generously side-walled tyres ensure a comfortable, quiet ride.

The 728i became the entry-level into the E38 7 Series range, and was the only version to use a straight-six engine. As we go to press, this tidy, 1999 model with 118,000 miles on the clock, is for sale at for an attractive £3,495.

The E38 was available with straight-six, V8 or V12 power. Complexity and maintenance requirements obviously vary between the three but, on the whole, reliability levels are good.

Left: Take your time when checking that all the electrical systems and optional extras work properly. Air con and heater controls should certainly be tested, as should the blower speed setting function. Centre: Digital screens below the main dials can suffer with pixel loss as the ribbon connectors behind break down, but repair/replacement isn’t too expensive these days. Right: The E38’s multi-function steering wheel was quite advanced for its time. Once again, check that everything works when test-driving a prospective purchase.

Slightly more raked front and rear screens, plus glazed headlamps, more compact rear light clusters and rounded door handles, were the external design subtleties that set the E38 apart from its predecessor, the E32.

Left: Impressive rear seat comfort was a big selling point for the E38. Legroom was increased over the E32; long-wheelbase versions offer even more than this! Right: The fitted telephone really should be regarded as nothing more than a curiosity nowadays.

Serious, structural, bodywork corrosion is very rare on the E38, although careless jacking can lead to problems with the sills.

The massive boot offers great load-lugging potential, but check inside for signs of leaks, especially in the nearside, rear corner.

“By and large, putting things right isn’t going to demand walletcrushing expenditure”

“Subtle external changes masked the improvements that were made across the board with the E38”

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