Jalopinions on future values of the BMW E34 M5?

"n54 & s38" (straight6) 09/23/2015 at 12:04 • Filed to: Bmw, E34, M5, Classics

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All this Ronin talk has gotten me thinking about the values of the E34 M5 relative to other German classics these days. Full disclosure: I own a 1990 Euro Spec E34 M5 which has been documented in Oppoland previously.

Been spending lots of time on Bringatrailer lately and it’s crazy what E30 M3s, air-cooled 911s and, recently, E28 M5s are going for these days compared with 10 or even 5 years ago. I started wondering what the next German classic will be and whether the E34 M5 is poised to start appreciating in value. Personally, I think that the E24 M6 is another car that’s gonna shoot up in value soon; they’re lovely cars with fantastic styling and underrated these days.

Not that it matters: im planning on owning this car for the rest of my life possibly and giving it to my son someday but I’m just curious about your thoughts, oppo.

Now my car will never be collectable (not original engine, high mileage, too many upgrades/mods) but I bought it to drive and enjoy, not as an investment. The main selling point for me was the fact that it had a new S38, a 2.5 inch thick binder full of all services, upgrades and parts and that it was only $9500. The mileage is high (282k kms) but with the new engine and the fact that everything has been replaced previously and all weak points were addressed (crank hub, headliner, timing tensioner, SLS delete, etc) it drives like a much newer car and doesn’t feel tired or dated. The M5 isn’t my daily driver: I have a 335xi 6 speed that serves that purpose.

Anyway, here are my thoughts on both why the E34 M5 may see an uptick in future values and why it may not, Pros and Cons style:

PROS (or why it might appreciate in the near future)

• Last hand built M car

• Fantastic build quality

• Last hand built Motorsport engine

• S38 engine traces a direct lineage back to BMW M’s Motorsport activities and racing. Last M5 with a classic BMW straight six that has its origins in the M88 used in the classic M1. Not to mention that the S48 is an amazing engine, both performance/sound wise and looks-wise. I’ve never once popped the hood of my 335xi to just stare at the black plastic-covered N54. But the S38 just looks incredible. See for yourself:

• Fantastic styling - IMO, the ultimate evolution of the classic BMW styling ethos with the four round headlights, narrow kidney grilles, tidy rear end and forward-opening hood

• Generally undervalued at this time, at least relative to classics like the E28 M5 & E30 M3

Fairly Limited production in the U.S. market. Only produced in North America from 1991-1993.

• Relatively simple to work on compared with later models. Not too many electronics or things to go wrong usually.

• Omg. The noise of dat straight six at high revs is amazing!

CONS (Why it might NOT appreciate significantly)

• Cost of parts/maintenance. The cost of an S38 motor is enough to make the most well-heeled enthusiast think twice. I’m fortunate that mine has a new S38 in it with less than 60k miles but older, high mileage ones can lose compression if not well-maintained. The engines also require more maintenance than most modern engines: valve adjustments, special synthetic oil, periodic balancing of the six throttle bodies, allowing the oil to fully warm up before revving it hard, etc.

The SLS suspension parts are also laughably pricey and very difficult to find these days. Thank goodness mine has the SLS deleted. Many parts are NLA or have very limited availability from BMW, including the Turbine wheel covers.

• For daily usage, the M60 V8 plus six speed manual is a much cheaper option if you can find one.

• Limited availability. Both a pro and con. Because the E34 M5 was only offered for a few years here, and was never offered with the 3.8 S38 variant or M5 touring models that Europe got, many people don’t know about it. It didn’t necessarily have the same impact of the original M5 or the mass popularity of the E39 M5.

• No true motorsports heritage like the E30 M3. The M5 was never a factory homologation special like the M3 (though this is true for all generations of M5).

• Performance isn’t a huge improvement over the original due to the E34’s extra pounds and is not on the level of the E39 which can still smoke most modern cars.

• The E34 M5 is kind of the awkward middle child in between the E28 and E39. Seems like it gets forgotten about sometimes when discussing M5s. It’s also probably the most understated looks-wise compared with the E28 and E39. For many though, this is part of the appeal. I still maintain that the E34’s basic design looks better than the E39 or E28 in plain-Jane non-M5 or M-sport guise.

• The car may not be old enough yet to have fully started appreciating. Right most, the E28 and E30 are old enough that those of us who lusted after them are willing to shell out the big bucks to buy a piece of our childhoods. Remember that the E34 chassis was produced right up until 1995 so they’re not as “classic” in some people’s minds. This may change, given a few years.

• Due to the taller gearing and rev-happy nature of the S38, it’s hard to enjoy at legal speeds. I can hit 140 kms in 3rd gear at redline, at which point I’m looking at losing my license. The N54 in my 335xi has way more low end torque and a close ratio 6 speed manual gearbox that’s much easier around town.

• Fuel economy borders on criminal for a daily driver.

• Again, in North America, the 540i with the M60 V8 and a six speed manual makes more sense to many as a daily driver. More torque, less maintenance and much cheaper to replace the engine if something goes wrong.

Anyway, those are my thoughts. I’d love to hear yours on the E34 M5 and what you think is the next big German classic that will take off in value. Maybe the Mercedes 500E? Thanks for reading this wall of text

Party-vi > n54 & s38 09/23/2015 at 12:22

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The 500E is already taking off, in-that owners are asking ridiculous amounts of money for an old E-Class with a V8 (because that’s what it is. A faster not-quite-AMG E-Class).

The E34 M5s I see for sale are usually with 500E pricing, around $20k or more. Some crazy people are asking more, like the 70k mile 500E for $35k on Hemmings, or the 29k mile E34 M5 for $45,000.

I don’t think these models are desireable yet. The 500E and E34 M5 really didn’t make a splash on the market like the first AMG or E39 M5 did, so I don’t think anyone with money now is lusting after them, just us weirdos on Oppositelock. You never hear anyone wax philosophical about the E34 M5 like they do with the E39, and the only time someone brings up the 500E in conversation is when someone points out it’s really an in-house AMG that Mercedes built with Porsche. By today’s standards the 500E is nothing to write home about (it’s a little quicker than my E46), and the E34 M5 can be bested by a new 328i.

n54 & s38 > Party-vi 09/23/2015 at 12:31

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For sure, in terms of all out modern performance, an E34 is not a fast car. But by that token, neither is an older 911 and an E30 M3 is pretty damn slow unless you cane it everywhere. I just wonder if this will change in a few years when the car is a little older. I feel like this current craze for E30 M3s is a fairly recent thing. Just interesting to speculate: it's like trying to pick a stock before it takes off

Party-vi > n54 & s38 09/23/2015 at 12:39

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I think pricing will be stable, from $20k - $30k depending on condition. I think a lot of E34 sellers are banking on people not being able to find a nice E39 and hopefully looking for another M5 to buy.

KatzManDu > n54 & s38 09/23/2015 at 14:00

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It’s not going to get any less expensive.

RallyWrench > n54 & s38 09/23/2015 at 14:32

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I wish I still had my E28 M5. I can see the E34 gaining value steadily in coming years, as people realize how good it is. It will be limited by both the cost of S38 maintenance and rebuilds and the E39 M5s values though. Good E39 M5s are already hard to find, and are such comprehensively good cars that it’ll probably be hard for the market to justify paying more for the E34. And the S38 isn’t getting cheaper to build. A professional rebuild is at least a $12k proposition, if not nearer $20k. The M5s don’t have the “homologation special” factor of the M3, so I don’t think their values will ever skyrocket as they have, despite being more usable and faster cars. I could see a perfect, sub 100k mile E34 being a $40-50k car in 10 years, more for the Euro 3.8s. I don’t think it matters much that the S38 cars aren’t as fast as their successor, but the engine and its symphony provide a direct mechanical link to the 3.5CSLs, the M1, and the heyday of BMW Motorsport, and that gives an inherent value that the E39 M5 doesn’t really offer in its more modern package. The E39 just set the sports sedan bar so high that it will never not be desirable. It’s still the car by which all new sports sedans are judged, and most come up short, including anything BMW built prior.

n54 & s38 > RallyWrench 09/23/2015 at 15:16

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My sentiments exactly about the S38 and its direct link back to the glory days of BMW Motorsport.

Yeah, the E34 seems like it’s stuck between two icons to some extent. It probably doesn’t help that the E60 is so radically different and polarizing that it doesn’t appeal to the same crowd as the E39 enthusiasts.

I just figured that the last hand built M car nature of the E34 would contribute to it appreciating in the future. Why do you think that E28 values hasve taken off so dramatically in the last few years? Particularly in a way that the contemporary M6 hasn't?

n54 & s38 > RallyWrench 09/23/2015 at 15:19

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Also, agreed on the E39 being the peak of M5s. I really don't have any interest in any M5 post-E39. What I really would love is the granddaddy of the M5, an E12 M535i.

RallyWrench > n54 & s38 09/23/2015 at 15:31

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Good question on the E28. I’m a total E28 fanboy in general so it’s easy for me to say it’s the best car ever, but the M6 values should be higher too because they are by far the sexier car. I think it’s mostly that the E30 M3 is picking up its stablemates, and the fact that the M5 has always elicited a reverence that the M6 has never quite pulled off, for whatever reason. It doesn’t help that the E24 M6 didn’t have a proper successor to continue the line, so it’s a bit of an orphan. Good M6s are appreciating though, I’ve seen some listed at $50k. The M5s, all in black, has a cache all their own. I sold mine for what I bought it for, $7k, in 2011. Dumb, but I needed the money for the house fund.

n54 & s38 > RallyWrench 09/23/2015 at 16:26

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Meh. More important to have a house than a car in the long run. At least that's what the wife tells me. You playing the drums more these days, man?

RallyWrench > n54 & s38 09/23/2015 at 16:54

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Yep, at least I have my 2002 in a garage instead of long term storage now. Drumming less now, in fact I just had to pack my kit up, but that’s because I have a new baby in the house and we moved our 3 year old’s room to the old music room. Sigh. I’ll be cleaning and rearranging my garage in hopes of getting it back up soon though. There’s a drum shop right down the street from work and I know them well, they said I can come down and use a practice room any time so I think I’ll be doing that on lunchbreaks to at least maintain my chops.

n54 & s38 > RallyWrench 09/23/2015 at 17:43

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Congrats on the baby! Boo on packing up your drums. A decent used electronic kit is a great way to keep your chops up and have a lot of fun without making a lot of noise. Just saying. :)

RallyWrench > n54 & s38 09/23/2015 at 18:29

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Thanks! I’d love to find a good used Roland and I do keep my eyes open for them, but space is still a limitation. Hopefully I can make a hole in the garage.