The 2011 BMW X3 is a good SUV, but does it live up to its brand and price tag?

The BMW X3 is pricey, even for a compact SUV. Normally, I’d say that paying a bit extra for the BMW badge is worth it. BMW performance is that good. In the X3 xDrive28i I tested, that BMW performance was blunted, making me think that the X3 isn’t worth the premium you pay for the BMW name.

My test X3 stickered at $44,165, and it did have a lot going for it. Cargo space handled everything from my 106-pound Rottweiler to a week’s worth of groceries, and still had room to spare. The seats were comfortable, and while the controls took some getting used to, after spending 10 minutes in the driveway familiarizing myself with them, using the iDrive system and other controls was easy. The 240-horsepower engine and smooth eight-speed transmission made it all too easy to speed. The all-wheel drive was surefooted through pouring rain and on muddy roads.

When it came to handling, however, the X3 just didn’t feel like a BMW. The steering was light and artificial. It wasn’t sloppy on the twisty roads, but it didn’t encourage attacking the curves either. When you buy a BMW, you want it to drive like a BMW. The X3 didn’t do that.

If I needed family SUV capability and wanted a BMW badge, I’d skip the American-made X3 and go for the German-built 3-Series wagon. If you go for the BMW 328xi, you’ll give up 10 horsepower and 5.2 cubic feet of cargo space. The 328xi wagon only has a six-speed transmission, and comparably-equipped to the X3 I tested, stickers at $45,365. For $1,200 more, you get an extra inch of front seat legroom and a BMW that actually drives like a BMW. For extra enthusiast appeal, the 328xi is available with a manual tranmission.  You can only get the X3 with an automatic.

You can get similar capabilities but better performance from a 3 Series Wagon.

Here’s something else to consider: using the U.S. News Best Price program, I found a 328xi wagon for $41,840 in the D.C. area. The best price I could get for an X3 outfitted identically to my test X3 was $42,370. Because 3-Series wagons tend to be less popular than the X3, you may be able to get a better price on it, even though its sticker price is higher. Only $530 separates the two prices I found, but saving about $500, getting true BMW performance and only sacrificing 10 horsepower and 5.2 cubic feet of cargo space makes a compelling case for the wagon over the X3.

Don’t get me wrong. The X3 is plenty practical and drives well. But, given that there are luxury compact SUVs and wagons with better performance and lower price tags, I’d shop around before committing to it.