Q: And don't say the year
A: 1997 til 2003 was the era of the e39 brand of the 540i. In 1997, BMW improved on its 4.0 engine slightly by adding a bit more torque with its M62 4.4 litre engine. In a nutshell, the e39 is improperly numbered as it 'technically' should be the 544i. The true difference in a 2001 and a 1998 would hardly be noticed by a driver. The M62 engine in pre sept of 1998 540i's had 'non vanos' engines. VANOS operates on the intake camshaft in accordance with engine speed and accelerator pedal position. At the lower end of the engine-speed scale, the intake valves are opened later, which improves idling quality and smoothness. At moderate engine speeds, the intake valves open much earlier, which boosts torque and permits exhaust gas re-circulation inside the combustion chambers, reducing fuel consumption and exhaust emissions. Finally, at high engine speeds, intake valve opening is once again delayed, so that full power can be developed. VANOS enhances emission management, increases output and torque, and offers better idling quality and fuel economy. It is also just one more thing that can fail on a 540i. Having both cars, I can't quite tell the difference in torque, and on some days I believe my 98 is faster than my 2002. The headlights are also different, a secondary air pump on the later 540's, more sensors..... really not much in performance gains. If on a budget, consider the 1998. I personally feel its a more reliable car.