I owned 3 E34's ('90 535i, '91 M5, '95 540-6 speed), and now have a 540ia Sport. The E34's are great cars, but the E39 is a more solid and refined car, and a better performer as well. My automatic 540 is faster and handles better than any of my E34's, with the possible exception of the M5 in some respects. The best way for you to decide is to drive both (getting the 2 together would be wonderful), and note the differences that matter to you. Do some research on the V8 before you buy one, as early models had problems handling US sulfer content gas, and you need to make sure you're not going to get nailed with a costly engine problem. Also, check out the E34 board for comments and suggestions.