SO dazzling is the performance, refinement and handling of the BMW X5 that we felt ourselves falling for the fantasy of it all.

“Hmm,” we thought, “perhaps BMW’s claims that the new twin-turbo X5 diesel is actually a bargain since it costs less than its performance-diesel rivals (Audi, Range Rover and Volkswagen – along with the Mercedes ML320 CDI) are right after all!”

And how could we not be smitten?

The new X5 3.0sd’s acceleration and midrange oomph is nothing short of outstanding its quietness and smoothness sensational the ride on regular bitumen not bad and the steering, handling and roadholding revelatory for every other competing SUV.

With the standard 18-inch suspension set-up, both smooth roads and loose gravely ones can be tackled with ease – although larger rocks and holes do reveal a sharper side to this SUV’s ride.

On some of central Victoria’s lovely country roads, the X5sd’s dynamic abilities serve as a forceful reminder that only BMW builds an SUV that makes you forget about the considerable amount of weight and bulk that accompany you when you’re throwing one around a series of bends.

And that’s not even driving an X5sd fitted with the awesome Adaptive Drive anti-roll suspension that – on smooth surfaces – has to be driven to be believed. Which kind of black magic are BMW’s engineers dabbling in to create a 2.1-tonne wagon that can be whisked around with such absolute gay abandon?

But reality starts to set in and the BMW’s total formidability begins to fade a little the moment you switch to an X5 3.0sd fitted with the 19-inch wheels and Sports suspension. This is when dirt roads reveal an SUV that you never want to take off-road.

You feel too much of the surface underneath, and some of the hitherto quiet cabin trims start to rattle and squeak like a chorus of starving church mice. Once you’re back on bitumen it all stops, but our experience with long-term BMWs – as well as some Audis – shows that eventually these sounds start creeping into everyday driving too.

Then, of course, once you peruse the options list and realise that the nicely kitted-out BMW X5 3.0sd you’re driving actually costs almost $30,000 more than the newcomer’s base price – and that’s before factoring in the $16K difference between base 3.0d and 3.0sd – then the Bavarian’s value argument is not as super-fantastic as you might have convinced yourself.

Yet there is no doubt that the X5 3.0sd is a sensational SUV, offering plenty of space for five, a reasonably large cargo area, an attractively presented interior and very high levels of active and passive safety. You’re onto such a good thing with this BMW.

So the new twin-turbo diesel is the one we would buy over any other rival for driver enjoyment, efficiency and desirability. And, yes, even the $6500 price gap between it and the single-turbo, equivalently equipped 3.0d Executive seems worth it.

We’re still dreaming about it, in fact.

Driving away from the launch venue, the thought occurred to us that only Ford Australia could currently offer something resembling the same level of fun, frugality and practicality in an SUV for sensible money with a diesel-powered Territory.

So while we’re fantasising about Jaguar's 2.7-litre V6 twin-turbo diesel powerplant being fitted into the big Ford SUV some day, at least – for wealthier individuals – the sensational reality of the BMW 3.0sd is right here and right now.