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Cato: I see from the Power Information Data below that the 2008 BMW X3 SUV (sport-utility vehicle) is definitely a middle-age-male kind of vehicle, and often a company car of some sort. The 80-plus per cent leasing rate is a dead giveaway.

Vaughan: But Cato, the 2.9 per cent lease rate BMW Canada is offering today really isn't a particularly great deal. Not now, not with SUV sales stalling as a result of soaring gas prices. And we're here to talk about the deal.

Cato: Hold your horses. There's cash on this SUV, Vaughan. A lot of it.

Vaughan: Enough to balance Canadian pricing with what's listed in the United States? We get so much mail about this — mail all the time.

Cato: Not quite, but close. According to www.Edmunds.com, the base X3 with a six-speed manual transmission is $38,600.

Vaughan: Yes, and BMW Canada's base list price for the X3 is $45,200. That's a big gap.

Cato: At the risk of inviting more mail on this subject, the two vehicles are equipped slightly differently, north and south. And BMW Canada has gone to the expense of importing and certifying Canadian vehicles with instruments and bumpers and so on specific to Canada.

Vaughan: Yes, but there is still a big price difference.

Cato: Patience, patience. The people at BMW Canada know it. And they have certainly taken a fair amount of flak on this topic.

Which explains, I think, why BMW in Canada also is putting up a $3,500 cash incentive. It's called "Alternate Cash Back" and you'll get it if you pay cash for a new X3. The $3,500 will be applied to the before-tax amount.

If you wish to finance, BMW Canada will give you a 2.0 per cent rate. Not bad, but not particularly outstanding. And the two deals cannot be combined, or "stacked," as they call it in the business.

Vaughan: In this age of 0.0 per cent money, 2.0 per cent is not overly impressive. But I will concede that the $3,500 in cash narrows the actual pricing gap.

Cato: Certainly does — when you consider the cost of importing a vehicle from the U.S. yourself. With the $3,500 bonus, most buyers will think twice of going through the hassle of importing an X3 from the U.S. for themselves. And there is always the issue of warranty coverage.

Vaughan: So the X3 is now closer to being a reasonable deal here in Canada. I am still not certain BMW has done enough, though.

SUV sales are pretty weak here in Canada and they are plunging in the U.S. I would expect even better deals to come.

Cato: Maybe. Whatever happens, the X3 is a great little crossover SUV that was updated and redesigned for the '07 model year. It's quick, practical, and handles pretty well.

Vaughan: It should. The X3 is based on the 3-series sedan and coupe. So it drives very much like a tall car. All-wheel drive is standard, too.

Cato: Yes, but we are talking about a wagon with only modest off-road capabilities.

Vaughan: Cato, this is the sort of vehicle that is going to suffer more and more as gas prices stay on the rise.

Cato: And that means the deals will not being going away. And if you buy an X3, you do get a crossover with taut steering, a sporty suspension and…

Vaughan: It still does not hold the road as well as a 3-series sedan or coupe. The centre of gravity is too high for one thing.

Cato: Speaking of high, even with the discounting, I know we'll hear from readers who argue the pricing is still too far up there.

Vaughan: But as we're seeing with this week's deal, the market, if left to do its work, will take care of pricing issues over time.

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2008 BMW X3

Buyer's Age Range:

• 16-34 years: 10.6%
• 35-54 years: 72.4%
• 55+ years: 17.0%

Gender ratio:

• Female: 45.2%
• Male: 54.8%

Type of sale:

• Cash/non-dealer financing: 12.4%
• Finance: 4.2%
• Lease: 83.5%

Most popular colours

1. Black
2. Silver
3. White

Vehicle price: $50,762 (does not include taxes, license or title fees)

Days to turn: 28

Trade ins: 7.9% (does not include lease returns)

Top three trade ins: