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With a dog, probably the X3 is more practical and easier on your back (no bending over when putting kids into seats) though personally I'm not a big fan of the SUV body shape.
The 5 can be a great family taxi all the same - nice big boot for shopping, lots of space to install child seats, quiet and smooth ride for getting about on trips. If you spec folding seats it's even better, or go for the touring / estate version.
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