The 507 made its debut at the Waldorf-Astoria Hotel in New York in the summer of 1955 . Production began in November 1956. Max Hoffman intended the 507 to sell for about $5,000 U.S., which he believed would allow a production run of 5,000 units a year. Instead, high production costs pushed the cost in Germany to DM 26,500 (later 29,950), driving the U.S. price initially to $9,000 and ultimately $10,500.
Intended to revive BMW's sporting image, the 507 instead took BMW to the edge of bankruptcy -- the company's losses for 1959 were DM 15 million. The company lost money on each 507 built, and production was terminated in late 1959 . Only 252 were built, plus two prototypes. Fortunately for the company, an infusion of capital from Herbert Quandt and the launch of new, cheaper models (the BMW 700, Isetta and eventually the 'New Class' 1500) helped the company recover.
The 507 prototype remains a milestone model for its attractive styling, which attracted some famous buyers. American icon Elvis Presley was the most noteworthy purchaser. In addition to owning another car, while on duty with the US Army in Germany in 1959 he bought a white 507 for US$3,500, a fortune at the time. He brought it back with him to the US, and at some point had the engine replaced with a 289-cubic inch Ford V-8. He gave the car to one of his most famous co-stars, the Swiss-born actress Ursula Andress, in 1963. She kept it for some 20 years and, in 1997, it sold at an auction for US$350,000. Another famous owner is John Surtees, who was given a 507 by MV Agusta (he still owns it). His series of engine upgrades yielding 194 hp became popular, and is known as the Surtees upgrade.
Front suspension was parallel double wishbones, with torsion bar springs and an anti-roll bar. Rear suspension had a live axle, also sprung by torsion bars, and located by a Panhard rod and a central, transverse A-arm to control acceleration and braking forces. Brakes were Alfin drum brakes of 284.5 mm (11.2 in) diameter, and power brakes were optional. Late-model 507s had front Girling disc brakes.
The engine was the aluminum alloy BMW OHV V8, of 3.2 L (195.8 in³) displacement, with pushrod-operated overhead valves. It had two Solex Zenith 32NDIX two-barrel carburetors. It rated 150 hp (111.9 kW) DIN, with 160 hp (119.4 kW) optional. It was mated to a four-speed manual transmission with various rear-end ratios optional. It was capable of 0-60 mph (0-96 km/h) in about 10 seconds; the factory claimed a top speed of 141 mph (227 km/h), depending on gearing.