I've used the third row occasionally. Kids will be fine. For trips under 2 hours, I've had people under 5'6" who said they were comfortable. Although I don't use it much, it is great to have the capability in a pinch. Not much storage space when you use the third row and you lose the spare.

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2012 F10 550xi Carbon black/oyster
2011 E92 M3 SSII/black
2012 W166 ML63 Steel grey/porcelain
2007 E93 monaco blue/beige (retired)
2010 E70 35d Space grey/saddle brown (retired)