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What does the xDrive system in the BMW X1 do?

I'm interested in purchasing a BMW X1 and I see that it has an xDrive system. Can you explain what this system does and if it's worth the extra cost?

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The xDrive system in the BMW X1 is an intelligent all-wheel drive system that constantly monitors road conditions and adjusts power distribution between the front and rear axles to optimize traction and handling.

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