Unless you've go a shit-load of money to put in to repairs, and have a spare car to drive while the Merc is in the shop, I would run, not walk, away from this. If you want a reliable used luxery car in this price range get a Lexus GS. My daughter bought a used 'E' - mint. In the six or seven years she had it it cost more to keep it than to buy it. My 2 cents.

(For a good reference check out the reliability of Mercedes of the early 2000's in the Consumer Reports. The charts look like they came from a Yugo.)

Edit: You might want to read through the BMW thread. The main difference between a BMW and a Mercedes is that the Mercedes parts cost more, and there are more of them.

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Azby