I have some experience with that model (and some other MB). You can expect from the E 320 W124 M104 engine:
Engine harness: MB made the insulator from some recycled rubber, that deteriorates, leaving the wires exposed producing all sorts of problems (rough idle, bad starting, poor acceleration, etc.) like burning the coils or even the ECU. Expect this to happen before 10 years or 100K kms after the car left the factory. If it has not be already changed, do it so. Around $1000 at the dealer just for the wiring.
Other issue is the AC Evaporator (inside the cabin, under the dashboard. It will corrode, discharging the system. Changing the Evaporator is a tricky and delicate (and expensive) job, because the dashboard must be fully disassembled. Wait until it does.
And finally, the engine head gasket. They are not as reliable as the former engine (M103 single overhead camshaft), and must be changed, around 100K kms. Look for leaking oil from it...
Besides this, this car is a piece of marvel engineering. Don´t forget to do the periodic maintenance: change the engine coolant (use only genuine MB), autobox fluid (dexron/mercon), ATE brake fluid, etc. and you can expect to enjoy this car for a very long time.
I have a 1995 model E280 (W124), and it is the best car I have ever owned, bar none, and is so much better than the W211.
It's metallic gold with beige leather, the 5 speed automatic gearbox, electric tilt/slide roof, electric windows x 4, electric heated door mirrors, headlamp wash wipe, center arm rest, leather steering wheel and gear knob, green tinted glass and twin air bags.
The gearbox is fine, and the wiring loom is fine so far.
I have done 105k miles, and it can cruise at 90 mph all day. It returns 25mpg. It just does not get better then this in the motoring world. :)
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