On the M104 inline 3.2L six used in the W124 chassis from 1993 to 1995 and in the W210 from 1996 to 1997, there is just one potential problem in a leaking head gasket. It effects a number of the cars, but far from them all.
The M112 3.2L V-6, used from 1998+, is turning out to be pretty much bullet-proof.
In a recent Road&Track, they published long-term ownership survey results that showed the 1996-2000 W210 E-Class to be one of the most reliable cars they've EVER surveyed.
If I were shopping for a gasoline E-Class, I would try to buy a 1998 or later for the V-6, but I sure wouldn't pass up a great deal on a 96 or 97 version.
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