You can fix the A/C by doing it yourself for less than/around $500 if you want to go that route. I bought a Delco R4 compressor for $245, Freon 12 for $16 per pound, drier and expansion valve $50, various O rings, flush and oil $40, vacuum/recharge station off craigslist for $50. It was fun work and it's a good thing to learn to avoid $2000+ A/C repair bills, which I imagine the MB dealer will charge, especially if they want to convert to R-134a (don't do that, and MB or cold A/C enthusiast will want r12)

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1980 240d
1999 SL500