It really depends on the overall condition and maintenece history of the car. Engine oil leaks are common on that engine espcially by the timing cover and such. Oil leaking on the car you checked out could of needed a HG sooner ot later. I would not of bought that car even if I got a great deal on it, good you didt buy it. My cousin found a mint, 91 300e with 45k miles for $6000. Might seem a little high in price but i have seen the car driven it and its worth the money. you could prob get a very clean one with more mileage for around 3-4k. If your friend isnt in a ruch then tell him to take his time becuase the price can vary alot.

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2001 E55

2001 E320 Sedan

2001 Subaru Legacy

2006 SLK280

2016 Subaru Outback 3.6