Well, I don't often disagree with Larry on much but in this case I want to make a few points.

First, the W123 was designed in the early '70s and built in the mid 70's to mid '80's. At the time it was one of the best handling luxury sedans on the market. I would suggest the W123 chassis defined the class of vehicles that evolved into what are now known as high performance luxury sedans. In fact, the then contemporary "S" class was named by Road and Track in around 1975 or so to be the best sedan in the world, and the W126 that followed, using the same basic suspension arrangement of the W123, was used by Bob Bondurant at his driving school to demonstrate classroom discussions on handling.

Compared to the standards of the average econobox today, well, the W123 is heavy and its suspension outdated, and it shows on a track. While many W123 owners never cared to find out how well the cars handle, they obviously enjoy the control and agility the car offers in every day driving. I would much prefer the precise feedback (I feel I know the location and can control the placement of each tire when I am driving these cars) and controlled transitions from understeer to oversteer I get from the 240D than the Nintendo feel of the controls in many of the cars of today with better track numbers. I am also not impressed with the new rack and pinion steering in my 1998 E300D TurboDiesel, as I really liked the feel of the recirculating ball system I grew accustomed to on all my previous Benz's and see no improvement (and possibly a slight loss of feedback) with the new system.

But to the original question, an my answer. I have been driving these things for over twenty years, so there was a time when I routinely pushed them just because. And I loved driving around the twisty roads in Upstate New York glued to the rear of a BMW 3 series, which I could not pass but could easily keep up with as long as there was no long steep uphill grade.

I found the only alarming conditions were in snowy or slippery weather, when the Diesel compression braking acting on the rear wheels could bring about a sudden and often hard to control tendency to swap ends. I am not sure if this happens with an automatic or not, but I learned to be very cautious and ready with the clutch if I backed off the throttle even slightly when I was in Alaska. There was this one stop sign at the bottom of little hill, and more than once I went spinning past it after a snowfall before I learned how seriously the compression braking was changing the speed of the rear tires. The engine speed would drop to idle and the car was still going faster than that, which is all it took on the little hill to get the rear tires to try to pass the front ones.

Overall I think the car has a chassis capable of much more than the engine can make use of, which is good reason to give these cars to younger drivers learning how to drive. Like Larry said, this is just my opinion. Jim

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Own:
1986 Euro 190E 2.3-16 (291,000 miles),
1998 E300D TurboDiesel, 231,000 miles -purchased with 45,000,
1988 300E 5-speed 252,000 miles,
1983 240D 4-speed, purchased w/136,000, now with 222,000 miles.
2009 ML320CDI Bluetec, 89,000 miles

Owned:
1971 220D (250,000 miles plus, sold to father-in-law),
1975 240D (245,000 miles - died of body rot),
1991 350SD (176,560 miles, weakest Benz I have owned),
1999 C230 Sport (45,400 miles),
1982 240D (321,000 miles, put to sleep)