One thing to keep in mind is that the 2003 E320 Wagon is in fact still a W210. The W211 wagon was not introduced until the 2004 model year. If it was me, I'd be looking at the 2002 or 2003 W210 just because all the bugs have been worked out of the chassis by this point - the 2004 is the first MY for the wagon in W211 form.

4Matic on the W210 isn't anything like the 4Matic on the W124 - it is a simple and trouble-free system. I don't know where you live, but I am amazed at how sure and planted our wagon feels in the snow and I think that the 4Matic is definitely worth the added weight and fuel penalty (maybe 1 mpg) as a trade-off for the safety.

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Jonathan

2011 Mazda2
2000 E320 4Matic Wagon
1994 C280 (retired)