I remember that red E420 on Craiglist. I love that color... but didn't pursue it, since it didn't have ASR & heated seats. I could retrofit heated seats, but not ASR, and I won't buy another 124 without ASR... it's just awesome in winter if you live anywhere that gets ice or snow.
The E420 is surprisingly good on fuel, should get 18-20 around town, and 23-25 on the freeway. The long-term average on both my E420's (over ~50kmi between the two) has been 20-21mpg, which ain't too shabby for 275-290hp on tap. If you need better economy, get a diesel.

But anyway, yes, the E420 is ~75% of a 500E/E500. However, that last 25%... oh yes, that last twenty-five percent...