John and others-
I really appreciate your perspective, so thanks for taking the time. As I am in the early stages of this purchase, I am still bouncing back and forth a bit between the two fuels. Personally, I would like a diesel for many of the reasons you state, and additionally, in CA, they do not need a smog check. When I was young, my family had bad luck with smog checks on old VWs, so I am a little intimidated about owning an older gas vehicle in CA. I do plan to DIY whatever possible. But I am relatively new at MB ownership, so still rather intimidated by many of the systems.

Until a moment ago, I didn't think the higher MPG in a diesel 124 was terribly relevant because diesel fuel is typically more expensive than gasoline in my area. But I forgot the M104 requires premium fuel, which is basically the same price as diesel around me. So a higher MPG with the diesel will actually correspond to higher MP$. Hmmm, this decision is going to require a lot more rumination.

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1968 220D, w115, /8, OM615, Automatic transmission.
My 1987 300TD wagon was sold and my 2003 W210 E320 wagon was totaled (sheds tear).