All modern cars use DFCO - deceleration fuel cutoff. When you close the throttle and the engine is above a set RPM - typically 1200 or so - fuel flow is completely shutoff. As a result, coasting in gear saves more fuel than shifting to neutral because no fuel is consumed to idle the engine. On newer MBs with a trip fuel economy display you can really see the impact of taking advantage of DFCO; the trip economy jumps during long stretches of coasting.

A 1995 model year car almost certainly has DFCO, especially one with engine controls as sophisticated as the M104. I believe this was the first mass market engine with drive by wire throttle.