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I would pick the BMW, for a big car it handles very well and at high speeds you feel safe just like most Mercedes cars. I also love the huge amount of leg room in the back, you also get trash cans in the rear doors of the IL. I also love the interior design particularly the way the wood is blended into the dashboard and hides the cassete player.
The engine problem involves nikasil in the cylinder walls and was fixed permanenently in 1996. The 1997 BMWs do not have this problem at all.
If you do buy the BMW or Mercedes, make sure you get a warranty, both are expensive to fix.
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