I've been a serial w124 owner since 1993.
Pretty much have had at least one of each of the major permutations.
My favorite is the 1995 E320 chassis.
Why?
Nicest interior, best looking trim (bumper/grille, headlight) outside, and polished wheels vs painted. Also has the M104 engine, a low numerical rear axle ratio, and first gear start.
The V-8s are nice, but they are very tightly packaged, and are chore to work on compared to the inline engines.
Diesels are also nice, I've had an 87 wagon, and a 95 4valve, as well as my current 2.5 turbo. Fastest was the 87, my favorite engine was the 95. Problem is availability. Not many sold, and those that pop up usually have high mileage and /or in poor condition, and the price asked is much higher than an equivalent gas powered car. If fuel mileage is a big deal to you, the next generation(s) diesels make these W124 diesels as obsolete as the W123 ones. I really like the W124 chassis, but my W211 CDI is a much better car than any of my W124 diesels, and from a mileage perspective, it knocks the W124 into the weeds. If you are looking at the W124 diesel as an emotional purchase, they are just as endearing as the W123s, and nicer in most ways.
The 260E and the 300E2.8. Basically the stripped, price leader versions. Smaller transmission, less of everything. Last choice for W124s.
The coupes are an acquired taste, the chassis and trim changes parallel sedans. The cabriolets, well lets just say take a look what the fifties 220S cabs and the sixties W111 cabs have been doing and you can see the future. At least, I'm betting on it, I've got mine.
The early gas cars had the single cam M103 engine. Noted to be long lived, with a couple of notable issues. The early versions also had a 3.07 or 3.27 rear end, and the trans started in second gear. Exterior trim was minimal, and unpainted bumpers detracted from the car. Interior was more severe, less wood than later cars, but tended to be fully equipped in standard trim.
Mid series cars got an improved trim package, and painted bumpers. Most of the cosmetic updates happened in 1990. Still the same M103 engine and driveline. In 1993, the M104 engine showed up, but the cars were still badged 300E. The 400E appeared in 1992 as a result of the japenese luxury car introduction in 1990.
In 1994, there were extensive changes in the cars. The sum of which make this series my favorite. MB dropped the price on these cars, and also skipped out on the standard features, making lots of used to be standard stuff optional. The M104 engine continued, and the transmission has a first gear start, with a rear axle ratio around 2.65. Better power, better economy. As the newest cars, there is higher probability of finding one that is low mileage and nice. When we bought our Wagon in 2005, there was a trend for nice late W124 wagons having a higher price than the next gen wagons. Super nice and well cared for W124 still have a market. Anything less than a top tier car, and there the market is poor. Lots of deferred maintenence high mileage cars on offer at low prices.
If I were in the market for a nice W124 wagon again, I'd still pay a premium over the W210 wagons to bag a W124. But, since I've already got one that my wife refuses to sell, I'm ok.
However, ownership of a W211 tends to make the W124 cars feel a lot older than they did when they were my newest car.
Jim