I believe I have 205/55-r16 on my w123 300D Turbo and I like them, they seem to get the job done and handle a little better. Also, with the larger ones you can fit the larger second generation w126 front brakes if you so desire. The only negative thing I've noticed with the larger wheels is since the sidewall is a little shorter it has less flex, and with the manual in my car I have to be careful sometimes so I don't spin the tires

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1982 300D Turbodiesel, daily driver. Mods so far: Fram 8038 paper filter, 4 brake light mod, Gen II w126 (front) rotors/calipers, boost turned up to 12lbs, non-egr manifolds, water/methanol injection, 4-speed manual
1980 300SD Turbodiesel, project car, nearly ready to hit the street

1974 240D, New paint