From my experience with both a 1987 300D Turbo and a 1996 E300D (not turbo), the 1996 has slightly better fuel economy. The 1996 car, as a W210, is more electronic and needs an OBD-II reader so you can figure out and reset trouble codes should they pop up. My '96 has been rather boringly trouble-free even though it is now over 300,000 miles. It has spent its entire life garaged in the West and so has no rust.

The 1987 300D Turbo is a W124 and is less electronic and hence a little easier to work on without fancy electronic diagnostic tools. That doesn't necessarily mean it's better than the later W210s, just different. A lot depends on whether you like to do your own work, tinker with the car, etc. W124s are more "tinkerable" than W210s but W210s are probably a little more reliable. That statement, however, is very much dependent on the care the car has received in the past.

I recommend buying the car with the best service records and the fewest current things that need fixing. My rule is that for every problem admitted by the seller there's another one they "forgot" to disclose. My '96 E300D was bought at 250,000 miles with a complete set of service records going all the way back to mile #1. OTOH, my '95 E300D came with almost no service records but I got it from a fellow enthusiast who knew the car and who I trusted. Both cars have been great—the 1995 for 3+ years and the 1996 for 8 years. The 1995 is, of course, basically a "newer" 1987.

Jeremy

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"Buster" in the '95

Our all-Diesel family
1996 E300D (W210) . .338,000 miles Wife's car
2005 E320 CDI . . 113,000 miles My car
Santa Rosa population 176,762 (2022)
Total. . . . . . . . . . . . 627,762
"Oh lord won't you buy me a Mercedes Benz."
-- Janis Joplin, October 1, 1970