Curt Class 1 hitch is probably the most popular one used on the 124. I had one on my 95 E300 and used it to pull my trailer and riding lawnmower on occasion. If I remember correctly, the Curt website has excellent directions for install, they also come with the hitch/receiver as well. I also put one on my 87 300TD wagon, install only took a few hours. Very good hitch.

Never felt like it was doing any harm to either car when pulling trailer. You should be fine.