My friend inherited a 1985 500SEL. He likes it an would like to use it daily. However, he told me he's unhappy with the fuel consumption. He asked me whether there are alternative engines to substitute the 5.0L M117.

I often found people swapped the original engine of W126 to M104 together with a higher-ratio differential. So, is it a good idea to replace the M117 with M104 with a shorter differential? I believe the original 500SEL's diff ratio should be around 2.47 (Euro model). With M104, the 3.46 diff from M110 or M103 should match. Am I correct?

Or is there any better option? Please advice. Also, my friend doesn't often go beyond 75MPH.