On rear drive only W124 cars, sensors only in the front wheels. On 4-Matic (AWD) cars, sensors in the front & rear wheels. My RWD E320 has this problem, and I think the brakes are O.K. The light has only come on recently, though, so I will check out thoroughly. The sensor is independent of the brake pad, and must be installed into the brake pad upon replacement of the pads.

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2002 Mercedes-Benz E320 4Matic
1995 Mercedes-Benz E320 Wagon
2005 Land Rover LR3 V8 SE
1999 Audi A8 4.2L quattro