Tough call.

I REALLY like the shape of the 740iL. Most of the ones in the years you specified has taken a pretty healthy depreciation hit and are affordable. One side of me is torn between their sexy shape and amenities, but the more practical side says the Lexus 400LS is going to be less expensive in the long run and will probably better retain its resale (if that matters?).

I also like the 540i, but for me the proportions and style of the 740iL get me going.

I have read the 740's have issues with trans, air flow meters, display units and radiator necks that may result in head damage. Most claim that by around 100k these items have probably been replaced lowering some potential repair costs.

The Mercedes, you specified, of the same vintage don't really do anything for me.

My $0.02.

Tinker