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I'm on my third car. My very first was a 1987 240DL sedan that I recently sold for $1,500. It was in immaculate condition (especially for a car with 250,000 miles) and ran really well. That car will easily make it to 300k with proper maintenance.
The second was an '87 240 wagon that I owned at the same time as the sedan, the wagon now belongs to my older sister. I LOVE the wagons. They're a slight bit slower than the sedans, but a little tweaking will wake them up some.
My new car is a 1990 240DL sedan. I looked at all kinds of cars, kind of wanted something a little different. After driving a LOT of other cars (70's BMW 2002s, old Diesel Benz, etc.) I just couldn't resist this 1990 240 sedan for sale with only 60,000 miles. These cars are so well built, and they just ooze quality. It's amazing. I LOVE my car. I can drive it anywhere an ocean won't prohibit at a moment's notice without much worry. My car was $7,800...right at Blue Book. A little high, but WAY better than any $8,000 Civic.
$5,000 will get you a great newer 240. My mom had a 740 for a while and really missed the 240 she had previously (that was my first 240...thanks, Mom!) The interior just seemed cheap compared to the 240, and I think they have more problems. The 740s are great cars, but they're not 240s.
For city-type driving, the engine is great. There's lots of torque down low to get you scooting. Just don't expect it to KEEP pushing like a V6 or V8...the B230s run out of steam up steep inclines. There were no turbo 240s after 1985.
I highly recommend a 90+ 240. In my opinion, they're the best used car deal out there for the money. For $5,000 you can get a wagon with seat heaters, and other nice luxury touches, that'll run forever and them some.
Good luck!
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