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Kahala--you might want to consider that Mercedes has had a lot of quality problems in the last few years--way more than BMW. I was considering a Mercedes before I decided on the BMW e90 (the new 3.5 v6 in the e-class and c-class sounds pretty good) but apart from the differences in cars there were a couple of things that didn't weigh in Mercedes favor. One was their recent history of quality problems. The second was that they no longer cover maintenance with model year 2005 so you have to pay for all non-warranty maintenance now.
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