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I've owned two of the W126 cars and a few other Mercs. The 87 560SEL is a pretty reliable car for what it is. However, most repairs are going to be significantly more expensive than your Honda's. But you knew that.
The self-leveling Nivomat rear suspension could be a problem. If it fails you can replace with conventional springs and shocks from a 300SE/SD. Rear Bilsteins run $50 each (new), and springs are about the same, or the combo at the junkyards for under $100.
The transmission is another potential area of trouble. Change the fluid and filter as soon as possible. Take it easy on the trans. Big $$ if it fails.
The engine may be very reliable, but a used one in there is unknown. Things like cold idle circuits and other little sensors will fail, but the engines are pretty good. 300K miles is common. Water pumps are cheap and it's likely to fail since it was sitting static for so long.
Brakes on that car are simple and inexpensive. The front ABS sensors can get dirty/greasy and not work (or get brittle and break teeth). If the ABS light is on, your brakes still work so it's money you don't have to spend.
Electronics are usualy pretty robust on 126s. The climate controls can go haywire and not send air to the right places or change temps on you. The cruise control amplifiers also break, then the cruise won't work or will cut out. It's common enough that there are companies that will rebuild both on exchange basis.
560's were usually good for 18-20mpg freeway and significantly worse around town.
If I were you, I'd nurse the 560 and do no major repairs. Use the time to save and fix the Honda. In the long run, the Honda will be cheaper to own.
E
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