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Have you driven the E350? I had a similar thought and drove a newer E class V8 wagon, it is definitely more on the side of isolated comfort than sport. Nice car but I didn't care for it. Also consider:
Audi S6 - wagon only, no worse reliability than MB or BMW
Audi A4/A6 - A4 can be had with a stick
Audi S4
BMW 3 or 5 series - the 3 can be had with a stick
Volvo V70/V70R - great cars, can be had with a stick
Subaru WRX wagon
Subaru Legacy GT - STi for grown ups
Lexus IS300 Sportback
Saab 9-5 Aero - parts aftermarket seems to be filling the void, excellent deals to be had on the cars
Mazda3/Mazdaspeed3 - hatchback = wagon
VW GTi - hatchback = wagon
Ford Fiesta/Focus hatch - nearly new cars can be had for $20k, a bit more buys you the very good ST version
Don't rule out a sedan either. My S8 will haul three kids in back easily (3/6/9) along with a trips worth of stuff.
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‘07 Mazda RX8
Past: 911T, 911SC, Carrera, 951s, 955, 996s, 987s, 986s, 997s, BMW 5x, C36, C63, XJR, S8, Maserati Coupe, GT500, etc
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