Buyers Guide: Gray-market Mercedes-Benz vehicles

Pierre Hedary


Article Pierre Hedary
Photography Daimler Archives

Setting the record straight about gray-market Mercedes-Benz vehicles

The darkened sky was just morphing to morning as we traveled across the Chesapeake Bay Bridge. Tearing up the bridge mesh at somewhat higher-than-normal speeds, Joe grabbed fifth gear, and the M110 twin-cam, 6-cylinder engine relaxed as it settled back down to 3,000 rpm. “I’m glad I didn’t settle for a U.S.-market car,” he said as we descended into the tunnel. The sound of the smooth M110 with its whirring cams echoed off the tunnel walls. No U.S.-market R107 Roadster offered six cylinders and five gears. I secretly thanked the car gods for the individual who bent the import regulations to bring this 1984 280SL to our shores.

For some reason, this car and similar gray-market Mercedes that were never originally sold in this country have acquired a bad reputation, and that’s just unfair. It’s time that someone set the record straight and tells the truth about these exciting cars.

The gray-market Mercedes-Benz

Any Mercedes vehicle that was imported outside of Mercedes-Benz of North America dealer network is a gray-market car. This does not include European delivery vehicles because they had to be ordered through a dealership. Gray-market Mercedes-Benz (GMMB) cars were purchased in Europe, imported and then federalized. Many of these models were never sold in United States, or were European variants of U.S. models, equipped with interesting options and generally, more power.

The gray market was born out of an economic perfect storm. The U.S. dollar was incredibly strong, making the purchase of European goods cheaper. The German economy was not doing so badly either, and sales of Mercedes-Benz vehicles in Europe were healthy. Savvy Americans knew they could buy a discounted Mercedes in Europe for half the cost they’d pay stateside. The only issue was getting them here and modifying the cars to meet U.S. Department of Transportation safety standards and Environmental Protection Agency emissions standards.

The European W126 S-Class sedans, 1980-1985, have the M110 engine with 185 horsepower, fantastic with either automatic or manual transmission.

Upsides, downsides

The attraction to European variants wasn’t merely financial. There were some amazing models in Europe, notably the R107. For diesel aficionados, the naturally aspirated 300D was available with manual gearboxes, and many of these cars came without complicated options such as climate control and power windows, simplifying service. For fans of larger cars, the European engines were always more powerful and the options were fantastic. The European market’s überwagen, the 500SEL with 4-wheel hydraulic suspension, was only available across the pond.

However, the gray-market bonanza created one small issue: All of these cars had to comply with U.S. DOT and EPA rules. This meant that catalytic converters, oxygen sensors, door reinforcements, bumpers and lighting had to be installed. Performed by independent mechanics, this work was not always done to the highest standard, and some questionable techniques were used in many instances. When inspecting any gray-market car, it is advisable to take a hard look at all the pollution controls. If they don’t seem to be in good order, look elsewhere or plan on replacing them. The body and structural stuff is more difficult to assess. Reinstalling European bumpers and headlights is no longer an issue because DOT sanctions have changed, including allowance for sealed-beam headlights and smaller bumpers.

The exception applied to diesels. While DOT safety requirements had to be met, the engines required no modifications to please the EPA. This means that a gray-market diesel won’t have problems meeting EPA requirements.

There must have been some German car fans in the nation’s capitol, because a one-time EPA exemption was passed, which allowed anyone with a driver’s license to import one car – one car only – from Europe, without having to federalize it. Often, DOT requirements were also circumvented, meaning that many of these vehicles stayed true to original form. Often cherished by their owners, these cars were the créme de la créme of the gray-market bunch.

The R107 500SL Roadster, 1980-1989, was the most powerful R107 roadster built, but was never officially available in the United States.

Buyer be wary

Another concern is the condition of the car when it was imported. Some very used Mercedes vehicles have been brought to the states, many with terminal rust or spotty mechanical histories. Used-car dealers have been successful flipping them to unsuspecting or naive customers for a neat profit.

Remaining issues involve “true mileage.” Particular attention should be given to the speedometer-odometer combination. Many GMMBs were exported with European instruments, which were often swapped with zero-mileage or used instruments. The real mileage of these cars was often lost in the process, meaning that “true miles unknown” applies here. Should you run away? No, just take a really thorough look at the car. A good Mercedes can still have 350,000 miles on it. The car’s condition is far more valuable than an odometer reading.

The R107-chassis 450SLC 5.0 and 500SLC, 1978-1981, were produced to homologate the SLC for rally competition, have more horsepower than the U.S.-bound SLCs, and are often found with desirable performance options like exhaust headers and even limited slip differentials.

Myth versus reality

Of course, even today, there are certain myths about GMMBs that continue to promulgate. These myths may have been true at one time, but now they have fallen by the wayside. Thankfully, the cars remain.

One legend is that Mercedes dealers will not supply parts for gray-market cars. While this was true to some extent in the 1980s, it is not true today. Consider this question: Is a gray-market car completely different – inside and out – from its U.S.-market sibling? Of course not. If you take a gray-market 380SL and compare it to a U.S.-market 380SL, the only real difference involves the engine, gearbox, rear-differential gearset, and some interior and exterior appointments. The suspension, rear axles, rear sub frame, fenders, doors, top, ignition coil, oil filter, brakes – I could go on and on – are all the same. Anyone who could not buy basic parts for the 107 chassis or the M110 engine in the 280SL did not understand the car.

Of course, there were some gray-market-specific bits – European camshafts, exhaust systems, interior bits, etc. – that you would have a difficult time ordering from some dealers. Other dealers were happy to supply these parts. Nowadays, Mercedes-Benz International’s electronic-parts catalog has solved this issue. While the federal government has placed a hold on certain items pertaining to emissions controls, you can get nearly any item you need for a gray-market Mercedes-Benz. As a long-time supplier of service parts for gray-market cars, Ken Brown, parts department veteran at Stahl Motor Company in Monterey, California, would agree.

Another common misunderstanding is that all GMMBs were poorly federalized. While many of these cars underwent questionable techniques during the process, the installation of federal equipment was not complicated and is easily reversible, if your state permits that. According to Larry Fletcher of CIS Flowtech (the leading rebuilding operation for Bosch K-Jetronic injection systems, which all 1980s gasoline Mercedes used), a small control unit called a “Johnson Box” was attached to an oxygen sensor and a frequency valve. This installation is easily reversible with a good set of pressure gauges needed to dial in the K-Jetronic to European standards.

If your state requires that your Mercedes comply with federal emissions, an outfit like CIS Flowtech can sell you the correct U.S. fuel distributor and warm-up regulator: Compliance is a few hours of labor away. And good exhaust shops can replace catalytic converters. Mike York at Time Valve Exhaust (a long-standing name in European exhaust systems) said that installing a catalytic converter is much simpler and less expensive than most people think. Jonathan Hodgeman, proprietor of Blue Ridge MB in the Atlanta, Georgia, area provided a great rundown of affordable aftermarket catalytic converters that will allow your GMMB to pass emissions and maintain its horsepower advantage.

The 240TD turbodiesel station wagon, 1977-1985, is a solid but stylish workhorse. If the wagon has been converted to run on filtered vegetable oil, check it out carefully.

Other considerations

Side-impact reinforcements, seat belt warning buzzers, bumpers and headlights – these were all fairly straightforward. No serious wiring modifications were needed to install them. The only caveat on any GMMB involves the air-conditioning systems; many had a/c added prior to or just after importation, and the quality of these systems varies wildly. None were as good as Mercedes factory systems, so expect a few difficulties in the climate-control department.

Many GMMB owners have found rust and salt damage on their cars. Does this mean that they all had it? Of course not. In this case, it is likely that any 30-year-old car will have some corrosion, so check the car carefully. Many owners who handpicked their Mercedes chose good examples that were only a year or two old. While some cars (particularly if they had been in Europe for a decade or more) did have rust, it was unusual on the cars from the 1980s given the quality of their construction and rust proofing.

There is also a lingering fear that no authorized Mercedes-Benz dealer will service GMMBs. This was often the case 20 years ago. Uwe Lehmann, a long-time veteran manager of an independent Mercedes service shop, saw numerous gray market cars in his shop in New Jersey during the 1980s. Almost all of them were rejects from the Mercedes-Benz dealership, which was just across the street.
While some dealers may still have a negative attitude toward these cars, many will service GMMBs today. And of course, this country is full of willing independent technicians who are fully capable of servicing even the oddest variant.

However, registering and licensing a car for the road isn’t merely a matter of meeting federal DOT and EPA regulations; the car must pass the smog requirements applied in your own state. California is the prime example, but several other states still subject older cars to the same smog requirements necessary when they were new – all emissions gear that was required then must be in place and functional. If you live in a state that requires passing a smog test before registration and considering an out-of-state car, be sure in advance that you’ll be able to register your proud acquisition.

The European-only 240GD Geländewagen, 1979-1986, was available in a variety of body styles, including this short-wheelbase “station wagen.”

Resale values for GMMBs fell short compared with their U.S.-market brethren about two decades ago. However, the notion that a gray-market car is worthless is a wagon of poppycock. What defines Mercedes values nowadays is based on condition, equipment and, of course, the car’s appeal.

We are seeing strong prices for many gray-market cars, such as the 280SL, European 123 diesels, AMG variants and the W460 G-Class, to name a few. All of these cars have developed a strong market presence, with five-digit prices becoming the norm for nice examples.
Do you prefer more manual controls? Do you want a 5-speed diesel wagon? How about a 300-horsepower 560SEL, complete with hydraulic suspension? Why would you want to purchase one of these oddities? The answer is that the gray-market Mercedes-Benz is for the individual. These cars, often purchased for their economic advantage, now represent a niche within a niche. They have survived in good numbers and proven that, even if we didn’t always love them, they would be loyal to us. If you are considering the purchase of a gray-market Mercedes, you have little to fear. Be prudent, but know that these vehicles are just as great as their U.S. counterparts.

I have a good friend who collects these models and stopped by his house to see a new addition – a white 300D 5-speed. The scene was certainly dramatic – he owns four other European stick-shift 300Ds, and on this day they were all proudly idling, as if welcoming one of their siblings back. Perhaps the clattering of their engines is more akin to a shrill laugh, suggesting merriment derived from having beaten the odds. They certainly deserve it.
The Gray Market of the 1980s

Desirable Mercedes-Benz models never officially available in America

R107 Roadsters
280SL/SLC: The combination of a 6-cylinder engine and a manual transmission makes this R107 variant more fun than any U.S.-market 107 ever was. Even automatic variants are fun to drive.
350SL/SLC: The V-8 350SL could be had with a 4-speed manual.
380SL/SLC: European variants of all 380s had 205 horsepower instead of 155.
500SL: This was the fastest W107 produced, with options such as headers or limited-slip differential.
W123 Sedans and Wagons
300D: While these were naturally aspirated, manual transmissions were available.
300TD: European wagons were available in turbo and naturally aspirated form. Turbo models had several great options, like 15-inch wheels and trailer hitches. Naturally aspirated vehicles were available with both 4- and 5-speed gearboxes.
W126 Sedans
280E/280CE/280TE/280SE/280SEL: The M110 engine, with 185 horsepower, is fantastic with any transmission choice, manual or automatic.
500SE/SEL/SEC: The 5-liter variants were gifted with 235 horsepower. The 500SEL was available with hydraulic suspension. AMG variants are even more fun.
560SEL/SEC: The European 560SEL/SEC is even more powerful than the 500. The AMG version, with four valve heads, is the fastest version of the 126 series car.
W460 Geländewagen
240GD/280GE/300GD: The W460 was built with 2.3- and 2.8-liter gasoline engines, and 2.4 and 3.0 diesels. These rugged 4x4s are well known in Europe. All were available with automatic or manual transmissions.
W201 Sedans
190E: The European 2.3-liter, 16-valve produced 185 horsepower and had a better climate-control system.
190D: The most frugal of diesels, a 5-speed 190D 2.0-liter will net 40 mpg.
 W116 Sedans
280SE/350SE/450SEL/450SEL 6.9: All European 116 variants were blessed with extra power and did not use the troublesome automatic climate-control system unless optionally equipped.