Mercedes or BMW
I would have to say that it really depends on which you like. Are you an aggressive driver, and like to be involved, or do you like to cruise? The BMW is still truly a driver's car, and generally ranked higher in short and long term reliability over the Merc. The two recommendations I would make is, buy the one you prefer, as they are both excellent vehicles, and be sure to get the long term warranty if you plan to keep it. Oh and remember, with AWD, you blow a tire, you will need to replace all 4!
The only thing I can add to the Dmatte4's excellent advice is: Do a lot of research. Good places to start: www.edmunds.com (I'm not fond of their pricing much of the time, but they have good consumer reviews. It's the actual owners, not the "consumer experts," that I would prefer to hear from any day of the week, all due respect to Consumer Reports.) Another really good source for reviews is www.kbb.com, or Kelley Blue Book. (Who would have known that the Blue Book would be such a good consumer resource?) www.CarSurvey.org is another helpful one. But don't forget www.cargurus.com! A lot of us here have opinions and aren't shy about sharing them!
Oh, and I forgot to mention Consumer Guide (as distinct from Consumer Reports.) I especially like their breakdown of major parts costs under the Reliability section. Very eye opening! http://consumerguideauto.howstuffworks.com
Make sure to do your research. Mercedes has had a lot of issues as of late with quality. When once they were know for rock solid cars has really changed in the past 4-5 years. BMW is a great car. The AWD drive is good though I personally like the Audi better. The BMW is a drivers car with fantastic feedback via the steering wheel. Overall I would tend towards the BMW.
P.P.S. Well, I found another interesting (and free!) site where you can do further research: www.automobilemag.com (I'm finding all these because I'll soon be in the vehicle market myself.) Especially interesting to me is the is Cost of Ownership in the used car section. Sadly, like BoxsterBoy pointed out, it seems that M-B's just aren't the same cars they used to be.
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