This model, 560SEL, was the "top of the line" back in '86 and designed to be a corporate / government limousine. It was NOT designed for economy or efficiency but for power and comfort. The fuel use is high for the 5.6L V-8 was somewhat detuned to meet emissions standards, I vaguely recall an EPA estimate of about 12 to 19 mpg. Others may have better data.
The V-8 has a long dual chain that drives the overhead valves. The chains stretch and wear and after 120K to 150K miles ought to be replaced for when they break the valves will be smashed by the pistons and the repair will cost about as much as you'll pay for the car. So if the chains are original or you don't affirmatively know that they've been replaced it's something to budget and do now or at least have a M-B shop check.
The other item on the 560 model, but not the 420 model, is its hydro-pneumatic rear suspension. There's a small engine driven hydraulic pump, a leveling valve in the rear and two nitrogen and oil filled shocks or struts - both in the rear. The hydraulic fluid is expensive and the rear shocks or struts wear out. The symptom thereof is a buckboard hard ride. YOU need to understand how this system works to avoid being at the mercy of some repair shop that wants to "replace everything", for "everything" doesn't need to be replaced, usually only the struts go bad.
Since you like the S model you should know that it was also sold as a
420SEL with a 4.2L V-8, slightly better fuel economy and regular steel spring rear suspension, otherwise very similar. Also available is the
300SDL which is the 420SEL except that a 3.0L straight six diesel provides the power. These diesel models are well regarded, unfortunately they're so well regarded that finding one with less than a zillion miles on its clock is difficult. Its diesel is quite durable but suffers cylinder head cracks or a blown headgasket if overheated, just in case you buy one.