The '74 3.0L, five-cylinder diesel.
At the 1977 Frankfurt International Motor Show, Mercedes-Benz debuted the turbocharged S-Class 300SD (W 116) specifically for the North American market. It had the 3.0L, five-cylinder engine and a Garrett turbocharger that bumped the output up to 115 hp. The extra power allowed the heavy sedan to reach 60 mph in about 14 seconds while getting 16.8 mpg (compared with 10.7 mpg for the gas version).
In 1981, tougher CAFE rules prompted Mercedes-Benz to add a turbocharger to the W 123-series cars. The 300CD coupe gained a turbo, and the 300D turbo sedan appeared-both were reserved for the North American market (sorry, Eastern Hemisphere). A station wagon with the turbo-powered mill was also available. For our money, the turbocharged cars are the best buys because they can be found for about the same price as the normally aspirated models but offer much better performance and still get terrific miles per gallon.
The Garrett turbocharger was added to the 300SD and pushed Mercedes-Benz diesel power into the 100-plus-horsepower range. | 
The 300SD was the first S-Class (W 116) to be equipped with a turbodiesel. Now, you may be able to find one of these fancy luxury sedans for just a couple thousand dollars. |
The 300CD (W 123) coupe helped Mercedes-Benz meet fuel-economy regulations and added a sporty body style to the diesel lineup. The 300CD gets more than 25 mpg, and although the coupes are somewhat rare, they're usually being sold for about the same price as sedans. | |
In 1983, the W 201-series got two diesel engines for the new 190D, which were called Whisper Diesels because they were completely encapsulated to trap noise. The 190D 2.2 used a four-cylinder engine, and the 190D 2.5 was equipped with a turbocharged five-cylinder that made 122 hp at 4,600 rpm and had a top speed of 119 mph. The W 201 body style is a big improvement over the models previously mentioned, and we'd suggest you jump on a 190D 2.5 if you find one for around $2,000.
From left to right: The W 123 300CD coupe, 300D sedan, and 300TD wagon. | 
The '61 Fintail 190D (W 110-series) took more than 25 seconds to reach 60 mph. |
The '76 240D (W 123) sedan. | |
In 1985, the W 124-series 300D got an inline-six engine that made 109 hp, and the six-cylinder turbo debuted in the 300DT station wagon. This engine made 143 hp and was improved to make 147 hp in 1988. The sedan was known as the 300D Turbo, and a 4Matic all-wheel-drive version was also offered. Other diesel models were offered through the '80s and into the '90s, but you are unlikely to find a 350SDL or E300 turbodiesel for less than $3,000.