this is actually quite funny because I am in Edmonton and saw it recently on the CanadaTrader.
I'd say a stern "no" to getting that car.
Owning 2 S-class sedans (W108 and W116) and now I am considering a W126 (my W116 is for sale for $4,500 CDN), I know quite a bit about these vehicles.
I am sure it is what he claims that it is in great shape, but to be quite blunt you can get a 90-91 560SEL with about 150,000 kms for that much or a little less. When gas prices are this high, that is a preposterous price for a car of that year.
I'm not sure what your standpoint is, AMG or not, the ground effects and the wheels make it look foolish - this isn't a Honda Civic, it's a premium luxury German flagship-class sedan.
They can be pricey to maintain (depends on how much work YOU can do to them) but they are reliable - don't expect a brand new car - every older car needs SOMETHING inspite of what the owner claims.
As far as the fuel economy of the V8's - the 4.5L V8's coupled with a 4,400 lbs car get about 19.9L/100 km in the city.
Take a look at mine LOL
W116 and W126 are both splendid vehicles, however, plastic started moving up the sides of the W126, where the W116 doesn't have plastic on the sides.
Hope this helps!