Date registered: Dec 2007
Vehicle: '97 S320 (LWB), '01 E320
Location: Richmond, VA, USA
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It's a piece of cake to do. Like others have said, get hold of a filter wrench. If you can't find one at your local auto parts store, go a Harley-Davidson or BMW motorcycle dealer and get one there. They're all the same size!
The only other word of advice I can offer is to put paper towels around the area when you remove the cap. The filter will stay attached to it while you pull it out and will almost always drip oil on the engine.
Once you have it out, you can simply pull the filter cartridge off of the cap. If you look at your new filter, you will see one end has a hole and one does not. The end without the hole is the one that goes in the cap. Push it in until it snaps into place. Don't forget to replace the rubber o-ring as well. Then all you have to do is put the cap/filter assembly back in its housing and tighten it back up. I start by screwing down by hand as far as it will go and then torquing to 25 nm.
"It's not about how fast you can go, but how well you can go fast."
'97 S320 (LWB), Ruby Red Metallic/Tan, 75k miles
'01 E320, Black/Charcoal, 105k miles
Gone but not forgotten. . .
'97 S420V, Smoke Silver Metallic/Tan, (RIP 22 Oct 2012, 178627 miles) He gave his life to save mine.