This is one mistake a lot of people make when looking to get a car in my opinion. Getting a car such as an S500 comes with a lot of maintenance that you have to be ready for. German cars are already have a high cost of maintenance but the get exponentially more expensive as you go up in the model range.
Yes a car could be a good deal but can you afford the cost of ownership after the fact if it doesn't have a warranty. Things like a normal brake job on an S class can run you over 1K at the dealer for all parts and labor. Of course you can get a better deal but this is not going to be some take it to a cheap brake place and get pads replaced because some of these cars come with rotors that have to be changed every time your pads are worn. Usually they only last about 50-60K miles depending on how you drive the car so they might be close to the time to be changed if they haven't already.
Minor things to fix on these cars are going to cost a decent amount so at the end of the day. If you can afford the upkeep then go for it. But don't expect to pay that much and not have stuff to pay for in the future.
If you do decide to go that route get a Pre Purchase inspection done on the car at a dealership or independent mechanic you trust. Might be a couple hundred bucks but they do a thorough check on the car and let yo know what you are getting into. I wouldn't buy a luxury high end car without it. It's peace of mind and you realize things like how much is left on the brakes, minor problems, major ones as well. I would hate to see you get the car and have to change the brakes out in 3K miles.
I'm big into cars and do a lot of research and have a German car myself that needs some upkeep but it's something I like and I do a lot of things myself and have connections to get things cheaper. These cars are not like Honda's, Toyotas, or even Lexus where you can just put gas and go and no worry.
They take more care and preventative maintenance to make sure you don't run into major problems.
If you can afford all that, then by all means go ahead and get the car no one is gonna stop you. Just think down the line. As someone else mentioned you can get some serious bang for your buck if you go with a Lexus.
I personally don't mind buying older cars but if you are going to look at one that is 12 years old make damn sure you get the PPI and some kind of service records.
BTW i checked the auction pricing on the S500 and they are going wholesale to dealers for about 9K on the high end with and average of about 8K so it seems pretty high for a car that old. Lot of room to negotiate if it's a dealer I'm sure.
You can always check sites like KBB.com or NADA.com to get pricing on cars and their values to give you a guage, but the market is always changing.
Private party value in outstanding condition is going to be about 11,500 which very few will fall in. So that's about right with wholesale/auction pricing at about 8 - 9 K. So I would say the price you are getting is super high for the car.
Sorry went on for a while.