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Ever since I heard the story of someone having an aftermarket air filter deteriorate and spit pieces into the engine causing catastrophic failure (which MB didn't cover!) I have decided the extra potential 5 hp isn't worth the risk.
K&N is a high quality aftermarket high flow filter. I run high flow filters on all my cars. If you want a step above K&N, go with BMC. I used both and K&N seems to perform the same without the premium price tag. Filters doesn't really do much for performance but it does enhance the intake noise from the engine.