Mercedes is a legit name and it's pretty. I've known several and they predate the Lexus fad.
Did you know your great grandmother? I personally feel weird naming after a person I or my DH have never met. I can understand liking the name, but I'd just say that I liked the name not that I was honoring a person one of us have never met. Well, unless it's a historical figure. We like Margaret, which happens to be my mother's grandmother's name. I never met her, she died when my mom was a teenager. She barely remembers her, didn't see her much and she was kind of cold and strict from what she does remember. My mom actually asked me if I was using Margaret after my great-grandmother. Um, no, mom. I'd have to know the person to name after them.