I'm about to spend about $3,000 for a tune-up, timing belt, tires, brakes etc on an '96 850 with almost 180K on the odometer. I'm hoping to get another 20-30K. My question has been the last few times in the shop is this: is it worth repairing this old car (which I love, and drives much better than the S60 that I also own) or should I use the $ on a downpayment on a newer vehicle? Thoughts?

You need to be a DIYer, either capable, enthusiastic or both, to own that car. If you are not you should get rid of it.

Can't you find a cheaper place to fix your car?????? $3,000 is what your car is worth on a good day. Plugs, wires, cap, and rotor (all OEM) is about $130, new brake pads and rotors are about double the above.
I had my timeing belt, Sbelt, and rollers/tensioner done by a shop, but for less than $500.
Please, look in the Brickboards "shops" section in the pull down menu at the top right of the index screen and look for your state.

An older Volvo is only worth keeping if you do your own maintenance, at least the easy stuff.

Klaus
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The 164 has a new home, all I am left with are a 95 854T and a 98 V70R :)