Looking at this 1998 V70XC it needs a steering rack and the differential...the dealer quoted 3500 for the repair, What should i pay for the car? the car is in pretty good shape otherwise and is drievable just the dif. making noises.
thanks

Not very much. But, it may be a steal. Most steering rack leaks are because of dried out O rings that are now leaking. Mine came with a "weep" according to the dealer when they inspected the car. After 50K miles there is still no leak.
My diff made noise at 105K, I thought. It makes more noise now, but that could be the viscous coupling according to the experts at Volvospeed. Still, no charge for the last 50K miles.
I did flush the bevel gear fluid which had morphed into something besides oil :) I suggest you do the same.

BUT, you don't need a NEW diff. A junk yard one will do just fine. It is then just labor charges to swap it.
If the steering rack really needs to be replaced, use some other shop, the dealers usually have high labor charges.

Klaus
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I still miss my 164 and my 854T. Just driving a V70R :)