Just bought my first Volvo, a 1998 S70 with 100k miles, auto/non-turbo. Surprised at how well it moves out and handles. Only problem is during the first 15 minutes in the morning, the car shifts at high rpm (about 3500 - 4000) and bangs into 2nd. Won't shift into 4th until 4000 at about 75 mph. After 15-20 minutes, starts shifting smoothly at around 2500, like I assume it was meant to.

From other postings on transmission problems, it seems that the first step recommended is to change ATF, or flush and change. From what I described, is this where I should start? Are add-on filters or synthetic ATF typically necessary? Thanks for any response.

be cautious with regard to a system flush. I dont know how Volvo
does it but if you powerflush the system you can stir up crud from
the pan which can block up the works in your tranny. I have heard
a lot of stories about having a tranny flushed... with bad results.
Look at vwvortex.com forums under technical/transmissions.
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vw bus site w/ Volvo section - http://www.geocities.com/vw_bus_74/index.html

Synthetic fluid certainly isn't "necessary", but I wouldn't run an auto without it. Drops operating temperature, flows more freely in cold, resists oxidation much better, lasts about 3 times longer than non-synthetic, reduces wear, might even give a bit better fuel economy.

well, regardless of whether it should do it or not, it is well worth it to have the transmission serviced since you bought it used and don't know what has been or not been done to it. First thing I do with any used car is give it a tune-up and change the oil and service whatever can be serviced.

The transmission will hold shift points to a higher RPM when the
engine is cold in an effort to warm it up faster (reducing emissions).
Is the car warming up correctly? The temp gage should be a bit below
3'O'Clock after about 5 minutes. I ask because thermostat failure is
a common problem and sometimes people don't notice the car is not
warming up fast enough.

Also, 3500 to 4500 is about right if the transmission is in sport
mode and the throttle is about half way down. although I would not
expect it to hold 4000 RPM on the freeway once you are a steady speed
(not accelerating).

A transmission flush is a good idea. After I had it done our car
shifted very smoothly -- quite noticeable. I'm not sure about synthetic
(I did not use it). I'd skip add on filters and such since Volvo
powertrains are pretty well engineered (oil coolers, transmission
coolers as needed right from the factory).