Our lease just ended on a 2001 V70 and we replaced it with an identical pre-owned 2004 (private seller). So far I have noticed the 04 feels much tighter (04 has 15000 miles vs. 40,000 on the 01 so that may explain that), the steering is heavier (which i like) and the throttle is much smoother then the 2001. I hated the throttle feel on the 2001, even though it improved after the throttle unit was replaced.

I have seen some 04's going for around $27,000 in N.J. including the Premiumm Package. The 05's do include some sheet metal updates as well as interior updates.

Good Luck

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Geo

Did the same thing that you are looking to do. My Volvo master tech said he feels the 2004+ are improved over the earlier models. Many of the problems with the 1994 850 were Bosch. The new 2004 for example has Denso MAS and throtle accuator, along with the computer that controls them. The MAS has been moved to a cooler spot under the hood. Can't tell yet about the body. I had not replaced the tranny or the ac evaporator on the '94 and hope not to on the new one. So far very satisfied with the new car. One surprise is both performance and mileage. Ours is a non tubo and rated at the same power as the old car. Due to the variable valve timing and 5 speed auto trans, it feels much quicker and will really get 30 mpg on the road. With super pricing on the '04 I could not get a used one cheep enough to make it work for us. Good luck.