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OK, I forgot one of the biggies. Make sure the PCV system works well. If there is an inherent weakness in the 5 cylinder engines, this is it. A rubber glove on the oil filler port will tell you if you have positive, neutral, or negative crankcase pressure. If it's not sucking the glove down then a PCV service is needed in short order or you risk creating an oil leak from one of the seals. Don't ask how I know. A PCV service is an all day task for a DIY'r and if you purchase the "complete" kit I want say it's around $300 + or -. A history of running synthetic oil and minimal short haul driving would be a plus.
Also, the timing belt change interval is every 105,000 miles or 10 years on that car. Normally a water pump replacement at every other T-belt change is recommended. So you want to ask when that was done and hope the seller is honest about it. There might be a sticker on the computer box (just aft of the RH headlight) that will tell when the belt was replaced. It's an interference engine so if you have any doubts about when the belt was last changed then just do it.
Ask if the radiator and/or heater core have been replaced and how long ago.
Pull the transmission dip stick and see if the fluid is red/clean or dirty. The trans in these cars isn't the most robust and letting the fluid get dirty and sludgy doesn't help.
At some point around 2004-ish the AWD drive system was improved but I have no experience there.
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Current rides: 2005 Volvo S80 2.5T, 2003 Volvo V70 2.4NA, 1973 Volvo 1800ES (STILL not road worthy!)
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