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ABS LIGHT 850 1995

In 1995 the ABS and electrical problems you describe, has been associated with a defective ignition switch.
The test to find out if the ignition switch is faulty is to wiggle the ignition key, which you already did.
Here's the instructions on how to replace the electrical part of the ignition switch.
Curtesy of Rich at www.volvospeed.com
Volvo Ignition switch replacement






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