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All the ABS control units (Installed on 96 and newer 850, 70 series and S80 models) will eventually fail after they reach 65,000 miles or 5 years. The average is 85,000 miles and/or 6 years for failures.
The erratic ABS light and/or no trouble codes is an indication of a defective ABS unit.
A dealer will charge from $60.0 to $120.00 to diagnose the problem and about 95% of the cases the mechanic will recommend to replace the ABS control unit.
Unless your mechanic has the VADIS or a high end OBDII reader, he will not be able to read the ABS codes from the ABS unit.
The missing speedometer signal is a symptom of the late stages of a defective ABS unit. The speedometer is restored after the unit is repaired.
A note regarding the ignition switch. The ignition switch in 1996 models has been known for causing the ABS light to turn ON. Only about 10% of the cars that have the ABS light ON is due to a defective ignition switch.
To find out if your car has a defective switch do this. Turn the engine ON, while the engine is running wiggle the ignition key and see if the ABS light is effected.
In 1996 there is also another issue. There was a recall for a wiring crimp under the relay panel. Find out if your car was repaired. This is a very unlikely source of your problem though.
Here's more information on this issue and a replacement alternative.
Vitor's Volvo ABS website
Click on the ABS / TRACS Repair link.
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