The "shift up" arrow will come on as a reminder if you have it in L or 3 or "M". No harm. You have a very high performance car and driving around the city at 30-40 mph in D is too slow for the engine. I suggest you drive it in 3 to help keep the engine turning fast enough to keep the sludge from forming. When you get out of the city and on the expressways, by all means, shift to Drive to save gas.
If the shift arrow blinks, that means something is wrong with the tranny.

When I mentioned flushing the transmission, have your neighbor check the color of the fluid on the tranny dip stick. It should be red ish, not dark brown. If he doesn't know how to flush a Volvo transmission, have him get back on this board and we will help. It's easy to do.

Klaus

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(V♂LV♂s 1975 164, 1995 854T, 1998 V70R)