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A 1990 245 with only 260K miles? And you want to get rid of it? I'll take it :)
Before you plunge into the old used car market, cars older than 10 years, consider that it will cost you close to $1,000 to get everything right and trustworthy during the first year.
Get your exhaust fixed, clean/replace the flame trap, get new plugs/points/rotor/cap, AND have an independent shop "inspect" your 'old' car. The mechanical inspection will give you a list of possible repairs that will be needed down the road and possibly point out what is wrong with your car that makes it get such poor mpg. The mpg should be better than any 850 by one or two miles/gallon. Just for kicks, replace the differential fluid if you didn't do that at 200K.
And call Volvo's 800 number and ask for a free 200K emblem, they might also give you a 300K one if your are nice and polite, with a smile as you talk.
Klaus
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Proud owner of a 220S. If I had more room, I would have more Volvos.
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