I think a 1995 Volvo 850 would be an excellent car to send your kids away to a technical auto mechanics school. If your kids are going to study law or medicine or engineering or something else, I would buy or lease a Honda or Toyota- the new Ford Fiesta looks like it's going to be a good car too. The Nissan Leaf all electric (100 miles on a charge) is also coming this year. Little maintenance and great economy and they are pretty safe.

As for your 95, I would have the milage pulled off the computer, 45K sounds really low. The engines still think they are Mack Trucks below 100K- I don't care how you drive them.

A new engine will cost 1,800.00 to 2500.00 to have installed (ebay or junk yard) Thats about one years worth of lease payments.....Most people also start having problems with steering racks (1 grand appx. to replace) and rear suspension bushings (1 grand to replace) and on and on. Volvo gets a bad rap for reliability because people are comparing hondas with 60K on them to Volvo's with 260K on them.

I do think your engine is shot- whether you lost compression because of a stuck valve or cracked ring, the repair bill is about the same.....