The general buying advice for any brand is to avoid the first year for a new model.
With that said, individual cars can overcome their first-year curse, so try them out if the price and condition are right.
I don't know much about these cars - but I know I'm basically not interested in the pre-2005 model and find the 2005+ car to be very appealing indeed. The early models (-2005) have styling I'm not fond of, the engine isn't as good, the interior is DEFINITELY not as good (2005 S40 is where Volvo started the floating center stack thing) and I have this 'feeling' that they're not as well built though I have no numbers to support that.
Either way you're looking at that will likely not be very DIY-friendly, if that matters to you.
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1998 V70 AWD->FWD->AWD Turbo 215k+
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