As Raidman suggested, If you've got a little time and are willing to keep an eye out for a lucky break, pulling one from a junkyard car is the way to go as far as price (and sometimes quality). I occasionally see hitches on junked 240's in my local yards - mostly aftermarket U-haul ones or Drawtites, which would work just fine.

I found my hitch in a pick-n-pull. It happened to be an OEM standard class III hitch for the 240 with a 2" receiver and an integrated plug and wiring harness that hooked directly into the rear wiring near the tailgate on the driver's side of my 245. I managed to get it for about $30. It was really easy to bolt up too...it fit exactly on the existing pre-drilled bolt holes (although you'd want to pull the longer bolts off the car you get the hitch from to replace the shorter stub bolts). I had to cut into the plastic valance that hides the muffler, but the hitch does a good job at hiding the muffler too.

The OEM hitch is pretty massive and reeks of old Volvo over-engineering. It'll support anything the engine and frame itself can tow. Any reasonable aftermarket class II or higher hitch will also support whatever the car itself can take.

The overload springs will help a lot to carry heavy loads, and stiff high quality shocks will dampen strong impacts better. The hitch itself serves as a sort of extra rear chassis "brace." And of course, sway-bars are *always* nice! :-)

Good luck!
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Zach in Vista, CA

1992 Volvo 245 DL, B230F, 175k, M47 (Toaster)
1970 Volvo 145 S, B20B, 145k, M41 (Honey Badger)