I have 1994 940 N/T Wagon with just 85K miles I bought 3 weeks ago. (I know I'm bothering 740 folks with this one, but I think this problem may touch both models.)

I can't believe how many weird electrical problems Volvos have. I'm still trying to figure out which tail light bulbs aren't working properly, as they sometimes work and sometimes they don't, and the bulb warning light comes on periodically. Also, the right side reverse light comes on when I have the headlights on and I use the right turn signal. Go figure.

But the more scary problem is this: Three times in the last 2 days I have simply been idling at stop lights and out of nowhere the orange warning light arrow (pointing upwards)comes on, indicating that I no longer have a 4th gear. Sure enough, I'm at 4,000 RPMs at 55 mph and no overdrive. I continue to push and push the little button on the back of the shifter (the button is on the left side of the shifter knob on my 740), but the arrow doesn't turn off. So I stop the car, put it in park, and continue to push the button. Twice I've been able to turn off the 4th gear override after putting it in park and pushing the button again and again, but tonight I couldn't even do that. I never had a 4th gear all the way home on the highway tonight. Then, after I pull into my garage and put the shifter into P, the arrow warning light mysteriously goes off on its own...I never even pressed the 4th override button.

I'm assuming there's a short somewhere, but the scary part is that pushing the button itself doesn't seem to make much of a difference. The 4th override turns on by itself and even turns off by itself. I recall about a year ago that my 740 (1990 159K) suddenly downshifted on the highway and the arrow warning light came on. But I just assumed I had accidentally pushed the button (though my hands were far from the shifter knob) on the side of the shifter knob, because when I pushed it again the warning light immediately went off and I had a 4th gear again. Maybe that wasn't the fluke I thought it was. Anybody ever experienced anything like this?