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103,000 miles is low, and gives you a great opportunity to 'zero mile' the car.
Assuming that the 50/100,000 mile service was not done on this car by the previous owner, here is what it entails:
-Check the valve lash and adjust if necessary (probably not)
-Replace valve cover gasket
-Clean flame trap
-Clean throttle body
-**Replace timing belt**, timing belt tensioner and front crank seals
-If original, replace the water pump and thermostat.
-Replace radiator and heater hoses
-Flush the cooling system
-Flush the transmission/replace the fluid (auto/manual)
-Check power steering fluid level, flush system if adventurous
-Replace the fluid in the differential, or at least check to see that it is full
-Replace distributor cap and rotor
-Replace spark plug wires and spark plugs
-Replace air filter (remove airbox thermostat!) and fuel filter
I added a few of these items to the list in that they are not actually part of the 50,000 mile service per Volvo's maintenance schedule, but could probably use attention at this mileage anyway.
If you do nothing else, you DO want to replace the timing belt and tensioner. The service interval is either 45,000 or 50,000 miles on an '88. Nothing catastrophic will happen if it fails, but you will end up stranded somewhere or with a no-start in your driveway.
Couple of other things to check are: motor mounts, tranny mounts, and trailing arm/panhard rod bushings in the rear suspension. They might be okay still at 103K, but then again the rubber is almost 20 years old.
Also take a look at the 700/900 FAQ for procedures to test the oxygen senor and air mass meter. This will help you come smog check time. Old, ailing sensors also decrease your gas mileage and contribute to poor running.
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