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Will has pretty well covered this. Let me emphasize that these are good cars but regular maintenance is key. Some thoughts: Head gasket failure on the 5 cylinder engines is extremely rare. As is AC compressor. Valve stem seals can leak with high mileage but using synthetic oil will prevent this. Synthetic oil is highly recommended for these engines as its use will help prevent clogged PCV issues and leaky valve stem seals. Quick check for valve seal issues is to see if it smokes at cold start up.
At that mileage I would also check the front end over thoroughly. Tie rod ends and sway bar end links can wear out and get noisy when hitting bumps. Also look closely at the CV joint boots for cracks. Any weird steering behavior or noise should be examined closely. The upper engine torque mount is usually toast by that mileage. Probably been replaced but if not no worries as it is cheap and a DIY job if you are willing...
$2400 sounds high even with a new engine. Is it brand new? Check the book value in Edmunds or elsewhere. Have found in the past that Edmunds values for old Volvos is pretty accurate.
J
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Will I buy another Volvo??? We'll see....
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