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I responded to a similar question a couple of days ago, (should be somewhere down the list), but I think I can get my thoughts down to a paragraph this time. In my household, we have a 94 850T and an 85 740 (my car). My experience with the 850 is that it's very quick and has a sporty suspension, but those are its best attributes. Working on the engine is anything between challengine and nightmarish, and makes the 740 (which is practically the same as a 940, save age) feel sooooo much nicer to work on. Stuff just isn't crammed in there like with that 5 cylinder engine. There are also major, expensive problems to look out for. Leaky rear main seals are common, as are busted AC evaporators. Done by a Volvo mech., we're talking about ~$1000 for EACH reapair. (Been there, done that.) I find that the interior of the 740 is also more spacious, especially the back seat. Much more legroom. And a note on winter handling: RWD does just as well, and sometimes better, as FWD if you put 4 good snow tires on it. Extremely controllable, IMHO. (I've had more control problem in the 850 than the 740, the same snow tires on both cars.) You want power? A 940T will be plenty fast. Those engines are of a proven design. I think it's a shame that they aren't made anymore. So that's my two cents. If I were making the same decision you are, I'd go for a nice 940. Wouldn't even think twice.
Best of luck.
Tim
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