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I'd say that VWs are generally more nimble and manueverable, but remember that the 700 series is a signficantly larger car than a Jetta. VWs also have great steering feel, but Volvos are certainly quite good. In terms of handling (stability, balance, body lean, roadholding), Volvos really give up nothing to VWs.
VW engines are very different; the engine in my wife's '90 Jetta is a screamer compared to the low-revving torquer in the 740. (The Jetta has a close-ratio five-speed; 80 mph = 4000 rpm, but it loves to run, at 100 mph it's rock-steady.)
With a VW you will give up a measure of elbow room (important to a 46 Tall like myself), sound deadening, ride (shorter wheelbase), a degree of build quality/engineering and rear-drive (if that's as important to you as it is to me). Advantages of a VW are easier-to-find manual transmissions and front-drive (if that's your preference). They are generally equal to Volvos for usable interior space and trunk space. Fuel economy is not much better with a gas Jetta.
However - in my experience, VW servicing costs are higher (yes, you read that right), and of course, durability is not generally as good, although 200,000 miles is not out of the question with a VW.
We've had the VW five years; if we could do it over again, we'd buy a Volvo. My wife drives the Volvo whenever she gets the chance, and it's not because she doesn't like the 5-speed in the VW.
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