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Sorry it took a while to reply. Anyway, I did this for two of my old Volvos. For the 164E, I positioned a microswitch in the shifter box (cover removed). The microswitch had a lever with a roller on the end. I fixed it with a couple of small screws to the side of the box such that the roller contacted the shift lever as it passed between P and D. At R, it pushed the roller and lever in far enough to trip the switch. I ran a couple of wires from the switch under the carpet to the reverse relay (these cars CAME WITH reverse relays).
The 260 didn't have a reverse relay. This meant all the power had to go through the small contacts in the neutral/reverse switch. For this car, I dissasembled the switch and cleaned up the contacts. I placed a relay in the dash behind the radio and wired power to it. I re-routed the wire previously going to the reverse lights to this relay. The relay coil I wired to the newly-cleaned reverse switch. So instead of powering the actual backup lights, the reverse switch now only powers the relay. It has worked for many years now this way.
Let me know if you need more details.
Adam
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