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My new Old Volvo last year gave me and two mechanics bad headaches when it started constantly overheating according to the gauge The first "idiot" even put a new thermostat in .... and then when that didn't work ... carved the core of the thermostat out and said my car probably needed a head job!!
A more competent mechanic used his thermo testing gun to see that the engine was running perfectly to spec even though the gauge was redlining....
later I've heard it's a common problem with this model of Volvo.
I still haven't fixed it as I found I could check the occasional heat spike by twiddleing with the wires behind dash... and the heat goes back to normal... I need to fix it soon as I did have a water pump seal go bad... and was falsely assumed that it was just the gauge going bad again... and noticed only after a short trip I was losing coolant..
If you're not losing coolant and heat of engine seems normal without steam coming out, you probably just have another false reading gauge ...(hint, does the fuel gauge read higher than what you thought you have in the tank... as they both use same voltage regulator... in my case just some electrical short maybe the culprit .....
I've also heard frequent water pump and or water pump seal failures are a Volvo 240 problem... one guy said every 40K miles he had to change his... I my records showed mine going after 40K too???!!!
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