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'87 740 wagon with lots of miles but ran like a champ. We had gone out for some food on a Saturday evening. About an hour after we returned, I went out to get something from the car, and there was fire coming from the front of the engine, out of the hood, and from molten plastic underneath. Doused it in a hurry, but too late to avoid the engine damage. Everything plastic was melted. The insurance company gave us market value which was a fair price. The car is 'totalled.'
Here's what happened: The positive battery cable runs under the timing cover at the front of the engine - it's held on by two steel clips. I think the clips originally had rubber inside. At least one of them, however, was steel only. Apparently, the cable had worn enough to contact ground. There was molten copper that looked like it almost tried to weld itself to the front of the engine. The fire was most intense right underneath this area.
On a positive note, no one was injured, and we had four years out of a vehicle that ended up depreciating only $1000. And, now I get to go Volvo hunting again (one of my favorite sports).
Check your battery cable where it is held to the engine. Consider adding a piece of garden hose or something to keep it away from metal.
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