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Nathan;
Don't let the armoured cable distract you from the fact that vintage Volvo ignition systems are classic, simple "coil and points" ignition systems...the ONLY thing that the armoured cable does, is prevent access the positive coil wire, thereby not allowing "hot-wiring". The three terminals on the back of the IGN switch are (refer to wiring diagram: http://www.intelab.com/swem/544%20Wiring%20Diagram.jpg):
30 - BAT power input
54 - IGN power ouptut
50 - START ouput to solenoid
Armoured cable - containing IGN power - NO ACCESS
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"I read somewhere that there's an unused terminal on the back of the switch which allows bypassing said armored cable" This is not the case! Whoever wrote this is missinformed!
It is NOT POSSIBLE to "hot-wire" a vintage Volvo! The definition of "hot-wiring" is to bypass the key switch and apply a powered wire (a "hot-wire") to the coil positive terminal... but since this terminal in not accessable at the coil (OR the back of the IGN switch!!), this is NOT possible...and it would be pretty silly to build in a way to bypass this effective anti-theft system!
If you want to steal a vintage Volvo, you need to bring your own IGN coil, or airlift the car away...and we like it that way!
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If you wish to retain a stock IGN switch, but replace the coil with a standard three terminal coil, CAREFULLY cut open the armoured cable (carbide grinder) to gain acces to cable inside, and connect this wire to the coil positive.
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Phil;
Beautiful, and impressive engine compartment!!
...If were playing "Show me yours, and I'll show you mine"...here you go:

Cheers
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