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OK, so you know it needs
Exhaust work
Electrical gremlins found + fixed
Check-Engine light (see below)
Offer way less than the $1500 if you do go for it!
PLUS you will then find the other things that you couldn't check while test-driving. I predict you will find them during the first month of ownership. That's how my "new" '89 245 worked out when I bought it last fall. Mine needed a full brake job, in-tank pump and fuel level sender, first exhaust pipe, shocks.
The '89s were past the era of self-destructing wiring. Wiring on them can go bad, but problems are most likely caused elsewhere, like switches or relays etc.
Check Engine light indicates a problem with the computer-controlled fuel injection/ignition system. The '89 has "On Board Diagnostics". This is a small box at rear of engine compartment, driver's side. It has a blinking light readout system. The FAQ will tell you how to decode it. The '89 240 has an LH2.4 ignition system (Jetronic).
http://www.brickboard.com/FAQ/700-900/EngineOBDCodes.htm
Usually the OBD ends up telling you that the mixture is either too rich or too lean; it doesn't know which. Occasionally it will tell someone something more specific. Anyway, the cause could be anything from a loose wire to a need for a new Oxygen sensor or ECU (computer) or fuel injectors.
Strange chimes and ign. switch behavior - - -
Sounds like maybe a problem with the ignition switch. It's misinterpreting the position you're setting it to. It also has a sensor for "key left in ignition with door open" that rings the chimes, I think that's what's going off when you tried the dome light. The switch has springs that can get gummed up - I suspect that's what's happening. Maybe needs a new switch or a good cleaning of the old one. Switch fits on back of lock/key assembly. OK for a do-it-yourself job - requires pretzeling yourself in there to get at it.
If you're on the East coast, you could look for another $1500 Volvo. I keep seeing them here. If out West, your market may be different. A car that dies while you go to look at it is not a good sign. Maybe they would take half their asking price when they see that. They know darn well the car has some problems.
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[aka Sophie's Maintainer] Sven: '89 245, IPD sways, E-fan conversion, 28+ mpg - auto tranny. 850 mi/week commute.
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