Mechanically sound Volvo wagons, 200\700 series, seem to command the premium price, because there just aren't enough for resale on tyhe secondary market. When people buy\find one, it's gone.

I recently purchased a 740 wagon with 111k on it from a secondary dealer for $3995. The car is tight as a drum, mechanically sound, was a one owner, Volvo serviced and is a nice change(for me) after driving 240 wagons for 18 years. A similar car at a local Volvo dealer, with some mechanical issues after inspection, was listed for $7995.

Ther are good deals out there, and it sounds like you may be on to one.

Check for main seal leaks, front and back, distributor leaks, tire wear pattern (for alignment\suspension issues). If your mechanic allows, get under the car while it's on a lift, and go over everything, looking for any signs of leaks that may have been freshly cleaned for resale purposes.

If you can deal with the minor issues that may pop up at the inspection, go for it. The late model 740's are solid cars, with easily (for the most part) serviceable engines that are vey dependable, as long as you take care of the maintenance when scheduled.

Good luck!