We've had three 240 wagons and now a 940 wagon (same as the recent 740's). Each model has its good and not-so-good points. For under $4000 you could get a nice '88 240 with better wiring harness and rust protection than earlier models. Compared to the 940/740 the 240 is simpler to work on but lacks all the on-board diagnostics.

The cargo bed in the 240 lays flat while that in the 940/740 rises slightly just near the back of the front seats. The 240 cargo bed is a little longer, by about inch or so but the 740/940 is a little wider.

Our 940 is more luxurious, the 240 utilitarian. I'd be more likely to throw messy loads in the 240 than I would in the 740/940. When I load my lawnmower and trimmer in the 940, I spread plastic all over the back, never bothered in the 240.

If you commute in the wagon, the 740/940 will be quieter. In any case, a manual transmission will give better performance on the highway and an automatic will be better in town. Both models will seem underpowered compared to your 850. Good luck on your search. We have liked every one of our Volvo Wagons, very useful vehicles.