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There is a known problem with "readiness" on certain Volvos and many other cars manufactured in the early days of OBDII. The inspection stations should be well aware of this and will not fail on that basis. Certainly in my state of North carolina this is the case. Try taking the issue up with a more knowledgable person at a station. You may have encountered an uninformed person.
The Volvo procedure to reset all the trip flags is not secret classified information and an honest dealer should be happy to give it to you.
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David Hunter
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