Faults:

Moon roof drains leaked inside (had to replace over engineered hoses), headlight assemblies not adjustable, poorly made, inferior wiring in headlight assemblies, headliner sagged.

General Comments:

I replaced the timing belt, water pump & associated parts, not enough room to work on engine bay, I love the car's handling / performance (Turbo, AWD), would be nice to have the ability to shut-off headlights during day driving. Would be great if more manual transmission models were available in the AWD version and "without" moonroof.

Faults:

Roof liner sagging, interior cloth on doors sagging - the glue in these models only lasts about 10 years before failing.

Lots of electrical problems - sensors suggesting a fault where there is not, power window failing one day but working the next, indicator will turn on right side if slightly touched, charging ports not working, sequential transmission won't manually switch (auto transmission mode works fine).

General Comments:

Mechanically the car has been great for the time I have owned it, and nearly every mechanical issue with it has been my fault. Unfortunately the electrics are playing up so will be selling it. You can pick them up for pretty cheap now ($5000 AUD) with about 150,000 km and they are reliable and have enough power to get around full of passengers and up hills, but not enough where you can give it a good go on the highway. A small car, so maybe not enough room if you are over 2m tall, but it looks like a fairly modern, luxury car.

The upgraded model of the S40 comes with a turbo, bigger engine, AWD (not front wheel drive) and usually leather seats for only about 20% more on average - worth it in my opinion.

Faults:

Couldn't get the boot open - faulty motor - renewed. Leaky rocker cover gasket, repaired for a small amount at a service. Not much else other than general wear and tear, exhaust, brakes, oil changes and so on.

General Comments:

Didn't know what to expect with this one when I bought it 2 years ago - with already 90K on it I knew Volvos were reliable and took a chance on this one, it had patchy service history. When I drove it I was well impressed however, it drove like new, still felt tight and the driving position is great and everything is ergonomically perfect as if I had designed the interior myself, and the interior is the best thing about this car - very comfortable and stylish, and you get a lot of equipment on even this most basic "S" model. Go for an "R-design" if you want leather and more stuff though, however I find electric windows all round and climate control enough, and just as equipped as my basic old 1999 C-class Mercedes that was traded in for this car. The Mercedes was a good car; just getting old and time to move on.

The Volvo looks good in black, is very stylish, and gets good comments from friends - most small saloons are usually ugly, but this one is the exception.

The car is a bit small to compete with the compact exec sector some say (Audi A4, BMW 3 series, Merc C-class, etc), however I find it every bit as capable a car in that regard; apparently it's based on the Ford Focus chassis though, which is fine as that is a sharp car to drive and so is this. The downside however is the 1.6 petrol engine is weak, performance is no more than adequate. Do yourself a favour and get the 1.8 petrol - avoid the diesels, they are plagued with problems as most modern diesels are.

To sum up, this is a great little Volvo that I can't believe is nearly 9 years old; it feels very modern. They are at rock bottom prices now so grab a used bargain; make sure it's got history though. I suppose the real test will come in the next year or two as the mileage rises, but if this car is anything like Volvos of the past, it should handle it no problem. Family had a few 740 and 940 saloons back in the 80s and 90s and they lasted for many years and miles no problem - hope this one proves to be the same; will try to remember to update my review, but at 9 years old and 120K - so far so good.