I have read that there is a compensation circuit connected to the temperature gauge to hold the needle steady so that people won't worry as it fluctuates slightly under normal operation.

This means that if the gauge goes above or below normal it is REALLY high or low.

You need a new thermostat, the cooling that you see may cause problems for your engine.
--
'96 855R,'64 PV544, '67 P1800, '95 855, '95 854, , 395,000 miles put on 8 bricks

Sounds like a failed open thermostat to me. The factory thermostat in my '96 850 failed several years ago in just that way. You got more time out of yours :).

Luckily it is easy to get to and easy to change. Some modern vehicles have made getting to the thermostat a real PITA!

John

In the 240's, '86-93, they had a Compensation Board that would fail and do funny things. I don't know if your car also has a C.B. (i.e., whether Volvo continued the practice of including it in your model's year), but even so it doesn't sound erratic (as a bad C.B. would be) but rather a regular event -- which means something really is not quite right.

So I agree that it's time to replace the thermostat, even for no other reason than a precaution.

And as an example, in a 240 (though it should make no difference) I once was on a vacation trip to Nova Scotia (from New Jersey, USA) and as we were sightseeing up and down the hilly roads along the shoreline, I noticed that the gauge's indicated temperature had started to fluctuate quite wildly! The temperature would go up to normal as I climbed up the hills, but when I descended (essentially coasting, with foot off the gas pedal and the tranny in 3rd, a habit of mine), the temperature dropped to "stone cold". As this was repeated consistently, I realized that the thermostat had become 'stuck' open (fortunately, rather than stuck closed, a far worse situation).

So change the thermostat and see.