Here's a blurp I've prepared on the trailer wiring topic. Some of the information in these notes is not in the FAQ so I'll post it again here.
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For a standard combined brake/turn bulb trailer system you do need a converter to merge the separate turn and brake signals from the vehicle to the single trailer brake lamp signal. These are typically labelled as converting Euro/Import systems to American or converting "3-wire systems to 2-wire" or "4-wire to 3-wire" or whatever depending on which circuits are supported (like park lights and reverse lights). If it says "easy installation" and "won't interfere with vehicle lighting" then that may or may mean you can make all connections at the tail lights without affecting the bulb out sensor found on your Volvo. In any case, with proper installation, all converters can be wired so as not to interfere with the bulb out sensor.
There are two kinds of converters: The cheaper ones (4-wire +grd) result in significantly dimmer lighting at the trailer since it adds the trailer lighting to the existing lighting circuits (the trailer may receive as little as 5 volts). The internal circuits of the cheaper ones are more failure prone (from heat or faulty trailer wiring). The better converters (5-wire +grd) avoid all this by using relays with a separate 12 volt supply from the fuse panel. If you tow trailers frequently, I would highly recommend the latter type of unit. It is sometimes difficult to tell from the packaging or a catalogue which kind is which, especially in the mid-price range -just look for a cigarette pack sized unit that indicates "powered converter" or "relay driven" or a connection labelled +12v to spot the better ones. Brand names for these include ModuLite from Draw-Tite, Tow-Power from Reese, LiteMate by Hoppy (Hopkins), BriteLite by Roadmaster, Max-Light, Calterm,... Prices are about U$10-U$25 for the cheapies and U$25-U$85 for the powered ones. If you have trouble finding powered converters at trailer rentals or auto stores then try RV centres, auto supply parts counters and web shopping. Unless the right features are specifically mentioned, it's best not to assume the person selling you the unit understands the different types and how they will work with your Volvo wiring.
In order to keep the bulb sensor happy you will need to be aware of a few things.
o Tap into the park lamp circuit at a point not on the bulb sensor such as a license plate light (and on some early models the side marker light).
o Tap into the brake lamp circuit ahead of the bulb sensor such as at the brake pedal switch (or on some early models the third brake light). For relay type converters, depending on the make of the unit and how balanced your left/right brake lamps currently are, the current drawn may be small enough to allow you to tap into the brake lamp circuit directly at the rear of the car without triggering the bulb sensor (you may need to try each side), but since you have to bring 12 volts back from the fuse panel you may as well bring a separate wire from the pedal switch to minimize false warnings when the brake bulbs get replaced.
Connections to the vehicle wiring can be made using crimped blocks to tap into the wires or by using proper crimp connectors at the terminals (use a piggyback connector if there are no free terminal spades). These are available at most auto supply stores, although you may need to find an electrical/electronics supplier or appliance repair shop for piggyback connectors. For the ground connection, use the same chassis screw as the tail light assembly.
For powered converters, rather than getting the 12 volt supply direct from the battery as is often indicated, it is normally better to use an ignition switched source. For most 240's, fuse #10 is a good source for this (use a 16 amp fuse and make sure you connect to the cold side). For 700's/900's, try using fuse #3 (on American models you can tap into the 12 volt supply wire to the rear fog light switch rather than going all the way to the fuse panel and on 700's/900's with electric seat controls you can tap into its 12 volt supply in the wire harness under the front of the seat toward the sill). Although you may be tempted to tap into the 12 volt supply going to the rear dome/trunk light or tailgate wiper, those circuits may get easily overloaded and blow a fuse depending on what other accessories/lighting elsewhere on that circuit are in use. Check the fuse panel to determine what else is on that circuit. For 240's, the seat heater pads will normally kill that thought. For 700's/900's, you may be luckier. The tailgate wiper circuit is probably not a good choice since the wiring/fuse may not be up to the added load and blowing that fuse may kill a more critical system such as door locks, headlights, brake lights or (heaven forbid) the cigarette lighter.
You should locate the converter at the left rear where you can pick up all the connections. For the brake connection use at least 16 gauge wire. For the fuse connection use at least 14 gauge wire. To run a wire to the dash, follow the wiring harness over the left wheel well, along the left rocker and up behind the left kick panel. You'll want to release the back seat cushions (on sedans, push the front edge of the seat down and toward the back before lifting). On 240's the door sill trim just pulls up to gain access behind the carpet. The door frame beading with imbedded clips simply pulls off. To remove the left side kick panel you need to pull off the door beading, pry out the plastic rivet behind the grill area and for non-A/C cars remove the floor vent rubber handle (push out the roll pin). For 700/900's, removal of the sill trim is a little more work requiring the removal of cover plates, screws and additional upper trim panels.
To protect the converter and vehicle from faulty trailer wiring (and it's not uncommon), you should really use a separate in-line fuse to protect each trailer lamp circuit. Use fuses rated at the same or next lower amperage as that used at the vehicle fuse panel. Powered converters only need to be protected with a single 10-15 amp fuse on the 12 volt supply line at the converter -most kits include this. Powered converters may produce an audible click from the relays, even when a trailer isn't connected, so you may want to wrap the unit in a piece of foam and stuff it in a body cavity behind an inner panel.
Make sure you have a good ground connection at the trailer. Many trailer lamp difficulties, especially weird behaviour, are simply a result of a poor trailer ground. Do this right at the trailer lamps rather than using the trailer chassis. Physically protect trailer wiring from abrasion and make trailer connections as water/corrosion proof as you can (like soldered connections with heat shrink protection or using dielectric grease to pack connectors and protect bulb contacts).
For the basic 4-wire flat trailer harness plug, the wiring convention is:
Pin #1 -ground (white, male end is on vehicle)
Pin #2 -park (black or brown)
Pin #3 -left turn/brake (yellow)
Pin #4 -right turn/brake (green)
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-Dave (not to be confused with a real expert, just goofing around at this)
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