Orange arrow flashing and transmission doesn`t switch from 3 to 4speed!

4th gear disengagement:

The 4th gear is engaged automatically after the transmission has shifted through 1st, 2nd and 3rd gears

at certain speeds and loads. By pressing in the button at the rear of the selector level, the 4th gear can be

disengaged, thus providing a three-speed transmission. As a reminder the

? light on the dashboard

glows. By pressing in the button again, the transmission reverts to four-speed operation and the

?
light shuts off.
This is straight out of the owner's handbook. What this indicates is that there may be a problem with the shift solenoid. On the highway, does is seem to rev high? Can you press the button on the shifter and have the light go out? let me know.

What is happening is the tranny is going. They can try to replace the selenoid, but really, you need a rebuild. Whomever charged you to remove the light, probably messed things up more. Volvo's typically lose overdrive before losing all the other gears. It is time for a rebuild. Go to a reputable tranny shop who knows volvos.

Check TCM for codes.

The lights indicate a problem with the transmission. The fact that the engine wont start, leads me to believe that the PNP (neutral safety switch) is the problem. You will have to have the vehicle scanned to make sure.

have the same problem with our 2001 s40 and stumbled onto a site like this with a couple answers.
1 your transmission could be going, however that is the extreme.
2 ours accelerates very slow when the light is flashing which means the winter traction is engaged even though we have not pushed button. to reset this you can turn your car off (key all the way back) and on 5 times consecutively and it resets itself most of the time.
3 sorry to type this, but just make sure you did not push the "w" button on the shifter area platform
hope this helps

You don't say whether it is a manual or Automatic trans ( they both have an electric overdrive). Assuming it is an Auto trans the problem is most likely the Orange colored OD relay to the left and behind the Glove box. Or the push switch on the gear selector may have an open circuit but less likely.

Yes, it's the 'pnp' switch (also known as the inhibitor switch) which is on the side of the transmission.

I own 2 Volvo 960s (3 litre automatics) which are similar in many respects ... and have that flashing arrow. It's a well known fault and you don't have much to worry about.

Rather than write it all here, you can read what I wrote as an ebay guide about it at http://reviews.ebay.co.uk/Volvo-960-Automatic_W0QQugidZ10000000003233806

I did put similar info on my website at http://www.glennsmart.btinternet.co.uk/volvo960.html with photos

Though the ebay guide is better ...

If you haven't got time to read it ... forget the flashing arrow and put a bit of black tape over it ... My wife's car has (192,000 miles) had that arrow flashing for 3 years. My car (100,000 miles) has had that flashing arrow since I bought it 1 year ago.

I did change the pnp on both cars ... but you also need to have the computer error reset by Volvo to have the light extinguished. Don't worry ... keep driving.

Most likely the transmission range switch is failing.
Have someone check the transmission computer for codes.

If an orange arrow is blinking that means that there is a problem with your transmission i have the same problem with mine. Bring it too a mechanic there is a relay switch on the transmission they have to replace it cost about 150$$. Have you had any problems with the transmission before?

Your automatic transmission is in limp mode. It detected a problem and set itself into limp mode which is basically the same as W or WINTER mode. It's computer should have stored a code that will tell the service technician what caused the error. Sometimes shutting the engine off and restarting will reset the transmission.