My 2007 XC90 looks great and runs well, belying its 250K+ miles. It has been a great source of comfortable, safe transportation and has carried lots of kids and stuff a long way. And my family loves it. Only left me stranded twice -- CCU and starter/battery -- but I am now facing some big repair bills that are greater than the KBB trade in/sale values, and figure it's probably time to say goodbye. On the other hand, with a few grand and a little luck I could get years more of that safe comfortable transportation. Am I crazy to even consider fixing and hanging on?

 

Here's II would look at this;
First, The 1st gen XC90 is the least favorite Volvo I have owned (or driven). Power, ride quality, towing, seemed below class standards. I got rid of mine quick (but I had a Tahoe to ake sure I had that niche filled).
Your case is a bit different, it's essentially worth nothing at this point - but replacing it is expensive. I think the gen 1's were discontinued in 2012 so IF you are thinking buying used you can get a vastly improved model with 6 or 7 years to choose from. Nice odds there.
The current models are very, very nice and I am considering one for my wife. (She needs a new car)

On the other hand, this is a traditional Volvoi conundrum (and many other modern cars nowadays). You cand get a new car like that for any where near where the repair cost will cost you.
On the 3rd hand, advances in modern cars are quick now and whereas 20/30 years ago the differnece in a 10/15 year old car and a new one were minimal, today there is literally no comparison.

So, if I was going to make this my primary family car (road trips, soccor mom duty) I would go with a new, or approx. 3 year old model. If I was beating it to go to work and haul crap from the garden center I would keep it.


Possibility 3 is dependant on your kids ages. Might make a good college car (and it's paid for and you now the history) Guys only though, I would never give my daughter a van or SUV or any car like that. She doesn't need a 'love machine' or something some boyfriend can play off road racer in.

 

If you can't do your own repairs, then its probably a good idea to move on. I wouldn't say the car is worthless - it has value for its parts and to a person willing to do their own repairs. What is the nature of the current problem? - I think that is probably what's going to make your decision and help determine the value (even as a trade in).