There is really no difference between keeping the Volvo and turning it into cash and buying another car. Right now you have an old car with many miles on it that will need expensive repairs and is declining rapidly in value. It also does not fit your needs because you like to take long trips and it is a gas guzzler. In 2-3 years, after a few thousand $ in repairs it will be worth about 4K and probably need to be replaced. There is nothing more expensive than a foreign lux car repair. Or you could sell it and use the cash for a down payment on another car that suits your needs better. So instead of a random expensive repair, you have a car payment and a far more valuable car that suits your needs. With interest rates so low, it is a good time to buy. How will you feel in 3 years when that car has 140,000 miles on it and needs to be replaced? Yes, a new car also declines in value, but if you need to you can always sell it. Likely you won't need to. GL.

In VA I'd have to make the car payment ($250+ a month), increased insurance (range of $50 a month), higher car taxes (remember, Gilmore's Gift only applies to the first $20k), etc., etc. And of course it will still need maintenance which is not (usually) free -- I suspect the "buy a car from us and we'll do maintenance" stuff has its own terms and conditions a mile long.

Even if that fluid leak is a $1,500 blackhole, that's 5 months of car payments.

Personally I would negotiate for a higher trade-in or sell on private market, and get a new car--either a lightly used car or a brand new one, whichever is a better deal. I got rid of my last car when it was 12 years old though it had well under 100,000 miles. It was incurring $2-3k/yr in replacing parts and repairs (european model). That level of repair costs plus difference in mileage justifies buying a new car. I've had my new car for 4 years now and have not spent anything beyond routine maintenance.