See here...
http://www.brickboard.com/FAQ/700-900/ElectricalStarting.htm#StarterW...
Starter Will Not Engage: Start Inhibitor Switch.
[Symptoms: I have an 89 740GL that sometimes starts but sometimes does not.
When I turn the key the car simply will not turn over: no starter response
on key to "start". However, all of the panel lights, the battery level and
starter assembly are good. When this happens I usually put the car in
Neutral and then back in Park which usually works allowing the car to
start.]
[Response:] If your car is an automatic, like my wagon, make sure that the
start inhibitor switch located under gear indication panel is not out of
adjustment. A simple test is to push the selector forward or back a little
in the P position (the only one the car should start in) as you turn the
key. If the car starts, crawl under and adjust the rod just a little and the
problem should be solved once and for all. Failing this option, check the
switch and wires associated with the lockout switch.
[Response: JohnB] Took about 250K and 16 years, but there it was: a
potential pattern failure at the start inhibitor (neutral safety) switch. A
nice square contact (should be rounded and smooth--the other one was) point
due to wear and a relaxed copper alloy arm...the car wouldn't start unless
the switch was compressed by hand (a get-home crutch, BTW!). And
beware...the Volvo part comes with a new and cheaper connector that the
dealer crutches by selling you four terminals and the late model socket for
an additional $5.00!! You're supposed to clip the OEM chassis harness clip
off and crimp the new male spade terminals on and install the late model
socket so the new NSS can plug into it...I just used the old socket and
spliced it onto the new NSS. This same NSS is used on the 9xx series....
My starter won't start. Based on advice I've found in this group, I
think my 1992 740 wagon starter won't start because of a problem with
the neutral safety switch. By wiggling the gear shift in neutral as I
keep the key turned all the way clockwise, I've been able to start the
starter and the car. Once I turn the car off, the starter won't start.
My mechanic can't look at it until next week. Any quick fix until
then? The point at which the starter starts is very tricky. How
difficult is it to replace the switch (if it needs replacing)?
Mark