When installing a thermostat on 240/700 Volvos it is important to have the "jiggle valve" , (the copper piece at the top of the picture) located at the highest spot so that any air trapped below the thermostat can bleed through it and not create an air pocket that would possibly cause the thermastat to not open correctly.

Hot running problems of 240 & 700 4 cyl and turbo model volvos is frequently caused by clogging of the tubes in the radiator. Many of the later models came with plastic tanks on the radiators and these should not be repaired because the plastic tends to become brittle and break the necks where the radiator hoses connect. They are also somewhat marginal in their cooling capacity and even the metal ones won't respond well to "rodding" of the tubes. For these reasons we suggest replacing the stock radiator with an All Metal 3 row radiator. No plastic on these units and they are aprox 1 1/2 times as thick for greater cooling capacity. Bolt in with no modifications.