You need to find out what year it is. Phase 1 cars ran from 96 up to 2000 then the phase 2 car was released. They look pretty much the same but there are interior chnages and suspension revisions on the phase 2(which made the suspension a little less harsh). An easy way to tell the difference is the larger bumper marker lights on the phase 2 car. I have a late 99 phase 1 car, nothing has gone wrong with it and its been driven very hard in the three years ive owned it.
Common things to check on either phase S/V40s are the engine mounts, knocks from the suspension as they can need new rear bushes around the 90k mark. On the front suspension the ARB bushes and drop links can cause a knocking noise as can the front suspension top mounts on the phase 1 cars(if you look at the strut top and bounce the car it should move the same both side if one moves more its a sign its knackered). None of the suspension issues are major money to replace unless you use an official volvo dealer. The very early models had some electrical and trim issues but this was resolved around 97/8. Wheel bearings arent a problem on these cars but if the car has tyres like p6000, p-zeros etc it can produce a wheel bearing type noise(continuous tread paterns are the preffered tye for noise reasons).
The engine and gearboxes are bullet proof on them as long as theyve been serviced. The phase 1 cars came with a 1.9l turbo motor which gained a twin scroll turbo in 99(reduced the lag somewhat) and then in 2000 the engine size was increased to 2.0l although power and torque remained the same. Because it has a fairly large turbo on it you will find that the engine will start producing most of its power between 3.5k and 4k then the power will really surge in. They dont handle badly, are great fun to drive and pretty quick to boot(7.2 0-60 officially although whatcar manged 6.7seconds on there test).
Here are some sites
http://www.volvoclub.org.uk/
http://www.volvo-forums.com/
http://www.s40concepts.net/
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