One problem related to transfer case has been reported for the 2005 Volvo XC70. The most recently reported issues are listed below. Please also check out the statistics and reliability analysis of the 2005 Volvo XC70 based on all problems reported for the 2005 XC70.
The awd system is not working. The vehicle was to spin the front wheels constantly. Also traveling on the highway, the vehicle wants to drift into the other lanes on its own. Dealer tells me it is the angle gear sleeve on the transfer case or the transfer case gear. To me its obvious that Volvo designed the part to fail. How can gear that is sealed fail with normal use? so the repair will could cost up to $3600. After doing some research on the web. This is so common its ridicules. Never buy a Volvo again. I bought this car to have a safe awd. Oh it s safe. . . As long as its in your driveway.