“Is it foolish to put this kind of money into the car?”
In order for you to make this decision, please first consider this question:
Since the book value of this car is–at most–$2,000 if it is in “average” condition, does it make sense to you to “invest” over $6k in a 15 year old car that will only develop more (expensive) problems as it ages? To me, doing this would border on insanity, but your values may be different than mine, and you are entitled to hold those values and opinions.
“I had been counting on this car going another 100,000 miles.”
In reality, this car–like any car that is still repairable–can probably go for another 200,000 miles. The ultimate question is whether it makes much sense to invest the huge amount of money (on an ongoing basis) that would be necessary in order to reach that goal.
Unfortunately, all too many Volvo owners seem to think that their cars will last forever. While this may–theoretically–be possible, the cost of repairing a Volvo as it ages tends to become truly prohibitive and trying to preserve these cars almost always veers into the category of bad economics.
If you were to buy a newer car, you would be getting a few things that you just can’t have with this car:
Better fuel economy
Superior safety for driver and passengers
Better reliability
Yes, I know that your Volvo was very safe when it was made, but even the smallest, cheapest cars on the market nowadays actually protect their occupants far better than your 15 year old Volvo. And, advances in fuel economy have left your Volvo in the dust when it comes to economy of operation. Needless to say, something much newer will have far fewer repair issues than a 15 year old car, as long as that newer car was properly maintained.