Help, Advice and DIY Tutorials on Volvo's P80 platform cars -- Volvo's 1990s "bread and butter" cars -- powered by the ubiquitous and durable Volvo inline 5-cylinder engine.
It looks like the clip that keeps the B-Pillar trim pieces together. Which side of the car did you find it on? Whichever side, pull your plastic pillar piece between your front and back door loose and see if there are the plastic roof trim pieces coming together...like wire brakets that over-lap each other. If what I'm thinking is correct, this red clip goes in the space where they come together and twists to lock them in place. It is under the hand of the guy pulling off the B-pillar trim in the diagram below.
it looks like the SIPS trigger guard. it's normal place is inside the plastic cover on the outside of the front seats, where the seat controls are.
its purpose is to guard the trigger when you're working down there (it's the insanely great little touches like this that make Volvos great). it slides over the trigger so that you can't accidentally activate the bags.
i'm not positive since it's been about 4 years since i looked at mine.
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Matt...now that I've had a better look, I think you're right. The piece inside the door trim area is flatter and doesn't have a handle like this one does.