Volvo started using external overdrive units in the 1960s. They were used on some
-122 (Amazon),
-1800/1800es,
- 142,
- 240, and
- 740/760 (Turbo only)
series cars.
The overdrive was activated by a column stalk on the 1960s to early 70s cars. On the 240 series and 740 it was switched to a button on the shifter. It could only be activated when the car was in fourth.
My 142 was a low-spec model and didn't have it, so I can't say if there was any provision for it to auto-disengage when shifted out of forward gear on the 60s and early 70s cars. However, the later 240/740 had a dummy switch that automatically disengaged the OD if the car was shifted out of 4th with the OD still engaged.
I am not sure if Volvo owners of the era exactly loved the system, but the old pushrod B18/B20, and to a lesser extent the later OHC B21/B23 four-cylinder engines sounded really agricultural at highway speeds, without the OD in operation....
