Did they give you a reason as to why they don't want to touch it? Which Volvo garage did you phone?
Really, its a guessing game. It could be anything from a low battery in actual alarm siren triggering the alarm, but I'd be inclined to think its related to the key fob. I'm not sure whether this will work, but I've read turning the key to the unlock position twice whilst the key is in the lock in the door disables the alarm (worth a try?).
All keys in the V40's up to 2004 took two batteries, but I'm not sure as to the exact reason why. I can only guess that one wasn't enough!
Have a look at this site below. Look at the pictures to see which key matches yours (They're labelled "A", "B" & "C") & follow the instructions. Given that your car is a 1998, I presume yours will be the same key as shown in picture "A". If that's the case, then the plus side of the batteries needs to face
down.
http://www.volvohowto.com/replace-re...volvo-s40-v40/
If this fails, then you need to get the fault codes read. If the alarm is going off, it should store some kind of code that diagnostics will show.