difficulty: 3/5
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Introduction
Using a coolant heater is the best way to preheat your VW TDI other than a heated garage. They work much better than an oil pan heater because it warms the coolant which warms the entire engine, instead of slightly warming the oil pan. Installation is relatively easy on a 4th gen body TDI but it's relatively hard on the Passat TDI due to access. The Jetta installation and kit are different but some pictures should help you with your installation. All instructions are superceded by the manufacturer's instructions. Faulty wiring, components, or installation could result in engine damage due to loss of coolant or a car/electrical fire, see the TOS Agreement for the full legal disclaimer.
The advantages of warming the engine include instant or much faster cabin heat, lower engine wear, emissions, and fuel use, on cold starts. Because a TDI puts out less waste heat compared to a similar displacement gasser, a coolant heater on a diesel is more helpful than on a gasser.. You shouldn't have any problem with starting the car in normal winter conditions due to the small displacement and fast glow plugs of the TDI engine, but it's just nice during cold winters.
The way it warms the whole engine and coolant is by an electrical element in a small heater. Since the coolant system is sealed, instead of boiling off, the heated coolant creates a natural circulation, a convection, where the heated coolant leaves the heater and pulls in cold coolant from the rest of the engine. Because it works on a natural circulation, the heater's installation height should be between the inlet and outlet, refer to your heater directions for more details. Different models may use a pump or check valve. It takes at least 1 hour to get decent heat but 2-3 hours will yield best results. This depends on ambient outside temperatures, your desired warm up time, etc. The heater that I purchased cannot be operated with the engine running. It's also best to not mount it directly to the engine to prevent vibration damage.
I preferred to buy the frostheater kit because it saves you time measuring, cutting,
running back and forth for parts, etc. Because they are manufactured
in bulk, I didn't think the savings were worth the time to find hoses, measure,
cut them, etc. You don't have to buy a kit but you may find some
issues routing the hoses. Remote cable operated spring hose clamp pliers
are required for this job. My only criticisms of the heater kit is that the lower
radiator hose would be an easier fit if it were longer and routed above the
radiator fan motor (pics below, this would give more clearance to the
heater). I prefer OEM style spring clamps vs. the included worm gear clamps.
After installation (and during scheduled maintenance) you should check
and retighten the worm gear clamps.
These instructions apply to all 1996, 1997 Passat TDI. Caution - some early build 1996 Passat may use a different style of water pump coolant flange. If the hose that gets replaced (outlined in green in pics below) is part of the flange, you have to replace the entire flange to a style which has a removable hose.
Parts (click links to compare current prices)
1 heater kit, available from kermatdi
or frostheater
replacement coolant VW type G12/G12+, caution - check the color of your
coolant, it should be pink, refer to 1000q: coolant
flush for more details
screwdrivers
dab of light soap or lube to lubricate hoses
required - remote cable operated hose clamp pliers like these: available
at sears or amazon

optional parts
the y-shaped hose that runs underneath the injection pump, connects the water
pump-oil cooler-cyl head flange , VW #028
121 053 q, worldimpex
generic hose, autohauz
generic hose part #028121053q
spring hose clamps - I don't know what the remarks in the part catalog (number before VW#) mean
but I'm pretty sure it's the hose diameter in mm. Double check with your vendor.
13 VW# n
100 987 01
23 VW# n
016 402 1
27 VW# n
016 403 1
32 VW# n
016 404 1
40 VW# n
016 410 1
The heater kit I purchased included instructions, all tips here are superceded by your kit's instructions and are not a substitute. Read the TOS Agreement for the full legal disclaimer. Doing this procedure on a lukewarm engine will help get the hoses on and off without damage but make sure that the coolant/engine is not hot or else you could get burned.
To help loosen hoses, rotate/twist the end before pulling it off. This breaks the seal so that it can be pull straight off much easier without damaging the hose. If the hoses are hard or cracked, they should be replaced. When installing the hoses, lube the ends or heat them with a heat gun. This will help expand the hose and make them easier to slip on.
Jack up the front of the car by the factory jack points, make sure the car is safe and secure before doing anything else. I made wood blocks for raising the car, see 1000q: wood jack blocks for these.
Remove the upper and lower engine covers.
Disconnect the battery.
I also suggest removing the intercooler piping at the hose couplers. It
will give you a little more access and since you already have a pair of hose
clamp pliers, it's fast and easy. I try to avoid using paper towels since
they can get stuffed down into the pipes and forgotten. Using blue tape
seals the piping from loose bolts and flying springs and is also more visible.
In the below picture, the crankcase vent (CCV) and some plugs were removed,
ignore them. The hose outlined in yellow goes from the cylinder head to
the EGR cooler. You will later remove it at the cylinder head end.

Drain the coolant at the radiator and water pump or oil cooler coolant flange. To do this, remove their hoses or look for a drain valve on the bottom of the radiator. You can reuse the coolant if you keep it clean, I prefer to just use new coolant.
Remove the water pump housing flange- oil cooler housing hose (outlined in green
below). This hose will be completely replaced by the curved end of the
heater
later. The problem is that you have to remove the y-shaped hose to get access (outlined in
white below). Use a bit of very light sandpaper or cloth to prepare the
oil cooler/flanges for the new hoses and to help prevent leaks. This step
is difficult because there's no easy access. You may have to remove the
oil filter in this step to get access. See 1000q:
oil change for details in changing your engine oil. In the below
picture, the injection pump and serpentine belt tensioner were removed for
illustration. The remote operated spring hose clamp pliers are required
because you won't have much clearance. You can also remove the lower radiator hose at this step.

Here is another picture to clarify which hose needs to be replaced - it's
outlined in green.

Remove the lower
radiator hose. Note - the transmission was removed in this picture, your
view will be slightly different. The tdiheater comes with a replacement lower radiator hose
for better fitment and comes with hose sheathing. The heater will rub against the lower
radiator hose so make sure to adjust the sheathing to prevent rubbing. If
you are making your own kit, I suggest making the hose longer so that it goes
over the fan motor instead of creating a clearance issue with the heater body. You will want test fit the heater to double check where to drill the mounting hole
and how to route the hoses. It should look like this. The lower
radiator hose gets a little squished against the heater - if something is poking
the hose you should smooth it out. I ground off one of the upper mount
tabs for this reason.
This is where the upper side of the heater kit goes, test fit it for now.

You may find that the heater is hitting the starter, radiator, power steering line, etc. Unless your motor mounts are totally squished, it shouldn't interfere with any of these. If it's hitting the power steering line, you can loosen the power steering bracket and move it around. If it's hitting the radiator, take into account where the lower radiator hose will be placed. If it's hitting the starter, move the lower radiator hose higher and push the heater towards the radiator. Here is a picture of how mine was routed with a view from above. If this installation is on a Jetta, test fit it and follow the manufacturer's instructions.
You also want to take this opportunity to inspect the wiring harness.
The wires to the starter and the wiring harness on top of the starter should be
tucked into it's bracket and not interfere with the heater hoses.

Here is a picture of where to drill the mounting hole. It's location is
near the 4th spot weld on the front frame. The welds are the small circular
spots. It's best to not drill into the weld, so test fit the heater
first. Use a file or ridge cleaner to deburr the edges of the drill hole.
If this installation is on a Jetta, test fit it and follow the manufacturer's
instructions.

Mount the heater and double check your work. Any potential rub areas
should be covered with sheathing and the heater should not touch the starter or
front motor mount. You may have to push the lower radiator hose up and
push the heater under and towards the radiator to make sure it's not touching
the starter. Again, the hoses should not be twisted or pulling. In
the below picture I already zip tied the power cord to the power steering line.

Attach the hoses. Double check that
all the hose clamps are tightened. Try to install the hoses so that they
are not under stress and not chaffing against anything, especially electrical
wires. Install anti-chaffing sheathing where the hoses rub. Here is
the heater installed at one end. The dashed green line represents where
the old hose outlined in green was. It is replaced by the hose marked
"to heater". You can remove the old lower radiator hose's
"C" shaped plastic holder since it will not work with the new lower
radiator hose.

Replace the lower radiator hose and the y-shaped coolant hose outlined in
white before.

Route the electrical cord somewhere so that it doesn't rub, drag, or come
loose. I routed it with the power steering line along the front lower
frame and secured it with zip ties. The plug is accessed through the front grille.

Refill the engine with 50/50 G12 coolant, bleed out the air, and change the engine oil as needed.
Reinstall any intercooler piping that you may have removed and double check for any paper towels stuffed in the piping! Reinstall the upper and lower engine covers. Regularly check the tension on the hose clamps and you should be good to go!
If you can't find a dump for used coolant/antifreeze, engine oil, gear oil, or other car fluids, earth911.com has a search function to find your local waste disposal.
If you have any other tips, questions, or reviews on installing a coolant heater on your VW, free to sign up and ask a question about this article at the forums here: myturbodiesel.com forums