Coolant migration
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Introduction
This is a bizarre problem that affects 1998+ VWs. Although it is rare, if you does happen to your car it can cause thousands of dollars in damage! The problem is that some coolant reservoir tanks were poorly manufactured and can leak where the plastic electrical sensor plugs in. It's not caused by overfilling the coolant tank and the plug should be above the coolant level anyways. The coolant moves through pressure and capillary action out of the leaky plug throughout the wiring harness and corrodes all of the electrical connectors. Some people even found coolant in their taillights and gas tank sensors, which means coolant migrated about 15 feet through the wiring harness!
Symptoms would include coolant pooled around the electrical plug on the coolant reservoir tank and unrelated electrical problems such as unexplained instrument cluster malfunctions, alarm, or malfunctions in anything else which is connected to the engine wiring harness. Sometime in 2004, a new part was released but it has the same part number (1j0 121 403 b) as the old part and started appearing on some 2004 cars. However, the old part still showed up on some 2005 and 2006 cars and they may also be affected. Even if your car does not display these symptoms, if you have the older style of tank, taking the free preventative steps below will prevent any occurrence.
Your coolant should be a bright pinkish color, if it's brown or muddy then someone mixed coolants, see 1000q: mk3 coolant flush or 1000q: mk4 coolant flush on how to clear the system. Also note that water inside the cabin that is corroding the instrument cluster, ECU, or relay panel could be from a faulty windshield installation (if you just had a new windshield put in this is highly suspect), a broken or clogged sunroof drain, or clogged drain around the base of the windshield.
Detection
Remove the coolant reservoir sensor plug and see if there is coolant
there. Below are some pictures of a defective tank that suffered coolant
migration. It should be dry. If you see pooled coolant there, there is already coolant
inside the wiring loom so be prepared for further examination of electrical
sensors. If the wiring loom is wet inside, you have coolant migration.
Unravel some of the wiring harness and dry it out, then check for further
damage. Also do a scan with VAG-COM for seemingly unrelated electrical
problems. Any corrosion or coolant behind the instrument cluster would need repair.

The coolant tank which is most susceptible to coolant migration is the tank pictured below. These have the sensor at an angle pointing down.

The newer style of tank (with the same part number as the old style) and the mk3 coolant reservoirs have the sensor near the top at a horizontal angle. The mk3 coolant reservoir has a different style connector. Because this style connector is not sealed with the wiring harness, any coolant that could get past the mk3 style plug would drip off the two wires and not get drawn into the wiring harness.

Possible corrective actions
Preventative maintenance or solutions involve preventing the coolant from migrating into the wiring harness. You can remove the bright orange seal at the coolant sensor. The seal provides a tight connection to prevent corrosion of the coolant sensor, but it also seals in the pressure that helps push coolant into the wiring harness. Exposing the wiring harness makes it more like the mk3 coolant tank and will let coolant drip down the exposed wires and not into the wiring harness.
Another solution involves making one or two small holes in the bottom of the coolant reservoir plug plastic. This will let any coolant weep onto the ground instead of being pushed into the wiring harness. Use a heated paper clip or tiny drill to put a hole into the connector plastic. In the pictures at the top of the page, the hole would go at the bottom of the connector the coolant is pooling, not through the reservoir.
A third possible solution involves also replacing the coolant sensor wires with spade connectors to break the path that the coolant can flow across. If you look at the picture (above right) of the mk3 coolant reservoir you can see how the wiring loom is exposed after the plug.
Lastly, you could just replace the coolant reservoir with the new style. I feel that since this condition is relatively rare, it may be better to just take one of the preventative steps listed above rather than spend the money on a new style tank.
Summary of TSB
Download the full TSB here: coolant contamination of wiring harness
Condition
Coolant leaking from coolant reservoir bottle
wiring connector contaminates the wiring
harness.
Contamination can result in various
malfunctions of the instrument cluster.
Service
If an instrument cluster exhibits a malfunction:
– Record Vehicle Mileage (odometer
adaptation reading) (see Repair Manual).
– Print out any and all instrument cluster
coding and adaptation values using the VAS
5051 for use after repairs are complete.
– Remove instrument cluster (see Repair
Manual).
– Remove blue flat contact housing cover and
inspect wire terminals for moisture or
corrosion.
If moisture or corrosion is found (arrow):
– Repair wiring using repair kit 1CM 998 001.
This kit contains overlay harnesses, splice
connectors, tape and installation tube
necessary to repair the affected harnesses.
The instrument cluster, coolant bottle and fuel
pump/fuel sender must also be replaced.
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