Heater core leaks are common in this model, more so if the wrong anti-freeze/coolant is used in the cooling system.
Problems for specific Volkswagen Golf TDI years:
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Newest reported 1996 Volkswagen Golf TDI problems
Electrical issues that are difficult to diagnose—and sometimes intermittent—are typically due to ground wiring issues. The most troublesome ground locations are under the battery or at the engine.
Reverse gear failures and noise in the manual transmission models are common.
Oil and carbon tend to build up, creating restrictions in the intake manifold. Symptoms will be loss of power (sometimes severe) and poor fuel economy.
Shifting issues due to internal problems in high mileage automatic transmissions can be difficult to resolve without transmission replacement.
Cars using biofuel typically have problems with injection pump failures; symptoms can include a "no start" condition or external pump leaks.