The Dim/Dip resistor - or yellow coil of doom - is a small device mounted at the front of the right hand side chassis leg. It has two yellow wires going to it and plugs into the headlight loom.
It's purpose is to make the dip headlight bulb (H4) shine a little bit when the ignition is on and just the sidelights are in use. Giving more light than just the sidelight bulb but less than the main headlight with dip beam activated. The result is an eery dim yellow glow from the front of the car - I personally quite like it
The problem is the wires for this over the lip of the chassis leg, and especially on GTI and other models where the airbox is fitted there the wires can chaff on this lip damaging the sheath and exposing the bare wire. Obviously when care live wire touches bare metal it can spark and cause a fire.
I often wonder if this is one of those urban myths, as many people in the VW community repeat this warning but I'm yet to hear of anyone that has had first hand experience with this or directly know of anyone that has had a fire through this issue.
Many people unplug it. If you unplug it there's no need to reconnect the wires to anything, you don't have to loop back into the plug or anything just unplug it. And unless you're going for that clean engine bay look you don't even have to remove the resistor. It's not going to burst into flames by itself! (disclaimer - if it does it's not my fault).
Alternatively keep it, and glow your lights (dimly) with pride! just keep a check on the wires and consider some of that hard corrugated wire wrap stuff!
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