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I will try not to re-type what others have said ... Sooo the one item that I would suggest you do and it is easy but time consuming .....

1. Check the brake fluid level - am sure you have performed the task but felt compelled to mention it.

2. if you brake fluid isn't clear or at least close, I would bleed the brakes ... am sure you know how to drain the fluid and replace with DOT 3 (VW and other European cars suggest Dot 4, but Dot 3 does not absorb moisture as easily as the 4). While you bleed - -wheel by wheel - - use your hand to press the brake pad, if one of the wheels feel as though its harder than another check that wheel - - is the caliper in good shape, how about the pads. My last suggestion, the float in the brake fluiid could be the issue. With the ignition in the run position have someone sit in the car while you lift the float in the brake fluid tank - that might be the issue.

3. your abs hose and sensor can be either broken or worn out with bad connections ... especially the front ones . ..

Someone had a great suggestion, FIX the issue... junk yards are loaded with VW Beetles with all of the engines achieving well over 200K . In other words it worth the money and time, not to mention safety and re-sell value..

bottom line it sounds like you have a well kept car ... worth the fix
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