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The 'Keyless Entry & Burglar Alarm System" is activated. You must 'Disarm' the system using the Keyless Entry Remove (Key Fob) to "Reset" the system. The reason the engine won't start is due to the burglar alarm - it has a "Starter Kill" circuit which is activated when the alarm is activated. The alarm must be DEactivated to DEactivate the 'Starter Kill' circuit. Another way to start the engine is to get in the car, put the key in the ignition and turn it to 'ON" and wait 3 to 5 minutes until the emergency flashers stop/turn off. Afterward, you should be able to start the engine. NOTE: This does NOT reset the burglar alarm. It will go off again when you enter the vehicle without using the remote/key fob.
Yes it flashes to let others know you have an alarm on the car and not to mess with it! Yes. It should blink when the key is not in the ignition. This lets you know that the Passive anti-theft system is on. What this means? Basically the key you use has a specific code that coordinates with your car, and that key is the only key that will work for your car out of a possible 70 quadrillion codes or something like that. The light is used to help scare away thiefs that would break into your car, no car alarm will go off if they do, but most run of the mill car thiefs wont take the chance of breaking into your car if they think there might be an alarm on it. If the light blinks while the key is in the ignition then you shouldn't be able to start the car. It's normal for it to always flash. The only time it won't is with the car running.
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the jetta has a faulty alarm system from the factory i have been working on one in my shop. the alarm moddule is inside the dash behind the light switch and has a 10 pin connector and a 6 pin connector. this can be bypassed if you disconnect both connectors and jump the two large wire on the 6 pin connectors, these wires operate your starter. the car will start and run but your alarm will no longer be active. the door locks and everthing else will still work. the only issue i am having is the factory radio isn't working because it is controlled by the alarm. but worse case scenario i can use an aftermarket radio if need be.