Loujet,
Given that you probably have about a year to decide, I would drive the car until you get very close to that 40k mark before I decided. Some cars are amazingly well put together and display almost no signs of problems. My brother drives a '00 NB and has had one problem. That's it.
Me, on the other hand. Ack. I went through a ton of issues while my car was in warranty, and since I came out of warranty I've had to replace two DRL's and wiring harnesses, and am now dealing with an illusive squeak in the right rear brake, a sticky driver's window (yep, the regulator), and a MAF that is on it's last legs. Oops, almost forgot, and a cracked whip antenna housing.
Do you think VW will cover any of this? I don't expect they will - so for me, the extended warranty is starting to look cost-effective, and Edmonds offers one to people outside of warranty that you might want to look into. Out of principle I would not give the dealer my business on the one they're offering.
I want to keep my car for a long time, but despite what others will tell you about extended warranties, you may want to consider it, if your car shows signs of nickle-and-diming you to death with small to medium-sized repairs.
Good luck.
~BeetleGo
[ January 04, 2002: Message edited by: BeetleGo ]</p>