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I had a similar experience last year when I was driving home to Milwaukee after picking up my 01 S in Chico, CA. Flashing coolant light, but no rise in temperature. Reservoir tank was empty, so I added coolant (what else was I going to do in the middle of Wyoming?) and drove on.
A few hours later, the light started flashing again. When I got home, I refilled again. I noticed once that there was a bit of liquid on the ground on the rear passenger side, but never any fluid in the trunk.
The is went on for a week while I waited to get it into the P-Dealer. Cracked reservoir tank. Less than 100K miles at the time. $1,700 to replace and refill.
You should jump with joy that the dealer you have is quoting only $1K. Get it fixed at the dealer or the indie and have peace of mind.
BTW, talking with my neighbor about this, he said BMWs have the same vulnerability with their coolant tanks. His 07 3-series had the same thing happen at 62K miles, and it cost him $1,200 to replace.
DBear
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