Called dealer to change timing belt for $400. However they recommend changing water pump, gasket seals. I was told they would break down if not replaced. there is nothing wrong with the car now. This does not sound right to me but I am not a mechanic. Any comments?
It is a recommended proceedure to replace a water pump if it is used as a guide pulley for the tensioning of the timing belt. In your case the timing belt does use the water pump in this manner. Doing the water pump when the front covers are off is more of a preventive measure as there is not much more LABOR involved to do it as most of the disassembly is done. When installing a new belt over an OLD water pump you take the chance of the the newly tensioned NEW belt putting more force on the OLD pump than it is used to thus leaving the possibility of the water pump bearing going bad and dropping the new belt. It is recommended in your case.
Replace everything. They will have the pump and seals exposed when doing the belt. The last thing you want to happen is a pump/seal failure 5k after your belt replacement because of an overstressed pump bearing.
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