Replace the clockspring under the steering wheel. It's a big plastic disc containing a wound up ribbon cable.
In the past, a sliding ring contact was used for the horn button connection. Wires can't be used because they would break from the constant turning of the steering wheel. With the advent of air bags, a sliding contact can not be trusted to make perfect electrical connection in the exact microsecond the airbag must deploy. For this reason, a wound up ribbon cable is used because it makes a solid electrical connection and can withstand the constant turning of the steering wheel.
If you plan on replacing the clockspring yourself, be aware they come with a piece of tape across it that must be torn off. This ensures it was not turned before installation. The steering wheel and tires MUST be straight ahead before installing the new part. It is designed to turn an equal distance in each direction and just a little more. If the steering wheel is off-center when the clockspring is installed, it will either get tight when turning in one direction and the ribbon cable will break instantly, or it will unwind too much in the other direction and fold over on itself. The flexing will cause it to break very soon.
The clockspring will not turn at all until the steering wheel is installed because the wheel releases two lock buttons that hold the unit secured during shipping.
Saturday, March 21st, 2009 AT 4:33 AM