Part 1, Lanolin Undercoating
Bottom line at the top: Yes, undercoating can help to stop rust. I recommend wet film lanolin coatings. I would not use rubberized or paint-type coatings.
Especially here in the salt belt, the inevitability of vehicle rust is right up there with death and taxes. And by the time most of us notice it's a problem, it's already eaten through from behind body panels or inside frame rails. In my experience, lanolin undercoating is our best defense to extend the life and preserve the value of our vehicles. Lanolin oil won't dry out, will self-heal over small scratches, will migrate through cracks, and is relatively easy and cost-effective to maintain.
Lanolin undercoating can be helpful to slow the advance of rust even if a significant amount has already taken hold. But far better to get it coated earlier—anywhere from brand new with zero rust to the surface rust that develops within even a few years around here. Here's a helpful overview video resource with some notes on undercoating a vehicle with existing rust (also why rust occurs, how to prevent it, how rubber/paint fails, and how oil/lanolin works).
Lanolin is an oil derived from sheep wool. I prefer working with this in my shop and on my vehicles since it's a non-toxic organic material (petroleum-based products like Cosmoline are toxic, flammable, etc). It's also safer for the environment as wash-off ends up on roads and drains into the watershed.
Coating metal with oil is an age-old method that works to prevent rust by isolating it from water and air, the elements required for the oxidation process. Ideally, you can start with the metal as dry as possible (including any existing rust if it can't be removed). But oil can also work to displace some existing moisture away from the metal surface to the outside of the coating. As such, little prep is needed if you're in the surface rust zone, or anything short of deep flaking rust.
The oil will soak and creep into any existing rust and for the most part will stay there for a long time. Even with regular car washes through the year, including underbody flush, 95% of my Woolwax coverage is usually still there a year later. The places most prone to wash-off are around the tires where driving on wet or slushy roads can create a high pressure spray. For those areas, and for additive coverage on the rest of the underbody, annual re-application is recommended. Here are some time-span video reviews of oil coatings after 3 years, 4 years, and 5 years.
More details about Woolwax/Fluid Film lanolin coatings:
Originally developed and tested for US Navy vessels in the 1940s
Used by US military, Coast Guard, NASA, and many other aerospace, industrial, and municipal entities
Product recommendations
Woolwax is the best solution I've found for rust protection. I've used it on my own vehicles with success, and I offer undercoating service for my clients (details here). Fluid Film is similar to Woolwax, but thinner and has a stronger odor. Though I haven't used it, B'laster Surface Shield is another comparable lanolin-based coating that looks good. It costs quite a bit more by volume compared to Woolwax, but could still be a good value with its two-year vs one-year recommended reapplication schedule (assuming it holds up for those two years in high wash-off areas). I have no product sponsors or affiliations.
Part 2, A Cautionary Tale
Is Rubberized/Paint Undercoating a Good Option?
I'll share some thoughts here since it's a common question I get with consideration alongside the oil coating option. I'm not inclined to use rubberized or other paint-on coatings that dry when finished (I'll refer to this general category as a paint coating heretofore).
Paint coatings have some significant potential downsides in the long run, and come with a higher risk of causing accelerated corrosion once rust finds a way to start.
The main problem is that paint coatings can become a net-negative liability if they get scratched or miss even a tiny spot of bare metal. This will happen at some point—maybe on day 3 during the oil change on your mechanic's lift, or year 3 when you ran over that weird stick thing on the road, or later if you're lucky. But as soon as it allows even a tiny amount of moisture to creep through a wound and start oxidation, the paint coating is now sealing that moisture inside and accelerating the corrosion process.
They are more costly to apply, especially with sandblasting or other time-intensive prep required in the case of a used car with any amount of existing rust.
Prospects for coating the inside of frame rails or unibody structure gets even worse for paint-type coatings:
Spraying inside frame rails is a blind operation with any coating product, but even more difficult or impossible to apply a paint-type coating perfectly.
Too much and you'll seal up moisture exit points (oil coating can flow or flush out to follow and coat egress paths continually).
Not enough, or miss spots, and you not only leave those spots unprotected but also leave edges of the coating exposed to allow moisture to creep in and causing the accelerated rust condition described above.
Paint-type coatings are not forgiving with follow-up re-application or touch-up of any scratches or other gaps in coverage. Where oil can be easily restored or improved with additive re-application, paint-type coatings would require full removal of any trace of rust and moisture before re-application to avoid trapping and accelerating rust (also not possible inside of frame rails).
Below is an example of a rubberized/paint-type undercoating failure point I encountered recently, peeled back to show the hidden trapped rust. This is completely rusted through, could push right through it with a finger—one of about six places on this vehicle where it had rusted completely through from moisture retention behind the undercoating. I see this commonly with rubberized/paint-type coatings.
Where paint coatings are ideal for protective application on perfectly clean prepped metal, but you don't generally have bare metal hanging around under your modern car. This occurs more in custom or modified vehicle territory, and you probably already know what you want to do with it if that's you. ;)
While paint coatings may be apparently effective protection for some time when applied on a brand new vehicle, I wonder if the upside is limited where a new factory-painted underbody may not have rusted for some years anyway. And then, say 5 or 7 years on, you've got a couple scratches underneath that would've started rusting either way but now you also have the damaged undercoating to deal with. At that point, you'd need to remove the coating down to clean bare metal and prep that for re-coating with paint to restore the coating, or risk leaving it in an accelerated rusting condition.
Yeah, some hypotheticals in all of that, but (another bottom line but at the bottom this time) overall I see a lot of potential pitfalls, and evidence of accelerated rust with failed paint undercoatings. So it just doesn't stack up for me against the cost and efficacy advantages of oil coatings.
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