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Book on How 
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There are many reasons for the VW Air Cooled Motor too run Hot, and we will list a few below.

The Air Cooled VW should be called an Air/Oil Cooled Motor as there must be Air Cooling, but the air alone will not be sufficient. Bigger and Faster turning Fans, also will not do the job. After the initial cooling is done with air you must rely on oil to dissipate the extra heat. Word of Caution here is that running the motor too cold can do serious harm, it just takes a little longer then a dropped fan belt. oil temp

The most likely reasons for running hot is having the Ignition Timing off or the Fuel Mixture too lean, or combination of both. Lean fuel mixtures are often caused by intake Air Leaks so check this out first before you start jetting the carburetor.

If the compression is too high for the fuel you are using. This can sometimes be fixed as simple as adjusting the timing, but the timing can only be retarded so far and then either the compression must be lowered or the fuel must be upgraded. Octane boosters like 104+ can often do the job, but remember if needed they must be used 100% of the time.  Compression *Computer

On a stock VW Bug overheating might be as simple as the sound deadening #16 on the fire wall being loose. When you run down the road at 60 mph the fan moves a lot of air and the airflow can suck the sound deadening material up agents the air intake. When you stop and take a look it may appear ok, so check it out and refasten it or remove it for the time being. Also check that no rags, etc have been sucked into the air intake. Also the top of the cylinders seems a good place for rodents to build there nest. 

Later model fans shrouds have internal flaps #23 that close to help heat up the motor faster and that helps  the heater in cold weather. A small bellows #29 opens up these flaps when it gets hot. These fan shrouds were designed to have these flaps in place to direct the air flow, so if you don't trust the bellows to open the flaps, don't remove the flaps, just fasten them permanently open.

If you rebuild your motor you will remember the small deflectors directly under the cylinders and just above the pushrod tubes. There are two types used. If you run off-road use the old style #27 , as they don't fill up with dirt and sand. These must be in place, so if they are not there pull the motor and install them. All those holes #4 & #8 and gaps in and along the fan shroud should be closed up. The tin from the center line of the cylinders down is not as important, but it does keep dirt from splashing up on the hot cylinders. After some time this grime can build up and the cylinders won't cool properly. 

On our off-road cars we clean the under side of the cylinders every time we wash the car. We also direct the hose into the fan intake and rev. up the rpm a little to blast the dirt off the top of the cylinders. Caution: Putting water in the fan intake can only be done when the motor is cold. After washing the engine always run it long enough to completely dry every thing. Most oil seals are designed to keep oil from leaking out, but will not keep water out.

If your running a stock bug with the Dog House Oil cooler make sure #8 & #11 are in place so the hot air is directed out of the engine compartment.

Oil coolers are very important and if their fins and external openings are clogged with dirt, they don't cool the oil very well. Using the wrong seals under the cooler can block some of the oil flow. 

The Large Oil Coolers mounted on top or above the engine compartment might look trick, but if they are the only oil cooler used they just won't do the job. The VW fan moves a lot of air and unless your running 55 or 60 your not going to get the same air flow thru the oil cooler.

Buggy's with the oil cooler mounted up on the frame are just as bad or worse. Off-road racers running this type of oil cooler will also be running the internal cooler. And if your thinking of an electric fan just make sure it's about a 3 or 4hp DC  motor. In other words, forget the electric fan unless you've got a 1/4 mile dragster. 

Gearing: If you try to use a larger diameter tire you might be geared too high and will be lugging the motor, which can cause it to overheat. Remember Don't Lug Down the RPM and don't set the Idle too low or Idle for long periods of time. Transmission Gear *Computer 

Now a word on painting the case, yes a light coat of black paint does help to dissipate the heat and 10 coats of heat resistance white is not the thing to use. But lets not get carried away with this as it makes a very small difference, and unless you have checked every thing else on a 12 to 1 compression motor putting out 250 hp I would say if you like the looks of a pink motor then go ahead and paint it pink.

Spark Plugs can also cause problems. If too hot a plug is used, major damage can occur, like burning a hole in the top of the piston or piston seizure. Run to cooled a spark plug and it might foul. So if your not sure always use the colder plug as a new spark plug is a little cheaper then a piston and cylinder.  

Cracked Heads are caused by overheating 99% of the time. But they might have started cracking 20,000 miles back buy lean mixture, Dropped fan belt or from any of the above causes.  

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