Essentially the Head Gasket takes the burned exhaust gases from the engine's cylinders and ejects the gas through the exhaust system and out through the car's tail pipe. The exhaust manifold gasket seals the surface of the exhaust manifold to the surface of the cylinder head, preventing leaks in the system. Over time, the constant expansion and contraction of the components (caused by constant heating and cooling in the engine), may cause the gasket to leak.
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If your car is out of warranty, then this opens up some freedom for servicing and parts. There are several things you can do with your car out-of-warranty than when it's in warranty: