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It has a tube between itself and the radiator. As coolant heats up, it expands. The expanding coolant goes through the tube into the overflow tank. Later, when the vehicle is shut off and the radiator cools, the overflow is pulled back into the radiator. The system is "closed", hence the coolant does not just "dribble away" when it expands like it did in vehicles many years ago.

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Q: What is an overflow tank in a vehicle for?
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