Had idling and overheating problems after having the car for 6 months (bought the car new), temp gauge would go slightly past half - then the engine would cut out (while driving on the highway at 120 km/h); was fixed by the dealer.
Then overheating started again, mentioned it to the dealer when taking the car for service at about 46000 km; they said they flushed cooling system. My head gasket blew at 50,000 km.
Dealer replaced the head gasket, thermostat, temp switch, water bottle, water bottle pressure cap (Palio's don't have a radiator cap). Also had engineering works skim the cylinder head, plus they tested the valves and confirmed the cylinder head is OK.
Collected car from the dealer after repair, took the car to a radiator shop, they pressure tested the cooling system - no leaks. They then did a block test (the blue liquid turned yellow - meaning that there is carbon monoxide gas in the cooling system - so the head gasket is leaking exhaust gas). Seems the head gasket has blown again, dealer does not respond to my emails.
Had a few Toyota's and VW's, Nissan's, Citroen's - never had this issue. I will never buy a Fiat again.
Would you buy another car from this manufacturer? No
Review Date: 8th November, 2012