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The purpose of the thermostat is to keep the engine temperature the same no matter what the outside temperature. The thermostat also helps the engine warm up more quicky.
On a water cooled engine, the thermostat blocks off the water (coolant) flow to the radiator until normal operating temperature is reached (usually 165 to 195 degrees). The "degrees" that a thermostat is rated is printed on the box and usually engraved on the thermostat itself. Most newer cars run at 195 degrees: they get better gas mileage that way. As the motor warms up, a paraffin pellet in the thermostat expands against a piston in the thermostat, pushing it open and allowing water to flow through the radiator. On a very cold day, the radiator may cool the water jacket of the engine too much. The thermostat will then close a bit, reducing the flow of coolant through the radiator and thus maintaining a steady operating temperature. .
Purpose of a thermostat
Your engine is designed to operate at a certain temperature. Your engine does not run its best until it's "warmed up." Symptoms of a bad thermostat
A motor with a bad thermostat will run fine for the first few minutes, then overheat rapidly. Other symptoms include the engine and radiator making a rumbling, gurgling, boiling sound: like a steam pipe knock, if you've ever heard one of those. A thermostat sticking open can make your heater not work in the winter. A partially closed thermostat can make the car run a bit hot but not overheat. Overheating can destroy a thermostat
When you overheat an engine from a coolant leak or whatever you can destroy the thermostat. It might not fail immediately, but the seal on the paraffin pellet that opens the thermostat can be compromised, and the thermostat often fails shortly thereafter. A thermostat will also fail from corrosion, and wear from many many cycles. Doing without a thermostat
If you are broken down with a bad thermostat you can remove it and not replace it right away. You can put the thermostat housing back on and leave the thermostat out and the engine will still run fairly well. The problem is that the engine is designed to operate at a certain temperature, and especially in cold weather an engine without a thermostat will never reach optimum operating temperature. On a computer controlled engine (like, most all engines since 1980) the computer might not control the engine properly if it never fully warms up. (Bad gas mileage!)
Below are pictures of a thermostat replacement in a Jeep Cherokee 4.0 Liter Motor.