The first sign is rarely a hole. It is a brown stain along a seam or around a hanger weld, or a rust coloured drip on the ground after a cold start, while the skin above it stays bright. Take the body off and look through the outlet: the inner shell and the core are furred with scale.
Owners read this as a failed finish. It is not. A finish problem starts where the eye can see it. Rust that begins inside shows first at the lowest point of the case, at a seam or at a drain hole, because that is where liquid sits and where it escapes. A band rather than a rash is the clue.
Every exhaust makes water. Burning fuel in air produces vapour, and the further the gas travels from the port the cooler it gets; below the dew point of the gas, that vapour condenses on the wall. On a cold start the whole system is below that point, so a muffler's first sight each morning is a wet interior. Short trips never boil it off.
Condensate is not neutral water. It carries combustion by-products, sulphur and nitrogen compounds, and it picks up chlorides from the road through the tip and through any joint that is not gas tight. Standing water with chlorides in it is exactly the environment that attacks stainless.
A muffler is welded closed before it is ever cleaned. The inside of the shell and the core never see a pickling bath, never get passivated and never get polished. Welding also leaves an oxide layer inside every seam unless the body was purged while it was made, and a chambered body has a great deal of seam.
The internal shape makes it worse. Baffles and chamber walls create pockets that hold condensate after the gas stops flowing, and some packings wick moisture and keep it against the steel. A straight-through core drains; a chambered body does not, which is why two mufflers of the same age and material fail so differently.
External rust has a cause you can point at: a stone chip, a scrape on a kerb, road salt held by a bracket, a hanger that has been rubbing. It starts at that spot and spreads in a circle. Internal rust starts in a line along a seam or across the bottom of the case, and the polish above it is intact.
Rust confined to the weld itself, in a narrow band set back from the fusion line, points at the joint rather than the condensate: the heat left the chrome depleted and the seam is now the weakest metal in the part. That is a different fault with a different cause, common on thin-wall bodies welded without a purge.
Start cold. Run the engine briefly, switch off, and hold a white cloth at the outlet while someone blips the throttle. A wet, brownish mark means the condensate inside is already carrying iron. Then tap along the body with a knuckle; a dead note over part of the case means the inner wall has scaled away from the packing.
Look at the drain hole at the lowest point of the case. It is regularly blocked by underseal, dirt or a bracket fitted over it, and then water stands in the muffler between drives. Clear it with a cocktail stick rather than a drill and see whether water runs out.
Once the inner shell has scaled through, no external treatment helps and the part has to be replaced. Prevention is layout and specification rather than polish. Mount the body so it drains, keep the drain hole clear, and avoid a chambered design where a straight-through core will do. On a car used mostly for short runs, the muffler is what pays for it.
Material still matters. A body and core in a grade that resists chloride attack, welded with the inside protected, outlasts one that was only finished outside. Ask how the inside of a stainless steel exhaust muffler was shielded during welding before calling a stain on the driveway cosmetic, and check that the rest of the stainless steel exhaust system drains the same way.
