VIDEO : Hide Pinch Seams with Ease on a Jeep and for Cheap

The concern is that most coatings applied to avoid rust would likely result in the vynil tape falling off.
 
A better solution to cutting oil, is a 5 to 1 mixture of Dawn dish soap and water in a spray bottle. That's five parts water to 1 part soap.
Squirt this on to lubricant the drill bit.
It is easier to clean up and more environmentally friendly.
 
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