40-Years-Owned 1968 Mercury Cougar XR-7 4-Speed Project

Description

OFFERED WITHOUT RESERVE

Introduced for the 1967 model year, the Mercury Cougar was FoMoCo’s plan to capture older, wealthier buyers who loved the Mustang but wanted more luxury.

Designed to look like a European sports car, the Cougar was built on a slightly longer frame than its pony car cousin, the Mustang. The longer wheelbase gave it a smoother ride and a roomier cabin, which was also fitted with extra sound deadening to reduce road noise.

The Cougar was offered in a range of trim levels, all of which came standard with a V8 engine. The car was a massive success, with over 150,000 sales in the first 12 months while also taking home MotorTrend’s 1967 Car of the Year honors.

This ‘68 XR-7 is a non-running project that was acquired in the 1980s by the seller, who notes they purchased the car from the nephew of its original owner. The car has been repainted in its factory color under current ownership along with a retrim of the black vinyl top.

Under the hood, the C4 automatic transmission has been swapped out for a Top Loader four-speed manual gearbox, and the non-running Cougar Super 302ci V8 is fitted with FLOTEK aluminum cylinder heads with roller rockers and Cougar-branded finned valve covers.

Additional work reportedly included replating the chrome bumpers and trim, overhauling the power steering and braking systems, installing a stainless steel dual exhaust, and rebuilding the air conditioning compressor.

A seller-provided description of the car's current engine state can be found under Additional Information below.

This 1968 Mercury Cougar XR-7 non-running project is now offered at no reserve with an owner’s manual and a clean Kentucky title in the seller’s name.

Highlights

• Long-term ownership

• Partially disassembled Cougar Super 302ci V8 with four-barrel carburetor

• Four-barrel carburetor

• FLOTEK cylinder heads with roller rockers

• Top Loader four-speed manual transmission

• Power-assisted front disc brakes

• Power steering

• Tilt column

• Repainted Lime Frost Poly

• Reupholstered black vinyl top

Factory Equipment

• The data plate decodes as:

  • Body: 65B – XR-7 Hardtop

  • Color: I – Lime Frost Poly paint

  • Trim: 6A – Charcoal Black leather upholstery

  • Date: 16M – December 1967 build date

  • DSO: 52 – Los Angeles, California, District Sales Office

  • Axle: 5 – 3.50:1 rear axle ratio

  • Trans: W – C4 Cruise-O-Matic three-speed automatic transmission

• The chassis number (8R93J505305) decodes as:

  • 8 – 1968 model year

  • R – San Jose, California, assembly plant

  • 93 – XR-7 Hardtop

  • J – 302ci 4V V8

  • 505305 – Sequential production number

Modifications

• FLOTEK aluminum cylinder heads with roller rockers

• Cougar-branded finned valve covers

• Top Loader four-speed manual transmission

• 14” Styled steel wheels

Servicing & Documentation

The following statements are from the seller:

• The car was originally a C4 automatic and has been converted to a factory-correct Ford Top Loader four-speed manual transmission.

• All chrome has been replated with copper/nickel/chrome.

• The car was repainted in original color and vinyl top was replaced.

• Factory AC is original, though pump was rebuilt and is holding charge.

• All systems - power steering, brakes, etc - have been restored, rebuilt where needed, or replaced.

• Original Super 302 4V engine was rebuilt using roller rockers, balanced, and detailed with finned Cougar valve covers that were a 1968 dealer-installed option.

A full statement from the seller, as well as photos showing the car during the overhaul, can be found in the gallery.

Known Imperfections

• Corrosion on underbody components

Ownership History

• From the seller: “The car was bought by a little old lady in Pasadena (true story!), and was passed to a relative in Louisville, Kentucky. I bought it from that gentleman in the early 1980s, making me the third owner”

Included Items

• Owner’s manual

Additional Notes This 1968 Mercury Cougar XR-7 was offered on Hagerty Marketplace in July 2026. You can view the previous listing here. The auction was withdrawn due to the vehicle's engine developing a noise during the auction. The engine is partially disassembled, and the car is now being offered as a project.

From the seller: "The car had not been started in several years when we finally decided to sell it, but had undergone an engine rebuild shortly before the last running. It still has the startup oil in the block. When we decided to sell, the car fired right up and drove fine, and accessories all checked out ok. However, there was some engine noise (pinging, clicking, and backfires) that we initially assumed was due to the long period of inactivity, and we just needed to dial everything back in. We listed the auction and started to diagnose the engine, but could not get it to settle down. At that point, we suspended the auction to investigate further.

"The oil pressure was good, so we pulled the spark plugs and checked compression, which read 140 on two cylinders and 160 on the other six. Valve covers came off - the roller rockers were fine, but push rod tensions were off. Push rods were removed and appear straight, but the hydraulic lifters were difficult to remove. Once removed, there was obvious wear on the lifters. That is as far as it was taken, as shown in the attached photos. At a minimum, the lifters and cam will need to be replaced, but that is no longer an option for us. So we are returning the car to auction as a project car, with the understanding that engine work will be required."