Subaru began selling four-wheel-drive-equipped Leone station wagons in the United States as 1975 models, and each passing year after that saw more American car shoppers deciding that they wanted cars—not trucks, cars—with power going to all four wheels. Toyota got into that game with the Tercel 4WD wagon, sold here for the 1983 through 1988 model years, and I’ve found one of those cars in its final parking space in Denver.

The very affordable Tercel first went on sale in the United States as a 1980 model, badged as the Corolla Tercel at first (in order to take advantage of the name recognition for the unrelated Corolla, which had been a strong seller since its American debut in 1966).

The original Tercel had an interesting powertrain layout, with a longitudinally-mounted engine driving the front wheels via a V-drive-style transmission that sent power to a differential assembly mounted below the engine. This resulted in an awkward-looking high hood but also meant that sending power to a rear drive axle was just a matter of adding a rear-facing output shaft to the transmission.

Making a four-wheel-drive Tercel wasn’t difficult with that rig plus a few off-the-shelf parts, and Toyota decided to add a wagon version of the Tercel at the same time. This was the Sprinter Carib, which debuted in Japan as a 1982 model. The Tercel 4WD Wagon (as it was known in North America) hit American Toyota showrooms as a 1983 model.

A front-wheel-drive version of the Tercel Wagon was also available in the United States, though not in Japan; most of the Tercel Wagons I find during my junkyard travels are four-wheel-drive versions.

This car has four-wheel-drive, not all-wheel-drive (as we understand the terms today), which means that the driver had to manually select front-wheel-drive for use on dry pavement. Failure to do so would result in damage to the tires or worse. American Motors began selling the all-wheel-drive Eagle as a 1980 model, with Audi following a year later with its Quattro AWD system, while Toyota didn’t begin selling true AWD cars in the United States until its All-Trac system debuted in the 1988 model year.

The Tercel 4WD Wagon sold very well in snowy regions of North America, despite strong competition from Subaru as well as from the 4WD-equipped wagons offered by Honda, Nissan, and Mitsubishi.

This one is a top-of-the-Tercel-range SR5 model with just about every possible option. While the base 1986 Tercel FWD hatchback started at a miserly $5448 ($15,586 in today’s dollars), the MSRP for a 1986 Tercel SR5 4WD wagon was $8898 ($25,456 after inflation).

One of the coolest features of the SR5 version of the ’86 Tercel 4WD Wagon was the six-speed manual transmission, with its “Extra Low” gear. If you’re a Tercel 4WD Wagon enthusiast (many are), this is the transmission you want for your car!

The SR5’s plaid seat upholstery looked great, as an added bonus.

These cars were reasonably capable off-road, though the lack of power made them quite slow on any surface. This is a 1.5-liter 3A-C SOHC straight-four, rated at 62 horsepower and 76 pound-feet (probably more like 55 horsepower at Denver’s elevation).

The curb weight of this car was a wispy 2290 pounds and so it wasn’t nearly as pokey as, say, a Rabbit Diesel, but I’ve owned several 1983-1988 Tercel Wagons and I can say from personal experience that they require a great deal of patience on freeway on-ramps.

I can also say from experience that the Tercel Wagon obliterates every one of its anywhere-near-similarly-priced competitors in the reliability and build-quality departments. This one made it to a pretty good 232,503 miles during its career, and I’ve found a junkyard ’88 with well over 400,000 miles on its odometer.

The air conditioning added $655 to the price tag, or $1874 in today’s dollars. This one has an aftermarket radio, but SR5 4WD Wagon buyers for 1986 got a pretty decent AM/FM radio with four speakers as standard equipment. If you wanted to play cassettes, that was $186 more ($532 now).

The Tercel went to a third generation during the 1988 model year (both the second- and third-generation Tercels were sold in the United States as 1988 models), becoming a cousin of the Japanese-market Starlet and getting an ordinary engine orientation in the process. The 4WD Wagon went away, to be replaced by the Corolla All-Trac Wagon. The 1996 Tercel ended up being the last new car available in the United States with a four-speed manual transmission, by the way.

These cars make fun projects today, though finding rust-free examples can be a challenge.

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On a rainy day in 2015, I had the chance to test drive an AMC Eagle up the side of a small mountain in Pennsylvania. I’m not a skilled off-roader, but the car conquered the washed-out gravel roads and muddy two-tracks with ease. Not once did this 30 year-old station wagon get stuck or even spin its wheels.

When new, the Eagle was an interesting mix of an outdated body and an old engine coupled to a groundbreaking four-wheel-drive system. AMC fans love bragging that the Eagle was the first four-wheel-drive car and the first crossover SUV. In response, I can’t help thinking of an often misquoted but apt meme:

The Subaru Leone offered four-wheel-drive in 1972, the Jensen FF had it in 1966, and the GAZ M-72 had it way back in 1955. At best, the 1980 Eagle could be called the first American four-wheel-drive car. But if we accept that as true, how could the AMC also be the first crossover SUV? A car and a crossover are not the same.

Now, I don’t mean to start a big debate, but I consider a crossover to be a vehicle built on a car platform but with styling that mimics traditional truck-based SUVs. A crossover is not just a lifted car with all-wheel drive. By that metric, the Audi Allroad and Volvo Cross Country aren’t crossovers, because they share body panels with their wagon siblings, but the Audi Q5 and Volvo XC60 are crossovers.

The Eagle’s body panels were virtually identical to those of the AMC Concord, and it came in sedan, wagon, and hatchback forms. The AMC may be lifted, with four-wheel drive and a bunch of plastic cladding, but it still shares its body and interior with a line of passenger cars. I have long thought of the Eagle as a four-wheel-drive car, not a crossover.

That is, until I discovered the Eagle’s original 1977 product proposal.

After American Motors acquired Jeep from the Kaiser Corporation in 1970, it hired Roy Lunn to run Jeep engineering. A British expat who had worked on the Ferrari-beating Ford GT40, Lunn was tasked with updating Jeep’s outdated products, but he also looked into the feasibility of a four-wheel-drive passenger car. In 1972, he cobbled together an AMC Hornet with a Jeep Quadra-Trac drive system. The combination worked, but the Jeep system produced unacceptable levels of noise and vibration, exacerbated by the car’s unibody construction. With plenty of demand for existing AMCs and Jeeps, American Motors shelved the project.

In 1976, Lunn learned about a viscous-coupling transfer drive developed by FF Developments and GKN and said to offer a quieter and smoother form of four-wheel drive. The Quadra-Trac system transferred power through a limited-slip center differential with a metal-on-metal connection. The FF-GKN viscous arrangement used a coupling that featured a series of discs spinning in a silicone-based fluid. Lunn hoped the technology would solve the four-wheel-drive Hornet’s issues with noise, harshness, and vibration.

Lunn quietly asked management for a million dollars to restart the project and build another prototype. The inquiry was a direct violation of company policy—American Motors believed new vehicle ideas were the job of product planners, not engineers. Lunn managed to get the money without getting fired, however, and immediately got to work with FF, GKN, and New Process Gear, the viscous technology’s American rights-holder. By June of 1977, FF had built a prototype four-wheel-drive Hornet in England and shipped it to the States. In July, Lunn presented his reworked idea to AMC’s board of directors.

Although he was an engineer, Lunn had noticed an increasing disconnect between the way Jeeps were marketed and the customers who actually bought them. Writing years later in a technical paper for the Society of Automotive Engineers, he said:

“It was evident that many consumers coming from the 2WD segments were buying the vehicles (Jeeps) for the security they offered for on-highway driving, although the only vehicles available were accented to off-road usage. This out-of-context purchase, particularly in high volumes, raises the question of whether there was a need for a new type of vehicle with a different balance of compromise accented to highway usage.”

In other words, “The commercials show people driving up mountains, but in real life, they only go to the grocery.”

In today’s world, as we drive around surrounded by mall-crawling SUVs, that conclusion seems obvious. But in the mid-1970s, automakers were slow to realize the trend. Then as now, most Jeep buyers weren’t hardcore off-roaders; they wanted extra traction “just in case” of rain, snow, or slush. Four-wheel-drive cars were rare. A Jeep Wagoneer or Cherokee might be overkill, but it was still more practical for a family than a pickup truck.

By 1977, AMC’s passenger-car sales and fortunes were sinking fast. Lunn’s product proposal, titled “8001 Plus Four,” was remarkably clear-eyed:

“American Motors has functioned most-profitably in situations where its products were unique in the marketplace. The current passenger-car decline is unquestionably partially due to a demand for larger vehicles; but our disproportionately low share of the small-car market is highly influenced by increasingly superior imports and domestic competition.

The ongoing product situation, particularly relating to emissions and fuel economy legislation, is also necessitating complete redesign of basic vehicles to meet a new market created by standards rather than customer demand or desire. AMC is not financially or creatively capable of being able to meet this changing situation in the main segments of the market. We have, therefore, to accept progressive annihilation or get back to where we started by finding unique slots in the marketplace which are legal on a continuing basis and are within our financial and creative capabilities. This product proposal relates to creating such a unique product as a natural combination of Jeep and Passenger Car factors.”

None of the above was earth-shattering; AMC was getting squeezed by imports in the compact market and by the Big Three in the full-size market. The company desperately needed a fresh product in a niche with less competition. As Lunn said, a four-wheel-drive car was “a natural combination,” and basing that vehicle off an existing design or designs would save AMC millions.

Here’s where it gets interesting: Lunn argued that AMC lacked the resources to meet upcoming government standards. Corporate Average Fuel Economy (CAFE) rules were set to go into effect in 1978 and grow more strict every year after. Emissions and safety standards were increasing, too. But Lund had devised a clever way around that:

“A most important aspect of the proposal is the legal categorizing to meet safety, fuel economy, and emission standards. The specification content and package layout are designed such that the vehicle would be categorized as follows:

• Safety—multi-purpose
• Fuel Economy—non-passenger cars (starts in 1979 at 17.2 mpg)
• Emissions—Light truck

These categories have obvious and distinct advantages over passenger-car requirements. This will enable us to pursue a course of action which will require less change to our basic powertrains and maybe a lower level of [emissions] control equipment.”

Roy Lunn said it first: The Eagle is not a car! And it was the first vehicle to exploit the “SUV loophole.”

Hagerty video host Jason Cammisa has a detailed and entertaining description of that term, but the loophole is essentially an unintended consequence of various American automobile regulations passed in the 1960s and 1970s. The majority of Americans at the time drove “passenger cars” (sedans, station wagons, coupes, hatchbacks, etc.), so the government made fuel economy, emissions, and safety regulations for these vehicles considerably stricter than those for “light trucks” (pickups, SUVs, off-road vehicles).

Those regulations were partly the result of corporate lobbying and partly just well-intentioned policymaking. Their goal was to cut trucks a bit of slack in fuel use, because those vehicles made up a smaller part of the market and needed more powerful engines for towing and hauling. Regardless, as with all well-intentioned rules, people found a way to skirt them.

By meeting the class specifications of a light truck, a vehicle would have more lenient engineering requirements and lower development costs. As a result, trucks and SUVs would become more profitable to build, so automakers spent more money designing and marketing them.

Those regulations unintentionally created a self-reinforcing feedback loop that helped truck and SUV sales skyrocket. The trend continues today and has contributed to all kinds of issues, from increased pedestrian deaths to increased air pollution. This isn’t the place for a political discussion, but no matter how you slice it, it’s funny that the United States government puts a Subaru Crosstrek in the same category as a Ram 1500, when it’s really just a lifted Subaru Impreza hatchback.

Those rules made sense back when SUVs were actually based on truck chassis—and when they were primarily used for towing, hauling, and off-roading. But now, and even more so than in Roy Lunn’s time, the majority of SUV drivers never even scratch the surface of their vehicle’s ability. Instead, automakers continually push the envelope for which car-like vehicles can technically be classified as SUVs. By this metric, perhaps the AMC Eagle was the first crossover after all.

AMC’s board approved Roy Lunn’s proposal, and the Eagle, as planned, was classified by the government as a light truck. Although the prototype was based on a Hornet, the Hornet was revamped into a new model, the Concord, for 1978. As a result, when the Eagle debuted in 1980, it used Concord bodies, with minor changes like fender flares and a different grille. The advanced viscous-coupling drive system was an industry first, and it later made its way into several Jeep products, including the XJ-chassis Cherokee.

Who could blame AMC or Lunn for taking advantage of the loophole? No one could have predicted the crazy consequences these regulations would have on the automotive landscape. Ironically, I think Lunn saw the Eagle as a less wasteful alternative to other trucks and SUVs.

Compared to those, the AMC was smaller, more fuel-efficient, and easier to drive. It was supposed to convince people to trade in their gas-guzzling Wagoneers, not their family sedans.

In light of all this, I still hesitate to call the Eagle a crossover SUV, despite what the government says. The term crossover didn’t even exist at the time, and most AMC marketing cagily refers to the Eagle as a “vehicle,” “automobile,” or “sport machine,” although sometimes the word “car” slips through.

Regardless of semantics, Roy Lunn and American Motors should be commended for the creativity it took to develop and launch such a revolutionary vehicle on such a small budget. More importantly, Lunn should be remembered for engineering an incredible 4WD system that still holds up after 30 years, and there’s no debate about that.

Joe Ligo is the director/producer of the “The Last Independent Automaker,” a documentary TV series about the history of American Motors Corporation.

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