The interior appointments were in mahogany metal finish and the steering wheel had two spokes. A single large glove box was positioned facing the front seat passenger. The instrumentation was new, with most instruments positioned in front of the driver's vision, instead of the center-mounted clusters found on earlier models. The three-speed manual transmission was now shifted via a steering column-mounted 'finger tip gearshift' lever. The 1940 Zephyr continued to use the L-head V12, but with a larger 292 cubic-inch displacement and 120 horsepower. The dramatic taper rear of the earlier Zephyr bodies was replaced by a design that allowed a wider rear seat and additional luggage space. This second-generation Zephyr retained the basic front design introduced on the 1938 model, although the low grille was larger and the headlamps mounted in the fenders were the new sealed beams that were being adopted industry-wide in 1940.

The 1940 Lincoln-Zephyr appeared to have evolved from the 1939 models but was, in fact, an essentially all-new car.

The Lincoln Continental was introduced in 1940 and was based on the Zephyr chassis. Power was from a 267 cubic-inch flat-head (L-head) V12 engine offering 110 horsepower and backed by a three-speed manual transmission. Introduced in late 1935 as a 1936 model, the original Lincoln-Zephyr had an early form of unit-body construction which helped reduce weight while enhancing rigidity. The prow-like grille was used for two years, and in 1938 a new low-mounted, horizontal grille appeared on the Zephyr. In the front was a prow-like front grille in a similar fashion to the front of a boat, helping it achieve a lower coefficient of drag than Chrysler's Airflow. The streamlined car was named the 'Zephyr,' derived from the Greek word Zephyrus, or the god of the west wind. It was the idea of Edsel Ford who had enlisted Eugene 'Bob' Turenne Gregorie to create a design with European-inspired design elements. The Lincoln-Zephyr was a modern automobile with integrated fenders, a low-raked windscreen, and streamlined aerodynamics.

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