The next new body style premiered in 1998, a redesign which included the removal of the car's hood ornament and more angular shapes. The Cartier model also received a 220 hp version of the Modular V8.
The more boxy Town Car design of the 1990s was replaced by a curvacious design scheme with a downwards sloping trunklid, pursed lip grille and cat-eye headlights.
While the Town Car lost three inches in overall length, the new Town Car was two inches wider, one inch taller, and weighed 600 pounds more. The post-1997 Town Car features a slightly longer wheelbase as well.
The interior was also completely redesigned. Door and instrument panels as well as the radio face, switches and controls were redone. Additional wood trim was added to the newly designed dahsboard and the door panels. The power seat controls were moved to the door panels. Lincoln emblems were also added to the door panels.
A factory option available to individual owners of Town Cars since 2001 has been a version of the Town Car with an extra six inches of rear seat legroom, designated as the "L" or "long" version. This model provides extra amenities for rear-seat passengers, including a unique rear-seat switch that allows the front-passenger seat to be moved forward as desired for extra room in the rear.
A Touring Edition also became available in late 2000. The Touring Edition featured a more powerful 235 hp version of the Town Car's Modular V8 engine, dual exhaust pipes and unique 16 inch alloy wheels with larger tires.
A minor body redesign in 2003 added the hood ornament back again. 2003 also marked the last year that the Town Car was available in a trim package with the name "Cartier" (1981 to 2003). Beginning with the 2004 model year, the top-of-the-line Town Car was instead designated as the "Ultimate". The Touring edition (on the Signature model only) was dropped likely because the handling of 2003 Town Cars were far better than last year's Touring edition. The 4.6 L V8 with 239 hp was also introduced for the 2003 model year.
The interior remained largely unchanged for 2003. More brushed satin metals and an analog clock were added to the interior. The Lincoln emblems on the door panels were removed and the radio face including climate controls received a facelift.
For the 2005 model year, the Ultimate trim level was dropped. The trim levels for the 2005 Lincoln Town Car were: Signature, Signature Limited, and the Signature L with a lengthened wheel-base.
For 2006, the model trim levels were changed again. The trim levels for the 2006 Town Car are: Signature, Signature Limited, Designer, and Signature L.
The Town Car overwhelmingly dominates the limousine market in the United States, since it is the only American luxury car still in production with body on frame construction, making the production of stretched versions easier than with unibody construction.