[18] Daimler's development of the 2.5-litre saloon was initially given few resources; the first prototype was based on an old Jaguar Mark 1 unibody that had been abandoned outside one of the factory buildings after having been modified for suspension experiments.

[2] The Daimler's Borg-Warner Type 35 automatic transmission was smaller and lighter than the units used on the Mark 2 and had strong engine braking in each gear range.

[2] As a result of being built with the unit body of the Jaguar Mark 2, the 2.5-litre saloon became the first Daimler motor car without a separate frame.

[22] It was essentially a rebadged Jaguar Mark 2 fitted with Daimler's 2.5-litre V8 engine and drive-train, a Daimler fluted grille and rear number plate surround, distinctive wheel trims, badges, and interior details including a split-bench front seat from the Jaguar Mark 1 and a black enamel steering wheel.

At the end of 1965,[20] the final drive ratio had been changed from 4.55:1 to 4.27:1, addressing complaints that the car as launched in 1963 had needed to exceed its recommended rev limit in order to reach its top speed, with a corresponding penalty in fuel consumption and engine noise and wear.

[23] A manual transmission, with or without an overdrive unit usable with the top gear, became available on British 2.5 V8 saloon in February 1967 and on export versions the following month.

Cars optioned with the overdrive had the original 4.55:1 final drive ratio[5][6] Produced from October 1967 to 1969, the V8-250 was a minor facelift and renaming of the 2.5 V8 saloon and differed in relatively small details: "slimline" bumpers and over-riders (shared with the Jaguar 240/340 relabelled at the same time), negative-earth electrical system, an alternator instead of a dynamo and twin air cleaners, one for each carburettor.

Aside from the smoother and more powerful engine and a number of external markers the Daimler V8-250 was simply a more luxuriously finished Jaguar 240.

Whilst historically Daimler had been a genuine luxury and super-luxury brand the 250, though far better equipped than the base-model Jaguar 240, lacked some interior appointments found on the 340.