After an optional second-generation AMC V8 engine was added in late 1966, the cars also became known as a powerful compact "muscle" models that included the 390 cu in (6.4 L) version built in conjunction with Hurst Performance, the 1969 SC/Rambler.

The new four-door rode on the same 100 in (2,540 mm) wheelbase as the other models and was meant to battle the newly introduced compacts from the Big Three, the Ford Falcon, Chevrolet Corvair, and Plymouth Valiant.

[20] Even in the face of the new competition from much larger automakers, the compact Rambler American enjoyed appeal not only because of its low initial price, economy, and high gas mileage, but also because its resale values ranked among the highest.

Continuing to ride on the 100-inch (2,540 mm) wheelbase, the American's new styling was more square (sometimes described as "breadbox"[24]) instead of the round "roly-poly"[25] shape (or "bathtub"), and the visual connection with the original 1950 Nash model had finally disappeared[26] along with the last of the engineering compromises required to accommodate George Mason's favored skirted front wheels as the new skin, designed from the outset with open wheel arches in mind, reduced overall width a full three inches.

[31] Although the Big Three domestic automakers had introduced competitive compact models by 1962, the Rambler American remained the oldest, smallest, and "stubbornly unique", refusing "to conform to Detroit's standard pattern for scaled-down automobiles" and "free of gimmicky come-ons.

"[35] A 10,000-mile (16,093 km) road test by Popular Science described the 1962 Rambler American as "sturdy, solid, dependable little automobile, comfortable to drive ... a good buy for what it's built for – transportation, not a status symbol.

"[35] The 1962 models included many improvements to lower maintenance requirements that included self-adjusting brakes, oil filters and changes extended from 2,000 to 5,000 miles (3,219 to 8,047 kilometres), larger celluose-fiber air filters for extended life, manual transmission that never need draining, improved automatic transmissions with longer mileage between fluid changes, factory filled engine coolant guaranteed for two years or 24,000 miles (38,624 kilometres), deep-dip rustproofing with the entire body is submerged in rustproofing primer paint, ceramic coated tailpipes with the coated muffler wrapped in asbestos and included a rust-resistant aluminized steel shield with the muffler guaranteed to the original owner for the life of the car, aluminum window frames (sedan models), batteries guaranteed for two years or 24,000 miles (38,624 kilometres) without any pro-rata charges, and numerous moving mechanical components now incorporating life-time lubrication eliminating customary grease or lubricant servicing.

The automaker's president, George W. Romney, appeared prominently in advertisements, asking potential customers to "think hard" about new cars and describing "more than 100 improvements in the 1962 Ramblers" and why they are not available in competitive vehicles, as well as AMC "workers as progress-sharing partners" so that buyers can "expect superior craftsmanship.

A special top-of-the-line model called the 440-H was equipped with sports-type features, including individually adjustable reclining front bucket seats and a center console, as well as a more powerful 138 hp (103 kW; 140 PS) version of Rambler's stalwart 195.6 cu in (3.2 L) inline-six engine.

Full coil front springs, along with soft rear leaf units, gave the new American an unusually smooth ride, better than many larger domestic cars.

[54] Few changes were made to AMC's smallest models, as Abernethy pinned his hopes for recovery not so much on the low-priced Rambler American as on the medium and higher-priced Classic and Ambassador lines.

[60] As the automobile marketplace in the U.S. was moving away from economy towards performance and luxury vehicles, American Motors began removing the historic Rambler name from its larger models.

The front of the car was extended three inches (76 mm), which allowed the optional air conditioning to be installed with the new 199 and 232 in-line six-cylinder engines, which were longer than the previous 195.6 versions.

Newly appointed as AMC's new chairman and chief executive officer, Roy D. Chapin Jr. began to promote and reposition the Rambler American, the automaker's least popular line.

The 440 and Rogue versions picked up a stainless-steel trim piece running stem to stern on either body side, straight back between the wheel wells and the beltline.

The rear end was an AMC 3.54:1 "Twin-Grip" limited slip differential using Dana internals, with outer wheel hubs attached through a spline and keyway system.

While similar Rogue and American models had standard drum brakes, the SC package came with front discs, a heavier sway bar, and a strengthened drive train and body components.

Some of the other unique standard items on this model included racing mirrors, antihop rear axle links, and blue painted "Magnum 500" 14x6-inch styled steel wheels with chrome beauty rings and AMC hub centers.

[100] Modifications included a special cast-iron manifold, advanced camshaft timing, heavier valve springs, factory-supplied carburetor, six-cylinder front springs with factory-supplied bottom shims to restore stock height, 90/10 front shocks, lightened chassis components, exhaust-system modifications, Chevrolet 10.5-inch diaphragm pressure plate, wide-ratio transmission gear set, 4.44 rear-axle ratio, and larger, softer, G70-15 rear tires on identical-design "Magnum 500" 15-inch Ford wheels painted AMC blue.

[122] Among its statutes was a ban on fully finished vehicle imports and called for a reduction of body styles and engines as well as a new requirement of a minimum of 60% of components and equipment to be produced locally.

The cars came standard with the two-barrel 155 hp (116 kW; 157 PS) version of the 232 engine coupled to a Borg-Warner "Flash-o-Matic" three-speed automatic transmission with floor shift, which was last available in regular production models in 1961.

It was inspired by VAM's successful 1965 racing season using Rambler American sedans and hardtops, as well as growing domestic market demand for muscle and performance cars.

The package included a two-barrel 155 hp (116 kW; 157 PS) 232 cu in (3.8 L) I6 engine, power drum brakes, fender-mounted "232 SIX" rectangular emblems, and individually adjustable reclining front seats with a center folding armrest.

Shown before the introduction of Ford's compact Falcon-based Mustang, AMC's show car was "an instant success" with 60% of surveyed potential buyers stating they would buy one.

However, the most astounding demonstration was the record set in the Pure Oil Economy Trials, another NASCAR-supervised event: 51.281 miles per US gallon (4.5868 L/100 km; 61.586 mpg‑imp), which AMC sagely noted, "No car owner should expect to approach in everyday driving.

"[171] In 1967, AMC and Gulton built the Amitron, an purpose EV rather than installing batteries and an electric motor in an existing production model, and later the similar Electron concept city car.

[179] Vaughn also achieved success in Hollywood as the composer for the hit NBC television series 3rd Rock from the Sun, in which the main characters use a 1962 Rambler American convertible.

"[187] More than 50 years after it was produced, the mission of the first-generation Rambler American as "an affordable, stylish people mover hasn't changed - though now it's rolling stingily down the road as a collector's item rather than a daily beater.

"[4] Benefiting from network television exposure, the 1962 Rambler American convertible became "a hot ticket item" for collectors after it began to appear regularly on 3rd Rock from the Sun with owners of rusty cars asking high prices and prime examples commanding upward of $14,000.

[189][190][191] While some sedans may not be particularly sought after because they were "just basic, reliable, unpretentious transportation for practical people," but examples like a 1968 Rambler American two-door with three-on-the-tree transmission that are "shockingly original" can become quite appealing.