There are several updgrades in the 1998 Dodge Caravan. First is an increase in horsepower for the 3.8-liter V6 engines, from 166 to 180-horsepower, in an attempt to appease demand for more power to haul bigger loads. The 3.0-liter V6 is now paired with the 4-speed transmission. Automatic headlights were added to ES models, as well as an automatic dimmer on the driver side mirror that adjusts for the glaring lights of cars behind you. New airbags, hooks on seatbacks for grocery bags, and adjustable lumbar support in the LE models round out some of the improvements for 1998.

This year, Chrysler also offered a Flexibile Fuel Vehicle version of the Dodge Caravan. Paired with the 3.3-liter, it runs on either gas or a combination of ethanol and gas (85%/15%). A control system adjusts the engine according to the fuel combination for maximum fuel efficiency. In tests, the FFVs performed comparably to the gas-only vehicles.

Transmission and repair problems continue to plague drivers of the 1998 Caravan, although the creature comforts of the interior and the handling of the shorter-wheelbase models still seem to outweigh any downsides.