Introduced in 1980, the Volkswagen Vanagon was designed as a replacement for the Microbus, which was VW's first van. (The Microbus had been around since 1950, and was showing its wear.) The rear-wheel-drive Vanagon, also known as the Type 2 T3, the T25 (in Great Britain), and the Transporter or Caravelle (in Europe), could carry seven to nine passengers.

In its first three years, it was equipped with a 67-horsepower, 2.0-liter, air-cooled four-cylinder engine with fuel injection. In mid-'83, the Vanagon's engine was upgraded to a 1.9-liter, water-cooled four-cylinder engine that generated 83 horsepower, and a Digi-Jet fuel-injection system was employed. Another engine overhaul was introduced in 1986, when the Vanagon got a 95-horsepower, 2.1-liter water-cooled four-cylinder engine with an updated fuel-injection system called the Digifant. That would continue to be the Vanagon's powerplant throughout its run, which ended in North American in 1991.

Over the 11 years it was in production, the Vanagon came in a number of different trim packages, including the standard Vanagon, the higher-end Vanagon GL, the Vanagon Camper, the GL Camper, the Vanagon Carat, and the limited-edition Wolfsburg Edition. Models with VW's Synchro all-wheel-drive system were also available.

While drivers were generally very loyal to the Vanagon, citing its roominess, sportiness, handling, and uniqueness as positive points, many offered words of caution to prospective owners, suggesting that the vehicle needed careful maintenance to prevent expensive repairs.