Ford originally outsourced Dana to build all the rear axles for the 1983-88 Cougars (the continued production of these axle assemblies has since shifted to Visteon). To find out what type of axle you have, you can look in two places.
The first is the driver's door tag; there will be a one-letter or one-numeral axle code listed there. You can then compare it to the chart below:
|CODE||Rear Axle Ratio|
The second is the axle tag, attached to the lower lefthand bolt on the rear axle itself. The bottom left line will give you the gear ratio, and the type of rear end (S for limited slip non-locking, and L for locking).
There were two different sized rear axles used in the Cougar: a 7.5" and an 8.8". Most cars had the 7.5" rear; only some 1988 V8 models had the 8.8". To check which type is under your car simply look at the center section shape itself (note: this will not give the axle ratio):
Above: This is a 7.5" rear axle. Note how the height is shorter than the width and the shape appears "oval".
Above: This is an 8.8" rear axle. Note how the dimensions are equal and the shape appears "round".
Beginning with the 1983 model year, the Cougar and Thunderbird shared a common-width 7.5" rear axle housing with the Mustang/Capri. Therefore, all 4 cars have the same rear end housing, but the Cougar/T-Bird had longer axle shafts. Most Cougars had the 2.73 open-end gear (non-locking). The 1984-86 XR7's had the locking rear with Quad shocks and a 3.45 gear. This Mustang/Capri style rear end was used until part way through the 1985 model year (approx. 11/84), when the Cougar/T-Bird got a unique width axle housing. It was approximately 1" wider than the Mustang housing and about 1" narrower than a Mark VII rear axle housing. However, due to a different offset rear drum, the overall width was the same (thus keeping the same rear track dimensions). This configuration was used until 1988 on all Cougars and Thunderbirds. Again, most were equipped with the non-locking 2.73 unit. However, on some models it was possible to order a 7.5" rear with a 3.08 gear for towing. Almost all 7.5" rear ends had the 9" rear drum brakes, which have a finned side profile. Some had the optional 10" drums, noted by their smooth side profile, which came later cars (primarily 1988) with the optional towing package or heavy duty suspension package.
Most Ford owners look down upon the 7.5" rear but it is a fairly tough unit. People have used them in 12-second cars without problems, and they're not nearly as weak as people make them out to be. If you're thinking about upgrading your 7.5" economically, you shouldn't have any reservations so long as you're not drag-racing heavily. The 7.5" rear is about 40-80 lbs. lighter than a comparable 8.8" rear. Keep in mind that while you can indeed swap in a locking center section on the 7.5" rear, it's tough to find one.
The only known Fox Cougar to sport the factory 8.8" rear axle is the 1988 Cougar XR7. It came equipped with Traction-Lok and at least a 3.08 gear with Quad shocks. A good extimate is that less than 15,000 8.8" rears found their way into Fox Cougars through 1988. Of importance to this axle is the standard larger 10" rear drum brakes. This 8.8" axle housing is identical to those from the 1987-88 Turbo Coupe and the Fox Mustang.
The 1987-88 Turbo Coupes had their own unique 8.8" axle equipped with rear disc brakes. The width of the axle housing itself was identical to the Cougar 8.8" with drums. All TC 8.8" rears had Quad shocks and Traction-Lok. Cars with 5-speed transmissions had a 3.55 gear; automatics had the 3.73 ratio (a clue while searching for on in salvage yards is that all 1987-88 5-speed Turbo Coupes had dual exhaust, whereas the automatics had single exhaust). All TC's had standard ABS brakes which necessitated several sensors to be installed on the rear end, along with an exciter ring on each rear axle shaft, thus making the rear axles wider. Installing a Turbo Coupe rear as-is requires conversion to rear disc brakes and modifications to the existing brake system. However, all ABS-related hardware will not work. It is possible to convert this axle to drum brakes using other Ford drums and hardware. Since there were quite a few TC's made, the TC rear is plentiful in supply but usually costs a bit more due to the rear discs. If you cannot find a stock 8.8" Cougar rear end with drum brakes, then making one out of a Turbo Coupe rear is indeed a viable alternative.
Ford started using the 8.8" rear in the Mustang starting in 1986 and was the V8's exclusive rear end. All had Quad shocks and a locking center unit. Cars with 5-speed transmissions generally had a higher (numerically lower) gear—2.73 or 3.08. The overall axle width itself is approximately 1" per side narrower than a 1985.5-88" Cougar/T-Bird axle, meaning that the tires will be in toward the body more. While it is entirely possible to use a Mustang 8.8" in a Cougar, be aware that tire or rim clearance problems may occur. Or, if ordering new rims anyway, you will need to adjust your offset to maintain the correct rear track. Also, there seems to be a bit of difference where the emergency brake cables and rear brake lines from your Cougar/Thunderbird hook into the Mustang rear end.
The Lincoln Mark VII also began using its own unique width 8.8" rear end around 1986. The Mark 8.8" is approximately .75" per side wider than a Cougar/T-Bird rear end. Again, wheel offsets may need adjusted, although it is usually better to have a bit more width than less. All Fox Lincolns had 5-lug axles. There have been reports of Mark VII's with 7.5" rears and drum brakes as well, so if you are shopping for a Mark axle be aware of this. The safest bet is to look at 1988-1992 LSC's (look for the third brake light in the rear window and LSC badges). Beginning in 1989, all Marks had standard ABS brakes. It is not worth the time and effort to try to make ABS brakes work on a Cougar. The rear end gear for all Mark VII's was 3.27 (locking) or 3.08 (non-locking).