The first automobile limousine, built in 1902, was designed so the driver sat outside under a covered compartment. The word limousine is derived from the name of the French region Limousin, because this covered compartment physically resembled the cloak hood worn by the shepherds there. An alternate etymology has the chauffeur wearing a Limousin-style cloak in the open driver's compartment, for protection from the weather.

The first “Stretch Limousine” was created in Fort Smith, Arkansas around 1928 by a coach company named Armbruster. These cars were primarily used to transport famous “big band” leaders, such as Glenn Miller and Benny Goodman, and their bands and equipment. These early stretch limousines were often called “big band buses”.