anxiety in dog

Question
QUESTION: My dog Lola is a rescue dog.  We got her when she was 7 months old from the humane society.  She is now 2 years and 3 months old and for the most part she is an amazing dog.  We recently purchased a house that we have had to do a lot of fixing up to.  In this time, she has become fearful of so many things.  She trembles when we go to give her a bath.  She has never liked them but has never been terrified of them before.  She trembles when we get in the car and has to sit on my lap.  She slinks and hides behind the couch if we're getting ready to leave in the mornings.  She won't eat if I put my shoes on before she's finished.  She just trembles all of the time and has her ears down in their scared position.   

Lola comes to work with me during the days and is with us during the evenings.  She is comfortable being in a separate room than us as long as she's not shut in said room by herself.  Even in that case, she will just lay in her bed and sleep.   

What could be causing her fear?  Is there any way to calm her down without medication?  I just want her to stop being so scared.

ANSWER: Your dog appears to have a generalized anxiety disorder at this point but I have some questions:
1.  at what point did you see this behavior for the first time, under what circumstances
2.  did the behavior generalize immediately or did it gradually progress
3.  is she spayed, at what age
4.  what do you do when she is trembling/fearful
5.  what do you do when she trembles on your lap in the car
6.  is she actually trembling all the time or are you over stating it
7.  when was her last full veterinary checkup and has she had blood work done and a neurological evaluation

Please answer questions in the order I asked them.

---------- FOLLOW-UP ----------

QUESTION: 1.  at what point did you see this behavior for the first time, under what circumstances

She was fearful of the car from the day we got her.  At first it was a fear of the shadows caused by going under trees and such but I got her over that.  Then we moved from Texas to Ohio 7 months later and she was a nervous wreck the whole time.  We had sedatives for her from our vet but even with those she had to be in the lap of whoever was not driving.  That was just over a year ago but a couple of weeks after our move she appeared to have gotten over the trauma of the move and no longer felt the need to sit on someone in the car.  
This most recent bout of activity started in January.  The first time I noticed the trembling was when we went to give her a bath and then it started up in the car

2.  did the behavior generalize immediately or did it gradually progress

Lola has always been a nervous dog.  She is not trusting of strangers (especially men or people in hats), scared of the kitchen, scared of loud noises etc..so taking that into account I guess you could say this has been gradual but it got worse very quickly.  

3.  is she spayed, at what age

She was spayed at the shelter so I'd imagine she was around 6 months old.

4.  what do you do when she is trembling/fearful

I try to ignore her or talk to her in an upbeat voice but I know I baby her sometimes because I feel bad that she's so scared.

5.  what do you do when she trembles on your lap in the car

I'm at the point where I ignore her.  She seems to be much calmer when she's in my lap so I've taken to just letting her be. I've tried getting her to go in the back but that seems to make things worse, I even tried bribing her with treats to stay back there.  She'll eat her treat and then dive towards the front seat again.  We've talked about getting her a doggy seat belt for multiple reasons but now I'm afraid that would do more harm. When we try to get her to stay in the back seat she gets this look in her eyes that reminds me of a wild horse being held in captivity if you can picture that.  

6.  is she actually trembling all the time or are you over stating it

She is actually trembling.  

7.  when was her last full veterinary checkup and has she had blood work done and a neurological evaluation

Her last full check up was just under a year ago.  She did have bloodwork done.  I don't believe she had a neurological evaluation done though.  

Answer
There's something about the body involvement of picking up the dog to give her a bath that triggered the conditioned fear response she acquired and associated with sitting in a person's lap in the car.  I have no idea what that something is, but it's a logical assumption (given your descriptions.)  Unfortunately, sedating a dog while it is being flooded by something it really fears can backfire; it's rather like being trapped in a semi-comatose state, unable to cognitively engage because of the medication.  Some dogs seem to rebound well from sedation during emotionally traumatic experience, but then they relapse.  That's called response perseverance and, when it happens, it's quite difficult to extinguish.

This dog has demonstrated fear of movement (trees overhead, shadows) that suggest she may have some low level neurological problem.  This is quite difficult to diagnose, even for a veterinary neurologist, but it's worth a trip to a specialist just to acquire some information regarding other things to observe, should this be the problem.

By alternately ignoring her and then "coddling" her (understandably, you feel very sorry for her), you've actually set this behavior; random reward ESCALATES LEARNING.  Confining her to a seatbelted harness is much safer than having the dog on your lap, for both you and the dog; in many states it is illegal to have a dog in your lap while driving.  It's an enormous distraction and, worse, if you were involved in an accident the dog could be catapulted around the car, or out of the car.  Since she has a wild look in the backseat, confine her to the passenger seat.  Ignore her fear response.  This may not assist in curing her problem, but it will prevent it from getting worse in response to perceived reward.  The dog is nervous (high strung, perhaps neurological problems), should have been allowed to go through one heat cycle (too late now), as hormones involved impart some maturity and often help a nervous dog, and has behavioral issues other than the car.  I understand that you are very concerned and a loving owner, but sometimes we just have to accept a situation for what it is.  She is sound and sight sensitive and has many fears; calm, consistent handling with positive reinforcement training is required.  Teaching her to perform certain behaviors for reward can actually improve her cognition and make her more secure.  Some things about her will never change, and car related problems may be one of them.