October 8, 2009

Lithia Motors, Inc. Prices Class A Common Stock Offering at $10.00 Per Share for Gross Proceeds of $40 Million

MEDFORD, Ore.--(BUSINESS WIRE)--Oct. 8, 2009-- Lithia Motors, Inc. (the "Company") (NYSE:LAD), a leading operator of automotive franchises and retailer of new and used vehicles and services, today announced that the public offering of 4,000,000 shares of its Class A common stock has priced at $10.00 per share for gross proceeds of $40.0 million. The Company also has granted to the underwriters for the public offering a 30-day option to purchase up to an additional 600,000 shares to cover over-allotments, if any. The closing of the offering is expected to occur on October 15, 2009, subject to customary closing conditions.

J.P. Morgan Securities Inc. acted as the sole bookrunner for the offering and Stephens Inc. acted as a co-manager.

The Company plans to use the net proceeds of the offering for general corporate purposes, including working capital and potential acquisitions. Prior to such use, the Company expects to use the net proceeds of the offering to pay down amounts outstanding under its revolving credit facility and one or more of its flooring lines of credit, which can be re-accessed when cash is needed for other purposes.

The offering is being made solely by means of a prospectus supplement and accompanying prospectus. Copies of the prospectus supplement and the accompanying prospectus relating to the securities may be obtained from the offices of J.P. Morgan Securities Inc., National Statement Processing, Prospectus Library, 4 Chase Metrotech Center, CS Level, Brooklyn, NY 11245, (718) 242-8002.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any offer of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.

About Lithia

Lithia Motors, Inc. is a Fortune 700 Company, selling 27 brands of new and all brands of used vehicles at 88 stores, which are located within 13 states. Internet sales are centralized at www.Lithia.com. Lithia also sells used vehicles; arranges finance, warranty, and credit insurance contracts; and provides vehicle parts, maintenance, and repair services at all of its locations.

Additional Information

For additional information on Lithia Motors, contact the Investor Relations Department: (541) 776-6591.

Source: Lithia Motors, Inc.

Lithia Motors, Inc.
Investor Relations Department, 541-776-6591

Safe Harbor Statement under the Private Securities Reform Act of 1995
With the exception of historical information, the matters discussed or incorporated by reference in this Annual Report include forward-looking statements. These statements are necessarily subject to risk and uncertainty. Actual results could differ materially from those projected in these forward-looking statements as a result of certain risks including those set forth from time to time in the Company's filings with the SEC. These risk factors include, but are not limited to, the cyclical nature of automobile sales and the intense competition in the automobile retail industry, the Company's ability to negotiate profitable acquisitions, and the ability to secure manufacturer approvals for such acquisitions.