Lithia Motors Comfortable With 4Q 2000 Expands Credit Facilities With Ford Credit

    MEDFORD, Ore., Jan. 25 Lithia Motors, Inc.
announced that its existing credit facility with Ford Credit has been
increased by $130 million to $580 million for a three year term until
November 2003.  The facility includes $250 million for new and program vehicle
flooring, $150 million for used vehicle flooring, $130 million for franchise
acquisitions and $50 million in mortgage financing.  In addition to the
Ford Credit facility, Chrysler Financial, Toyota Motor Credit and GMAC are
providing the wholesale flooring financing for their respective vehicles.
    Jeff DeBoer, Senior Vice President and CFO of Lithia Motors, stated, "It
has been over two years since Lithia entered into a strategic partnership with
Ford Credit and we are pleased that we were able to expand the relationship
even further.  With a combination of cash on hand and the new acquisition
line, Lithia has approximately $150 million in available acquisition capital
plus expected positive free cash flow from operations.  Using historical
transaction prices, these funds could be used to acquire between $1.0 and
$1.5 billion of revenue, assuming that the transactions are funded with cash.
This would represent a substantial increase in Lithia's current $1.7 billion
revenue run-rate without the need for further capital market events."
    With $155 billion in receivables, Ford Credit is the world's largest
company dedicated to automotive financing, serving over 10 million customers
and over 11,000 dealers in 36 countries.

    4Q 2000 Outlook
    "We feel comfortable with current analyst expectations for the fourth
quarter and full-year 2000," stated Sid DeBoer, Chairman and CEO.  "The
national slowdown in new vehicle sales presented a challenge in the
fourth quarter of 2000, but we have managed a transition to a slower sales
pace very well, with a focus on tighter inventory and cost controls.  The
slowdown was most noticeable in the month of December with new vehicle sales
declining by 8% nationally.  Lithia's December same store new vehicle sales
were down less than 1%.  It's important to remember that historically
auto-retailers have remained profitable even in the face of slowing new
vehicle sales.  New vehicle sales represent less than one third of total gross
profits from a diversified product mix that also includes the less cyclical
used vehicles, parts and service and the finance and insurance businesses.
Our balance sheet remains very strong as a result of our conservative growth
strategy.  Lithia's acquisition pace at this time remains unchanged from
previous guidance.  We will be updating our guidance for 2001 in our earnings
release and conference call to be held on February 21, 2001."
    Lithia Motors operates 111 franchises in California, Oregon, Washington,
Nevada, Colorado Idaho and South Dakota.  Lithia sells 26 brands of new
vehicles at 52 stores and over the Internet through "Lithia.com -- America's
Car & Truck Store."  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.  Lithia retailed
52,485 new and used vehicles in 1999.  Lithia's current annualized revenue run
rate, including all completed acquisitions, is over $1.7 billion.
    This press release includes forward looking statements, which management
believes are a benefit to shareholders. Within the meaning of the
"Safe-Harbor" provisions of the Private Securities Litigation Reform Act of
1995, these statements are necessarily subject to risk and uncertainty and
actual results could differ materially due to certain risk factors, including
without limitation economic conditions, acquisition risk factors and others
set forth from time to time in the company's filings with the SEC.  Specific
risks in this press release include revenue run rate, positive free cash flow
from operations, inventory and cost controls and 4Q 2000 and full-year 2000
expectations.
    For additional information on Lithia Motors, contact:  Jeff DeBoer,
Senior VP and Chief Financial Officer 541-776-6868 (E-mail:
invest@lithia.com) or Dan Retzlaff, Investor Relations at 541-776-6819 or
log-on to:  http://www.Lithia.com -- About Lithia -- Investor Relations