Lithia Motors Announces Closing of Convertible Note Offering, Purchase of Alaska Stores

MEDFORD, Ore.--May 4, 2004--Lithia Motors, Inc. today announced the completion of its sale of $85 million in principal amount of 2.875% convertible senior subordinated notes due 2014. The initial purchasers have been granted a 13-day option to purchase up to an additional $15 million in notes. The notes will be convertible under certain circumstances into shares of Lithia's Class A common stock at an initial conversion rate of 26.5331 shares per $1,000 principal amount of notes. Net proceeds from the sale of the notes will be used to pay down its lines of credit which have been used to finance prior acquisitions and its new and used vehicle inventories.

This press release does not constitute an offer to sell or the solicitation of an offer to buy securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.

Lithia also reported that on Friday, April 30, 2004, it had completed its purchase of the two Chevrolet stores located in Anchorage and Wasilla, Alaska previously announced on April 26, 2004.