Carbiz Inc. Closes Financing and Announces Plans for Further Expansion

SARASOTA, Fla.--Oct. 12, 2004--Carl Ritter, Chief Executive Officer of Carbiz Inc. (TSX VENTURE:CZ) ("Carbiz"), announced the closing of a brokered 5% convertible debenture (the "Debentures") financing (the "Financing"), pursuant to which an aggregate of US$1,030,922 principal amount of Debentures were issued. Carbiz seeks to use the proceeds of the Financing to accelerate the expansion of its credit center business. As was previously announced, Carbiz also seeks to list its common shares for trading on the United States Over-The-Counter Bulletin Board (the "OTCBB").

Pursuant to the terms of the Financing, upon listing on the OTCBB and concurrently delisting from the TSX Venture Exchange (the "Conversion Date"), the principal amount of the Debentures and all accrued interest will be automatically converted into units (the "Units") of Carbiz at a conversion price of CDN$0.22 per Unit. Each Unit will consist of one common share, one class A common share purchase warrant (a "Class A Warrant") and one-half of one class B common share purchase warrant (a "Class B Warrant"). Each Class A Warrant may be exercised to acquire one common share at a price of CDN$0.23 per share on or before the date that is five years from the date of issuance of the Class A Warrant. Each whole Class B Warrant may be exercised to acquire one common share at a price of CDN$0.30 per share on or before the date that is five years from the date of issuance of the Class B Warrant.

In consideration for the services provided by the placement agent (the "Agent") for the Financing, the Agent received a cash commission equal to 10% of the gross proceeds raised by the Agent. The Agent is also entitled to receive a cash fee equal to 2% of the gross proceeds from the subsequent exercise within twelve months from the Conversion Date of any Class A Warrants or Class B Warrants that were issued upon conversion of Debentures placed by the Agent. In addition, the Agent will receive that number of Agent's units (the "Agent's Units") that is equal to 10% of the number of Units to be issued on the Conversion Date in respect of Debentures placed by the Agent. Each Agent's Unit shall consist of one Agent's first common share purchase warrant (the "Agent's First Warrant") and one-Agent's second common share purchase warrant (the "Agent's Second Warrant"). Each Agent's First Warrant may be exercised to acquire one common share at a price of CDN$0.22 per share on or before the date that is five years from the Conversion Date. Each Agent's Second Warrant may be exercised to acquire one common share at a price of CDN$0.23 per share on or before the date that is five years from the Conversion Date.

Carbiz is a recognized leader in software and business consulting to the used-car industry. In 2004, the Carbiz began leveraging its industry knowledge and software products into company-owned credit centers, which are used-car dealerships that offer financing to customers with poor credit. Carbiz opened its first credit center in Palmetto, Florida in May 20, 200404 and plans to open a second credit center in St. Petersburg, Florida in November 2004 and seeks to open a third credit center in the Tampa, Florida area in early 2005. Each credit center originates, funds, manages and collects loans for vehicles sold to customers.

"We expect that Florida will be our focus for expansion in the near future," said Richard Lye, President of Carbiz. "The success of our credit center business is based on a philosophy of treating credit-challenged customers with dignity and respect. We combine this customer-friendly approach with interest rates below the industry average, which encourages customer loyalty and results in successful collections that translate to the Carbiz's bottom line."

Based in Sarasota, Florida and Toronto, Canada, Carbiz is a leading provider of Internet and software solutions to the North American automotive industry. Carbiz's suite of business solutions includes dealer software products focused on the finance, sub-prime finance and "buy-here, pay-here" markets. Carbiz has 40 full-time employees and provides finance solutions, lead generation, Internet capability and training services. Carbiz supports more than 3,000 dealers with a recurring revenue model, in addition to individual product sales. Carbiz also provides a tax refund service and refund anticipation loans at a facility in Clearwater, Florida that employs 90 people on a seasonal basis.

For more information about Carbiz and its services, visit Carbiz's web site: www.carbiz.com.