Lithia Motors, Inc., Announces Effectiveness of Registration Statement for Resale of 2.875% Convertible Senior Subordinated Notes Due 2014

MEDFORD, Ore.--Oct. 25, 2004--Lithia Motors, Inc. today announced that the Securities and Exchange Commission has declared effective its Registration Statement on Form S-3 relating to the resale of $85,000,000 in aggregate principal amount of its 2.875% Convertible Senior Subordinated Notes due 2014 (the "Notes") and the shares of its Class A Common Stock issuable upon conversion of the Notes. The Notes were originally issued in a private placement in May 20, 200404. Lithia will not receive any proceeds from the sale by any selling securityholder of the Notes or the shares of Lithia Class A Common Stock issuable upon conversion of the Notes.

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

About Lithia

Lithia Motors, Inc. is a Fortune 1000 and Russell 2000 Company that sells 25 brands of new vehicles and operates 85 stores and 162 franchises in 12 states in the Western United States 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 95,255 new and used vehicles and had $2.51 billion in total revenue in 2003.

Additional Information

For additional information on Lithia Motors, contact Jeff DeBoer, Senior VP and Chief Financial Officer, (541) 776-6868 (e-mail: invest@lithia.com).