Lithia Motors Inc. Increases Quarterly Dividend 50% to $0.12 Per Share for the Second Quarter of 2005

MEDFORD, Ore.--July 26, 2005--Lithia Motors, Inc. today announced that the Board of Directors has approved a 50% increase in Lithia's quarterly dividend from $0.08 to $0.12 per share for the second quarter of 2005. Shareholders of record as of August 5, 2005 will receive the dividend that will be payable August 19, 2005.

Sid DeBoer, Lithia's Chairman and CEO, commented, "The Company remains confident that it has sufficient cash flow to fund the increased dividend and to continue our growth plans."

About Lithia

Lithia Motors, Inc. is a Fortune 1000 and Russell 2000 Company that sells 25 brands of new vehicles and operates 88 stores and 174 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 98,331 new and used vehicles and had $2.7 billion in total revenue in 2004.

Forward Looking Statements

This press release includes forward looking statements within the meaning of the "Safe-Harbor" provisions of the Private Securities Litigation Reform Act of 1995, which management believes are a benefit to shareholders. 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 the company's ability to meet future cash flow needs while maintaining its growth plans.

Additional Information

For additional information on Lithia Motors, contact the Investor Relations Department: 541-776-6591 or log-on to: www.lithia.com - go to Investor Relations