Zag Acquires CU Auto Sales; Acquisition Expands Zag's Credit Union Auto-Buying Audience Reach, Increases Zag's Volume, Revenue and Profits from Day One

SANTA MONICA, Calif.--Sept. 12, 2006--Zag (http://www.zag.com), an automotive retail innovator, today announced the acquisition of CU Auto Sales (http://www.cuauto.com) of Roseville, Calif., a Credit Union auto-buying service that serves more than 800,000 Credit Union members throughout Central and Northern California. Zag made the acquisition through its subsidiary, Autoland (http://www.autoland.com), the nation's oldest and most successful Credit Union auto-buying service.

The transaction continues Zag's aggressive strategy to grow through acquisition and by aggregating as many customers through affinity buying groups as possible. The acquisition immediately increases Zag's volume, reach and trade area by expanding Autoland's presence in Northern California with a built-in customer base at critical mass - helping Zag deliver even more sales to its auto dealer and affinity group partners.

"This transaction is profitable for everyone - Credit Unions in Northern California get to enhance their member services, while our dealer partners gain customers in their markets," said Scott Painter, Zag CEO. "As for Zag, this acquisition is advantageous from day one - giving us additional revenue, sales and profits. We are absolutely looking for more of these transactions. Expanding our footprint enables us to reach even more auto-buyers through trusted affinity relationships, and to facilitate even more sales for our dealer partners. This, in turn, increases our buying power and helps us enable Credit Unions and other affinity partners to deliver even better service to their members. It's our groundbreaking technology that makes all this possible."

Like Autoland, CU Auto Sales specializes in selling new and used vehicles through Credit Unions. Founded in 1985 by a consortium of 11 Credit Unions based in metropolitan Sacramento, Calif., CU Auto Sales now serves members in the Sacramento, Stockton, Modesto and Fresno markets. Autoland will work with the Credit Unions that currently do business with CU Auto Sales. In addition, Autoland is bringing all of CU Auto Sales' employees on board - no one will have to relocate.

"We actively pursued Autoland as a potential acquisition partner," said Jerry Kinlock, CU Auto Sales, chairman of the board. "Autoland's staying power, its Credit Union exclusivity, call centers, technology leadership and breadth of services will provide an even higher level of auto-buying convenience for our Credit Union members."

To elevate the Credit Union car-buying experience, Autoland has aggressively expanded its call center and, through Zag, is actively seeking to acquire similar auto-buying companies that specialize in Credit Unions.

Zag also recently acquired Automotive Invitational Services (AIS), an auto-buying program operator that serves more than six million members of 12 of the clubs of the American Automobile Association (AAA); and inked a deal with Kelley Blue Book to license its new car pricing and configuration data. In its first full year of operation, Zag already has zoomed onto Entrepreneur Magazine's "Hot 100" list of the fastest-growing companies (as determined by PricewaterhouseCoopers).

About Zag

Zag is an independent technology and services business, committed to dramatically improving the way consumers buy cars while simultaneously helping dealers enable sales. Zag is transforming the auto-buying experience with a groundbreaking online platform that extends current online buying capabilities - and soon will make it possible for consumers to complete the entire auto-buying transaction online. Zag's platform goes beyond research-related websites to give consumers upfront pricing and inventory availability for new and used cars, and the ability to configure a new vehicle and arrange financing online. Over the next year, the company will roll out additional capabilities that will enable a complete, end-to-end online transaction for the first time. Zag works with affinity-based organizations to bring a private label, customized experience to members or customers while automating much of the time-consuming, inefficient processes at the dealership level. Inaugural users include Capital One Auto Finance, the nation's largest online auto lender, which is rolling out Zag's platform for its DriveOne program; and Autoland, the nation's oldest and most successful credit union auto-buying service, which Zag acquired as a wholly owned subsidiary in November 2005. Zag is based in Santa Monica, Calif., with offices in Sherman Oaks, Calif., Fullerton, Calif., and Portland, Ore.