2018 05 Investor Presentation+v2

1 LITHIA MOTORS MAY 20181 Investor PRESENTATIONMay 2018 LITHIA MOTORS MAY 20182 DISCLOSUREF orward-Looking StatementsThis presentation includes "forward-looking statements" within the meaning of the "Safe-Harbor" provisionsof the Private Securities Litigation Reform Act of 1995. Forward lookingstatements include statements regarding our goals, plans, projections and guidance regarding our financial position, results of operations, market position, pending and potential futureacquisitions and business strategy, and often contain words such as "project," "outlook," "expect," "anticipate," "intend," "plan," "believe,""estimate," "may," "seek," "would," "should,""likely," "goal," "strategy," "future," "maintain," "continue," "remain," "target" or "will" and similar references to future periods. Examples of forward-looking statements in this pressrelease include, among others, statements regarding: Expected operating results, such as improved store efficiency and performance and targeted 2018 performance such as revenue, EPS and growth rates; Our ability to improve store performance; Anticipated acquisition opportunities and additions of dealership locations to our portfolio in the future, and our ability to improve earnings and achieve returns on investments; Anticipated revenues from acquired and open point stores.

2 And Anticipated availability of liquidity from our credit facility and unfinanced operating real their nature, forward-looking statements involve risks and uncertainties because they relate to events that depend on circumstances that may ormay not occur in the statements are not guarantees of future performance, and our actual results of operations, financial condition and liquidity anddevelopment of the industry in which weoperate may differ materially from those made in or suggested by the forward-looking statements in this press release. The risks and uncertainties that could cause actual results todiffer materially from estimated or projected results include, without limitation, future economic and financial conditions (both nationally and locally), changes in customer demand, ourrelationship with, andthe financial and operational stability of, vehicle manufacturers and other suppliers, risks associated with our indebtedness (including available borrowing capacity,compliance with financial covenants and ability to refinance or repay indebtedness on favorable terms), government regulations, legislation andothers set forth throughout "Part II, Item7.

3 Management's Discussion and Analysis of Financial Condition and Results of Operations" and in "Part I, Item 1A. Risk Factors" of our most recent Annual Report on Form 10-K, andfrom time to time in our other filings with the SEC. We urge you to carefully consider this information and not place undue reliance on forward-lookingstatements. We undertake no dutyto update our forward-looking statements, including our earnings outlook, which are made as of the date of this Financial MeasuresThis presentation contains non-GAAP financial measures such as adjustednet income and diluted earnings per share, adjusted SG&A as a percentage ofrevenue and gross profit,adjusted operating margin, adjusted operating profit as a percentage of gross profit, adjusted pre-tax margin, EBITDA, adjusted EBITDA, leveraged EBITDA and adjusted total measures do not have definitions under GAAP and may be defined differently by and not comparable to similarly titled measures used by other companies. As a result, wereview any non-GAAP financial measures in connection with a review of the most directly comparable measures calculated in accordance with GAAP.

4 We caution you not to placeundue reliance on such non-GAAP measures, but also to consider them with the most directly comparable GAAP measures. We present cash flows from operations in the attachedtables, adjusted to include the change in non-trade floor plan debt to improve the visibility of cash flows related to vehicle financing. As requiredby SEC rules, we have reconciled thesemeasures to the most directly comparable GAAP measures in the attachmentsto this release. We believe the non-GAAP financial measures we present improve the transparency ofour disclosures; provide a meaningful presentation of our results from core business operations, because they exclude items not related to core business operations and other non-cash items; and improve the period-to-period comparability of our results from core business operations. These presentations should not be considered an alternative to MOTORS MAY 20183 One of the largest auto retailers in the (#3 by adj. EBITDA / #4 by revenue)#294 on the Fortune 500$12bn+in est.

5 2018 revenues186 Service/delivery centers reaching 80% of the ,000 team membersnationwideTODAYL ithia is one of the largest, strongest returning and most diversified public automotive retailers in North America1946 Walt DeBoer founded Lithia Motors in 1946 as a Chrysler-Plymouth-Dodge dealership in Ashland, Oregon1996 Walt's son Sid took over the business in 1968 and grew it to include 5 stores and 19 franchises in Southern Oregon. In December 1996, the collection of dealerships was transformed into Lithia Motors, Inc., a publicly traded company (NYSE:LAD) 2012In May 2012, Bryan DeBoer became CEO, accelerating company growth 2014In October, completed the acquisition of DCH Auto Group, adding ~$ in annualized revenue, one of the largest deals between dealership groups in history$150mm$ $ $ +(est. 2018)#14 5-year Total Shareholder Return on the Fortune 500 in 2017 (#1 in 2015, #2 in 2016)HIGHLIGHTSHISTORY1 storeLITHIA MOTORS MAY 20184 RETAIL NETWORK COVERAGE48-hour DeliveryNATIONAL PRESENCES erving over 80% of the auto marketLEADING RETAILER#4 auto retailer.

6 Top ten online auto marketplaceONLINE & IN-STORE FULFILLMENTE mploy technology to provide personalized experiencesLITHIA MOTORS MAY 20185 Vast potential in existing storesWorld-class performance managementAgile, local market approachINTERNALDRY POWDERA cquire strong brand, under-performing businessesCreate complementary opportunitiesDeliver superb returnsGREENFIELD-LIKE GROWTHP roven leadership teamGenerates substantial cashInnovating to meet customer needsCAPITAL ENGINEOUR STRATEGYLITHIA MOTORS MAY 20186 OUR KEY STRENGTHSLITHIA MOTORS MAY 20187 LITHIA BUSINESS MIX 53% of gross profit derived from countercyclical segments (Used, P&S) A third of gross profit from high-margin and stable Parts & Service segment Generated Adj. EBITDA margin at trough of financial crisisSAAR AND ADJUSTED EBITDARESILIENT BUSINESS MODELP rofitable business with multiple earnings : Adjusted EBITDA is defined as net income, excluding non-core items, addback other interest expense, taxes and depreciation, less floor plan interest expense, used vehicle LOC interest expenseSUMMARY55%21%30%18%11%34%4%27%Rev enueGross profitNew vehiclesUsed vehiclesParts and serviceF&INote.

7 Revenue and gross profit mix for the three-months ended March 31, 2018 LITHIA MOTORS MAY 20188 DIVERSIFIED BY GEOGRAPHY AND BRANDN ationwide Footprint with 186 Dealerships Representing 28 Brands Across 18 StatesLITHIA new vehicle UNIT MIXI mport57%Toyota20%Honda17%Subaru9%Nissan6 %Other Import*5%Domestic30%Chrysler16%GM8%Ford6 %Luxury13%BMW/Mini4%Audi3%Acura2%Mercede s2%Other Luxury**2%*Other import includes Hyundai, VW, Kia and Mazda ** Other luxury includes Lexus and PorscheMix as of the three-months ended March 31, 2018 GEOGRAPHIC PRESENCENEW vehicle REVENUE BY BRANDLITHIA MOTORS MAY 20189 DISCIPLINED ACQUISITION STRATEGYG enerating Greenfield-like ReturnsINVESTMENT METRICS Seek strong franchises under-earning their potential Regularly monitor 2,600 specific acquisition targets Data driven metrics used to identify opportunities 15-20+% after tax ROE 3x-5x Ent. Value/EBITDA 10%-20% equity investment on annual revenuesINTERNAL DRY POWDERAUTO RETAILOPPORTUNITIESCOMPLEMENTARYOPPORTUN ITIESCAPITALENGINEHISTORICAL RETURNS100% return on equity324%136%98%55%32%11%5%ACQUISITION FOCUSES81% Success Rate84%0%100%200%300%2010 2011 2012 2013 2014 2015 2016 2017 Accumulated Acquisition Return on Equity0-5 Years+5 YearsLITHIA MOTORS MAY 201810 DCH CASE STUDY: LARGE GROUPP urchased in October 2014*As of transaction announcement in June 1YR 2YR 3 Adj.

8 EBITDA MarginTotal 1YR 2YR 3 Revenues ($mm)$2,266$2,276$2,339$2,500 EBITDA ($mm)$43$59$85$98 Implied investment as a % of revenue11%11%11%10%LithiaDCHT otalDomestic51%2%30%Import38% 80%56%Luxury11% 18%14%Total Investment: $266mmBlue Sky: $205mm Top 10 dealer group; ~$ in revenue Expand to metro markets partnering with a proven volume retailer Transformed brand mix Significant opportunity to improve performance and boost earningsTRANSACTION RATIONALEACQUISITION SUMMARYDIVERSIFIED BRAND MIX*OPERATIONAL INTEGRATIONLITHIA MOTORS MAY 201811 Luxury platform in metropolitan market of Portland Created scale in market to augment existing locations Required capital investment previous dealer unwilling to makeTRANSACTION RATIONALEACQUISITION SUMMARYDIVERSIFIED BRAND MIX*OPERATIONAL INTEGRATIONRASMUSSEN CASE STUDY: MEDIUM GROUPP urchased in April 2011*Assumes all real estate is leased at actual rent or if owned, at a 7% capitalization rate PriorYR 1YR 2YR 3 Revenues ($mm)$146$158$188$227 EBITDA* ($mm)$2$10$12$13 Implied investment as a % of revenue15%14%12%10%Total Investment: $22mmBlue Sky: $18mm*As of transaction date in April 100%21% 1YR 2YR 3 Adj EBITDA MarginTotal MOTORS MAY 201812 Exclusive franchise.

9 Only Honda store on island of Maui Remodeled store to improve operational efficiencies Entered Hawaii; subsequently added four dealerships on OahuTRANSACTION RATIONALEACQUISITION SUMMARYSUBSEQUENT EXPANSIONOPERATIONAL INTEGRATION*Assumes all real estate is leased at actual rent or if owned, at a 7% capitalization rate PriorYR 1YR 2YR 3 Revenues ($mm)$36$34$53$65 EBITDA* ($mm)$ $2$4$6 Implied investment as a % of revenue15%16%10%8%Total Investment: $ Sky: $ *Assumes full year revenues for Honolulu Ford acquired in 2016$34$65$14520142016*Hawaii RevenuesIsland HondaAll Other HI 1YR 2YR 3 Adj. EBITDA MarginTotal HONDA: SINGLE STOREP urchased in January 2014 LITHIA MOTORS MAY 201813 PRODUCT LINE OVERVIEWLITHIA MOTORS MAY 201814 new vehicle OVERVIEW Average age of vehicles historically high at 11+ years Technology, safety and sustainability drive sales Target 12 to 36 months for acquisition improvementSUMMARYR ecovery spikes above long-run 1981 1986 1991 1996 2001 2006 2011 HISTORICAL new vehicle SAAR TRENDSHISTORICAL REVENUE PERFORMANCE ($MM)$1,848 $5,764 20122017 CAGR: AvgTargetLithia Partners GROSS PROFIT AT TARGET: ~ $60MM% Of Sales Above OEM Market ShareDRY POWDER OPPORTUNITYI mprove to 25% Above OEM market shareNote: Analysis as of December 31, 2017 LITHIA MOTORS MAY 201815 USED vehicle OVERVIEWUSED MARKET SIZEHISTORICAL REVENUE PERFORMANCE ($MM)$833 $2,544 20122017 CAGR: , 2%Private Party, 29%Franchised Dealers, 37% 2013 2014 2015 Retail Units sold (mm)NewUsedSource.

10 WardsAuto Group Market Used vehicle Sales ,32%USED MARKET SHARE ~ larger than new vehicle market at ~40mm annual unit sales Low correlation with new vehicle cycle; full spectrum offerings including 10+ year old vehicles Target 12 to 36 months for acquisition improvementSUMMARYINCREMENTAL GROSS PROFIT AT TARGET: ~ $80 MMLithia Partners Group: 97 unitsAvg. Used Units per Store Each Month386785 Pre-acqCompany AvgTargetDRY POWDER OPPORTUNITYI mprove to 85 Units per Store Each MonthNote: Analysis as of December 31, 2017 LITHIA MOTORS MAY 201816 FINANCE & INSURANCE OVERVIEW Growing retail vehicle sales increase F&I opportunity Company arranges financing on ~75% of units sold F&I products drive loyalty in parts and service Target 6 to 18 months for acquisition improvementSUMMARYHISTORICAL REVENUE PERFORMANCE$112$386$1,083 $1,299 20122017 Revenue ($mm)F&I PVRCAGR: PER RETAIL UNIT VS. PEERS$1,299$1,464 LithiaPeer Average$165 Note: F&I per unit as of the year ended December 31, 2017.