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Press Release

UnitedAuto Reports Third Quarter Results; Revenues Increase 11%; Same-Store Retail Revenues Increase 7.0%; Gross Margin Increases 50 Basis Points to 14.7%

BLOOMFIELD HILLS, Mich.--(BUSINESS WIRE)--Oct. 25, 2005--United Auto Group, Inc. (NYSE: UAG), a worldwide automotive retailer, today reported a 10.8% increase in third quarter revenues to $2.8 billion. The revenue increase is driven by a 10.3% rise in retail vehicle revenues and a 14.3% growth in service and parts revenues, and includes a 7.0% increase in same-store retail sales. Gross margin in the third quarter increased 50 basis points to 14.7% due to margin increases in each of the Company's product lines, coupled with a 43-basis-point increase in the relative contribution of higher margin service and parts and finance and insurance revenues to total revenues.

Third quarter net income was $32.8 million, or $0.70 per share. This represents a 19.0% increase compared to third quarter 2004 adjusted net income of $27.5 million, or $0.60 per share, which excludes $4.9 million ($0.10 per share) of net income resulting from the sale of an investment, a reduction of the Company's estimated annual effective tax rate, a refund of UK consumption taxes, and costs associated with the relocation of certain franchises in the UK.

For the nine months ended September 30, 2005, revenues increased 14.6% to $8.0 billion. Net income for the nine months was $88.9 million, or $1.89 per share. This represents a 16.0% increase compared to prior year adjusted net income of $76.6 million, or $1.69 per share, which excludes the $4.9 million of items referenced above and an additional $4.1 million from the sale of an investment in the second quarter of 2004.

"We are pleased with the performance of our business in the third quarter," said UAG Chairman Roger Penske. "During the quarter, we were challenged by higher interest rates, rising gasoline prices, product availability, and a shift in consumer buying patterns. Despite these obstacles, we achieved our 26th consecutive quarter of record revenue, including an 8.5% increase in same-store service and parts revenue, as well as improved gross margins in all areas of our operations."

Penske continued, "Our service and parts operation continues to improve, including increases in volume and margins, as a result of increases in units in operation and the continuing maturity of our capital investments. In fact, service and parts revenues increased to 10.3% of our total revenue, an improvement of 31 basis points over the prior year. The performance of our service and parts operations, coupled with strong margins on both new and used vehicles, contributed to an increase in our operating margin to 2.8%."

After considering the steady increase in interest rates, volatile energy prices and the challenging selling environment in the fourth quarter, the Company currently estimates earnings in the range of $0.51 to $0.56 per share for the fourth quarter and $2.40 to $2.45 per share for the full year 2005.

UnitedAuto will host a conference call discussing financial results relating to third quarter 2005 on Tuesday, October 25, 2005 at 12:30 p.m. ET. To listen to the conference call, participants must dial (800) 230-1059 (International, please dial (612) 234-9959). The call will be simultaneously broadcast live over the Internet through the UnitedAuto website at www.unitedauto.com.

About UnitedAuto

United Auto Group, Inc., headquartered in Bloomfield Hills, Michigan, operates 269 retail automotive franchises, representing 40 different brands, and 29 collision repair centers. UnitedAuto, which sells new and previously owned vehicles, finance and insurance products and replacement parts, and offers maintenance and repair services on all brands it represents, has 167 franchises in 19 states and Puerto Rico and 102 franchises located internationally, primarily in the United Kingdom. UnitedAuto is a member of the Fortune 500 and Russell 2000 and has approximately 14,000 employees.

Statements in this press release involve forward-looking statements, including forward-looking statements regarding UnitedAuto's future sales and earnings growth potential. Actual results may vary materially because of risks and uncertainties, including external factors such as interest rate fluctuations, changes in consumer spending and other factors over which management has no control. These forward-looking statements should be evaluated together with additional information about UnitedAuto's business, markets, conditions and other uncertainties which could affect UnitedAuto's future performance, which is contained in UnitedAuto's Form 10-K for the year ended December 31, 2004, and its other filings with the Securities and Exchange Commission, and which is incorporated into this press release by reference. This press release speaks only as of its date and UnitedAuto disclaims any duty to update the information herein.

This release contains certain non-GAAP financial measures as defined under SEC rules, such as adjusted net income, which exclude certain items disclosed in the release. The Company has reconciled these measures to the most directly comparable GAAP measures in the release. The Company believes that these non-GAAP financial measures improve the transparency of the Company's disclosure and the period-to-period comparability of the Company's results from operations.

                        UNITED AUTO GROUP, INC.
                   Consolidated Statements of Income
             (Amounts in Thousands, Except Per Share Data)
                              (Unaudited)

                                                    Third Quarter
                                               -----------------------
                                                  2005        2004
                                               ----------- -----------
New Vehicles                                   $1,641,443  $1,475,564
Used Vehicles                                     577,209     536,063
Finance and Insurance                              65,129      55,872
Service and Parts                                 287,357     251,416
Fleet                                              24,602      28,938
Wholesale                                         201,429     177,171
                                               ----------- -----------
   Total Revenues                               2,797,169   2,525,024
Cost of Sales                                   2,385,418   2,166,022
                                               ----------- -----------
   Gross Profit                                   411,751     359,002
SG&A Expenses                                     323,021     277,811
Depreciation and Amortization                      10,556      14,111
                                               ----------- -----------
   Operating Income                                78,174      67,080
Floor Plan Interest Expense                       (12,869)    (11,538)
Other Interest Expense                            (12,349)    (10,470)
Other Income                                           --       4,858
                                               ----------- -----------
   Income from Continuing Operations Before
    Minority Interests and Income Tax Provision    52,956      49,930
Minority Interests                                   (486)       (669)
Income Tax Provision                              (19,258)    (17,154)
                                               ----------- -----------
   Income from Continuing Operations               33,212      32,107
Income (Loss) from Discontinued Operations, Net
 of Tax                                              (448)        258
                                               ----------- -----------
   Net Income                                     $32,764     $32,365
                                               =========== ===========
Income from Continuing Operations Per Diluted
 Share                                              $0.70       $0.69
                                               =========== ===========
Diluted EPS                                         $0.70       $0.70
                                               =========== ===========
Diluted Weighted Average Shares Outstanding        47,124      46,567
                                               =========== ===========



                        UNITED AUTO GROUP, INC.
                   Consolidated Statements of Income
             (Amounts in Thousands, Except Per Share Data)
                              (Unaudited)

                                                     Nine Months
                                               -----------------------
                                                  2005        2004
                                               ----------- -----------
New Vehicles                                   $4,633,416  $4,036,802
Used Vehicles                                   1,710,007   1,537,829
Finance and Insurance                             182,468     155,352
Service and Parts                                 840,611     707,763
Fleet                                              79,260      75,245
Wholesale                                         587,337     498,221
                                               ----------- -----------
   Total Revenues                               8,033,099   7,011,212
Cost of Sales                                   6,837,055   5,994,385
                                               ----------- -----------
   Gross Profit                                 1,196,044   1,016,827
SG&A Expenses                                     946,725     794,430
Depreciation and Amortization                      31,233      30,893
                                               ----------- -----------
   Operating Income                               218,086     191,504
Floor Plan Interest Expense                       (40,350)    (34,774)
Other Interest Expense                            (36,138)    (31,287)
Other Income                                           --      11,469
                                               ----------- -----------
   Income from Continuing Operations Before
    Minority Interests and Income Tax Provision   141,598     136,912
Minority Interests                                 (1,250)     (1,491)
Income Tax Provision                              (51,965)    (50,924)
                                               ----------- -----------
   Income from Continuing Operations               88,383      84,497
Income from Discontinued Operations, Net of Tax       469       1,075
                                               ----------- -----------
   Net Income                                     $88,852     $85,572
                                               =========== ===========
Income from Continuing Operations Per Diluted
 Share                                              $1.88       $1.87
                                               =========== ===========
Diluted EPS                                         $1.89       $1.89
                                               =========== ===========
Diluted Weighted Average Shares Outstanding        47,005      45,198
                                               =========== ===========



                        UNITED AUTO GROUP, INC.
                 Consolidated Condensed Balance Sheets
                        (Amounts in Thousands)
                              (Unaudited)

                                                9/30/05     12/31/04
                                               ----------- -----------
Assets
Cash and Cash Equivalents                          $2,694     $15,187
Accounts Receivable, Net                          379,922     356,625
Inventories                                     1,147,807   1,252,358
Other Current Assets                               61,820      44,315
                                               ----------- -----------
   Total Current Assets                         1,592,243   1,668,485
Property and Equipment, Net                       463,084     406,783
Intangibles                                     1,225,092   1,221,731
Other Assets                                       77,934      86,881
Assets of Discontinued Operations                  65,333     148,921
                                               ----------- -----------
   Total Assets                                $3,423,686  $3,532,801
                                               =========== ===========

Liabilities and Stockholders' Equity
Floor Plan Notes Payable                       $1,015,268  $1,197,540
Accounts Payable and Accrued Expenses             437,847     402,232
Current Portion Long-Term Debt                      3,556      11,367
                                               ----------- -----------
   Total Current Liabilities                    1,456,671   1,611,139
Long-Term Debt                                    620,434     574,970
Other Long-Term Liabilities                       191,096     179,104
Liabilities of Discontinued Operations             30,588      92,553
                                               ----------- -----------
   Total Liabilities                            2,298,789   2,457,766
Stockholders' Equity                            1,124,897   1,075,035
                                               ----------- -----------
   Total Liabilities and Stockholders' Equity  $3,423,686  $3,532,801
                                               =========== ===========



                        UNITED AUTO GROUP, INC.
                             Selected Data
           ($ in thousands, except per transaction amounts)

                            Third Quarter            Nine Months
                       ----------------------- -----------------------
                          2005        2004        2005        2004
                       ----------- ----------- ----------- -----------
Units
  New Retail Units         51,171      46,409     142,508     127,333
  Used Retail Units        22,876      21,761      66,966      63,349
                       ----------- ----------- ----------- -----------
  Total Retail Units       74,047      68,170     209,474     190,682
                       =========== =========== =========== ===========

Same-Store Retail
 Revenue
  New Vehicles         $1,520,874  $1,420,904  $4,067,849  $3,888,302
  Used Vehicles           547,906     520,812   1,512,693   1,475,721
  Finance and Insurance    61,919      53,993     168,967     151,597
  Service and Parts       262,796     242,217     730,789     677,703
                       ----------- ----------- ----------- -----------
    Total Same-Store
     Retail Revenue    $2,393,495  $2,237,926  $6,480,298  $6,193,323
                       =========== =========== =========== ===========

Same-Store Retail
 Revenue Growth
  New Vehicles                7.0%        1.8%        4.6%        5.1%
  Used Vehicles               5.2%        3.1%        2.5%        3.1%
  Finance and Insurance      14.7%      (3.1%)       11.5%      (0.2%)
  Service and Parts           8.5%       11.4%        7.8%       13.0%

Revenue Mix
  New Vehicles               58.7%       58.4%       57.7%       57.6%
  Used Vehicles              20.6%       21.2%       21.3%       21.9%
  Finance and Insurance       2.3%        2.2%        2.3%        2.2%
  Service and Parts          10.3%       10.0%       10.4%       10.1%
  Fleet                       0.9%        1.2%        1.0%        1.1%
  Wholesale                   7.2%        7.0%        7.3%        7.1%

Retail Gross Margin -
 by Product
  New Vehicles                8.5%        8.4%        8.6%        8.5%
  Used Vehicles               9.1%        8.5%        9.2%        8.8%
  Finance and Insurance     100.0%      100.0%      100.0%      100.0%
  Service and Parts          54.2%       53.2%       54.3%       53.9%

Gross Profit per
 Transaction
  New Vehicles             $2,724      $2,687      $2,805      $2,704
  Used Vehicles             2,292       2,098       2,341       2,124
  Finance and Insurance       880         820         871         815



                        UNITED AUTO GROUP, INC.
                       Selected Data (Continued)

                                     Third Quarter      Nine Months
                                   ----------------- -----------------
                                    2005     2004     2005     2004
                                   -------- -------- -------- --------
Brand Mix:
     Toyota/Lexus                       21%      22%      21%      23%
     BMW                                15%      15%      14%      15%
     Honda/Acura                        15%      12%      14%      11%
     Mercedes                            9%      11%      10%      11%
     Ford Premier Group                  7%       8%       7%       9%
     Audi                                7%       6%       7%       4%
     General Motors                      7%       8%       7%       8%
     Ford                                3%       3%       3%       3%
     Nissan/Infiniti                     4%       4%       4%       4%
     Chrysler                            3%       4%       3%       4%
     Porsche                             3%       3%       4%       3%
     Other                               6%       4%       6%       5%

Debt to Total Capital Ratio             36%      40%      36%      40%

Rent Expense                       $29,274  $25,230  $86,999  $68,759

CONTACT: United Auto Group, Inc.
Jim Davidson, 201-325-3303
jdavidson@unitedauto.com
or
Tony Pordon, 248-648-2540
tpordon@unitedauto.com

SOURCE: United Auto Group, Inc.