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FORT LAUDERDALE, Fla. — Continuing a run of positive news in
connection with auto financing, AutoNation chairman and chief executive officer
Mike Jackson believes conditions are "fully back" to where they back six
years ago.

Jackson told investment analysts last week during the
company's second-quarter financial report conference call that, "I think as far
as automotive finance, we're fully back to '06. The availability is just
terrific."

While Jackson contends dealers can get financing for
potential buyers throughout the credit spectrum, he acknowledged one element
that helped to get deals done before the recession no longer is available.

"But what is different, of course, is using home equity
lines as a piggy bank. Those days are over," Jackson noted. "That has nothing
to do with auto finance, but it certainly was part of the business that people
could use home equity for down payment or even to pay for the entire car. That
game is over."

However, CNW Research pointed out earlier this year that the
practice might not be completely abandoned just yet.

Like Jackson, CNW president Art Spinella agreed that using a
home-equity loan to make a new-vehicle purchase was a key method for acquiring
a vehicle prior to the recession and the house-price collapse.

But Spinella discovered indications are consumers are
reverting back to home equity loans, especially among those who have been
long-time owners of their residence and still have equity to use.

In 2007 prior to the big hit on the housing market, Spinella
tabulated that 11.8 percent of all new-vehicle acquisitions were done with a
home equity loan. He found the continual decline hit its nadir in 2010 with
only 4.4 percent of new-vehicle buyers using a loan based on home equity.

Last year, CNW indicated the figure inched upward to 4.56
percent. When the firm considered the topic after the first quarter of this
year, CNW noted it was likely to be closer to 5 percent.

Delving deeper into its data, CNW determined California had
the most home equity loans used for a new-vehicle purchase in 2007 with nearly
30 percent.

"That dropped by more than 13 points in a single year and
continued to tumble until 2010," Spinella shared. "The share rebounded in 2011
and CNW expects it will rise to 12.5 percent this year."

CNW also noted Florida had a similar deterioration pattern,
falling from nearly 20 percent in 2007 to 7.5 percent the following year.

But Spinella expects the Sunshine State figures that began
to rise in 2010 will likely hit nearly 11 percent this year.

What do these home-equity loan trends mean for franchised
dealerships and other stores?

"All of the stars were aligned when the industry hit 17
million units. One star was home equity loans," Spinella stressed. "That's a
long-way from returning to its peak and until it does, 17-plus is currently
only a dream."

While Spinella thinks a new-vehicle sales level at 17
million might be a dream, Jackson is fully confident the industry can hit 14.7
million this year and head toward 16 million soon. The AutoNation boss came to
this assertion by explaining how consumers are finding funds to aid their
financing efforts if in fact home equity is not available.

"I think in the period where the sales were depressed, you
had a certain savings from individuals in order to make some appropriate down
payment. Now we're through that and people have the down payment," Jackson
said.

"The decision point that the consumer is at is they've
postponed replacing the car and it's now very old," he continued. "They're
postponed a lot of maintenance work. They have saved some money. So do they
spend money fixing this older clunker or do they do something? It's a very
positive constructive conversation on the showroom floor, whether it's going
from a very old car to something that's newer or even a brand new car. Then you
have exciting products and financing; that's what's driving the business."

What could throw a wrench into overall sales growth?

"I think the only questionable or risky period is how the
year closes," Jackson responded. "Nothing to do with the automotive recovery or
underlying drivers; but just simply the election and the fiscal cliff and all
of the real drama that will come with that.

"At the end of the day, I believe there will be a grand
bargain, but I think it will take into the beginning of next year. How
disruptive that will be the economy and business, nobody really knows. I think
we're on the journey back to 16 million units. The only question is the pace
with which we get there," he concluded.