SecProbe.io

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Mail Stop 3561

      				             September 16, 2005

By Facsimile and U.S. Mail

Mr. Earl J. Hesterberg
President and Chief Executive Officer
Group 1 Automotive, Inc.
950 Echo Lane
Suite 100
Houston, TX 77024

      Re:	Group 1 Automotive, Inc.
      	Form 10-K for Fiscal Year Ended December 31, 2004
      	Filed March 16, 2005
                	File No.  1-13461

Dear Mr. Hesterberg:

	We have reviewed the above referenced filing and have the
following comments.  Where indicated, we think you should revise
your
document in response to these comments.  If you disagree, we will
consider your explanation as to why our comment is inapplicable or
a
revision is unnecessary.  Please be as detailed as necessary in
your
explanation.  In some of our comments, we may ask you to provide
us
with information so we may better understand your disclosure.
After
reviewing this information, we may raise additional comments.

      Please understand the purpose of our review is to assist you
in
your compliance with the applicable disclosure requirements and to
enhance the overall disclosure in your filing.  We look forward to
working with you in these respects.  We welcome any questions you
may
have about our comments or any other aspect of our review.  Feel
free
to call us at the telephone numbers listed at the end of this
letter.

Item 7. Management`s Discussion and Analysis of Financial
Condition
and Results of Operation, page 25
Floorplan Interest Expense, page 37
1. Please expand your disclosure to discuss the relationship
between
floorplan interest expense and manufacturer interest assistance
including why you are eligible to receive assistance in excess of
your incurred interest expense.  In your discussion, quantify the
amounts of interest assistance recognized and interest expense
incurred and the effects on your cost of sales, gross profit,
operating income and net income for each of the three years ending
December 31, 2004.  Disclose the basis for the amount of interest
assistance received.  Describe the impact this interest assistance
has on your liquidity and capital resources in these periods and
include any risks of concentration, performance or cancellation
provisions that are reasonably likely to result in the termination
or
a material reduction in availability of this manufacturer
assistance.
See Item 303(a)(1) and (2) of Regulation S-K.

Liquidity and Capital Resources, page 38
2. Please tell us how the tabular information that reflects $918
million in credit facilities outstanding reconciles to $932
million
presented in your consolidated balance sheet as of December 31,
2004.
Also, please advise or revise your table of contractual
obligations
to include interest payments associated with your contractual
obligations in future filings.  In your response, please show us
what
your revised disclosure will look like.

Item 8 Financial Statements and Supplementary Data, page 43
General

3. We note that you have two reinsurance subsidiaries committed to
the administration of your insurance service offerings.  Please
tell
us why you have not included the supplemental information
concerning
property-casualty insurance operations, or Schedule V, for these
subsidiaries.  Reference is made to Rule 5-04(c) and Rule 12-18 of
Regulation S-X.

4. Tell us if your captive insurance subsidiaries have restricted
shareholders` equity due to either statutory requirements or terms
and conditions of reinsurance agreements.  If so, please tell is
if
the restricted shareholders` equity of your insurance subsidiaries
exceeds 25% of consolidated shareholders` equity as of the most
recent balance sheet date and whether you are required to disclose
the financial information in Schedule I.  See Rule 5-04(c) of
Regulation S-X.

5. Please advise or revise your future filings to include a
schedule
for all existing valuation and qualifying accounts.  See Rule 12-
09
of Regulation S-X.

Consolidated Statements of Operations, page F-4
6. Please tell us how you determined the twenty dealership
franchises, disposed in the past five years and possessing
approximately $267.2 million of annual revenues, do not qualify
for
treatment as assets held for sale or discontinued operations in
previous filings.  Include the criteria in paragraphs 30 and 42 of
SFAS No. 144 in your response.

Consolidated Statements of Cash Flows, page F-6
7. Please clarify how you derived cash flows related to floorplan
notes payable and net borrowings on the revolving credit facility
for
the year ended December 31, 2004.  The consolidated balance sheets
reveal a $244,956,000 cash inflow from floorplan notes payable,
less
the floorplan notes acquired in fiscal 2004 business combinations.
The cash inflow from floorplan notes currently presented is
$73,509,000.  In addition the $84,000,000 cash inflow from the
acquisition line appears to be represented by $255,447,000 of cash
inflows from the credit facility.  Although the currently
presented
cash flow amounts equal the aggregate changes in the balance
sheet,
it appears there are significant reclassifications between cash
flow
categories.   Please provide your calculation for the cash inflows
for floorplan notes payable and the revolving credit facility as
well
as reclassifying adjustments and the applicable accounting
pronouncements that support the present accounting treatment.

8. We note you include the changes in your floor plan notes
payable
as an operating activity on the statements of cash flows.
Borrowings
and repayments on floor plan notes payable for new and used
vehicle
inventory should be classified in financing activities when
inventory
is purchased from a manufacturer unaffiliated with the lender,
similar to obtaining external financing through a line of credit
or
other borrowing facility.  When the lender is affiliated with the
manufacturer, those borrowing and repayments should be included in
operating activities similar to accounts payable treatment. See
paragraph 23a of SFAS no. 95.  Please advise and revise in future
filings to distinguish your floor plan notes payable.  Also, note
that Rule 5-02(19)(a) of Regulation S-X requires separate and
clear
balance sheet display of amounts payable to trade creditors and
amounts payable for borrowings.

Notes to Consolidated Financial Statements, page F-7
2. Summary of Significant Accounting Policies, page F-7
Revenue Recognition, page F-7

9.   Please provide us with your accounting policies for recording
Internet revenues specifically as it relates to reporting revenue
and
related costs either gross as a principal or net as an agent.
Please
refer to EITF No. 99-19. Tell us the names of the Internet sites
operating right now and the amounts of revenue recorded in fiscal
years 2004, 2003 and 2002.  Tell us if you employ lead generators
to
refer prospective car buyers to either your brick and mortar
dealerships or Internet sites.  To the extent that lead generator
fees are material, tell us if you pay fees for each referral, upon
the consummation of the sale or based on a combination of factors.
Tell us where you classify lead generator fees in your statement
of
operations and the amount of these fees incurred in fiscal years
2004, 2003 and 2002.  Please include the names of your Internet
sites
and the related accounting policies in your future filings and
include an example of the disclosures in your response.  We may
have
further comments after reviewing your response.
10. In future filings please expand your current revenue
disclosure
to clarify the following:
* For sales transactions that have multiple units of accounting
please state how you determine the separate units and allocate the
fair values to each separate unit using the residual method.  Also
describe the nature of any performance, termination, cancellation
or
refund type provisions, as applicable. See Example 4 of EITF No.
00-
21;
* Expand the disclosure of your future charge backs to include the
disclosures required by Rule 12-09 of Regulation S-X for valuation
and qualifying accounts and disclose the effects that a two
percent
change in service fee revenues would have on chargeback estimates,
if
such change was material.  See Question 1 of Topic 13B;
Please include an example of your expanded and revised disclosure
in
your response.

Business Segment Information, page F-12
11. Please tell us how you arrived at the conclusion your
reinsurance
companies and auto dealerships are representative of a single
reportable segment specifically as it relates to the nature of the
products and services offered by these businesses and the
regulatory
environments which oversee the property and casualty insurance and
automotive retail industries.  See paragraph 17 of SFAS No. 131.
If
after further consideration you determine that you have multiple
reportable segments, please include the segment disclosure
required
by paragraphs 33 - 39 of SFAS No. 131 in your future interim and
annual filings.  Disclose whether operating segments have been
aggregated.  Please include an example of the revised segment
disclosure in your response, as applicable.

12. Operating Leases, page F-21

12. You disclose that you typically do not guarantee residual
values
on lease transactions.  Reference is made to page 4 of your 10-K.
Please tell us if any arrangements presently exist where you do
guarantee the residual value in your leases even though this may
not
be a common or pervasive business practice.  If these arrangements
exist, please tell us the features of these residual guarantees
and
your accounting treatment.

13. If other than cash, tell us the form and terms of Mr. Howard`s
initial investment in the dealership buildings you sold on
February
18, 2003 for $4.5 million.  If the consideration is in the form of
a
buyer`s note tell us the relevant terms of the note including if
it
is supported by an irrevocable letter of credit.  Tell us if there
is
any third party financing or if you provided direct or indirect
funding to the buyer or collaterized or guaranteed loans for the
buyer.  Please summarize your response with a conclusion as to why
the sale of these dealership buildings qualifies for sale-
leaseback
accounting treatment and include references to applicable
accounting
pronouncements as necessary.

		As appropriate, please amend your filing and respond to
these comments within 10 business days, or tell us when you will
provide us with a response.  You may wish to provide us with
marked
copies of the amendment to expedite our review.  Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested information.  Detailed letters
greatly facilitate our review.  File your response on EDGAR as a
correspondence file.  Please understand that we may have
additional
comments after reviewing your responses to our comments.

	 We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision.  Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.

In connection with responding to our comments, please provide, in
writing, a statement from the company acknowledging that:

* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;

* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and

* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

	In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.

		You may contact Brian McAllister, Staff Accountant at
(202)
551-3341, Donna Di Silvio at (202) 551-3202, or me at (202) 551-
3841
if you have any questions regarding comments on the financial
statements and related matters.

									Sincerely,

									Michael Moran
									Accounting Branch
Chief
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Mr. Earl J. Hesterberg
Group 1 Automotive, Inc.
September 16, 2005
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