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CORRESP
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January 30, 2006

Mr. George F. Ohsiek, Jr.

Accounting Branch Chief

United States Securities and
Exchange Commission

100 F Street

Washington, D.C.

RE:         Asbury Automotive Group,
Inc.

Form 10-K for Fiscal Year Ended December 31, 2004

Filed March 14, 2005

File No. 001-31262

Dear Mr. Ohsiek:

We have
reviewed the comments in your letter dated January 18, 2006 (referred to as the
“Comment Letter”) regarding Asbury Automotive Group, Inc.’s Annual Report on
Form 10-K for the year ended December 31, 2004 (referred to as our “Annual
Report”).  For your convenience, we have
included the text of your comments appearing in italics prior to our response.

Financial Statements, page 57

1.  We
note that you include the changes in your floor plan notes payable as an operating
activity on the statement of cash flows.
Borrowings and repayments on floor plan notes payable for 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 borrowings and repayments for new vehicle
inventory should be included in operating activities analogous to inventory
financed with accounts payable.  See
paragraph 23a of SFAS No. 95.  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.  Please advise or revise your
financial statements of cash flows and balance sheets.

We have been aware of this issue for several
months as the result of the correspondence that the Staff has had with the
various other registrants in our industry.
We would like to go on record in saying that we agree with the arguments
made by our peers as to why the presentation of all floor plan borrowings in
operating activities was appropriate. We believe that their collective
arguments were complete and therefore we have no additional arguments to make
on the issue.  We also understand that the
Staff did not agree with the reasoning presented in those arguments.

As a result, management
has recommended to our Audit Committee and the Committee has approved the
amendment of our Form 10-K for the fiscal year ended December 31, 2004 (the “2004
Form 10-K”), our Form 10-Q for the quarter ended March 31, 2005, our Form 10-Q
for the quarter ended June 30, 2005,  and
our Form 10-Q for the quarter ended September 30, 2005 to classify borrowings
and repayments for the purchase of vehicle inventory from lenders not
affiliated with the manufacturer of the inventory in the financing activities
section of our statements of cash flows and to separately disclose floor plan
borrowings from lenders affiliated with the vehicle manufacturers from those
unaffiliated with the vehicle manufacturers on our balance sheets.

In completing
our restatement we would like to furnish to you the significant terms and
conditions of our floor plan financing agreements that were in effect during
the periods covered by our 2004 Form 10-K and those that are currently in
effect and how we plan to present each form of borrowing and repayment in our
restated cash flow statements.

During the
periods covered by our 2004 Form10-K and through March 2005, we financed the
acquisition of our new vehicle inventory through (i) an arrangement with
DaimlerChrysler Financial Services North America, LLC (“DCFS”) for the
acquisition of new DaimlerChrysler vehicles and the acquisition of new
non-DaimlerChrysler vehicles; (ii) an arrangement with General Motors
Acceptance Corporation (“GMAC”) for the acquisition of new General Motors
vehicles and the acquisition of non-General Motors vehicles; and (iii) an
arrangement with Ford Motor Credit Company (“FMCC”) for the acquisition of new
Ford “family” vehicles and the acquisition of new non-Ford “family”
vehicles.  In addition, under certain
circumstances, each of these credit lines allowed us to finance used vehicle
purchases.

Floor plan
borrowings from FMCC and DCFS were individual notes payable specifically
identifiable to each vehicle purchased and were due within three to five days
of the sale of the vehicle.  Payments for
the initial acquisition of inventory were made directly from the affiliated
lender to the manufacturer and we did not have the ability to access these
funds.  The arrangements were cancelable
by either party with less than 90 days written notice.  Floor plan borrowings with GMAC were on
substantially similar terms except the arrangement was cancelable by either
party with 180 days written notice.

In March 2005,
we entered into a committed credit facility with a syndicate of 17 financial
institutions and FMCC and GMAC.  The
terms and conditions of our agreements with FMCC and GMAC remained relatively
unchanged (we only negotiated pricing of these existing facilities) and we terminated
our relationship with DCFS.  We continue
to finance the acquisition of all new Ford “family” vehicles with FMCC and the
acquisition of all new General Motors vehicles with GMAC under these new
agreements.  Floor plan financing for the
purchase of all

other vehicles, including used
vehicle purchases, is provided by the syndicate.  Floor plan borrowings from the syndicate are
individual notes payable specifically identifiable to each vehicle purchased
and are due within 15 days of the sale of the vehicle.  Our lending agreement with the syndicate has
a term of three years and allows for an indefinite series of renewals.

In addition, included
in the syndicate is BMW Financial Services.
Because all of our borrowings and repayments under the syndicate are
done through the lead bank (JP Morgan Chase, NA) and are then distributed among
the other financial institutions within the syndicate by the lead bank, we do
not believe that our BMW dealerships that borrow from the syndicate are
borrowing from BMW Financial Services.
As a result, all borrowings and repayments with the syndicate are deemed
to be done through a third party, independent of our vehicle manufacturers.

Based
paragraph 23a of SFAS 95, our understanding of the presentation of borrowings
and repayments of floor plan notes payable in our statements of cash flows is
as follows:

•              Borrowings
and repayments of floor plan notes payable for vehicle inventory should be
classified in financing activities when inventory is purchased from a
manufacturer unaffiliated with the lender and in operating activities when
inventory is purchased from a manufacturer affiliated with the lender.

•              Borrowings
and repayments of floor plan notes payable with an original maturity of three
months or less for vehicle inventory purchased from a manufacturer unaffiliated
with the lender may be shown net in financing activities; however, separate “gross”
presentation is also permitted.

Assuming that
our understanding of the above is correct, we will present our borrowings and
repayments of floor plan notes payable as follows:

•              All
borrowings and repayments associated with purchases of new vehicles at our Ford
dealerships for all years, our General Motors dealerships for all years and our
DaimlerChrysler dealerships for the period from 2002 through March 2005 will be
presented net in operating activities.  This activity will be shown net as the
borrowings are considered accounts payable and the correct presentation of
changes in accounts payable under the indirect method is to present the net
change in the operating activities section of the cash flow statement,
irrespective of the original maturity of the borrowings. In addition, the
initial acquisition of inventory will be included in operating activities
section of the statement of cash flows.

•              All
borrowings and repayments associated with purchases of new vehicles at
non-General Motors dealerships that borrowed from GMAC from 2002 through March
2005 will be presented separately in financing activities.  Borrowings and repayments under this
agreement should be shown separately, as our GMAC facility is not considered a
demand instrument due to its 180-day termination provision.   In addition, the initial acquisition of
inventory will be included in operating activities section of the statement of
cash flows.

•              All
borrowings and repayments associated with purchases of new vehicles at all
non-Ford “family” dealerships that borrowed from FMCC and all
non-DaimlerChrysler dealerships that borrowed from DCFS from 2002 through March
2005 may be presented net in financing activities; however, separate “gross”
presentation would be permitted.  This
activity may be shown net as both the FMCC and DCFS facilities have an original
maturity of less than 90 days; however, the Company will present these
borrowings and repayments gross so as to not create another line for net
presentation in the financing activities section of our cash flow statements.  In addition, the initial acquisition of
inventory will be included in operating activities section of the statement of
cash flows.

•              All
borrowings and repayments associated with purchases of new vehicles at all
dealerships that borrowed from the syndicate will be presented separately in
financing activities, as all activity is with a non-affiliate lender and the
facility has an original maturity of greater than 90 days.  In addition, the initial acquisition of
inventory will be included in the operating activities section of the statement
of cash flows.

•              All
borrowings and repayments from FMCC or DCFS associated with the purchase of
used vehicles from 2002 through March 2005 may be presented net in financing
activities (separate “gross” presentation would be permitted), with the initial
acquisition of inventory included in the operating activities section of the statement
of cash flows.  This activity may be
shown net as these facilities had original maturities of less than 90 days;
however, the Company will present these borrowings and repayments gross so as
to not create another line for net presentation in the financing activities section
of our statement of cash flows.

•              All
borrowings and repayments from GMAC associated with the purchase of used
vehicles from 2002 through March 2005 will be shown gross in financing
activities as this facility has an original maturity of greater than 90
days.  In addition, the initial
acquisition of inventory will be included in the operating activities section
of the statement of cash flows.

•              All
borrowings and repayments associated with the purchase of used vehicles
borrowed from the syndicate should be presented

separately in financing activities, as all activity is with a non-affiliate
lender and the facility has an original maturity of greater than 90 days.  In addition, the initial acquisition of
inventory will be included in the operating activities section of the statement
of cash flows.

We are in the
process of evaluating the amount of time that it will take in order to complete
these restatements.  Our objective is to
complete the restatements before filing our Form 10-K for the fiscal year ended
December 31, 2005 on or before March 15, 2005.

In connection
with the responses submitted herewith, we hereby acknowledge that:

•      The
Company is responsible for the adequacy and accuracy of the disclosure in our
filings;

•      Staff
comments or changes to disclosure in response to Staff comments do not
foreclose the Commission from taking any action with respect to such filings;
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.

Please address
any questions you may have to me at (212) 885-2521 or via facsimile at (212) 297-2651.

  Sincerely,

  /s/ J.
  Gordon Smith

  J. Gordon
  Smith

  Senior Vice
  President

  and Chief
  Financial Officer