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February 24, 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:

As a follow up
to our response dated February 1, 2006 to 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”), we wanted to you make you aware of some additional
information.

In preparing
the restated cash flows in the manner described in our February 1, 2006
response to you, we reviewed our treatment of floor plan activity associated
with our acquisitions and divestitures.
Historically we have treated borrowings from our floor plan providers in
connection with our acquisitions, and payments to our floor plan providers in connection
with our divestitures, as non cash items.
In other words, we have treated such floor plan borrowings as if they
were assumed liabilities in these transactions.   This treatment was consistent with the
historical treatment of floor plan borrowings and repayments as an operating
activity.

In each of our
dealership acquisitions, we acquire new vehicle inventory.  We fund that portion of the purchase price
with borrowings from one of our floor plan lenders.  We fund the remaining portion of the
acquisition with cash or with borrowings from our acquisition line.  We typically pay the portion of the purchase
price related to the acquisition of the inventory to the seller’s floor plan
provider.  The seller’s floor plan
provider will not release the lien nor pass the title until the floor plan has
been repaid.  As a result the seller’s floor
plan provider is typically paid directly in every acquisition.  Therefore, the scheduling of the floor plan
transition is an important component of the timing of an acquisition’s closing
date.

Based on the
conclusions we reached in our February 1, 2006 letter, when those funds
are borrowed from a non-manufacturer affiliated lender, we will disclose those
borrowings in the financing activities section

in our consolidated statement of cash flows.  When those funds are borrowed from a lender
affiliated with vehicle manufacturer, we will also disclose those borrowings in
the financing activities section of our consolidated statement of cash
flows because we are purchasing the inventory from a dealer who is independent
of our lending source.  We reach the same
conclusion even if the seller is using the same manufacturer affiliated lender
from which we will borrow. Even though the lender remains the same, as we
stated above, the relationship which gives rise to the operating activities
treatment, in essence buying from the manufacturer of a product on credit, does
not exist.  In both instances, we will
include the acquisition price of the new vehicle inventory in the acquisitions line
of the investing activities section of our consolidated statement of cash
flows.  In the instance when any portion
of the purchase price has been borrowed from a manufacturer affiliated floor
plan lender, the repayment of those borrowings will be reflected as the repayment
of non-affiliated floor plan in the financing activities section of our
consolidated statement of cash flows.

In the case of
divestitures, the same is true as stated above with the exception that we are
on the other end of the transaction.  In
the instance of a dealership to be sold, we would have borrowed the funds used
to acquire the new vehicle inventory held for sale from one of our floor plan
providers and we would have the acquirer repay our floor plan lender with a
portion of the proceeds from the acquisition, for the reasons stated above.  Those proceeds typically come from the
acquirer’s floor plan provider.   When we
sell new vehicle inventory in a dealership divestiture where the funds used to
purchase the inventory being sold were borrowed from a non-manufacturer
affiliated lender, we will include the repayment of such floor plan obligation
in the financing activities section of our consolidated statement of cash
flows.  Likewise when we sell new vehicle
inventory in a dealership divestiture where the funds to purchase the inventory
being sold were borrowed from a manufacturer affiliated lender, we will include
the repayment of such floor plan obligation in the operating activities section of
our consolidated statement of cash flows.
In both instances we will include the selling price of the new vehicle inventory
in the proceeds from the sale of assets line of the investing activities section in
our consolidated statement of cash flows.

We have
concluded that this is the appropriate accounting treatment of floor plan
activity in connection with acquisitions and divestitures.  We want to make the Staff aware that this
treatment may have the effect of materially decreasing operating cash flow as the
result of divestiture activity as payments to manufacturer affiliated floor
plan providers, in connection with our divestitures, will have the dollar-for-dollar
impact of decreasing our operating cash flow.

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