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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):                  May 11, 2006

Lithia Motors, Inc.
(Exact Name of Registrant as specified in its charter)

Oregon    0-21789    93 - 0572810 
(State or other jurisdiction of    (Commission File Number)    (IRS Employer Identification 
incorporation)        No.) 

360 E. Jackson Street
Medford, Oregon 97501
(Address of Principal Executive Office)

Registrant's telephone number including area code 541-776-6868

Not applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c))

 

Item 1.01   Entry into Material Definitive Agreement.

        The Board of Directors of Lithia Motors, Inc. adopted a new compensation package for members of the Board of Directors serving the 2006-2007 term. Attached as Exhibit 99.1 is a summary of the compensation package.

Item 9.01   Financial Statements and Exhibits.

  (a)      Not applicable.
  (b)      Not applicable.
  (c)      Exhibits.
    99.1 2006 Board of Directors' Compensation Package
  

SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

            LITHIA MOTORS, INC. 
            (Registrant) 
 
 
Date:   May 17, 2006    By:    /s/ Kenneth E. Roberts                         
            Kenneth E. Roberts 
            Assistant Secretary