EXHIBIT 5.1



                    [FOSTER PEPPER & SHEFELMAN LETTERHEAD]



June 8, 2000


Board of Directors
Lithia Motors, Inc.
360 E. Jackson St.
Medford, Oregon 97501

     Re:  Form S-8 Registration
          250,000   Additional   Shares   under  the  1998
          Employee Stock Purchase Plan

Gentlemen:

     This  firm  is  special  counsel  to  Lithia  Motors,   Inc.,  an  Oregon
corporation,  (the  "Company")  and,  in that  capacity,  has  assisted in the
preparation  of certain  documents  relating to the  issuance of up to 250,000
shares  of the  Company's  common  stock  ("Shares")  in  accordance  with the
Company's 1998 Employee Stock Purchase Plan (the "Plan");  in particular,  the
Company's  Registration  Statement on Form S-8 (the "Registration  Statement")
registering an additional 250,000 shares pursuant to the Plan.

     In the course of our  representation as described above, we have examined
the Plan, the Registration  Statement  prepared for filing with the Securities
and Exchange  Commission  and related  documents and  correspondence.  We have
reviewed the Restated Articles of Incorporation, as amended, the Bylaws of the
Company,  and minutes of certain meetings of the Company's Board of Directors.
We have also received from the officers of the Company  certificates and other
representations concerning factual matters. We have received such certificates
from, and have had conversations with, public officials in those jurisdictions
in which we have deemed it appropriate.

     As to  matters  of fact,  we have  relied  upon the  above  certificates,
documents  and  investigation.  We  have  assumed  without  investigation  the
genuineness of all signatures and the  authenticity and completeness of all of
the documents submitted to us as originals and the conformity to authentic and
complete original  documents of all documents  submitted to us as certified or
photostatic copies.

     Based upon and  subject to all of the  foregoing,  we are of the  opinion
that:

     The Shares have been validly  authorized,  and  when (i) the Registration
     Statement becomes effective;  (ii) the Shares have been delivered against
     payment  therefore as contemplated by the Registration  Statement and the
     Plan; and (iii) such state securities laws as may be applicable have been
     complied  with,  then the Shares will be validly  issued,  fully paid and
     non-assessable.





     This  opinion is limited to the  present  laws of the State of Oregon and
the United  States of America and to the facts bearing on this opinion as they
exist on the date of this  letter.  We disclaim  any  obligation  to review or
supplement this opinion or to advise you of any changes in the  circumstances,
laws or  events  that may  occur  after  this date or  otherwise  update  this
opinion.

     This  opinion is provided to you as a legal  opinion  only,  and not as a
guaranty or warranty of the matters discussed  herein.  Our opinion is limited
to the matters  expressly stated herein,  and no other opinions may be implied
or inferred.

     The  opinions  expressed  herein are for the benefit of and may be relied
upon only by you in  connection  with the Plan.  Neither  this opinion nor any
extract therefrom nor reference thereto shall be published or delivered to any
other person or otherwise relied upon without our expressed written consent.

     We hereby  consent to the filing of this opinion with the  Securities and
Exchange  Commission as an exhibit to the  Registration  Statement.  In giving
this  consent,  we don not admit that we are within  the  category  of persons
whose consent is required  under Section 7 of the Act or the General Rules and
Regulations of the Commission.

                                    Very truly yours,

                                    FOSTER PEPPER & SHEFELMAN, LLP


                                    By:  /s/ Kenneth E. Roberts
                                         Kenneth E. Roberts


Portland, Oregon