Managing in Troubled Times

Tempe, Ariz., October 16, 2009. NowAuto Group, Inc. (NAUG:BB and NWAU.PK) today announced results for its fiscal year ended June 30, 2009. The Company reported revenue of $5.4 million and a net loss of $0.24 per diluted share versus revenue of approximately $4.5 million and a net loss of $0.21 per diluted share in the prior fiscal year. The increase in revenue in fiscal 2009 was due to improved sales. Gross margin increased during fiscal 2008 to 45% up from 42% (restated) in the prior year as a result of the new enterprise system that is more efficient at capturing cost and incorporating them in the sales price.

Contract receivables, including deferred revenue from lease contracts, increased 27% from the prior year.

Construction is the largest industry in the Phoenix area. The crisis in the financial and mortgage industries has hit construction especially hard. As a result, the Company’s Bad Debt expense increased 36% from fiscal 2008. Administrative costs increased because of increase in staff, additional costs due to the new system, and an increase in health care benefits.

“The present condition of the sub-prime and below sub-prime market has continued to impact our industry and our company” said CEO Scott Miller. “While our emphasis is always on collections, our challenge in the current environment is to maximize sales while aggressively work with our customer to maintain active contracts. New finance programs and changes in marketing and advertising yielded positive sales results this fiscal year. Nevertheless, we expect a difficult environment for the foreseeable future. Our commitment to customers and shareholders alike remains; NowAuto will do whatever it can to maintain productive contracts without placing imprudent demands on our customers” Miller said.

“As previously announced, there have been unexpected changes in auditor. This has posed some significant challenges for us”, said Faith Forbis, CFO.  “However, the filing of this report marks the successful end of the audit. We look forward to working with the new audit firm of Semple, Marchal, and Cooper.”

“At the end of September, the Corporate office and Service Department relocated to the same facility. This new location significantly expands the Service Department, makes it more efficient, and gives Officers better oversight of operations” said Chief Operating Officer Tino Valenzuela.

About NowAuto Group, Inc.

NowAuto Group, Inc. operates three buy-here-pay-here used vehicle dealerships in Arizona. The Company manages all of its installment finance contracts and purchases installment finance contracts from a select number of other independent used vehicle dealerships. Through its subsidiary, NavicomGPS, Inc. the company markets GPS tracking devices, primarily to independent used vehicle dealerships.

The following information was filed by Nowauto Group, Inc. (NAUG) on Monday, October 19, 2009 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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