PENSKE AUTOMOTIVE GROUP, INC.

In addition to the information set forth in this Form 10-Q, you should carefully consider the risk factors discussed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024, and Part II, Item 1A. "Risk Factors" in our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2025, along with our other periodic reports filed with the Securities and Exchange Commission, which could materially affect our business, financial condition, or future results. The following disclosure further updates the risk factors included in our 2024 Annual Report on Form 10-K and our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2025:

Other Regulatory Issues. We are subject to a wide variety of regulatory activities and oversight, including:

Governmental regulations, claims, and legal proceedings. Governmental regulations affect almost every aspect of our business, including the fair treatment of our employees, wage and hour issues, and our financing activities with customers. We could be susceptible to claims or related actions if we fail to operate our business in accordance with applicable laws or it is determined that our long-standing compensation methods or other practices did not comply with local laws. Many laws and regulations applicable to our business were adopted prior to the introduction of online vehicle sales, the Internet and certain digital technology, generally. As a result, we are tasked with maintaining compliance in an uncertain regulatory environment. Claims arising out of actual or alleged violations of law which may be asserted against us or any of our dealers by individuals, through class actions, or by governmental entities in civil or criminal investigations and proceedings, may expose us to substantial monetary damages which may adversely affect us.

Our financing activities with customers are subject to truth-in-lending, consumer leasing, equal credit opportunity, and similar regulations as well as motor vehicle finance laws, installment finance laws, insurance laws, usury laws, and other installment sales laws. In the U.K., the Financial Conduct Authority (the "FCA") regulates financial services firms and financial markets, including our activities in acting as broker of vehicle financing. The FCA is currently consulting on an industry-wide compensation scheme. This follows the FCA’s review of the vehicle finance industry concerning certain practices which, in the FCA’s determination, may have been unfair to customers, including with respect to vehicle financing commission disclosures. The FCA’s proposed redress scheme provides that lenders must compensate customers whose financing arrangements are deemed unfair because they involved a discretionary commission arrangement, the commissions paid to dealers were too high, or there was an undisclosed exclusivity or similar arrangement between the lender and broker. This new proposed redress scheme remains subject to comment by industry participants and is expected to be implemented in 2026.

The proposed redress scheme requires that lenders, not dealers, reimburse customers. However, we will be subject to significant administrative obligations in connection with the redress scheme, and it is possible that lenders could seek to directly or indirectly offset their redress obligations under the scheme from dealers. While the terms of the final redress scheme and its repercussions are presently unknown, it could materially and adversely affect our business and results of operations.

Tariffs and Trade Risk. In addition to previously announced tariffs imposed on automobiles and certain automobile parts (the "Automotive Tariffs"), U.S. President Trump recently announced the imposition of a 25% tariff on medium- and heavy-duty trucks and truck parts (the "Truck Tariffs"), scheduled to be effective on November 1, 2025. In their current form, the Truck Tariffs are expected to impact various commercial vehicles sold by our Premier Truck Group ("PTG") business and trucks used in the operations of Penske Transportation Solutions ("PTS"). The policies and announcements regarding tariffs, including the Automotive Tariffs and Truck Tariffs, remain fluid.

It remains difficult to assess how the Automotive Tariffs, Truck Tariffs, other recently announced tariffs, and non-tariff trade barriers will affect our business and results of operations, although these tariffs, if sustained in their current or similar forms, are expected to broadly impact the automotive and transportation industry and supply chain and will affect a substantial portion of the retail automotive and commercial truck vehicles and parts we sell, particularly as many of our key manufacturing partners, including Daimler Trucks North America LLC in its production of Freightliner trucks, produce and assemble certain vehicles and parts outside of the U.S., some of which include imported components. Although tariffs will affect each manufacturer and vehicle model differently, the Automotive Tariffs, Truck Tariffs, and other existing or subsequently announced tariffs affecting the automotive or transportation industry are likely to increase our cost of acquiring vehicles, trucks and parts, as well as our inventory carrying costs. This may lead to increased prices for consumers, which may decrease consumer demand and negatively impact revenue and gross profit with respect to the sale of new vehicles and parts, particularly in light of the prolonged recessionary freight rate environment.

In October 2025, the Dutch government invoked emergency powers to seize control of Nexperia, a subsidiary of a Chinese company and an important supplier of basic chips used in vehicles, prompting the Chinese government to ban exports of the company's finished products. The Alliance for Automotive Innovation reported that OEMs could experience significant production delays if Nexperia does not resume shipments. Should this situation not be resolved, we could experience delays in acquiring vehicles or parts or experience other events which could materially and adversely affect us.

On September 16, 2025, a fire at a major U.S. aluminum production facility caused significant damage and is expected to keep the plant offline until early 2026. The facility supplies several OEMs, and the disruption is anticipated to affect the production of certain aluminum-intensive vehicle models. Certain OEMs have indicated they are working with alternative aluminum suppliers to mitigate the impact of the fire. In response to these supply constraints, Ford temporarily suspended production of certain SUV models and additional impacts to truck production may occur if aluminum shortages persist. While the ultimate impact on our new vehicle supply remains uncertain, these disruptions could result in reduced vehicle availability, which could materially and adversely affect us.

Changes or increases in tariffs, trade restrictions, the negotiation of new trade agreements, non-tariff trade barriers, local content requirements, uncertainty surrounding global trade policies, and the imposition of retaliatory tariffs or trade barriers against certain countries or covering certain products, including vehicles and parts, may affect our competitive position and negatively impact our gross profit with respect to affected vehicles and parts. The ultimate impact of any tariffs is uncertain and will depend on various factors, including whether such tariffs are maintained and/or implemented, the scope and nature of applicable exemptions, the duration of the tariffs and the timing of their implementation, the amount, scope, and nature of the tariffs, and the related responses from impacted countries, manufacturers, and/or consumers.