We lease certain dealerships, office space, land, and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. We have elected not to bifurcate lease and non-lease components related to leases of real property.

Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to 25 or more years. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

Certain of our lease agreements include rental payments based on a percentage of retail sales over contractual levels and others include rental payments adjusted periodically for inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.


	December 31,
($ in millions)	2024			2023
Operating lease liabilities:
Current portion included in accrued liabilities	$	97.6		$	68.2
Non-current operating lease liabilities	596.5			427.9
Total operating lease liabilities	694.1			496.1

Finance lease liabilities:
Current portion included in current maturities of long-term debt	20.6			7.8
Long-term portion of lease liabilities in long-term debt	93.7			91.6
Total finance lease liabilities	114.3			99.4
Total lease liabilities	$	808.4		$	595.5

Finance lease right-of-use assets:
Total finance lease right-of-use assets (1)	$	114.0		$	132.7
Weighted-average remaining lease term:
Operating leases	11 years			10 years
Finance leases	7 years			8 years
Weighted-average discount rate:
Operating leases	5.56		%	4.78		%
Finance leases	5.64		%	5.53		%


		Year Ended December 31,
($ in millions)	Classification	2024		2023		2022
Operating lease cost (1)	Selling, general and administrative	$	135.9	$	96.9	$	77.9
Variable lease cost (2)	Selling, general and administrative	7.4		7.1		5.6
Amortization of finance lease right-of-use assets	Depreciation and amortization	4.4		3.8		4.2
Interest on finance lease liabilities	Other interest expense	5.7		4.1		3.7
Sublease income	Selling, general and administrative	(14.0)		(9.0)		(7.5)
Total lease costs		$	139.4	$	102.9	$	83.9

(2)Variable lease cost generally includes reimbursement for actual costs incurred by our lessors for common area maintenance, property taxes and insurance on leased real estate.


($ in millions)	Operating Lease Liabilities		Finance Lease Liabilities
Year Ending December 31,
2025	$	116.0	$	26.7
2026	102.0		7.5
2027	93.2		28.3
2028	84.3		5.9
2029	75.3		5.9
Thereafter	406.9		79.3
Total minimum lease payments	877.7		153.6
Less: present value adjustment	(183.6)		(39.3)
Total lease liabilities	$	694.1	$	114.3

We have recorded a liability of $175.0 million as of December 31, 2024 for our estimated contractual obligations related to potential charge-backs for vehicle service contracts and other various insurance contracts that are terminated early by the customer. We estimate that the charge-backs will be paid out as follows:

We retain the obligation for lifetime lube, oil, and filter service contracts and at home valet contracts sold to our customers and assumed the liability of certain existing lifetime lube, oil, and filter contracts. These amounts are recorded as a contract liability. At the time of sale, we defer the full sale price and recognize the revenue based on the rate we expect future costs to be incurred. As of December 31, 2024, we had a contract liability balance of $410.4 million associated with these contracts and estimate the contract liability will be recognized as follows:

We self-insure a portion of our property and casualty insurance, vehicle open lot coverage, medical insurance, and workers’ compensation insurance. Third parties are engaged to assist in estimating the loss exposure related to the self-retained portion of the risk associated with these insurances. Additionally, we analyze our historical loss and claims experience to estimate the loss exposure associated with these programs. As of December 31, 2024 and 2023, we had liabilities associated with these programs of $95.6 million and $77.1 million, respectively, recorded as a component of accrued liabilities and other long-term liabilities in our Consolidated Balance Sheets.

We are party to numerous legal proceedings arising in the normal course of our business. Although we do not anticipate that the resolution of legal proceedings arising in the normal course of business will have a material adverse effect on our business, results of operations, financial condition, or cash flows, we cannot predict this with certainty.