CARMEL, Ind. — Along with an announcement late last week of
another common stock offering, KAR Auction Services' board of directors
approved the initiation of a quarterly cash dividend on the company's common
stock.

The first dividend paid to stockholders in the company's
history entails the initial quarterly dividend of $0.19 per share to be paid on
Dec. 28 to stockholders of record at the close of business on Dec. 19,
representing an annualized dividend of $0.76 per share.

KAR said the declaration and payment of any future dividend
will be subject to the discretion of the board of directors and will depend on
a variety of factors. Those elements include:

—The company's financial condition and results of
operations.

—Contractual restrictions, including restrictive covenants contained in the
company's credit agreement, Automotive Finance Corp.'s securitization
facilities and the indenture governing the company's outstanding debt
securities.

—Capital requirements.

—Other factors the board of directors deems relevant.

"Therefore, no assurance can be given as to whether any
future dividends will be declared by the board of directors or the amount
thereof," KAR officials said.

The company also announced last week that it has entered
into an amendment to its credit agreement dated as of May 19, 2011.

KAR explained the amendment provides greater flexibility to
the company, "including modifications to increase the amount of restricted
payments (which include, among other things, dividends, stock buybacks and
other payments made in respect of the company's equity securities) permitted to
be paid under the terms of the credit agreement and modifications to a
financial covenant to account for such greater flexibility."

Secondary Offering of Common Stock

In other company news, KAR announced the commencement of an
underwritten offering of up to $200 million of its common stock by existing
stockholder KAR Holdings II that's subject to market and other conditions.

KAR Holdings II is controlled by entities affiliated with
Kelso Investment Associates VII, L.P., GS Capital Partners VI, L.P., ValueAct
Capital Master Fund, L.P. and Parthenon Investors II, L.P.

Officials said the company will not receive any proceeds
from the offering.

In connection with the offering, KAR Holdings II intends to
grant the underwriters an option to purchase an additional 15 percent of the
number of shares in the offering.

Officials said the offering will be made pursuant to the
company's existing effective shelf registration statement on Form S-3 filed
with the Securities and Exchange Commission.

Credit Suisse Securities, Goldman, Sachs & Co. and J.P.
Morgan Securities are acting as joint book-running managers for the offering.

When available, copies of the prospectus supplement and
accompanying prospectus related to this offering may be obtained from:

Credit Suisse Securities
Attention: Prospectus Department
One Madison Avenue, New York, N.Y. 10010
Telephone: (800) 221-1037
newyork.prospectus@credit-suisse.com

Goldman, Sachs & Co.
Attention: Prospectus Department
200 West Street, New York, N.Y. 10282
Telephone: (866) 471-2526
Fax (212) 902-9316
prospectus-ny@ny.email.gs.com

J.P. Morgan Securities
c/o Broadridge Financial Solutions
1155 Long Island Avenue
Edgewood, N.Y 11717
Telephone: (866) 803-9204

"This press release does not constitute an offer to sell or
the solicitation of an offer to buy the securities, nor shall there be any sale
of these securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction," KAR officials said.