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Filed Pursuant to Rule 424(b)(5)
Registration No. 333-86672

Prospectus Supplement

(To prospectus dated August 16, 2002)

$150,000,000

Sonic Automotive, Inc.

4.25% Convertible Senior Subordinated Notes due 2015

Sonic Automotive, Inc. is offering $150,000,000 aggregate principal amount of its 4.25% Convertible Senior Subordinated Notes due 2015. The notes will bear interest at the rate of 4.25% per year, which interest rate shall be increased by 0.50% for all periods beginning after November 30, 2010. Interest on the notes is payable on May 31 and November 30 of each year, beginning on May 31, 2006.

The notes will mature on November 30, 2015, unless earlier converted, redeemed or repurchased by us. We may also, at our option, redeem some or all of the notes for cash at any time on or after November 30, 2010 at a redemption price equal to 100% of the principal amount of the notes to be redeemed plus accrued and unpaid interest to the redemption date.

The notes will be our unsecured senior subordinated obligations and rank junior in right of payment to all of our other existing and future senior indebtedness and equal in right of payment to all of our existing and future senior subordinated debt and senior to all future subordinated indebtedness. The notes will not be guaranteed by any of our subsidiaries and accordingly the notes will be effectively subordinated to the indebtedness and other liabilities of our subsidiaries.

Holders may convert their notes into cash and shares of our Class A common stock, if any, at a conversion rate of 41.4185 shares of Class A common stock per $1,000 principal amount of notes, subject to adjustment upon certain events, under the following circumstances: (1) subject to certain limitations, during a specified conversion period if the trading price for the notes falls below a specified threshold; (2) if we call the notes for redemption; or (3) upon the occurrence of certain corporate transactions. Upon conversion, we will deliver cash equal to the lesser of the aggregate principal amount of notes to be converted and our total conversion obligation, plus shares of our Class A common stock in respect of the remainder, if any, of our conversion obligation. In addition, on or after October 31, 2010, to (and including) the close of business on the business day immediately preceding the maturity date, holders may convert the notes into cash and shares of our Class A common stock, if any, regardless of the foregoing circumstances. If certain corporate transactions occur on or prior to November 30, 2010, we will increase the conversion rate by a number of additional shares of Class A common stock or, in lieu thereof, we may under certain circumstances elect to adjust the conversion rate and the related conversion obligation so that the notes will be convertible into shares of the acquiring or surviving company, in each case as described in this prospectus supplement.

Holders may also require us to repurchase in cash some or all of the notes at a repurchase price equal to 100% of the principal amount of the notes, plus accrued and unpaid interest up to but excluding the applicable repurchase date, on November 30, 2010 or, subject to specified exceptions, at any time prior to the notes’ maturity following a fundamental change as described in this prospectus supplement.

Our Class A common stock currently trades on the New York Stock Exchange under the symbol “SAH.” On November 17, 2005, the last reported sale price of our Class A common stock on the NYSE was $19.79 per share.

Investing in the notes involves risks. See “ Risk Factors” beginning on page S-13 of this prospectus supplement and page 2 of the prospectus.

The underwriters may also purchase up to an additional $10,000,000 aggregate principal amount of notes within 13 days from the date of this prospectus supplement to cover over-allotments, if any.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The notes will be ready for delivery in book-entry form only through the facilities of The Depository Trust Company on or about November 23, 2005.

Joint Book-Running Managers

The date of this prospectus supplement is November 18, 2005.

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TABLES OF CONTENTS

Prospectus Supplement

Prospectus

ABOUT THIS PROSPECTUS SUPPLEMENT

This document is in two parts. The first is this prospectus supplement, which describes the specific terms of the offering and the notes. The second part, the accompanying prospectus, gives more general information, some of which does not apply to this offering.

If the description of this offering and the notes varies between this prospectus supplement and the accompanying prospectus, you should rely on the information in this prospectus supplement.

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Unless we state otherwise, all information in this prospectus supplement assumes that the underwriters do not exercise their over-allotment option.

In various places in this prospectus supplement and the accompanying prospectus, we refer you to sections of other documents for additional information by indicating the caption heading of the other sections. The page on which each principal caption included in this prospectus supplement and the accompanying prospectus can be found is listed in the table of contents above. All cross references in this prospectus supplement are to captions contained in this prospectus supplement and not in the accompanying prospectus, unless otherwise indicated.

CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus supplement contains numerous “forward-looking statements” within the meaning of the Private Litigation Securities Reform Act of 1995. These forward-looking statements address our future objectives, plans and goals, as well as our intent, beliefs and current expectations regarding future operating performance, and can generally be identified by words such as “may,” “will,” “should,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” and other similar words or phrases. Specific events addressed by these forward-looking statements include, but are not limited to:

These forward-looking statements are based on our current estimates and assumptions and involve various risks and uncertainties. As a result, you are cautioned that these forward-looking statements are not guarantees of future performance, and that actual results could differ materially from those projected in these forward-looking statements. Factors which may cause actual results to differ materially from our projections include those risks contained in “Risk Factors” and elsewhere in this prospectus supplement and the filings made by us with the Securities and Exchange Commission (“SEC”) that are incorporated by reference into this prospectus supplement, as well as:

You should rely only on the information contained or incorporated by reference into this prospectus supplement or the accompanying prospectus. We have not, and the underwriters have not, authorized any other person to provide you with different information. If anyone provides you with different or inconsistent

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information, you should not rely on it. We are not, and the underwriters are not, making an offer to sell these securities (1) in any jurisdiction where the offer or sale is not permitted, (2) where the person making the offer is not qualified to do so or (3) to any person who cannot legally be offered the securities. You should assume that the information appearing in this prospectus supplement, the accompanying prospectus and the information incorporated by reference herein is accurate only as of their respective dates. Our business, financial condition, results of operations and prospects may have changed since those dates.

You should not consider any information contained in or incorporated by reference into this prospectus to be legal, business or tax advice. You should consult your own attorney, business advisor and tax advisor for legal, business and tax advice regarding an investment in our securities.

You should base your decision to invest in our securities solely on information contained in this prospectus supplement or the accompanying prospectus and information incorporated by reference herein and therein.

No representation or warranty, express or implied, is made as to the accuracy or completeness of the information obtained from third party sources contained in or incorporated by reference into this prospectus supplement or the accompanying prospectus, and nothing contained in or incorporated by reference into this prospectus supplement or the accompanying prospectus is, or shall be relied upon as, a promise or representation, whether as to past or future performance.

This offer may be withdrawn at any time prior to the closing of the offering, and the offering is subject to the terms of this prospectus supplement and the accompanying prospectus.

No automobile manufacturer or distributor has been involved, directly or indirectly, in the preparation of this prospectus supplement or accompanying prospectus or in the offering being made hereby. No automobile manufacturer or distributor has been authorized to make any statements or representations in connection with the offering, and no automobile manufacturer or distributor has any responsibility for the accuracy or completeness of this prospectus supplement or accompanying prospectus or for the offering.

Except as otherwise indicated, all references in this prospectus supplement to “we,” “us,” “our,” “our company,” “the company” or “Sonic” means Sonic Automotive, Inc. and its subsidiaries.

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PROSPECTUS SUPPLEMENT SUMMARY

Sonic Automotive, Inc.

We are one of the largest automotive retailers in the United States. As of November 15, 2005, we operated 174 dealership franchises, representing 37 different brands of cars and light trucks at 150 locations, and 38 collision repair centers in 15 states. Our dealerships provide comprehensive services including sales of both new and used cars and light trucks, sales of replacement parts, performance of vehicle maintenance, warranty, paint and collision repair services, and arrangement of extended service contracts, financing and insurance, vehicle protection products and other aftermarket products (collectively, “F&I”) for our automotive customers. Our brand diversity allows us to offer a broad range of products at a wide range of prices from lower priced, or economy vehicles, to luxury vehicles. We believe that this diversity reduces the risk of changes in customer preferences, product supply shortages and aging products. In addition, although vehicle sales are cyclical and are affected by many factors, including general economic conditions, consumer confidence, levels of discretionary personal income, interest rates and available credit, our parts, vehicle maintenance and collision repair services are not closely tied to vehicle sales and are not as dependent upon near-term vehicle sales volume. As a result, we believe the diversity of these products and services reduces the risk of periodic economic downturns.

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The Offering

The summary below describes the principal terms of the notes. Certain of the terms and conditions described below are subject to important limitations and exceptions. The “Description of Notes” section of this prospectus supplement contains a more detailed description of the terms and conditions of the notes.

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You will not receive any cash payment or additional shares representing accrued and unpaid interest upon conversion of a note, except in limited circumstances. Instead, interest will be deemed paid by the cash and Class A common stock, if any, delivered to you upon conversion. Once we have called the notes for redemption, you may surrender your notes for conversion until the close of business on the second business day prior to the redemption date.

Upon a surrender of your notes for conversion, we will deliver cash equal to the lesser of the aggregate principal amount of notes to be converted and our total conversion obligation with regard to those notes. We will deliver shares of our Class A common stock in respect of the remainder, if any, of our conversion obligation as described under “Description of Notes—Conversion Procedures—Payment upon Conversion.”

If you elect to convert your notes in connection with certain corporate transactions that occur on or prior to November 30, 2010, we will increase the conversion rate by a number of additional shares of Class A common stock upon conversion as described under “Description of Notes—Conversion Rights—Conversion Rate Adjustments—Make Whole Amount and Adjustments for Conversion After a Public Acquirer Change of Control” or, in lieu thereof, we may in certain circumstances elect to adjust the conversion rate and related conversion obligation so that the notes are convertible into shares of the acquiring or surviving company.

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These activities could impact the price of our Class A common stock and the notes. See “Risk Factors—The convertible note hedge and warrant option transactions may affect the value of the notes and our Class A common stock” and “Purchase of Convertible Note Hedge and Sale of Warrants.”

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SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA

The summary consolidated income statement data for the years ended December 31, 2002, 2003 and 2004 and the summary consolidated balance sheet data as of December 31, 2003 and 2004 are derived from Sonic’s Consolidated Financial Statements, which are incorporated by reference into this prospectus supplement. The summary consolidated balance sheet data as of December 31, 2002 are derived from Sonic’s audited financial statements, which are not included or incorporated by reference in this prospectus supplement. The summary consolidated balance sheet data as of September 30, 2004 are derived from Sonic’s unaudited interim financial statements, which are not included or incorporated by reference into this prospectus supplement. The summary consolidated income statement data for the nine months ended September 30, 2004 and September 30, 2005, and the summary consolidated balance sheet data as of September 30, 2005, are derived from Sonic’s unaudited interim financial statements, which are incorporated by reference into this prospectus supplement. In the opinion of management, these unaudited financial statements reflect all adjustments necessary for a fair presentation of Sonic’s results of operations and financial condition. All such adjustments are of a normal recurring nature. The results for interim periods are not necessarily indicative of the results to be expected for the entire fiscal year. This summary consolidated financial and operating data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Sonic’s Consolidated Financial Statements and the related notes thereto, incorporated by reference into this prospectus supplement.

Sonic has accounted for all dealership acquisitions using the purchase method of accounting and, as a result, does not include in the financial statements the results of operations of acquired dealerships prior to the date they were acquired. The “Summary Consolidated Financial and Operating Data” of Sonic discussed below reflects the results of operations and financial position of each of the dealerships acquired prior to September 30, 2005. As a result of the effects of our acquisitions, the “Summary Consolidated Financial and Operating Data” set forth below is not necessarily indicative of the results of operations and financial position of Sonic in the future or the results of operations and financial position that would have resulted had such acquisitions occurred at the beginning of the periods presented below.

The following financial data for all periods presented reflects Sonic’s September 30, 2005 classification of franchises between continuing operations and discontinued operations in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144: Accounting for the Impairment or Disposal of Long-Lived Assets (“SFAS 144”).

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RISK FACTORS

The following is a brief description of certain risks related to this offering. We encourage you to carefully consider and evaluate all of the information set forth in this prospectus supplement, including the risk factors set forth below and incorporated by reference herein from our Current Report on Form 8-K dated November 3, 2005 and our other filings with the SEC.

Our significant indebtedness could materially adversely affect our financial health, limit our ability to finance future acquisitions and capital expenditures and prevent us from fulfilling our financial obligations.

As of September 30, 2005, after giving effect to the offering of the notes and the application of the estimated net proceeds of the offering, including the repayment of approximately $128.9 million under our revolving credit facility and the net payment of $17.1 million in connection with the convertible note hedge and warrant option transactions, our total outstanding indebtedness would have been approximately $1,560.3 million, including the following:

As of September 30, 2005, after giving effect to the offering of the notes and the application of the estimated net proceeds of the offering, we would have had approximately $357.8 million available for additional borrowings under the revolving credit facility, subject to compliance with applicable financial covenants. We also had approximately $100.0 million available under a construction/mortgage credit facility for real estate acquisitions and new dealership construction. We also have significant additional capacity under the floor plan facilities. In addition, the indentures relating to our senior subordinated notes, convertible senior subordinated notes and other debt instruments allow us to incur additional indebtedness, including secured indebtedness.

The degree to which we are leveraged could have important consequences to the holders of our securities, including the following:

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In addition, our debt agreements contain numerous covenants that limit our discretion with respect to business matters, including mergers or acquisitions, paying dividends, incurring additional debt, making capital expenditures or disposing of assets.

The notes are subordinated to our senior indebtedness.

The payment of the principal of, premium, if any, and interest on the notes will be subordinated to the prior payment in full of all of our existing and future senior indebtedness. In the event of a liquidation, dissolution, reorganization or any similar proceeding, our assets will be available to pay obligations on the notes only after senior indebtedness has been paid in full. Therefore, there may not be sufficient assets to pay amounts due on all or any of the notes.

In addition, we may not:

Moreover, under certain circumstances, if any non-payment default exists with respect to senior indebtedness, we may not make any payments on the notes for a specified time, unless such default is cured or waived, any acceleration of such indebtedness has been rescinded or such indebtedness has been repaid in full. See “Description of Notes—Subordination.”

The notes will be unsecured senior subordinated obligations and, as such, will be subordinated in right of payment with all of the other existing and future senior indebtedness incurred by us and pari passu in right of payment to all of the existing and future senior subordinated indebtedness incurred by us. As of September 30, 2005, after giving effect to the offering of the notes and application of the estimated net proceeds of the offering:

Our indebtedness is described in the footnotes to our audited financial statements contained in our Current Report on Form 8-K dated November 3, 2005, which is incorporated by reference into this prospectus supplement. The notes will not be secured by any of our, or our subsidiaries’, assets. Our floor plan indebtedness is secured by vehicle inventory and proceeds from the sale of that inventory. The indebtedness under our revolving facility is secured by:

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In the event of a default on the notes or our bankruptcy, liquidation or reorganization, these assets will be available to satisfy the obligations with respect to the indebtedness secured thereby before any payment therefrom could be made on the notes. Therefore, there may not be sufficient assets to pay amounts due on all or any of the notes.

The notes are effectively subordinated to the obligations of our subsidiaries.

Our cash flow and ability to service the notes will depend, in large part, upon the cash flow of our subsidiaries and payments of funds by those subsidiaries to us in the form of repayment of loans, dividends or otherwise. These subsidiaries are separate and distinct legal entities with no legal obligation to pay any amounts due on the notes or to make funds available therefor. Most of our operating subsidiaries are primary obligors under our floor plan facilities. In addition, although our operating subsidiaries will not be providing guarantees in connection with the notes, they do guarantee our indebtedness under our revolving credit facility, other senior debt and our 8 ⁵/8% Senior Subordinated Notes due 2013. See “Capitalization.” In addition, our subsidiaries have, and in the future may become parties to, financing arrangements that contain limitations on the ability of our subsidiaries to pay dividends or to make loans or advances to us or otherwise make cash flow available to us. Our indenture does not restrict such provisions or prohibit us or our subsidiaries from incurring debt or other obligations, including senior indebtedness, under the indenture. As a result of the factors described herein, the notes are effectively subordinated to the obligations of our subsidiaries. If we or our subsidiaries incur additional debt or liabilities, our ability to pay our obligations on the notes could be adversely affected.

We may experience significant fluctuations in our stock price, which may significantly affect the trading price of the notes.

Fluctuations in the trading price of our Class A common stock will affect the trading price of the notes. The stock market in general has from time to time experienced extreme price fluctuations. Often, these changes have been unrelated to the operating performance of the affected companies. Furthermore, quarter-to-quarter fluctuations in our results of operations caused by changes in customer demand or other factors may have a significant effect on the market price of our Class A common stock. In addition, general market conditions and international political or economic factors unrelated to our performance may affect our stock price. These and other conditions and factors could cause the price of our Class A common stock, and therefore the price of the notes, to fluctuate substantially over short periods.

Shares eligible for future public sale after this offering could adversely affect our stock price.

The 29,932,286 shares of Class A common stock and 12,029,375 shares of Class B common stock (which are convertible into Class A common stock) owned beneficially by our stockholders at November 14, 2005 and the shares of Class A common stock underlying options granted by us under our stock option plans may be resold in the public market in the future. The shares of Class B common stock are subject to registration rights. In addition, such shares, as well as shares issued by us in acquisitions, can be sold freely under Rule 144 or Rule 145, subject to volume limitations for shares held by affiliates or shares held for less than two years. Shares issued in future acquisitions may also be subject to registration rights. In addition, shares underlying our options have generally been registered on Form S-8. No prediction can be made as to the effect that resale of such shares (or their ability for resale) will have on the market price for the Class A common stock prevailing from time to time. The resale of substantial amounts of Class A common stock, or the perception that such resales may occur, could materially and adversely affect prevailing market prices for the Class A common stock, and thus the notes. We have agreed not to issue and our executive officers, principal accounting officer, directors and certain stockholders have agreed not to resell any equity securities during the 90 day period (which may be extended under certain circumstances) beginning with the date of this prospectus supplement, subject to certain exceptions. See “Underwriting—No Sales of Similar Securities.”

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We may not have the ability to raise the funds necessary to repurchase the notes upon a fundamental change or on the repurchase date, as required by the indenture governing the notes.

On November 30, 2010 or following a fundamental change as described under “Description of Notes—Repurchase of Notes by Sonic at the Option of the Holder” and “—Repurchase of Notes by Sonic at Option of Holder upon a Fundamental Change,” holders of notes may require us to repurchase their notes for cash. A fundamental change may also constitute an event of default or prepayment under, and result in the acceleration of the maturity of, our then-existing indebtedness. We cannot assure you that we will have sufficient financial resources, or will be able to arrange financing, to pay the repurchase price in cash with respect to any notes tendered by holders for repurchase on the repurchase date or upon a fundamental change. In addition, restrictions in our debt agreements or other indebtedness may not allow us to repurchase the notes. Our failure to repurchase the notes when required will result in an event of default with respect to the notes.

We depend upon the operations of our subsidiaries.

Our ability to make interest and principal payments when due to holders of the notes depends upon the receipt of sufficient funds from our subsidiaries. The notes are our obligations. Substantially all of our consolidated assets are held by our subsidiaries and substantially all of our cash flow and net income are generated by our subsidiaries.

We do not expect an active public trading market for the notes to develop after completion of the offering.

The notes are a new issue of securities with no established trading market. There can be no assurance as to the liquidity of any trading market or that an active public trading market will develop for the notes, the ability of holders of the notes to sell their notes, or the prices at which holders of the notes would be able to sell their notes. If markets were to exist, the notes could trade at prices higher or lower than their initial purchase prices depending on many factors. We do not intend to apply for listing of the notes on any securities exchange or for quotation on any automated dealer quotation system.

The convertible note hedge and warrant option transactions may affect the value of the notes and our Class A common stock.

In connection with the offering of the notes, we have entered into a convertible note hedge transaction with each of Bank of America N.A., an affiliate of Banc of America Securities LLC, and JPMorgan Chase Bank, National Association, an affiliate of J.P. Morgan Securities Inc. We have also entered into a warrant option transaction with each of Bank of America N.A. and JPMorgan Chase Bank, National Association. These transactions are expected to reduce the potential dilution upon conversion of the notes and, from our perspective, increase the effective conversion price of the notes. We intend to use approximately $17.1 million of the net proceeds of the offering to pay the net cost of these transactions. If the underwriters exercise their option to purchase additional notes to cover over-allotments, we may use a portion of the net proceeds from the sale from the additional notes to enter into additional convertible bond hedge and warrant transactions. These transactions will be accounted for as an adjustment to our stockholders’ equity. In connection with hedging these transactions, Bank of America N.A. and JPMorgan Chase Bank, National Association or their respective affiliates:

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Such activities could impact the price of our Class A common stock and the notes. See “Purchase of Convertible Note Hedge and Sale of Warrants.”

Bank of America N.A. and JPMorgan Chase Bank, National Association, or their respective affiliates are likely to modify their hedge positions from time to time prior to conversion, redemption or maturity of the notes by purchasing and selling shares of our Class A common stock, or other of our securities or instruments they may wish to use in connection with such hedging. In particular, to the extent we settle conversions in cash and shares of our Class A common stock as described under “Description of Notes—Conversion Rights—Payment upon Conversion,” such hedging modification may occur during any cash settlement averaging period for a conversion of notes, which may have a negative effect on the value of the consideration received in relation to the conversion of those notes. In addition, we intend to exercise options we hold under the convertible note hedge transaction whenever notes are converted. In order to unwind its hedge position with respect to those exercised options, Bank of America N.A. and JPMorgan Chase Bank, National Association, or their respective affiliates, expect to sell shares of our Class A common stock in secondary market transactions or unwind various derivative transactions with respect to our Class A common stock during the cash settlement averaging period, if any, for the converted notes.

In addition, if the convertible note hedge and warrant option transactions fail to become effective when this offering of notes is completed, or if the offering is not completed, Bank of America N.A. and JPMorgan Chase Bank, National Association, or their respective affiliates, may unwind their hedge positions with respect to our Class A common stock, which could adversely affect the value of our Class A common stock and, as a result, the value of the notes. We have also agreed to indemnify each of them or any of their affiliates for losses incurred in connection with a potential unwinding of their hedge positions under certain circumstances. The effect, if any, of any of these transactions and activities on the market price of our Class A common stock or the notes will depend in part on market conditions and cannot be ascertained at this time, but any of these activities could adversely affect the value of our Class A common stock and the value of the notes and, as a result, the number of shares and value of the common stock you will receive upon the conversion of the notes.

The notes will be issued with original issue discount for United States federal income tax purposes.

The notes will be issued with original issue discount (“OID”) for United States federal income tax purposes. Regardless of your method of accounting, you will be required to include the OID on your notes in your gross income, as ordinary interest income, on a constant yield basis in advance of the receipt of cash payments to which such income is attributable. See “Certain United States Tax Considerations”.

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USE OF PROCEEDS

The net proceeds to Sonic from the sale of the notes, after deducting estimated offering expenses and the underwriters’ discounts, are estimated to be approximately $146.0 million, or $155.7 million if the underwriters exercise their overallotment option in full. We expect to apply the net proceeds from the offering of the notes to repay a portion of the amounts outstanding under our revolving credit facility, which may be reborrowed, and for general corporate purposes, which may include the repayment or reduction of other indebtedness, capital expenditures, working capital requirements and acquisitions.

We also intend to use approximately $17.1 million (or approximately $18.2 million if the underwriters exercise in full their option to purchase additional notes) of the net proceeds for the net cost of convertible note hedge and warrant transactions we expect to enter into with Bank of America N.A. and JPMorgan Chase Bank, National Association, relating to our Class A common stock.

The amounts outstanding under our revolving credit facility bear interest at 2.55% above the one-month LIBOR as quoted in the Wall Street Journal. As of September 30, 2005, there was approximately $260.6 million outstanding thereunder. Amounts borrowed under our revolving credit facility were used to finance prior acquisitions and for general corporate purposes.

PRICE RANGE OF COMMON STOCK AND DIVIDENDS

Our Class A common stock is listed on the New York Stock Exchange under the symbol “SAH.” The following table sets forth the high and low closing sales prices for Sonic’s Class A common stock for each calendar quarter during the periods indicated.

On November 17, 2005, the last reported sale price for our Class A common stock was $19.79 per share. As of November 14, 2005, we had 89 stockholders of record. We intend to pay dividends in the future based on available cash flows, covenant compliance and other factors. However, we cannot assure you that any dividend will be paid in the future.

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CAPITALIZATION

The following table sets forth our capitalization on a historical basis as of September 30, 2005, and on a pro forma basis to give effect to the sale of the notes and the application of the estimated net proceeds therefrom, as described under “Use of Proceeds” in this prospectus supplement. This table should be read in conjunction with the unaudited Consolidated Financial Statements (including the notes thereto) incorporated by reference into this prospectus supplement.

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PURCHASE OF CONVERTIBLE NOTE HEDGE AND SALE OF WARRANTS

Concurrently with the pricing of the offering of the notes, we have entered into a convertible note hedge transaction with respect to our Class A common stock (the “purchased call options”) with each of Bank of America N.A., an affiliate of Banc of America Securities LLC, and JPMorgan Chase Bank, National Association, an affiliate of J.P. Morgan Securities Inc. (collectively, the “dealers”). The purchased call options will cover, in the aggregate, subject to anti-dilution adjustments substantially similar to the conversion rate adjustments under the notes, approximately 6,212,775 shares of our Class A common stock. Concurrently with entering into the purchased call option transactions, we entered into warrant transactions whereby we will sell to the dealers warrants to acquire, subject to customary anti-dilution adjustments, approximately 6,523,414 shares of our Class A common stock (the “sold warrants”) in the aggregate. The terms of the purchased call options and sold warrants are summarized below. If the underwriters exercise their over-allotment option to purchase additional notes, we may enter into additional purchased call options in an amount equal to the number of shares initially issuable upon conversion of those additional notes and we may sell additional warrants in an amount proportionate to the number of warrants sold in the initial transaction.

The purchased call options and sold warrants are separate transactions entered into by us with each of the dealers, are not part of the terms of the notes and will not affect the terms of the notes. As a holder of the notes, you will not have any rights with respect to the purchased call options or the sold warrants.

We expect the convertible note hedge transaction to reduce the potential dilution of our Class A common stock upon conversion of the notes in the event that the market value per share of our Class A common stock at the time of exercise is greater than the strike price of the purchased call option, which corresponds to the initial conversion price of the notes and is subject to customary adjustments substantially similar to the conversion rate adjustments under the notes. This transaction will also have the effect of increasing the effective conversion price of the notes from our perspective.

Subject to certain exceptions, the purchased call options should result in our receipt of shares equal to our obligation to deliver shares, if any, pursuant to the terms of conversion of the notes. See “Description of Notes—Payment upon Conversion.” If the market value per share, as defined in the purchased call option transaction document, of our Class A common stock is above the strike price of the purchased call options over the exercise period and the holders of the notes exercise their option to convert, the purchased call options entitle us to receive from the dealers shares of our Class A common stock based on the excess of the then current market price of our Class A common stock over the strike price of the purchased call options subject to a cap, in certain circumstances. Additionally, if the market value per share, as defined in the warrant transaction document, of our Class A common stock exceeds the strike price of the sold warrants over the exercise period, we will owe the dealers net shares of our Class A common stock in an amount based on the excess of the then current market price of our Class A common stock over the strike price of the sold warrants.

If the market value per share, as defined in the warrant transaction document, of our Class A common stock at the maturity of the sold warrants exceeds the strike price of the sold warrants, the dilution mitigation under the purchased call options will be capped, which means that there would be dilution from conversion of the notes to the extent that the then market value per share of our Class A common stock exceeds the strike price of the warrants at the time of conversion.

For a discussion of hedging arrangements that the dealers have entered into and may enter into in the future in connection with these purchased call options and sold warrants, see “Underwriting” and “Risk Factors—The convertible note hedge and warrant option transactions may affect the value of the notes and our Class A common stock.”

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DESCRIPTION OF NOTES

We will issue the notes under an indenture dated as of May 7, 2002, as supplemented, between us and U.S. Bank National Association, as trustee. Each holder may request a copy of the indenture and the form of the notes from the trustee at the address provided herein.

The following description is a summary of the material provisions of the notes and the indenture and does not purport to be complete. This summary is subject to and is qualified by reference to all the provisions of the notes and the indenture, including the definitions of certain terms used in the indenture. Wherever particular provisions or defined terms of the indenture or the notes are referred to, these provisions or defined terms are incorporated in this prospectus supplement by reference. We urge you to read the indenture and the form of the notes in their entirety because they, and not this description, define each holder’s rights as a holder of the notes.

As used in this “Description of Notes” section, references to “Sonic,” the “company,” “we,” “us” and “our” refer only to Sonic Automotive, Inc. and do not, unless expressly stated or the context otherwise requires, include its subsidiaries.

General

The notes will mature on November 30, 2015 unless earlier converted, redeemed or repurchased. Each holder has the option, subject to certain qualifications and the satisfaction of certain conditions and during the periods described below, to convert its notes into cash and shares, if any, of our Class A common stock at an initial conversion rate of 41.4185 shares of Class A common stock per $1,000 principal amount of notes. This is equivalent to an initial conversion price of approximately $24.14 per share of Class A common stock. The conversion rate is subject to adjustment if certain events occur. Upon a surrender of a holder’s notes for conversion, we will deliver cash equal to the lesser of the aggregate principal amount of notes to be converted and our total conversion obligation. We will deliver shares of our Class A common stock in respect of the remainder, if any, of our conversion obligation, as described below under “—Conversion Procedures—Payment Upon Conversion.” If we deliver shares of Class A common stock upon conversion of a note, a holder will receive cash in lieu of a fractional share as described below. A holder will not receive any cash payment for interest accrued and unpaid to the conversion date except under the limited circumstances described below herein.

If any interest payment date, maturity date, redemption date, repurchase date or settlement date (including upon the occurrence of a fundamental change, as described below) falls on a day that is not a business day, then the required payment will be made on the next succeeding business day with the same force and effect as if made on the date that the payment was due, and no additional interest will accrue on that payment for the period from and after the interest payment date, maturity date, redemption date or repurchase date (including upon the occurrence of a fundamental change, as described below), as the case may be, to that next succeeding business day. As used in this prospectus supplement, “business day” means any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which commercial banks are authorized or required by law, regulation or executive order to close in The City of New York.

Neither we nor any of our subsidiaries will be subject to any financial covenants under the indenture. In addition, neither we nor any of our subsidiaries are restricted under the indenture from paying dividends, incurring debt, or issuing or repurchasing our securities.

You are not afforded protection under the indenture in the event of a highly leveraged transaction or a change in control of us except to the extent described below under “—Repurchase of Notes by Sonic at Option of Holder upon a Fundamental Change.”

The notes will be issued only in denominations of $1,000 principal amount and integral multiples thereof. References to “a note” or “each note” in this prospectus supplement refer to $1,000 principal amount of the notes. The notes will be limited to $150,000,000 aggregate principal amount, or $160,000,000 aggregate principal amount if the underwriters’ option is fully exercised.

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Subordination of the Notes

General

The payment of the principal of, premium, if any, and interest on, the notes will be subordinated, as set forth in the indenture, in right of payment, to the prior payment in full of all senior indebtedness. The notes will be senior subordinated indebtedness of the company ranking pari passu with all other existing and future senior subordinated indebtedness of the company and senior to all future subordinated indebtedness of the company. None of our subsidiaries will guarantee our obligations under the indenture. As a result, the notes will be effectively subordinated to the indebtedness and other liabilities of our subsidiaries.

Payment Stoppages

Upon the occurrence and during the continuance of any default in the payment of any designated senior indebtedness beyond any applicable grace period and after the receipt by the trustee from a representative of holders of any designated senior indebtedness (collectively, a “senior representative”) of written notice of such default, no payment (other than amounts previously set aside with the trustee) or distribution of any assets of the company or any subsidiary of any kind or character (excluding certain permitted equity interests or subordinated securities) may be made by the Company on account of the principal of, premium, if any, or interest on, the notes or on account of the purchase, redemption or other acquisition of or in respect of, the notes unless and until such default shall have been cured or waived or shall have ceased to exist or such designated senior indebtedness shall have been discharged or paid in full after which the company shall resume making any and all required payments in respect of the notes, including any missed payments.

Upon the occurrence and during the continuance of any non-payment default with respect to any designated senior indebtedness pursuant to which the maturity thereof may then be accelerated immediately (a “non-payment default”) and after the receipt by the trustee and the company from a senior representative of written notice of such non-payment default, no payment (other than amounts previously set aside with the trustee) or distribution of any assets of the company of any kind or character (excluding certain permitted equity interests or subordinated securities) may be made by the Company or any subsidiary on account of the principal of, premium, if any, or interest on, the notes or on account of the purchase, redemption, conversion or other acquisition of, or in respect of, the notes for the period specified below (the “payment blockage period”). The payment blockage period shall commence upon the receipt of notice of the non-payment default by the trustee and the company from a senior representative and shall end on the earliest of:

After the occurrence of any of the dates set forth in clauses (i), (ii) or (iii), we will promptly resume making any and all required payments in respect of the notes, including any missed payments. In no event will a payment blockage period extend beyond 179 days from the date of the receipt by the company and the trustee of the notice initiating such payment blockage period (such 179-day period referred to as the “initial period “). Any number of notices of non-payment defaults may be given during the initial period; provided that during any period of 365 consecutive days only one payment blockage period, during which payment of principal of, premium, if any, or interest on, the notes may not be made, may commence and the duration of such period may not exceed 179 days. No non-payment default with respect to designated senior indebtedness that existed or was continuing on the date of the commencement of any payment blockage period will be, or can be, made the basis for the commencement of a second payment blockage period, whether or not within a period of 365 consecutive days, unless such default has been cured or waived for a period of not less than 90 consecutive days.

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If the company fails to make any payment on the notes when due or within any applicable grace period, whether or not on account of the payment blockage provisions referred to above, such failure would constitute an event of default under the indenture and would enable the holders of the notes to accelerate the maturity thereof. See “—Events of Default; Waiver and Notice.”

The indenture will provide that in the event of any insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding in connection therewith, relative to the company or its assets, or liquidation, dissolution or other winding up of the company, whether voluntary or involuntary, or whether or not involving insolvency or bankruptcy, or any assignment for the benefit of creditors or other marshaling of assets or liabilities of the company, all senior indebtedness must be paid in full before any payment or distribution (excluding distributions of certain permitted equity interests or subordinated securities) is made on account of the principal of, premium, if any, or interest on the notes or on account of the purchase, redemption or other acquisition of or in respect of the notes.

Liquidation/Insolvency

By reason of such subordination, in the event of liquidation or insolvency, our creditors who are holders of senior indebtedness may recover more, ratably, than the holders of the notes. Funds which would be otherwise payable to the holders of the notes will be paid to the holders of such indebtedness to the extent necessary to pay such indebtedness in full and we may be unable to meet our obligations fully with respect to the notes.

Related Definitions

“Capital lease obligation” of any person means any obligation of such person and its subsidiaries on a Consolidated basis under any capital lease of real or personal property which, in accordance with GAAP, is required to be recorded as a capitalized lease obligation.

“Commodity price protection agreement” means any forward contract, commodity swap, commodity option or other similar financial agreement or arrangement relating to, or the value, which is dependent upon, fluctuations in commodity prices.

“Currency hedging agreements” means one or more of the following agreements which shall be entered into by one or more financial institutions: foreign exchange contracts, currency swap agreements or other similar agreements or arrangements designed to protect against the fluctuations in currency values.

“Designated senior indebtedness” means (i) all senior indebtedness under our floor plan facilities, revolving facility or mortgage facility and (ii) any other senior indebtedness which at the time of determination has an aggregate principal amount outstanding of at least $25 million and which is specifically designated in the instrument evidencing such senior indebtedness or the agreement under which such senior indebtedness arises as “designated senior indebtedness” by the company.

“Fair market value” means, with respect to any asset or property, the sale value that would be obtained in an arm’s-length free market transaction between an informed and willing seller under no compulsion to sell and an informed and willing buyer under no compulsion to buy. Fair market value shall be determined by the board of directors of the company acting in good faith and shall be evidenced by a resolution of the board of directors.

“Guaranteed debt” of any person means, without duplication, all indebtedness of any other person referred to in the definition of indebtedness guaranteed directly or indirectly in any manner by such person, or in effect guaranteed directly or indirectly by such person through an agreement:

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“Indebtedness” means, with respect to any person, without duplication,

For purposes hereof, the “maximum fixed repurchase price” of any redeemable capital stock which does not have a fixed repurchase price shall be calculated in accordance with the terms of such redeemable capital stock as if such redeemable capital stock were purchased on any date on which Indebtedness shall be required to be determined pursuant to the indenture, and if such price is based upon, or measured by, the fair market value of such redeemable capital stock, such fair market value to be determined in good faith by the board of directors of the issuer of such redeemable capital stock.

“Interest rate agreements” means one or more of the following agreements which shall be entered into by one or more financial institutions: interest rate protection agreements (including, without limitation, interest rate swaps, caps, floors, collars and similar agreements) and/or other types of interest rate hedging agreements from time to time.

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“Outstanding notes” means the company’s outstanding (a) 8.625% Senior Subordinated Notes due 2013 and (b) 5.25% Convertible Senior Subordinated Notes due 2009.

“Pari passu indebtedness” means any indebtedness of the company that is pari passu in right of payment to the notes, including without limitation, the outstanding notes.

“Person” means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

“Redeemable capital stock” means any capital stock that, either by its terms or by the terms of any security into which it is convertible or exchangeable or otherwise,

“Senior indebtedness” means the principal of, premium, if any, and interest (including interest, to the extent allowable, accruing after the filing of a petition initiating any proceeding under any state, federal or foreign bankruptcy law) on any Indebtedness of the company (other than as otherwise provided in this definition), whether outstanding on the issue date or thereafter created, incurred or assumed, and whether at any time owing, actually or contingent, unless, in the case of any particular Indebtedness, the instrument creating or evidencing the same or pursuant to which the same is outstanding expressly provides that such Indebtedness shall not be senior in right of payment to the notes. Notwithstanding the foregoing, “senior indebtedness” shall (x) include our floor plan facilities, the revolving facility and the mortgage facility to the extent the company is a party to them and (y) not include

“Subordinated indebtedness” means indebtedness of the company subordinated in right of payment to the notes.

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Interest

The notes will bear interest at a rate of 4.25% per year. Interest shall be payable semi-annually in arrears on May 31 and November 30 of each year, commencing May 31, 2006, which interest rate shall be increased by 0.50% for all periods beginning after November 30, 2010.

Interest on a note if any, will be paid to the person in whose name the note is registered at the close of business on the May 15 or November 15, as the case may be (each, a “record date”), immediately preceding the relevant interest payment date (whether or not such day is a business day); provided, however, that accrued and unpaid interest, if any, payable upon redemption or repurchase by us will be paid to the person to whom principal is payable, unless the redemption date or repurchase date, as the case may be, is after a record date and on or prior to the related interest payment date, in which case interest shall be paid to the record holder on the record date. Interest will be calculated on the basis of a 360-day year consisting of twelve 30-day months and will accrue from the date the notes are issued or from the most recent date to which interest has been paid or duly provided for.

Upon conversion of a note, a holder will not receive any cash payment of interest unless, as described below, such conversion occurs between a record date and the interest payment date to which that record date relates. If we deliver any shares of Class A common stock upon surrender of a note for conversion, we will not issue fractional shares of Class A common stock. Instead, we will pay cash in lieu of fractional shares based on the last reported sale price of the Class A common stock on the trading day immediately prior to the conversion date. Our delivery to a holder of the full amount of cash and shares of Class A common stock, if any, as described below under “—Conversion Procedures—Payment upon Conversion,” together with any cash payment for any fractional share, will be deemed to satisfy our obligation to pay:

As a result, accrued but unpaid interest up to but excluding the conversion date will be deemed to be paid in full rather than cancelled, extinguished or forfeited. For a general discussion of the U.S. federal income tax treatment upon receipt of our Class A common stock upon conversion, see “Certain U.S. Federal Income Tax Considerations.”

Notwithstanding the preceding paragraph, if notes are converted after the close of business on a record date but prior to the opening of business on the interest payment date to which that record date relates, holders of such notes at the close of business on the record date will receive the interest, if any, payable on the notes on the corresponding interest payment date notwithstanding the conversion. Such notes, upon surrender for conversion, must be accompanied by funds equal to the amount of interest payable on the notes so converted on the next succeeding interest payment date; provided that no such payment need be made (1) if we have specified a redemption date or a repurchase date relating to a fundamental change that is after a record date and on or prior to the next interest payment date or (2) to the extent of any overdue interest, if any such interest exists at the time of conversion with respect to such note.

Optional Redemption by Sonic

No sinking fund is provided for the notes. Prior to November 30, 2010, the notes will not be redeemable at our option. On or after November 30, 2010, we may redeem the notes for cash in whole or in part at any time for a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus any accrued and unpaid interest up to but excluding the redemption date.

If the redemption date occurs after a record date and on or prior to an interest payment date, accrued and unpaid interest shall be paid on such interest payment date to the record holder on the relevant record date.

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We will provide not less than 30 nor more than 60 days’ notice of redemption by mail to each registered holder of notes to be redeemed. If the redemption notice is given and funds are deposited as required, then interest will cease to accrue on and after the redemption date on those notes or portions of notes called for redemption.

Once we have called the notes for redemption, notes or portions of notes will be convertible by the holder until the close of business on the second business day prior to the redemption date.

If we decide to redeem fewer than all of the outstanding notes, the trustee will select the notes to be redeemed (in principal amounts of $1,000 or integral multiples thereof) by lot, on a pro rata basis or by another method the trustee considers fair and appropriate. If the trustee selects a portion of a holder’s notes for partial redemption and the holder converts a portion of its notes, the converted portion will be deemed to be from the portion selected for redemption.

We may not redeem the notes if we have failed to pay any interest on the notes when due and such failure to pay is continuing.

Conversion Rights

General

Subject to the qualifications and the satisfaction of the conditions and during the periods described below, a holder may convert each of its notes prior to the close of business on the business day immediately preceding stated maturity into cash and shares of our Class A common stock, if any, initially at a conversion rate of 41.4185 shares of Class A common stock per $1,000 principal amount of notes (equivalent to an initial conversion price of approximately $24.14 per share of Class A common stock based on the issue price per note). The conversion rate and the equivalent conversion price in effect at any given time are referred to as the “applicable conversion rate” and the “applicable conversion price,” respectively, and will be subject to adjustment as described below. A holder may convert fewer than all of its notes so long as the notes converted are an integral multiple of $1,000 principal amount. Upon surrender of a note for conversion, we will deliver cash and shares of our Class A common stock, if any, as described below under “—Conversion Procedures—Payment upon Conversion.”

A holder may convert its notes in whole or in part only in the following circumstances, which are described in more detail below, and to the following extent:

We refer to each of these events as a “conversion triggering event.”

We will notify holders by press release once the notes have become convertible upon any of the foregoing circumstances.

If we call a holder’s notes for redemption, the holder may convert the notes only until the close of business on the second business day prior to the redemption date unless we fail to pay the redemption price. If a holder has already delivered a repurchase election with respect to a note as described under either “—Repurchase of Notes by Sonic at Option of Holder” or “—Repurchase of Notes by Sonic at Option of Holder upon a Fundamental Change,” it may not surrender that note for conversion until it has withdrawn the repurchase election in accordance with the indenture.

If a holder converts notes, we will pay any documentary, stamp or similar issue or transfer tax due on the issue of shares of our Class A common stock upon the conversion, unless the tax is due because a holder requests the shares to be issued or delivered to another person, in which case that holder will pay that tax.

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Conversion Upon Satisfaction of Trading Price Condition

Prior to October 31, 2010, a holder may surrender any of its notes for conversion during the five business days after any five consecutive trading day period in which the trading price per $1,000 principal amount of the notes (as determined following a request by a holder of the notes in accordance with the procedures described below) was less than 103% of the product of the last reported sale price of our Class A common stock and the conversion rate of the notes for such trading day, subject to compliance with the procedures and conditions described below concerning the trustee’s obligation to make a trading price determination.

The trustee will have no obligation to determine the trading price of the notes as described in this section unless we have requested such determination; and we shall have no obligation to make such request unless a holder provides us with reasonable evidence that the trading price per $1,000 principal amount of notes would be less than 103% of the product of the last reported sale price of our Class A common stock and the conversion rate of the notes. At such time, we will instruct the trustee to determine the trading price of the notes beginning on the next trading day and on each successive trading day until the trading price per $1,000 principal amount of notes is greater than or equal to 103% of the product of the last reported sale price of our Class A common stock and the conversion rate of the notes. If, at any point after the trading price condition has been met, the trading price per $1,000 principal amount of notes is greater than 103% of the product of the last reported sale price of our Class A common stock and the conversion rate for such day, we shall so notify the holders of notes.

The “trading price” of the notes on any date of determination means the average of the secondary market bid quotations obtained by the trustee for $5.0 million principal amount of the notes at approximately 3:30 p.m., New York City time, on such determination date from three independent nationally recognized securities dealers we select; provided that if three such bids cannot reasonably be obtained by the trustee, but two such bids are obtained, then the average of the two bids shall be used, and if only one such bid can reasonably be obtained by the trustee, that one bid shall be used. If the trustee cannot reasonably obtain at least one bid for $5.0 million principal amount of the notes from a nationally recognized securities dealer, then the trading price per $1,000 principal amount of notes will be deemed to be less than 103% of the product of the last reported sale price of our Class A common stock and the conversion rate.

“Trading day” means a day during which (i) trading in our Class A common stock generally occurs, (ii) there is no market disruption event and (iii) a last reported sale price for our Class A common stock (other than a last reported sale price as referred to in the last sentence of such definition) is provided on the New York Stock Exchange or, if our Class A common stock is not listed on the New York Stock Exchange, on the principal other U.S. national or regional securities exchange on which our Class A common stock is then listed or, if our Class A common stock is not listed on a U.S. national or regional securities exchange, on the principal other market on which our Class A common stock is then traded (the “exchange”).

The “last reported sale price” of our Class A common stock or the capital stock of any subsidiary on any day means the closing sale price per share (or, if no closing sale price is reported, the average of the bid and asked prices or, if more than one in either case, the average of the average bid and the average asked prices) on such day as reported for composite transactions by the principal United States national or regional securities exchange on which our Class A common stock or the capital stock of such subsidiary is traded or, if our Class A common stock or the capital stock of such subsidiary is not listed on a United States national or regional securities exchange, as reported by Nasdaq National Market. The last reported sale price will be determined without reference to after-hours or extended market trading. If our Class A common stock or the capital stock of such subsidiary is not listed for trading on a United States national or regional securities exchange and not reported by the Nasdaq National Market on the relevant day, the “last reported sale price” will be the last quoted bid price for our Class A common stock or the capital stock of such subsidiary in the over-the-counter market on the relevant day as reported by the National Quotation Bureau or similar organization. If our Class A common stock or the capital stock of such subsidiary is not so quoted, the “last reported sale price” will be the average of the

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mid-point of the last bid and asked prices for our Class A common stock or the capital stock of such subsidiary on the relevant day from each of at least three independent nationally recognized investment banking firms selected by us for this purpose.

“Market disruption event” means (i) a failure by the exchange to open for trading during its regular trading session or (ii) the occurrence or existence, at any time during the regular trading session (without regard to after hours or any other trading outside of the regular trading session hours), on any trading day for our Class A common stock, of any material suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the stock exchange or otherwise) in our Class A common stock or in any options, contracts or future contracts relating to our Class A common stock.

Conversion upon Notice of Redemption

If we call any or all of the notes for redemption, a holder may convert any of its notes at any time until the close of business on the second business day prior to the redemption date. Upon surrender by a holder of its notes for conversion, we will deliver cash and shares of Class A common stock, if any, as described below under “—Conversion Procedures—Payment upon Conversion.”

Conversion upon Specified Corporate Transactions

Certain Distributions

If we elect to distribute to all holders of our Class A common stock:

we must notify holders of the notes at least 20 business days prior to the ex-dividend date for such distribution. Once we have given such notice, holders may surrender their notes for conversion at any time until the earlier of the close of business on the business day immediately prior to the ex-dividend date or any announcement that such distribution will not take place. No holder may exercise this right to convert if the holder otherwise could participate in the distribution without conversion in respect of notes held by the holder. The “ex-dividend” date is the first date upon which a sale of the Class A common stock does not automatically transfer the right to receive the relevant distribution from the seller of the common stock, regular way on the relevant exchange or in the relevant market for the common stock, to its buyer. Upon surrender by a holder of its notes for conversion, we will deliver cash and shares of common stock, if any, as described below under “—Conversion Procedures—Payment upon Conversion.”

Certain Corporate Transactions

If:

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in each case, regardless of whether a holder has the right to put the notes as described under “—Repurchase of Notes by Sonic at Option of Holder upon a Fundamental Change,” then a holder may surrender notes for conversion at any time from and after the date which is 15 days prior to the anticipated effective date of the transaction until and including the date which is 15 days after the actual effective date of such transaction (or, if such transaction also constitutes a “change of control” which results in holders having a right to require us to repurchase their notes, until the fundamental change repurchase date). We will notify holders and the trustee at the same time we publicly announce such transaction (but in no event less than 15 days prior to the anticipated effective date of such transaction).

If a holder elects to convert its notes during the period specified above on or prior to November 30, 2010 with respect to a transaction occurring on or prior to such date and 10% or more of the consideration for our Class A common stock in the corporate transaction consists of consideration other than common stock that is traded or scheduled to be traded immediately following such transaction on a U.S. national securities exchange or the Nasdaq National Market, we will increase the conversion rate by the additional shares as described below under “—Conversion Procedures—Conversion Rate Adjustments—Make Whole Amount and Adjustments for Conversion After a Public Acquirer Change of Control” or, in lieu thereof, we may in certain circumstances elect to adjust the conversion rate and related conversion obligation so that the notes are convertible into shares of the acquiring or surviving entity.

If a transaction described above occurs, a holder can, subject to certain conditions, require us to repurchase all or a portion of its notes as described under “—Repurchase of Notes by Sonic at Option of Holder upon a Fundamental Change.”

Conversion after October 31, 2010

On or after October 31, 2010, to (and including) the close of business on the business day immediately preceding the maturity date, holders may convert the notes into cash and shares of our Class A common stock, if any, regardless of the foregoing circumstances.

Conversion Procedures

To convert a note, a holder must do each of the following:

The date a holder complies with these requirements is the “conversion date” under the indenture. The notes will be deemed to have been converted immediately prior to the close of business on the conversion date. If a holder’s interest is a beneficial interest in a global note, in order to convert a holder must comply with the last three requirements listed above and comply with the depositary’s procedures for converting a beneficial interest in a global note.

The conversion agent will initially be the trustee. The conversion agent will, on a holder’s behalf, convert the notes into cash and shares of common stock, if any. A holder may obtain copies of the required form of the

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conversion notice from the conversion agent. Payments of cash and, if shares of Class A common stock are to be delivered, a stock certificate or certificates will be delivered to the holder, or a book-entry transfer through DTC will be made, by the conversion agent for the number of shares of Class A common stock as set forth below under “—Conversion Procedures—Payment upon Conversion.”

Payment upon Conversion

In connection with any conversion, we will satisfy our obligation to convert the notes (the “conversion obligation”) by delivering to holders in respect of each $1,000 principal amount of notes being converted a “settlement amount” consisting of:

The “conversion value” means the product of (1) the applicable conversion rate and (2) the average of the daily VWAP prices of the Class A common stock for the 25 consecutive trading days during the cash settlement averaging period.

The “cash settlement averaging period” with respect to any note means the 25 consecutive trading-day period beginning on the second trading day after you deliver your conversion notice to the conversion agent, except that with respect to any notice of conversion received after the date of issuance of a notice of redemption as described under “—Optional Redemption by Sonic,” the “cash settlement averaging period” means the 25 consecutive trading-day period beginning on the first trading day following the applicable redemption date.

The “daily VWAP” for our Class A common stock means, for each of the 25 consecutive trading days during the cash settlement averaging period, the per share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page SAH <equity> [AQR] (or any successor thereto) in respect of the period from 9:30 a.m. to 4:00 p.m. (New York City time) on such trading day (or if such volume-weighted average price is unavailable, the market value of one share of our Class A common stock on such trading day as our board of directors determines in good faith using a volume-weighted method).

For the purpose of determining “payment upon conversion,” “market disruption event” means (i) a failure by the Exchange to open for trading during its regular trading session or (ii) the occurrence or existence prior to 1:00 p.m. on any trading day for our Class A common stock of an aggregate one half hour period, of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the stock exchange or otherwise) in our Class A common stock or in any options, contracts or future contracts relating to our Class A common stock.

We will not issue fractional shares of Class A common stock upon conversion of the notes. Instead, we will pay the cash value of such fractional shares based upon the last reported sale price of our Class A common stock on the trading day immediately preceding the conversion date. Upon conversion of a note, a holder will not receive any cash payment of interest unless such conversion occurs between a record date and the interest payment date to which that record date relates. We will deliver the settlement amount on the third business day following the date the settlement amount is determined.

If a holder tenders notes for conversion and the conversion value is being determined at a time when the notes are convertible into other property in addition to or in lieu of our Class A common stock, the conversion value of each note will be determined based on the kind and amount of shares of stock, securities or other property or assets (including cash or any combination thereof) that a holder of a number of shares of our Class A common stock equal to the conversion rate would have owned or been entitled to receive in such transaction and the value thereof during the cash settlement averaging period. Settlement of notes tendered for conversion after the effective date will be as set forth above.

Upon the occurrence of a conversion triggering event, our requirement to pay in cash a portion of the conversion value of any notes tendered for conversion may constitute an event of default under the agreements

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governing certain of our indebtedness, including our senior credit facility. See “Risk Factors—We may not have the ability to raise the funds necessary to repurchase the notes upon a fundamental change or on the repurchase date, as required by the indenture governing the notes.”

Conversion Rate Adjustments

The conversion rate will be adjusted as described below, except that we will not make any adjustments to the conversion rate if holders of the notes participate, as a result of holding the notes, in any of the transactions described below without having to convert their notes.

(1) If we issue shares of our Class A common stock as a dividend or distribution on shares of our Class A common stock, or if we effect a share split or share combination, the conversion rate will be adjusted based on the following formula:

where,

CR₀ = the conversion rate in effect immediately prior to such event;

CR' = the conversion rate in effect immediately after such event;

OS₀ = the number of shares of our Class A common stock outstanding immediately prior to such event; and

OS' = the number of shares of our Class A common stock outstanding immediately after such event.

(2) If we issue to all or substantially all holders of our Class A common stock any rights or warrants entitling them for a period of not more than 60 calendar days to subscribe for or purchase shares of our Class A common stock, at a price per share less than the last reported sale price of our Class A common stock on the business day immediately preceding the date of announcement of such issuance, the conversion rate will be adjusted based on the following formula (provided that the conversion rate will be readjusted to the extent that such rights or warrants are not exercised prior to their expiration):

where,

CR₀ = the conversion rate in effect immediately prior to such event;

CR' = the conversion rate in effect immediately after such event;

OS₀ = the number of shares of our Class A common stock outstanding immediately prior to such event;

X = the total number of shares of our Class A common stock issuable pursuant to such rights; and

Y = the number of shares of our Class A common stock equal to the aggregate price payable to exercise such rights divided by the average of the last reported sale prices of our Class A common stock over the ten consecutive trading-day period ending on the business day immediately preceding the record date for the issuance of such rights.

(3) If we distribute shares of our capital stock, evidences of our indebtedness or other assets or property of ours to all or substantially all holders of our Class A common stock, excluding

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then the conversion rate will be adjusted based on the following formula:

where,

CR₀ = the conversion rate in effect immediately prior to such distribution;

CR' = the conversion rate in effect immediately after such distribution;

SP₀ = the average of the last reported sale prices of our Class A common stock over the ten consecutive trading-day period ending on the business day immediately preceding the record date for such distribution (or, if earlier, the “ex-date” relating to such distribution); and

FMV = the fair market value (as determined by our board of directors) of the shares of capital stock, evidences of indebtedness, assets or property distributed with respect to each outstanding share of our Class A common stock on the record date for such distribution.

With respect to an adjustment pursuant to this clause (3) where there has been a payment of a dividend or other distribution on our Class A common stock or shares of capital stock of any class or series, or similar equity interest, of or relating to a subsidiary or other business unit, which we refer to as a “spin-off,” the conversion rate in effect immediately before 5:00 p.m., New York City time, on the record date fixed for determination of stockholders entitled to receive the distribution will be increased based on the following formula:

where,

CR₀ = the conversion rate in effect immediately prior to such distribution;

CR' = the conversion rate in effect immediately after such distribution;

FMV₀ = the average of the last reported sale prices of the capital stock or similar equity interest distributed to holders of our Class A common stock applicable to one share of our Class A common stock over the first ten consecutive trading-day period after the effective date of the spin-off; and

MP₀ = the average of the last reported sale prices of our Class A common stock over the first ten consecutive trading-day period after the effective date of the spin-off.

The adjustment to the conversion rate under the preceding paragraph will occur on the tenth trading day from, and including, the effective date of the spin-off.

(4) If any cash dividend or distribution made to all or substantially all holders of our Class A common stock during any quarterly fiscal period is in an aggregate amount that, together with other cash dividends or distributions made during such quarterly fiscal period (the “Current Dividend Rate”), does not equal $0.12 per share (appropriately adjusted from time to time for any share dividends on, or subdivisions of, our common stock) (the “Initial Dividend Rate”), the conversion rate will be adjusted based on the following formulas:

(a) if the Current Dividend Rate is greater than the Initial Dividend Rate, the conversion rate shall be increased based on the following formula

where,

CR₀ = the conversion rate in effect immediately prior to the record date for such distribution;

CR' = the conversion rate in effect immediately after the record date for such distribution;

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SP₀ = the last reported sale price of our Class A common stock on the trading day immediately preceding the record date for such distribution (or, if earlier, the “ex-date” relating to such distribution); and

C = the amount in cash per share we distribute to holders of our Class A common stock in excess of $0.12 (appropriately adjusted from time to time for any share dividends on, or subdivision of, our Class A common stock).

(b) if the Current Dividend Rate is less than the Initial Dividend Rate, the conversion rate shall be decreased based on the following formula:

where,

CR₀ = the conversion rate in effect immediately prior to the record date for such distribution;

CR' = the conversion rate in effect immediately after the record date for such distribution;

SP₀ = the last reported sale price of our Class A common stock on the trading day immediately preceding the record date for such distribution (or, if earlier, the “ex-date” relating to such distribution); and

C = the amount in cash per share we distribute to holders of our Class A common stock that is below $0.12 (appropriately adjusted from time to time for any share dividends on, or subdivision of, our Class A common stock).

(5) If we, any of our subsidiaries or the Smith holders makes a payment in respect of a tender offer or exchange offer for our Class A common stock, to the extent that the cash and value of any other consideration included in the payment per share of common stock exceeds the last reported sale price of our Class A common stock on the trading day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer, the conversion rate will be increased based on the following formula:

where,

CR₀ = the conversion rate in effect on the date such tender or exchange offer expires;

CR' = the conversion rate in effect on the day next succeeding the date such tender or exchange offer expires;

AC = the aggregate value of all cash and any other consideration (as determined by our board of directors) paid or payable for shares purchased in such tender or exchange offer;

OS₀ = the number of shares of our Class A common stock outstanding immediately prior to the date such tender or exchange offer expires;

OS' = the number of shares of our Class A common stock outstanding immediately after the date such tender or exchange offer expires; and

SP' = the average of the last reported sale prices of our Class A common stock over the ten consecutive trading-day period commencing on the trading day next succeeding the date such tender or exchange offer expires.

(6) If someone other than us or one of our subsidiaries or the Smith holders makes a payment in respect of a tender offer or exchange offer for our Class A common stock, in which, as of the closing date of the offer, our

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board of directors is not recommending rejection of the offer, we will increase the conversion rate based on the following formula:

where,

CR₀ = the conversion rate in effect on the last time tenders or exchanges may be made pursuant to such tender or exchange offer (the “offer expiration time”);

CR' = the conversion rate in effect immediately following the offer expiration time;

FMV = the fair market value (as determined by our board of directors) of the aggregate consideration payable to stockholders based on the acceptance (up to any maximum specified in the terms of the tender or exchange or offer) of all shares validly tendered or exchanged and not withdrawn as of the offer expiration time (the “accepted purchase shares”);

OS' = the number of shares of our Class A common stock outstanding (less any accepted purchase shares) as of the offer expiration time;

OS₀ = the number of shares of our Class A common stock outstanding (including any accepted purchase shares) as of the offer expiration time; and

SP = the last reported sale price of our Class A common stock on the trading day next succeeding the offer expiration time.

The adjustment referred to in this clause (6) will only be made if: