Definitive Proxy Statement

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Autobytel Inc., a Delaware corporation (“Autobytel”), will be held at 18872 MacArthur Boulevard, Fourth Floor, Irvine, California 92612-1400, on Thursday, June 22, 2006, at 10:00 a.m., Pacific Daylight Time, for the following purposes:

2. To transact such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof.

The board of directors has fixed the close of business on April 26, 2006 as the record date for the determination of the holders of common stock entitled to notice of and to vote at the Annual Meeting.

We are enclosing a copy of our Annual Report on Form 10-K for the fiscal year ended December 31, 2005.

A list of stockholders entitled to vote at the Annual Meeting will be open for examination by any stockholder for any purpose germane to the meeting during ordinary business hours for a period of ten days prior to the Annual Meeting at the offices of Autobytel, 18872 MacArthur Boulevard, Irvine, California 92612-1400, and will also be available for examination at the Annual Meeting until its adjournment.

YOUR ATTENTION IS DIRECTED TO THE ACCOMPANYING PROXY STATEMENT. WE INVITE ALL STOCKHOLDERS TO ATTEND THE ANNUAL MEETING. TO ENSURE THAT YOUR SHARES WILL BE VOTED AT THE ANNUAL MEETING, PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE YOUR SHARES IN PERSON EVEN IF YOU HAVE PREVIOUSLY SUBMITTED A PROXY.

By Order of the Board of Directors

James E. Riesenbach

President and Chief Executive Officer

YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND PROMPTLY RETURN IT IN THE ENVELOPE PROVIDED TO AUTOBYTEL’S TRANSFER AGENT AT U.S. STOCK TRANSFER CORPORATION, ATTENTION: PROXY DEPARTMENT, 1745 GARDENA AVENUE, GLENDALE, CALIFORNIA 91204, TO BE RECEIVED NO LATER THAN JUNE 21, 2006. IN ORDER TO AVOID THE ADDITIONAL EXPENSE TO AUTOBYTEL OF FURTHER SOLICITATION, WE ASK YOUR COOPERATION IN MAILING IN YOUR PROXY PROMPTLY.

THE ENCLOSED PROXY IS SOLICITED BY AND ON BEHALF OF THE BOARD OF DIRECTORS OF AUTOBYTEL INC., A DELAWARE CORPORATION, FOR USE AT AUTOBYTEL’S 2006 ANNUAL MEETING OF STOCKHOLDERS (THE “ANNUAL MEETING”) TO BE HELD ON THURSDAY, JUNE 22, 2006 AT 10:00 A.M., PACIFIC DAYLIGHT TIME, AT AUTOBYTEL’S CORPORATE HEADQUARTERS AT 18872 MACARTHUR BOULEVARD, FOURTH FLOOR, IRVINE, CALIFORNIA 92612-1400, AND AT ANY AND ALL ADJOURNMENTS OR POSTPONEMENTS THEREOF, FOR THE PURPOSES SET FORTH IN THE ACCOMPANYING NOTICE OF ANNUAL MEETING OF STOCKHOLDERS.

This Proxy Statement of Autobytel is being mailed on or about May 10, 2006 to each stockholder of record as of the close of business on April 26, 2006.

Autobytel’s board of directors has fixed the close of business on April 26, 2006 as the record date for the Annual Meeting. Only holders of record of Autobytel’s common stock at the close of business on the record date are entitled to notice of and to vote at the Annual Meeting. As of the close of business on the record date there were 42,331,777 shares of common stock outstanding and entitled to vote, held of record by 582 stockholders.

Holders of Autobytel common stock are entitled to one vote for each share held as of the record date. Approval of the directors in Proposal 1 requires the vote of a plurality of the outstanding common stock of Autobytel present in person or represented by proxy at the Annual Meeting. Attendance at the Annual Meeting in person or by proxy of the shares representing a majority of the outstanding common stock of Autobytel is required for a quorum.

Any abstention will be counted for purposes of determining a quorum, but will have the same effect as a vote AGAINST the proposals considered at the Annual Meeting.

In the event that a broker, bank, custodian, nominee or other record holder of Autobytel’s common stock indicates on a proxy that it does not have discretionary authority to vote certain shares on a particular matter, which is called a broker non-vote, those shares will not be considered for purposes of determining the number of shares entitled to vote with respect to a particular proposal on which the broker has expressly not voted, but will be counted for purposes of determining the presence or absence of a quorum for the transaction of business.

The enclosed proxy is solicited by and on behalf of the board of directors of Autobytel. In addition, officers, directors and regular employees of Autobytel may solicit proxies by regular mail, electronic mail, facsimile transmission or personal calls. These persons will receive no additional compensation for solicitation of proxies, but may be reimbursed for reasonable out-of-pocket expenses.

Autobytel will pay all of the expenses of soliciting proxies to be voted at the Annual Meeting. Autobytel has requested brokers and nominees who hold stock in their name through Cede & Co. to furnish this proxy material to their customers and Autobytel will reimburse such brokers and nominees for their related out-of-pocket expenses.

The proxy accompanying this Proxy Statement is solicited on behalf of the Autobytel board of directors for use at the Annual Meeting. Please complete, date and sign the accompanying proxy and promptly return it in the enclosed envelope or otherwise mail it to Autobytel. All properly signed proxies that Autobytel receives prior to the vote at the Annual Meeting and that are not revoked will be voted at the Annual Meeting according to the instructions indicated on the proxies or, if no direction is indicated, such proxies will be voted FOR the nominees for Class II Director.

Autobytel’s board of directors does not know of any matter that is not referred to in this Proxy Statement to be presented for action at the Annual Meeting. If any other matters are properly brought before the Annual Meeting, the persons named in the proxies will have discretion to vote on such matters in accordance with their best judgment.

If you are the holder of record for your shares, you may revoke your proxy at any time before it is exercised at the Annual Meeting by taking any of the following actions:

Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the Annual Meeting, you must bring to the Annual Meeting a letter from the broker, bank or other nominee confirming your beneficial ownership of the shares.

The board of directors of Autobytel recommends that Autobytel stockholders vote FOR the proposal to elect two Class II Directors.

TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE ANNUAL MEETING, PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE POSTAGE-PAID ENVELOPE PROVIDED, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING. YOU MAY REVOKE YOUR PROXY AT ANY TIME BEFORE IT IS VOTED.

The persons named in the enclosed proxy will vote to elect the nominees named below under “Nominees for Class II Director” unless instructed otherwise in the proxy. The persons receiving the greatest number of votes will be the persons elected as the Class II Directors. Holders of common stock are not allowed to cumulate their votes in the election of Class II Directors. Shares represented by proxies which are marked “withhold authority” will have the same effect as a vote against the nominees. The Class II Directors are to hold office until the 2009 Annual Meeting of Stockholders and until their respective successors are duly qualified and elected.

The names and certain information concerning the persons nominated to be elected as Class II Director by the board of directors at the Annual Meeting are set forth below. THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE ELECTION OF THE NOMINEES NAMED BELOW UNDER “NOMINEES FOR CLASS II DIRECTOR”. It is intended that shares represented by the proxies will be voted FOR the election to the board of directors of the persons named below unless authority to vote for the nominees has been withheld in the proxy. Although the persons nominated have consented to serve as a director if elected, and the board of directors has no reason to believe that the nominees will be unable to serve as directors, if either of the nominees withdraws or otherwise becomes unavailable to serve, the persons named as proxies will vote for any substitute nominees designated by the board of directors. The following information regarding Autobytel’s directors, including the nominees, is relevant to your consideration of the nominees proposed by your board of directors:

The board of directors is divided into three classes, with each class holding office for staggered three-year terms. The term of Class I Directors Mark R. Ross and Jeffrey H. Coats expires in 2008, the terms of Class II Directors Mark N. Kaplan, James E. Riesenbach and Richard A. Post expire in 2006 and the terms of Class III Directors Michael J. Fuchs and Robert S. Grimes expire in 2007. Mr. Kaplan and Mr. Riesenbach are being nominated for Class II Directors at the Annual Meeting. There are no family relationships among Autobytel’s officers and directors.

During the fiscal year ended December 31, 2005, the board of directors held a total of 37 meetings. Each member of the board of directors attended more than 75% of the meetings of the board and of the committees of which he was a member.

The board of directors has constituted a Corporate Governance and Nominations Committee, a Compensation Committee and an Audit Committee.

The Corporate Governance and Nominations Committee, which was established in March 2004, met on two occasions in 2005 and operates under a charter approved by the board of directors, is responsible for (i) identifying individuals qualified to become directors and selecting director nominees or recommending nominees to the board of directors for nomination; (ii) recommending nominees for appointment to committees of the board of directors; (iii) developing and recommending charters of committees of the board of directors; and (iv) overseeing the corporate governance of Autobytel and, as deemed necessary or desirable from time to time, developing and recommending corporate governance policies to the board of directors. The Corporate Governance and Nominations Committee currently consists of Michael J. Fuchs (Chairman), Mark N. Kaplan and Mark R. Ross. A copy of the charter of the Corporate Governance and Nominations Committee is posted and available on the Corporate Governance link of the Investor Relations section of the Autobytel web site, www.autobytel.com. Information on our Web site is not incorporated by reference in this Proxy Statement.

The Compensation Committee, which met on 24 occasions in 2005 and operates under a charter approved by the board of directors, is responsible for (i) determining or recommending to the board of directors the compensation of the Chief Executive Officer and each other executive officer or any other officer who reports directly to the Chief Executive Officer based on the performance of each officer, (ii) making recommendations to the board of directors regarding stock option and purchase plans and other equity compensation arrangements and (iii) preparing reports regarding executive compensation for disclosure in Autobytel’s proxy statements or as otherwise required by applicable laws. The Compensation Committee currently consists of Jeffrey H. Coats (Chairman), Michael J. Fuchs and Mark N. Kaplan. A copy of the Compensation Committee charter is posted and available on the Corporate Governance link of the Investor Relations section of the Autobytel web site, www.autobytel.com. Information on our Web site is not incorporated by reference in this Proxy Statement.

The Audit Committee operates under a charter approved by the board of directors. The Audit Committee’s primary responsibilities are to (i) oversee Autobytel’s accounting and financial reporting policies, processes, practices and internal controls, (ii) appoint, compensate and oversee the independent registered public accounting firm, (iii) review the quality and objectivity of Autobytel’s independent audit and financial statements and (iv) act as liaison between the board of directors and the independent registered public accounting firm. The Audit Committee currently consists of Jeffrey H. Coats, Mark N. Kaplan (Chairman) and Mark R. Ross and met on 22 occasions in 2005. Mr. Kaplan is an “independent director” within the meaning of Item 7(d)(3)(iv) of Schedule 14A under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and audit committee financial expert within the meaning of federal securities laws. A copy of the Audit Committee charter is posted and available on the Corporate Governance link of the Investor Relations section of the Autobytel web site, www.autobytel.com. Information on our Web site is not incorporated by reference in this Proxy Statement.

All directors, other than James E. Riesenbach, Richard A. Post and Robert S. Grimes, and all committee members satisfy the definition of independent director under applicable federal securities laws and rules of the NASDAQ National Market. All members of the Audit Committee satisfy the definition for audit committee independence under federal securities laws.

The Corporate Governance and Nominations Committee considers candidates for directors suggested by its members and other directors, as well as management and stockholders. The Corporate Governance and Nominations Committee may also from time to time as appropriate retain a third-party executive search firm to identify candidates. A stockholder who wishes to recommend a prospective nominee for the board of directors should notify Autobytel’s Secretary or any member of the Corporate Governance and Nominations Committee in writing with whatever supporting material the stockholder considers appropriate. The Corporate Governance and Nominations Committee will also consider whether to nominate any person nominated by a stockholder pursuant to the provisions of Autobytel’s by-laws relating to stockholder nominations as described in “Future Stockholder Proposals” below.

Generally, once the Corporate Governance and Nominations Committee identifies a prospective nominee, the Corporate Governance and Nominations Committee will make an initial determination as to whether to conduct a full evaluation of the candidate. This initial determination will be based on whatever information is provided to the Corporate Governance and Nominations Committee with the recommendation of the prospective candidate, as well as the Corporate Governance and Nominations Committee’s own knowledge of the prospective candidate, which may be supplemented by inquiries to the person making the recommendation or others. Generally, the preliminary determination will be based

primarily on the need for additional board of directors members to fill vacancies or expand the size of the board of directors and the likelihood that the prospective nominee can satisfy evaluation factors determined by the Corporate Governance and Nominations Committee to be appropriate from time to time for such evaluation. If the Corporate Governance and Nominations Committee determines, in consultation with the other board members, as appropriate, that additional consideration is warranted, it may request a third-party search firm to gather additional information about the prospective nominee’s background and experience and to report its findings to the Corporate Governance and Nominations Committee. The Corporate Governance and Nominations Committee will then evaluate the prospective nominee against factors it considers appropriate from time to time, which currently include:

The Corporate Governance and Nominations Committee generally intends to nominate current members of the board of directors in the year in which their respective term expires so long as they continue to exhibit the qualities described above and are otherwise qualified to serve as members of the board of directors.

The Corporate Governance and Nominations Committee may also consider such other relevant factors as it deems appropriate, including the current composition of the board of directors, the balance of management and independent directors, the need for Audit Committee expertise and the evaluations of other prospective nominees. In connection with this evaluation, the Corporate Governance and Nominations Committee will determine whether to interview the prospective nominee, and if warranted, one or more members of the Corporate Governance and Nominations Committee and others, as appropriate, will interview prospective nominees in person or by telephone. After completing this evaluation and interview, the Corporate Governance and Nominations Committee will make a recommendation to the full board of directors as to the persons who should be nominated by the board of directors, and the board of directors determines the nominees after considering the recommendation and report of the Corporate Governance and Nominations Committee.

The nominees for Class II Director herein were nominated by the board of directors at the recommendation of the Corporate Governance and Nominations Committee.

Stockholders and other parties interested in communicating directly with any director or with the non-management directors as a group may do so by writing to Secretary, Autobytel Inc., 18872 MacArthur Boulevard, Irvine, California 92612-1400. Effective April 6, 2004, the Corporate Governance and Nominations Committee approved a process of handling letters received by Autobytel addressed to non-management members of the board of directors. Under that process, the Secretary reviews all such correspondence and regularly forwards to the board of directors a summary of all such correspondence and copies of all correspondence that, in the opinion of the Secretary, deals with the functions of the board of directors or committees thereof or that he otherwise determines requires their attention. Directors may at any time review a log of all correspondence received by Autobytel that is addressed to members of the board of directors and request copies of any such correspondence. Concerns relating to accounting, internal controls or auditing matters are immediately brought to the attention of Autobytel’s Chairman of the Audit Committee and handled in accordance with procedures established by the Audit Committee with respect to such matters.

The board of directors adopted a Code of Conduct and Ethics for Employees, Officers and Directors (the “Code of Ethics”). The Code of Ethics is applicable to employees, officers and directors of Autobytel, including the principal executive officer, the principal financial officer and the principal accounting officer. The Code of Ethics is posted and available on the Corporate Governance link of the Investor Relations section of the Autobytel website, www.autobytel.com. Autobytel intends to post amendments to or waivers from the Code of Ethics (to the extent applicable to Autobytel’s chief executive officer, principal financial officer or principal accounting officer or directors) at this location on its Web site. Information on our Web site is not incorporated by reference in this Proxy Statement.

The following names will be placed in nomination for election to the board of directors as Class II Director. The shares represented by the proxy cards returned will be voted FOR the election of these nominees unless you specify otherwise.

Mark N. Kaplan was elected as a director of Autobytel in June 1998. Mr. Kaplan was a member of the law firm of Skadden, Arps, Slate, Meagher & Flom LLP from 1979 through 1998 and currently is of counsel to such firm. Mr. Kaplan serves on the board of directors of the following companies whose shares are publicly traded: American Biltrite Inc. (adhesive-coated, pressure-sensitive papers and films; tile flooring), Congoleum Corporation, Inc. (resilient sheet and tile flooring), DRS Technologies, Inc. (defense electronic products and systems), REFAC Optical Group (retail optical services) and Volt Information Sciences, Inc. (staffing services and telecommunications and information solutions). Mr. Kaplan holds an A.B. from Columbia College and a J.D. from Columbia Law School.

James E. Riesenbach joined Autobytel as its President and Chief Executive Officer and was appointed as a director on March 20, 2006. Prior to joining Autobytel, Mr. Riesenbach served as Senior Vice President of America Online’s Search & Directional Media Group from August 2001 through March 15, 2006. Mr. Riesenbach was a founder and Vice President of AOL’s Local Group (then known as Digital City) from April 1996 through August 2001. From March 1990 through April 1996, Mr. Riesenbach led consumer marketing and programming for Comcast Corporation in its largest region. Mr. Riesenbach holds a Bachelors of Science in Management from Rutgers University.

Jeffrey H. Coats was elected a director of Autobytel in August 1996. Mr. Coats has been Chief Executive Officer, President and director of Mikronite Technologies Group Inc., an industrial technology company, since February 2002. Since August 2001, Mr. Coats has also been Managing Director of Maverick Associates LLC, a financial consulting and investment company. From July 1999 to July 2001, Mr. Coats was a Founder and Managing Director of TH Lee Global Internet Managers, L.P., a fund focused on making equity investments in eCommerce and Internet-related companies globally. Mr. Coats remains a limited partner of the fund. Mr. Coats served as Managing Director of GE Equity, Inc., a wholly-owned subsidiary of General Electric Capital Corporation, from April 1996 to July 1999. Mr. Coats led GE Equity’s Consumer Group, which included strategic and financial investments in the Internet, eCommerce, media and entertainment, retail and consumer products and services. Many of these investments were made in conjunction with other GE operating subsidiaries, including NBC, GE Lighting and GE Appliances. Mr. Coats has also held various positions, including as Managing Director, of GE Capital Corporate Finance Group, Inc., a wholly-owned subsidiary of General Electric Capital Corporation, from June 1987 to April 1993. From May 1993 to April 1996, Mr. Coats was a partner in two private investment firms. Mr. Coats holds a B.B.A. in Finance from the University of Georgia and an M.B.A. in International Management from the American Graduate School of International Management. Mr. Coats serves on the board of directors of Congoleum Corporation, Inc. (resilient sheet and tile flooring).

Michael J. Fuchs was elected as a director of Autobytel in September 1996 and became Chairman in June 1998. From November 2000 to May 2001, Mr. Fuchs was Chief Executive Officer of MyTurn.com, Inc. and was Interim Chief Executive Officer from April 2000 to October 2000. Mr. Fuchs was a consultant from November 1995 to April 2000. Mr. Fuchs was Chairman and Chief Executive Officer of Home Box Office, a Division of TimeWarner Entertainment Company, L.P., a leading pay-television company, from October 1984 until November 1995, and Chairman and Chief Executive Officer of Warner Music Group, a Division of Time Warner Inc., from May 1995 to November 1995. Mr. Fuchs holds a B.A. from Union College and a J.D. from the New York University School of Law. Mr. Fuchs is a member of the board of directors of Imax Corporation (entertainment).

Robert S. Grimes has been a director of Autobytel since inception and from April 2000 to December 2005 was a consultant to Autobytel. From July 1996 through March 2000, Mr. Grimes served as Executive Vice President of Autobytel. Since September 1987, Mr. Grimes has been President of R.S. Grimes & Co., Inc., a private investment company. From April 1981 to March 1987, Mr. Grimes was a partner with the investment firm of Cowen & Company. Mr. Grimes holds a B.S. from the Wharton School of Commerce and Finance at the University of Pennsylvania and an L.L.B. from the University of Pennsylvania Law School. Mr. Grimes has served on the board of directors of Philips International Realty Corp., a New York Stock Exchange listed company, since April 1998.

Richard A. Post has served as a director of Autobytel since February 1999 and as Chief Executive Officer and President from April 2005 through March 2006. Mr. Post is currently a part time employee of Autobytel providing advisory service to the Chief Executive Officer and Board of Directors. From July 2000 to December 2002, Mr. Post was Managing

Partner of Lonetree Capital Partners, a technology investment fund. From June 1998 to July 2000, Mr. Post was Executive Vice President and Chief Financial Officer of MediaOne Group, Inc. and President of MediaOne Capital Corp., a subsidiary of MediaOne Group, Inc. From January 1997 to June 1998, Mr. Post was Vice President and Chief Financial Officer of MediaOne Group, Inc. Mr. Post joined US WEST Financial Services in April 1988 as manager of Corporate Development and was promoted in 1990, first to Executive Director, and then to Vice President, responsible for all Capital Asset Group businesses. From June 1996 to January 1997, he was President of Corporate Development at US WEST, Inc. where he had responsibility for corporate development efforts at US WEST Communications, as well as US WEST, Inc. From December 1995 to June 1996, he served as Vice President of Corporate Development for US WEST Media Group, a division of the former US WEST, Inc. Mr. Post holds both a business administration degree and an M.B.A. from Delta State University. Mr. Post is a member of the board of directors of Arbitron, Inc., an international media and marketing research company.

Mark R. Ross has been a director of Autobytel since August 2001 and Vice Chairman since April 2005. Mr. Ross was a founding investor and director of Autoweb.com, Inc. from 1996 until its merger with Autobytel in August 2001. From 1999 until March 2004, Mr. Ross was a Managing Director of Chatsworth Securities, L.L.C., an investment firm. Since May 1996, Mr. Ross has been Managing Director of Cogito Capital Partners, L.L.C., a merchant bank focusing on advising, investing in and raising funds for technology companies. Mr. Ross has served on the board of advisors of numerous Internet companies, including iCastle.com and MediaPlex, Inc. Since May 1984, Mr. Ross has served as President, Chief Executive Officer and a director of On Word Information, Inc. He received a Bachelor of Science degree in finance from Lehigh University and studied at the graduate level in education at the University of Massachusetts.

Aggregate fees for professional services rendered by PricewaterhouseCoopers LLP for the years ended December 31, 2005 and 2004 were as follows:

The audit fees billed by PricewaterhouseCoopers LLP for the years ended December 31, 2005 and 2004 were for professional services rendered for the audits of Autobytel’s restated financial statements filed on May 31, 2005, as well as the annual financial statements and the reviews of the interim financial statements included in Autobytel’s Quarterly Reports on Form 10-Q.

The audit related fees billed by PricewaterhouseCoopers LLP for the year ended December 31, 2004 were for professional services rendered for due diligence in connection with acquisitions, accounting consulting and internal control reviews.

Tax fees billed by PricewaterhouseCoopers LLP for the years ended December 31, 2005 and 2004 were for professional services rendered for tax compliance and tax advice, including tax advice and tax due diligence relating to acquisitions.

There were no other fees billed by PricewaterhouseCoopers LLP for the years ended December 31, 2005 and 2004 other than for services described above.

The Audit Committee has determined that the provision of services rendered above is compatible with maintaining PricewaterhouseCoopers LLP’s independence.

Under its charter, the Audit Committee is required to pre-approve all audit (including the annual audit engagement letter with the independent registered public accounting firm) and permitted non-audit services (including the fees and terms thereof) provided to Autobytel by the independent registered public accounting firm, subject to the de minimus exception for non-audit services as described in the Exchange Act. The Audit Committee consults with management with respect to pre-approval, including whether the provision of permitted non-audit services is compatible with maintaining the registered public accounting firm’s independence, and may not delegate these responsibilities to management. The Audit Committee may delegate to any member or members of the Audit Committee the power to grant any pre-approval, provided that such pre-approval is reported to the Audit Committee at the next scheduled Audit Committee meeting.

Each member of the Audit Committee has the authority to approve fees for services by PricewaterhouseCoopers LLP of up to $50,000. Any approved fees may be exceeded by no more than 20% without seeking further approval even if the total amount of such fees, including the excess, exceeds $50,000. Such authority is delegated first to Mark N. Kaplan and then to Mark Ross and Jeffrey Coats in such order. Any approval by a member of the Audit Committee is required to be reported to the Audit Committee at the next regularly scheduled meeting. All fees for services by PricewaterhouseCoopers LLP during 2005 were approved by the Audit Committee.

From time to time, the Audit Committee pre-approves fees and services up to a maximum amount for future services relating to recurring tax matters and securities filings.

Autobytel is required to provide the Audit Committee at each regularly scheduled quarterly meeting information about engagements with PricewaterhouseCoopers LLP, including fees paid.

The following table sets forth certain information regarding the beneficial ownership of the common stock as of April 15, 2006, by each director, each Autobytel Executive Officer, all directors and Autobytel Executive Officers as a group, and all beneficial owners of more than five percent (5%) of the common stock of Autobytel. The “Number of Shares Beneficially Owned” is based on 42,331,555 outstanding shares of common stock as of April 15, 2006. Shares of common stock are deemed to be outstanding and to be beneficially owned by the person listed below for the purpose of computing the percentage ownership of the person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person, if such person has the right to acquire beneficial ownership of such shares within 60 days of April 15, 2006, through the exercise of any option, warrant or other right or the conversion of any security, or pursuant to the power to revoke, or the automatic termination of, a trust, discretionary account, or similar arrangement. Except as otherwise noted, the persons or entities in this table have sole voting and investing power with respect to all the shares of Autobytel common stock beneficially owned by them subject to community property laws, where applicable. The information with respect to each person specified is as supplied or confirmed by such person, based upon statements filed with the U.S. Securities and Exchange Commission, or based upon the actual knowledge of Autobytel.

Ariel Amir joined Autobytel as Vice President and General Counsel in March 1999, was elected Secretary in April 1999, and was promoted to Senior Vice President in April 2000, Executive Vice President in September 2000, and Chief Legal and Administrative Officer in July 2005. Mr. Amir was Vice President of Security Capital U.S. Realty from February 1998 until March 1999, where he was responsible for mergers and acquisitions and relations with strategic investees. Mr. Amir was Vice President of Security Capital Group Incorporated, where he provided securities offering and corporate acquisitions services from June 1994 until January 1998. Prior to joining Security Capital Group, Mr. Amir was an attorney with the law firm of Weil, Gotshal & Manges in New York where he practiced securities and corporate law from September 1985 until April 1994. Mr. Amir received his law degree from Georgetown University Law Center, an M.S. in industrial administration from Carnegie-Mellon University Graduate School of Industrial Administration and an A.B. in Economics from Washington University in St. Louis.

Michael F. Schmidt joined Autobytel as Senior Vice President, Finance in April 2004, and was appointed Executive Vice President and Chief Financial Officer in May 2005. From April 2002 to April 2004, Mr. Schmidt was Chief Financial Officer at Telephia Inc., a leading provider of performance information for the mobile telecommunications industry. From December 2000 to August 2001, Mr. Schmidt was Chief Financial Officer of Autoweb.com, Inc., an automotive marketing services company. From May 2000 to October 2000, Mr. Schmidt was Chief Operating Officer and Chief Financial Officer at MizBiz, an internet startup. From September 1999 to May 2000, Mr. Schmidt was Director of Finance at Pacificare Health Systems, a health care company. From 1988 to March 1999, Mr. Schmidt held various senior level finance and operational positions at IMS Health, a worldwide provider of information services. Mr. Schmidt began his career as a certified public accountant with Ernst & Whinney. Mr. Schmidt received a Bachelors of Business Administration and Accounting from Cleveland State University.

Richard Walker joined Autobytel in January 2003 as Senior Vice President, Corporate Development and Strategy, and was promoted to Executive Vice President, Corporate Development and Strategy in June 2003 and Executive Vice President and Chief Operating Officer in April 2005. On April 26, 2006, Mr. Walker resigned as Executive Vice President and Chief Operating Officer of Autobytel effective May 31, 2006. Mr. Walker will continue as a part time employee of Autobytel after such date advising on general business and corporate development matters as reasonably requested. Previously, Mr. Walker served as Vice President for LoneTree Capital Management, a technology investment fund, from August 2000 to December 2002. Prior to that, Mr. Walker was Vice President, Corporate Development for MediaOne Group, Inc., a multinational broadband and wireless company, from November 1998 until July 2000, where he was responsible for directing several strategic corporate and business development initiatives in the United States and Asia-Pacific. From April 1997 through October 1998 he was Vice President, Business Development for MediaOne, Inc., the domestic broadband operating division of US WEST Media Group and, after June of 1998, MediaOne Group, Inc. From December 1995 until March 1997, he was Executive Director, Corporate Development for US WEST, Inc., a Regional Bell Operating Company, where he supported overall corporate and business development efforts at the two largest operating groups: US WEST Communications and US

West Media. Mr. Walker originally joined US West in December 1990 and held various positions in investor relations, business development, and strategic marketing. Mr. Walker began his career in 1986 as a certified public accountant with Arthur Andersen & Co. in Atlanta, GA. Mr. Walker graduated Magna Cum Laude with a B.S. in Business from the University of Colorado, and an MBA from the University of Denver, Executive Program.

All executive officers of Autobytel are chosen by the board of directors and serve at its discretion, except that James Riesenbach has an employment agreement expiring on March 1, 2009, Michael Schmidt has an employment agreement expiring May 30, 2007 and Ariel Amir has an employment agreement expiring July 19, 2007. Mr. Walker resigned as Executive Vice President and Chief Operating Officer of Autobytel effective May 31, 2006. Mr. Walker will continue as a part time employee of Autobytel after such date advising on general business and corporate development matters as reasonably requested.

Summary of Cash and Certain Other Compensation. The following table provides certain summary information concerning compensation paid or accrued by Autobytel to or on behalf of Autobytel’s former Chief Executive Officers, the other executive officers of Autobytel as of December 31, 2005, and Autobytel’s former Executive Vice President for the year ended December 31, 2005 (the “Autobytel Executive Officers”):

The following table sets forth for each of the Autobytel Executive Officers certain information concerning stock options granted to them during 2005. We have never issued stock appreciation rights. During 2005, Autobytel granted options at an exercise price equal to the fair market value of a share of common stock as determined by its closing price on the Nasdaq National Market on the date of grant. The term of each option granted is generally ten years from the date of grant. Options may terminate before their expiration dates if the optionee’s status as an employee is terminated or upon the optionee’s death or disability.

The following table sets forth for each of the Autobytel Executive Officers certain information concerning options exercised during fiscal year 2005 and the number of shares subject to both exercisable and unexercisable stock options as of December 31, 2005. The values for “in-the-money” options are calculated by determining the difference between the fair market value of the securities underlying the options as of December 30, 2005 ($4.94 per share) and the exercise price of the individual’s options. Autobytel has never issued stock appreciation rights.

On March 1, 2006, we entered into an Employment Agreement with James E. Riesenbach whereby Mr. Riesenbach agreed to join us as our Chief Executive Officer and President as of March 20, 2006 (the “Riesenbach Employment Agreement”). The Riesenbach Employment Agreement is for a three year term and commenced on March 20, 2006 (the “Commencement Date”) and ends on March 20, 2009 and automatically renews for an additional one year period unless either party notifies the other of its intent not to renew no later than one hundred twenty days prior to the expiration of the three year term. Mr. Riesenbach is entitled to an annual base salary of $425,000 during the term, and is eligible for a bonus of at least 100% of his annual base salary for the fiscal year ending immediately after the Commencement Date, at least 50% of his annual base salary for the fiscal year ending in 2007 and the target bonus for each year shall be at least 100% of his base salary for the respective year as to which such bonus relates. In addition, Mr. Riesenbach may participate in any benefit plans generally afforded to executive officers. If Mr. Riesenbach’s employment is terminated without “cause,” if Mr. Riesenbach terminates his employment with “good reason” (each as defined in the Riesenbach Employment Agreement) or if we deliver to Mr. Riesenbach a Non-Renewal Notice (as defined in the Riesenbach Employment Agreement), Mr. Riesenbach is entitled to a lump sum payment equal to two times the sum of his annual base salary (determined as the highest annual base salary during the Term (as defined in the Riesenbach Employment Agreement)) and a bonus of 100% of his annual base salary (determined as the highest annual base salary during the Term), as well as benefits for twenty four months following such termination. If the Riesenbach Employment Agreement expires by its terms upon the expiration of the additional one year period, Mr. Riesenbach is entitled to receive a severance payment equal to two times his highest annual base salary as well as benefits for twelve months following such expiration.

In the event of a change of control (as defined in the Riesenbach Employment Agreement) during the term of his employment or at any time during the six month period following such term, Mr. Riesenbach is entitled to a lump sum payment equal to two times the sum of his annual base salary (determined as the highest annual base salary during the Term) and a bonus of 100% of his annual base salary (determined as the highest annual base salary during the Term), so long as Mr. Riesenbach agrees, if requested, to continue with us or any successor for no longer than ninety days after the change of control. If Mr. Riesenbach’s compensation is deemed to be parachute payments under the Internal Revenue Code, then we have agreed to make additional payments to him to compensate for his additional tax obligations.

Mr. Riesenbach was granted stock options to purchase 1,000,000 shares of our common stock, which shall vest, as to 333,333 of the options, on the one year anniversary of the Commencement Date, and thereafter (i) 11,111 of the options shall vest on each monthly anniversary of the Commencement Date over the period beginning on the 13th monthly anniversary and ending on the 35th monthly anniversary of the Commencement Date, (ii) 11,114 of the options shall vest on the day immediately preceding the 36th monthly anniversary of the Commencement Date, provided that the vesting of such options shall accelerate upon a change of control, and (iii) 200,000 of the options shall vest upon each filing by us of our Annual Report on Form 10-K for each of the fiscal years ending on December 31, 2007 and December 31, 2008 provided Mr. Riesenbach is actively employed by us on the respective vesting dates and Mr. Riesenbach and we have satisfied reasonable performance criteria established by the Board or a committee thereof in its sole discretion after consulting with Mr. Riesenbach.

On April 27, 2005, we entered into an Employment Agreement with Richard Post in connection with his appointment as Chief Executive Officer and President. The Employment Agreement was for a one year term. Mr. Post was entitled to an annual base salary of $325,000 during the term, and was eligible for a bonus of 65% of his annual base salary in the board’s discretion. In addition, Mr. Post had the right to participate in any benefit plans generally afforded to our executive officers. Mr. Post was also granted stock options to purchase 200,000 shares of our common stock, all of which vested. If Mr. Post’s compensation is deemed to be parachute payments under the Internal Revenue Code, then we have agreed to make additional payments to him to compensate for his additional tax obligations.

In connection with the agreement by Mr. Post to resign as our Chief Executive Officer and President, effective upon the commencement by Mr. Riesenbach as the Chief Executive Officer and President on March 20, 2006, we and Mr. Post amended Mr. Post’s April 27, 2005 Employment Agreement, effective March 7, 2006 .

The term of Mr. Post’s employment will terminate on April 27, 2008, provided that Mr. Post may terminate the term for any reason upon at least 30 days’ prior written notice and we may terminate the term for cause upon at least 30 days’ prior written notice. During the period from March 20, 2006 until the termination of the term of employment by Mr. Post, Mr. Post will provide advisory services to our Chief Executive Officer and Board of Directors. Mr. Post’s base salary was eliminated subsequent to April 7, 2006 and he will be compensated through the remainder of his term of employment as a part-time employee at a rate of $1,000 per day worked, prorated for partial days worked, for at least one full day of work each month.

During such part-time employment Mr. Post will not be entitled to benefits, though he will be reimbursed for travel expenses incurred in connection with such employment.

Mr. Post was paid a bonus of $56,140 for 2006, which is equal to the target bonus for his position for 2006 multiplied by a fraction where the numerator is equal to the number of days worked by Mr. Post in 2006 through April 7, 2006 and the denominator is equal to 365.

In the event of a change of control within six months of April 7, 2006 Mr. Post is entitled to a lump sum amount equal to two times the sum of his annual base salary plus the bonus (at the target level).

In connection with the appointment of Richard Walker to the position of Executive Vice President and Chief Operating Officer, we and Mr. Walker amended and restated the January 21, 2003 and July 1, 2003 letter agreements between us in an Employment Agreement, effective April 27, 2005 (as amended and restated, the “Walker Employment Agreement”). Mr. Walker is entitled to an annual base salary of $300,000 during the term, and is eligible for a bonus of 50% of his annual base salary in the board’s discretion. In addition, Mr. Walker may participate in any benefit plans generally afforded to executive officers. Mr. Walker was also granted stock options to purchase 100,000 shares of our common stock, all of vested. If Mr. Walker’s compensation is deemed to be parachute payments under the Internal Revenue Code, then we have agreed to make additional payments to him to compensate for his additional tax obligations.

We and Mr. Walker amended the Walker Employment Agreement, effective March 7, 2006 (as amended, the “Amended Walker Employment Agreement”), to provide that Mr. Walker may terminate his employment or that there may be change in his employment status with us in connection with the Riesenbach Employment Agreement. Mr. Walker tendered his resignation as Executive Vice President and Chief Operating Officer and all other officer titles he holds with us or any of our subsidiaries effective May 31, 2006. Mr. Walker will be entitled to an amount equal to his annual base salary plus a bonus (at the target level) and benefits for one year. In addition, Mr. Walker will no longer be employed by us on a full-time basis but will thereafter be employed on a part-time basis and advise our Chief Executive Officer and Board of Directors on business and corporate development matters as reasonably requested by either of them. Following such change in status, Mr. Walker will no longer be entitled to a base salary or a bonus but will be compensated at the rate of an annual salary of $12,000. During such part-time employment Mr. Walker will not be entitled to benefits, though he will be entitled to reimbursement for all travel expenses incurred in connection with such employment.

Mr. Walker will be entitled to a bonus for 2006 in an amount equal to the target bonus for his position for 2006 multiplied by five twelfths (5/12).

In the event of a change of control (a) during the term while Mr. Walker remains employed by us as our Executive Vice President and Chief Operating Officer, or (b) at any time during the six month period following the termination of Mr. Walker’s employment with us as our Executive Vice President and Chief Operating Officer, Mr. Walker is entitled to a lump sum amount equal to the remainder of (x) two times the sum of Mr. Walker’s annual base salary plus a bonus (at the target level) minus (y) any other severance amount previously paid to Mr. Walker pursuant to the Amended Walker Employment Agreement, provided that if Mr. Walker is employed by us as our Executive Vice President and Chief Operating Officer at the time of the change of control, he agrees, if requested to continue with us or any successor for such requested period after the change of control not to exceed 90 days.

In connection with Jeffrey Schwartz’ resignation as our Chief Executive Officer and President, effective April 27, 2005, we and Mr. Schwartz amended and restated Mr. Schwartz’s December 4, 2003 Employment Agreement, effective April 27, 2005 (as amended and restated, the “Schwartz Employment Agreement”).

The Schwartz Employment Agreement is for a one year term and may be terminated by us at any time, or by Mr. Schwartz, with thirty days prior written notice. We may renew the agreement by delivering written notice to Mr. Schwartz at least ninety days prior to the expiration of the agreement, in which case, the term of the agreement shall extend for an additional one year term. If the agreement is not renewed, we are required to pay Mr. Schwartz his base salary for three months after the expiration of the agreement and to continue his benefits during such period. We did not renew the agreement. If, during the one year following the termination of employment, Mr. Schwartz complies with the non-competition and non-solicitation provisions of the agreement, any unvested stock options held by him on the date of termination will be deemed to have vested during such period as if he was an employee during that time.

Mr. Schwartz was entitled to an annual base salary of $400,000 during the term, and was eligible for a bonus of 50% of his annual base salary in the board’s discretion. In addition, Mr. Schwartz had the right to participate in any benefit plans generally afforded to our executive officers. If Mr. Schwartz’ compensation is deemed to be parachute payments under the Internal Revenue Code, then we have agreed to make additional payments to him to compensate for his additional tax obligations. The agreement also requires us to indemnify Mr. Schwartz under certain circumstances.

In the event of a change of control during the term of his employment or at any time during the six month period following such term, Mr. Schwartz is entitled to a lump sum payment equal to two times the sum of his annual base salary plus a bonus of 50% of his annual base salary. In addition, if Mr. Schwartz’s employment was terminated prior to a change of control that occurs during the six month period following such termination, any unvested stock options held by Mr. Schwartz on the date of termination shall vest in full immediately prior to such change of control, assuming Mr. Schwartz complies with the non-compete and non-solicitation provisions of the agreement.

In connection with the appointment of Michael Schmidt to the position of Executive Vice President and Chief Financial Officer, on May 30, 2005, we and Mr. Schmidt amended and restated the March 9, 2004 letter agreement between us in an Employment Agreement (as amended and restated, the “Schmidt Employment Agreement”). The Schmidt Employment Agreement was further amended on April 26, 2006. We may, at any time and in our sole discretion, change Mr. Schmidt’s position as the Executive Vice President and Chief Financial Officer to another officer position within our financial group, provided, however, that any such change will not constitute a termination of Mr. Schmidt’s employment with us.

The Schmidt Employment Agreement was renewed through May 30, 2007. Mr. Schmidt is entitled to an annual base salary of $250,000 during the term, and is eligible for a bonus of 50% of his annual base salary in the board’s discretion. In addition, Mr. Schmidt may participate in any benefit plans generally afforded to executive officers. We may, at any time in our sole discretion, terminate Mr. Schmidt’s employment upon 30 days prior written notice to Mr. Schmidt, and Mr. Schmidt may, at any time, in his sole discretion, terminate his employment upon 30 days prior written notice to us. In the case of termination by us at any time or termination by Mr. Schmidt on or after December 31, 2006, Mr. Schmidt is entitled to a lump sum payment equal to his annual base salary plus bonus, as well as benefits for one year following such termination; provided, however, that Mr. Schmidt is not entitled to such payment to the extent he becomes entitled to receive severance compensation in connection with a change of control. If Mr. Schmidt terminates his employment without reason, he shall nonetheless make himself reasonably available to advise the Chief Executive Officer and the Board of Directors on any accounting or audit matters as reasonably requested for a period of 12 months following such termination, in which event Mr. Schmidt will no longer be entitled to a base salary or bonus, but instead will be compensated at a rate of $1,000 per day for each day worked, prorated for partial days worked.

In the event of a change of control during the term of his employment or at any time during the six month period following such term, Mr. Schmidt is entitled to a lump sum payment equal to two times the sum of his annual base salary plus a bonus of 50% of annual base salary, so long as Mr. Schmidt agrees, if requested, to continue with us or any successor for such requested period after the change of control provided that such request cannot exceed six months. If Mr. Schmidt’s compensation is deemed to be parachute payments under the Internal Revenue Code, then we have agreed to make additional payments to him to compensate for his additional tax obligations.

Mr. Schmidt was also granted stock options to purchase 150,000 shares of our common stock, which shall vest, as to 50,000 of the options, on the one year anniversary of the date of grant, and thereafter 4,166 of the options shall vest on each monthly anniversary of the date of grant, provided that the vesting of such options shall accelerate upon a change of control.

In connection with the appointment of Ariel Amir to the office of Chief Legal and Administrative Officer of Autobytel, effective July 19, 2005, we and Mr. Amir amended and restated the April 1, 2002 Employment Agreement, as amended, between us in an Employment Agreement (as amended and restated, the “Amir Employment Agreement”).

The Amir Employment Agreement is for a one year term and automatically renews for an additional one year period unless either party notifies the other of its intent not to renew no later than 120 days prior to the expiration of the one year term. The agreement was renewed through July 19, 2007. Mr. Amir is entitled to an annual base salary of $265,000 during the term, and is eligible for a bonus of 50% of his annual base salary in the board’s discretion. In addition, Mr. Amir may participate in any benefit plans generally afforded to executive officers. If Mr. Amir’s employment is terminated without “cause” or if Mr. Amir terminates his employment with “good reason” (each as defined in the Amir Employment Agreement), Mr. Amir is entitled to a lump sum payment equal to his annual base salary plus bonus, as well as benefits for one year following such termination.

In the event of a change of control during the term of his employment or at any time during the six month period following such term, Mr. Amir is entitled to a lump sum payment equal to two times the sum of his annual base salary plus a bonus of 50% of annual base salary, so long as Mr. Amir agrees, if requested, to continue with us or any successor for such requested period after the change of control provided that such request cannot exceed 90 days. If Mr. Amir’s compensation is deemed to be parachute payments under the Internal Revenue Code, then we have agreed to make additional payments to him to compensate for his additional tax obligations.

Mr. Amir was also granted stock options to purchase 100,000 shares of our common stock, which shall vest, as to 33,333 of the options, on the one year anniversary of the date of grant, and thereafter approximately 2,777 of the options shall vest on each monthly anniversary of the date of grant, provided that the vesting of such options shall accelerate upon a change of control.

On June 15, 2005, Andrew F. Donchak, former Executive Vice President of Autobytel, resigned effective July 31, 2005. In connection with the resignation, we and Mr. Donchak entered into a letter agreement, dated June 15, 2005, in which we agreed that the termination of Mr. Donchak’s employment was for “Good Reason” under that certain letter agreement, dated October 1, 2002, which governs the terms of Mr. Donchak’s employment with us (the “Employment Agreement”). As a result, Mr. Donchak was paid severance of $265,000. Mr. Donchak is also entitled to benefits for twelve months following the termination of his employment. In addition, pursuant to the Employment Agreement, any unvested portion of any option acquired by Mr. Donchak during his employment became fully vested and all options, including any previously vested but unexercised portions of any options, are exercisable until the date that is two (2) years following the termination date.

Autobytel directors who are not full time employees receive cash compensation for service on Autobytel’s board of directors or any committee or subcommittee thereof. Such directors receive the following fees: (i) annual fee of $20,000 payable quarterly and (ii) $1,000 for each board or committee meeting attended, whether by phone or in person, with the Chairman of the Board or committee, as applicable, receiving $2,000 for each such meeting rather than $1,000. In addition, directors are reimbursed for expenses incurred in connection with attendance at board and committee or subcommittee meetings. Each of the Chairman of the Board and the Chairman of the Audit Committee is entitled to a $25,000 annual retainer payable quarterly. The Chairman of the Compensation Committee is entitled to a $10,000 annual retainer payable quarterly. The Chairman of the Corporate Governance and Nominations Committee is entitled to a $5,000 annual retainer payable quarterly.

Autobytel’s 1999 Stock Option Plan provides for an automatic grant of a first option to purchase 20,000 shares of common stock to each non-employee director on the date on which the person first becomes a non-employee director; provided, that if any person serving as a non-employee director before January 14, 1999 received options for less than 20,000 shares on the date such person became a member of the board of directors, such person was granted an option to purchase a number of shares equal to the difference between 20,000 shares and the shares actually granted. After the first option is granted to the non-employee director, he or she will automatically be granted a subsequent option to purchase 5,000 shares on November 1 of each subsequent year provided he or she is then a non-employee director and, provided further, that on such date he or she has served on the board of directors for at least six months. First options and each subsequent option will have a term of ten years. The shares related to the first option and each subsequent option vest in their entirety and become exercisable on the first anniversary of the grant date, provided that the option holder continues to serve as a director on such dates. The exercise price of shares subject to the first option and each subsequent option shall be 100% of the fair market value per share of common stock on the date of the grant of the option. The Autobytel 2000 Stock Option Plan contains identical provision for option grants to non-employee directors that become effective when no shares are available for grant under the 1999 Stock Option Plan.

The Compensation Committee, based in part upon the advice received from its compensation consultant regarding the amount of time required by directors who are not full time employees to spend on company matters in 2005 in relation to their existing compensation, granted to each such director options to purchase 12,000 shares of common stock, all of which were vested on the date of grant. In addition, the Compensation Committee, based in part upon the advice received from its compensation consultant regarding the amount of time required by the Chairman of the Audit Committee to devote to company matters in relation to his existing compensation, granted to him options to purchase 25,000 shares of common stock, all of which vested on the date of grant. In addition, the Board of Directors, based upon the recommendation of the Compensation Committee, which was based in part upon the advice of its compensation consultant regarding the amount of time spent by the Chairman of the Compensation Committee on completing the Riesenbach Employment Agreement and other employment agreements with executives in relation to his existing compensation, granted to him options to purchase 5,000 shares of common stock, all of which vested on the date of grant, and approved a payment to him of $10,000.

No automatic grants referred to above were made in 2005 as both the 1999 and 2000 Stock Option Plans did not have available shares for grant.

Directors who are also full time employees of Autobytel do not receive any additional compensation for their service as directors.

The following table summarizes information, as of December 31, 2005, relating to equity compensation plans of Autobytel pursuant to which grants of options, restricted stock or other rights to acquire shares may be granted from time to time.

No interlocking relationship exists between the board of directors or Compensation Committee and the board of directors or compensation committee of any other company, nor has any such interlocking relationship existed in the past. The Compensation Committee of the board of directors currently consists of Mr. Fuchs, Mr. Coats and Mr. Kaplan.

The following graph shows a comparison of cumulative total stockholder returns for Autobytel’s common stock, the NASDAQ National Market, the Russell 2000 Index and the Russell 3000 Index. In 2003, Autobytel was included for the first time in the Russell 3000 Index. The graph assumes the investment of $100 on December 31, 2000. The data regarding Autobytel assumes an investment at the closing price of $2.50 per share of Autobytel’s common stock on December 29, 2000. The performance shown is not necessarily indicative of future performance.

Based upon Autobytel’s review of forms filed by directors, officers and certain beneficial owners of Autobytel’s common stock (the “Section 16 Reporting Persons”) pursuant to Section 16 of the Exchange Act, Autobytel is not aware of any failures by the Section 16 Reporting Persons to file the forms required to be filed by them pursuant to Section 16 of the Exchange Act.

On January 5, 2006, Autobytel and Robert S. Grimes, a current director and former Executive Vice President, agreed to terminate a consulting agreement pursuant to which Mr. Grimes provided consulting services to Autobytel. The termination is effective as of December 31, 2005. Under the consulting agreement, Mr. Grimes received $50,000 per year payable on a monthly basis and a $2,500 monthly office expense allowance. Also under the consulting agreement, Mr. Grimes made himself available to Autobytel’s executive officers for up to 16 hours a month for consultation and other activities related to formulating and implementing business strategies and relationships.

This report on executive compensation is required by the Securities and Exchange Commission and shall not be deemed to be incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended, or under the Exchange Act, except to the extent that Autobytel specifically incorporates this information by reference, and shall not otherwise be deemed soliciting material or filed under such Acts.

The Compensation Committee of the board of directors administers Autobytel’s executive compensation program. The current members of the Compensation Committee are Mr. Coats, Mr. Fuchs and Mr. Kaplan. Each of these persons is a non-employee director within the meaning of Section 16 of the Exchange Act and an “outside director” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended.

The role of the Compensation Committee is to set the salaries and other compensation of the executive officers (including named executive officers) and certain other key employees of Autobytel, and to make grants under, and to administer, the stock option, restricted stock and other employee purchase and bonus plans. Autobytel’s compensation philosophy for executive officers is to relate compensation to corporate performance and increases in stockholder value, while providing a total compensation package that is competitive and enables Autobytel to attract, motivate, reward and retain key executives and employees. Accordingly, each executive officer’s compensation package may, in one or more years, be comprised of the following three elements:

The compensation of the Chief Executive Officer was determined by the Compensation Committee, in part, on the advice of an independent third-party compensation consultant. The compensation of other executives was determined by the Compensation Committee, in part, on the advice of the Chief Executive Officer and an independent third-party compensation consultant.

Base Salary. Salaries for executive officers for 2005 were generally determined on an individual basis by evaluating each executive’s scope of responsibility, performance, prior experience and salary history, as well as the salaries for similar positions at comparable companies.

Annual Incentive Awards. The Compensation Committee evaluated the performance of Autobytel relative to the performance of other similarly situated companies. To the extent that bonuses were paid to officers for 2005, the Compensation Committee focused on retention to encourage officers to remain in the employ of Autobytel and considered several factors including:

The Compensation Committee from time to time considers various discretionary incentive compensation alternatives for Autobytel’s executives.

Long-Term Incentive Awards. The Compensation Committee believes that equity-based compensation in the form of stock options or restricted stock links the interests of executive officers with the long-term interests of Autobytel’s stockholders and encourages executive officers to remain in Autobytel’s employ. Stock options generally have value for executive officers only if the price of Autobytel’s shares of common stock increases above the fair market value of a share of common stock on the grant date and the officer remains in Autobytel’s employ for the period required for the shares granted to such person to vest.

In 2005, Autobytel granted stock options in accordance with the 1996 Stock Incentive Plan, 1998 Stock Option Plan, 1999 Stock Option Plan, 1999 Employee and Acquisition Related Stock Option Plan, 2000 Stock Option Plan, the Amended and Restated 2001 Restricted Stock and Option Plan and the 2004 Restricted Stock and Option Plan. During 2005, stock options were granted to certain executive officers to aid in the retention of executive officers and to align their interests with those of the stockholders. Stock options typically have been granted to executive officers when the executive first joins Autobytel. At the discretion of the Compensation Committee, executive officers may also be granted stock options to provide greater incentives to continue their employment with Autobytel and to strive to increase the value of Autobytel’s common stock. The number of shares subject to each stock option granted is within the discretion of the Compensation Committee and is based on anticipated future contribution and ability to impact Autobytel’s results, past performance or consistency within the officer’s peer group. In 2005, the Compensation Committee considered these factors. The stock options granted in 2005 generally become exercisable over a one to three-year period and were granted at a price equal to the fair market value of Autobytel’s common stock on the date of grant.

Mr. Post’s base salary, target bonus, and long-term incentive awards for 2005 were determined by the Compensation Committee in a manner consistent with the factors described above for all executive officers and based on Mr. Post’s business experience.

The following Audit Committee Report is provided in accordance with the rules and regulations of the Securities and Exchange Commission. Pursuant to such rules and regulations, this Audit Committee Report shall not be deemed “soliciting materials,” filed with the Securities and Exchange Commission, subject to Regulation 14A or 14C of the Securities and Exchange Commission or subject to the liabilities of Section 18 of the Exchange Act nor shall this Audit Committee Report be deemed to be incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that Autobytel specifically incorporates this information by reference.

The audit committee is responsible for oversight of Autobytel’s accounting and financial reporting policies, practices and internal controls on behalf of its board of directors. The audit committee operates pursuant to a charter that was amended and restated on December 9, 2004. The management of Autobytel is responsible for the preparation, presentation and integrity of Autobytel’s financial statements, Autobytel’s accounting and financial reporting principles, and internal controls designed to assure compliance with accounting standards and applicable laws and regulations. The independent auditors are responsible for auditing Autobytel’s financial statements and expressing an opinion as to their conformity with accounting principles generally accepted in the United States.

In fulfilling its oversight responsibilities, the audit committee reviewed and discussed the audited financial statements in the annual report with the independent auditors and management. As part of its review, the audit committee discussed the quality, and not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements.

The audit committee also reviewed with the independent auditors their judgments as to the quality, not just the acceptability, of Autobytel’s accounting principles and such other matters as are required to be discussed with the audit committee under generally accepted auditing standards. In addition, the audit committee has discussed with the independent auditors the auditors’ independence from management and Autobytel, including the matters in the written disclosures and the letter required by the Independence Standards Board Standard No. 1 (Independent Discussions With Audit Committees), and considered the compatibility of non-audit services with the auditors’ independence.

The audit committee discussed with the independent auditors the overall scope and plans for their audits. The audit committee met with the independent auditors to discuss the results of their examinations, and the overall quality of its financial reporting and the other matters required to be discussed by Statement on Auditing Standards No. 61, as amended (Communication With Audit Committees). The audit committee also regularly met without management.

The members of the audit committee are not professionally engaged in the practice of auditing or accounting, and are not employed by Autobytel for accounting, financial management or internal control purposes. Members of the audit committee relied, without independent verification, on the information provided to them and on the representations made by management and the independent auditors. Accordingly, the audit committee’s oversight does not provide any basis, other than the review and discussions with management and the independent auditors referred to above, to determine that management has maintained appropriate accounting and financial reporting principles and policies or internal controls over financial reporting and procedures designed to assure compliance with accounting standards and applicable laws and regulations. Furthermore, the audit committee’s considerations and discussions referred to above do not assure that the audit of Autobytel’s financial statements has been carried out in accordance with auditing standards generally accepted in the United States or that Autobytel’s auditors are in fact “independent.”

In reliance on the reviews and discussions referred to above, and subject to the limitations on the role and responsibilities of the audit committee referred to above and in its charter, the audit committee recommended to the board of directors (and the board of directors approved) that the audited financial statements be included in the Annual Report on Form 10-K for the year ended December 31, 2005 for filing with the Securities and Exchange Commission.

The Audit Committee

Mark N. Kaplan

Jeffrey H. Coats

Mark R. Ross

As of the date of this Proxy Statement, the board of directors is not aware of any matters other than those set forth herein and in the Notice of Annual Meeting of Stockholders that will come before the Annual Meeting. Should any other matters arise requiring the vote of stockholders, it is intended that proxies will be voted in respect thereto in accordance with the best judgment of the person or persons voting the proxies.

Autobytel must receive at its principal office before January 1, 2007, any proposal which a stockholder wishes to submit to the 2007 annual meeting of stockholders, if the proposal is to be considered by the board of directors for inclusion in the proxy materials for that annual meeting. Stockholders of Autobytel may submit proper proposals for inclusion in Autobytel’s proxy statement and for consideration at the 2007 annual meeting of its stockholders by submitting their proposals in writing to the Secretary of Autobytel in a timely manner. In order to be included in Autobytel’s proxy materials for the 2007 annual meeting, the proposal must also otherwise comply with the requirements of Rule 14a-8 of the Exchange Act.

In addition, Autobytel’s by-laws establish an advance notice procedure with regard to stockholder nominations for the election of directors or other business to be properly brought before an annual meeting. For nominations or other business to be properly brought before the meeting by a stockholder, such stockholder must provide written notice delivered to the Secretary of Autobytel no less than 60 nor more than 90 days prior to the anniversary date of the immediately preceding annual meeting, which notice must contain specified information concerning the business or the nominee. However, in the event that the annual meeting is called for a date that is not within 30 days before or after such anniversary date, such stockholder must provide written notice delivered to the Secretary of Autobytel not later than 10 days following the date notice of the annual meeting is mailed to the stockholders of Autobytel. Accordingly, a stockholder who intends to present a nomination or proposal at the 2007 annual meeting of stockholders without inclusion of the proposal in Autobytel’s proxy materials must provide written notice of the nominations or other business the stockholder wishes to propose to the Secretary no later than 10 days following the date the notice of the 2007 annual meeting is mailed to the stockholders of Autobytel. A copy of the full text of the by-law provision discussed above may be obtained by writing to the Secretary of Autobytel. All notices of proposals by stockholders, whether or not included in Autobytel’s proxy materials, should be sent to Autobytel Inc., 18872 MacArthur Boulevard, Irvine, California 92612-1400, Attention: Corporate Secretary.

Autobytel reserves the right to reject, rule out of order, or take other appropriate action with respect to any proposal that does not comply with these and other applicable requirements.

In addition, a stockholder who intends to present a proposal at Autobytel’s 2007 annual meeting without inclusion of the proposal in the proxy materials should be aware that the rules of the Securities and Exchange Commission provide that a proxy may confer discretionary authority on management to vote on a matter if the proponent fails to timely notify Autobytel. Such proposals must also have met the other requirements of the rules of the Securities and Exchange Commission relating to stockholder proposals.

Please return your proxy as soon as possible. Unless a quorum consisting of a majority of the outstanding shares entitled to vote is represented at the meeting, no business can be transacted. Therefore, please be sure to date and sign your proxy exactly as your name appears on your stock certificate and return it in the enclosed prepaid return envelope. Please act promptly to ensure that you will be represented at this important meeting.

If requested, we will furnish you any exhibit listed on the exhibit index to our Annual Report on Form 10-K for the fiscal year ended December 31, 2005 upon payment of a reasonable copy fee.

By Order of the Board of Directors

James E. Riesenbach

President and Chief Executive Officer

James Riesenbach and Ariel Amir and each of them, with full power of substitution, are hereby authorized to represent and to vote as directed on this proxy the shares of common stock of Autobytel Inc. held of record by the undersigned on April 26, 2006 at the Annual Meeting of Stockholders to be held on June 22, 2006, and at any adjournments or postponements, as if the undersigned were present and voting at the meeting.

The shares represented by this proxy will be voted as directed by the stockholder. Where no direction is given when the duly executed proxy is returned, such shares will be voted FOR the proposal set forth on this proxy as such proxies deem advisable and on such other matters as may properly come before the Annual Meeting of Stockholders, including, among other things, consideration of any motion made for adjournment of the meeting.

Whether or not you expect to attend the meeting, you are urged to execute and return this proxy, which may be revoked at any time prior to its use.


	PricewaterhouseCoopers LLP
	2005		2004
Audit fees	$	1,918,100	$	2,823,400
Audit related fees		—		360,900
Tax fees		45,400		71,900
All other fees		—		—

Total	$	1,963,500	$	3,256,200


	Shares Beneficially Owned
Name of Beneficial Owner:	Number	Percent
Coghill Capital Management, L.L.C. One North Wacker Drive, Suite 4350, Chicago, IL 60606(1)	4,142,071	9.8	%
Morgan Stanley 1585 Broadway, New York, NY 10036(2)	3,569,128	8.4	%
Peninsula Capital Management, Inc. One Sansome Street, Suite 3134, San Francisco, CA 94104(3)	3,307,055	7.8	%
Passport Capital, LLC 402 Jackson Street, San Francisco, CA 94111(4)	2,111,925	5.0	%
Jeffrey A. Schwartz(5)	1,349,456	3.1	%
Robert S. Grimes(6)	758,614	1.8	%
Ariel Amir(7)	668,161	1.6	%
Mark R. Ross(8)	546,790	1.3	%
Richard Walker(9)	510,416	1.2	%
Andrew Donchak(10)	505,000	1.2	%
Michael J. Fuchs(11)	360,952	*
Richard A. Post(12)	311,382	*
Michael F. Schmidt(13)	195,267	*
Mark N. Kaplan(14)	150,031	*
Jeffrey H. Coats(15)	120,770	*
James E. Riesenbach	10,000	*
All Autobytel Executive Officers and directors as a group (12 persons)(16)	5,486,839	11.8	%


Name	Age	Position
James E. Riesenbach	49	Chief Executive Officer, President and Director
Richard Walker	42	Executive Vice President and Chief Operating Officer(1)
Ariel Amir	46	Executive Vice President, Chief Legal and Administrative Officer and Secretary
Michael F. Schmidt	43	Executive Vice President and Chief Financial Officer


Name and Principal Position	Fiscal Year Ended December 31,	Annual Compensation								Long-term Compensation Awards	All Other Compensation
Name and Principal Position	Fiscal Year Ended December 31,	Salary		Bonus			Other Annual Compensation			Securities Underlying Options(#)	All Other Compensation
Richard A. Post Former Chief Executive Officer and President	2005	$	220,729	$	138,000	(1)	$	45,089	(2)	200,000	— —
Jeffrey A. Schwartz Former Vice Chairman, Chief Executive Officer and President	2005 2004 2003		400,000 401,000 399,000		100,000 250,000 250,000	(1) (4) (1)		9,359 39,371 22,354	(3) (3) (3)	— — 1,000,000	— — —
Michael Schmidt Executive Vice President and Chief Financial Officer	2005 2004		235,660 161,250		125,000 72,563	(1) (5)		111,276 32,160	(2) (2)	150,000 200,000	— —
Ariel Amir Executive Vice President and Chief Legal and Administrative Officer	2005 2004 2003		265,000 265,000 265,000		127,000 82,515 158,735	(1) (5) (1)		— 1,000 —	(6)	100,000 75,000 160,000	— — —
Richard Walker Executive Vice President and Chief Operating Officer	2005 2004 2003		288,771 265,000 236,250		143,500 114,025 149,750	(1) (5) (1)		43,402 — —	(2)	100,000 75,000 355,000	— — —
Andrew Donchak Former Executive Vice President	2005 2004 2003		154,583 265,000 265,000		— 132,515 158,735	(5) (1)		265,000 — —	(7)	— 75,000 160,000	— — —


	Individual Grants							Potential Realizable Value of Assumed Annual Rates of Stock Price Appreciation for Option Term(2)
Name	Number of Securities Underlying Options Granted(#)		Percent of Total Options Granted to Employees in 2005(1)		Exercise Price ($/Share)		Expiration Date
Name	Number of Securities Underlying Options Granted(#)		Percent of Total Options Granted to Employees in 2005(1)		Exercise Price ($/Share)		Expiration Date	5%($)		10%($)
Richard A. Post	200,000	(3)	11.80	%	$	4.86	05/31/15	$	611,285	$	1,549,117
Jeffrey A. Schwartz	—		0.0	%		—	—		—		—
Ariel Amir	100,000	(4)	5.9	%		4.47	08/11/15		281,116		712,403
Andrew Donchak	—		0.0	%		—	—		—		—
Richard Walker	100,000	(5)	5.9	%		4.86	05/31/15		305,643		774,559
Mike Schmidt	150,000	(4)	8.8	%		4.86	05/31/15		458,464		1,161,838


Name	Number of Shares Acquired on Exercise	Value Realized($)		Number of Securities Underlying Unexercised Options at December 31, 2005		Value of Unexercised In-The-Money Options at December 31, 2005
Name	Number of Shares Acquired on Exercise	Value Realized($)		Exercisable	Unexercisable	Exercisable		Unexercisable
Richard A. Post	—	$	—	232,832	66,668	$	148,592	$	5,333
Jeffrey A. Schwartz	—		—	1,264,885	500,000		2,480,998		—
Ariel Amir	—		—	606,875	128,125		1,190,000		47,000
Andrew Donchak	—		—	505,000	—		466,400		—
Richard Walker	—		—	446,873	78,127		488,066		12,334
Michael Schmidt	—		—	107,634	242,366		—		12,000


	Number of securities to be issued upon exercise of outstanding options and rights	Weighted-average exercise price of outstanding options and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)	(b)		(c)
Plan category
Equity compensation plans approved by stock holders(1)	7,483,462	$	5.57	1,730,939
Equity compensation plan not approved by stock holders(2)	994,343	$	8.44	179,383

Total(3)	8,477,805	$	5.91	1,910,322


	Cumulative Total Return
	12/00		12/01		12/02		12/03		12/04		12/05
AUTOBYTEL INC.	$	100.00	$	69.00	$	112.00	$	364.40	$	241.60	$	197.60
NASDAQ STOCK MARKET (U.S.)		100.00		79.08		55.95		83.35		90.64		92.73
RUSSELL 2000		100.00		102.49		81.49		120.00		142.00		148.46
RUSSELL 3000		100.00		88.54		69.47		91.04		101.92		108.16


	(continued from other side)		Please mark votes as in this example	x

1. ELECTION OF NOMINEES MARK N. KAPLAN AND JAMES E. RIESENBACH AS CLASS II DIRECTORS OF AUTOBYTEL INC.

FOR all nominees ¨		WITHHOLD AUTHORITY for all nominees	¨

(Instruction: To withhold authority to vote for any nominee, write his name in the space provided.)



2. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING OF STOCKHOLDERS, OR ANY ADJOURNMENTS THEREOF.



				Date		______________________________, 2006


						(Signature of stockholder)

				Date		______________________________, 2006


						(Signature of stockholder)

						NOTE: Signatures should agree with the names printed hereon. When signing as executor, administrator, trustee, guardian or attorney, please give the title as such. For joint accounts or co-fiduciaries, all joint owners or co-managers should sign.