EXHIBIT 10.7


                                    GUARANTY




         FOR VALUABLE  CONSIDERATION,  the receipt and  sufficiency  of which is
hereby  acknowledged,  each of the undersigned  corporations  (the  "Guarantor")
guarantees  unconditionally,  the full and prompt performance of all obligations
of each of the other  undersigned  corporations who may, from time to time, be a
Seller under the Master  Purchase and Sale Agreement  (the "Master  Purchase and
Sale  Agreement"),  including,  but  not  limited  to,  the  obligations  of the
Servicing  Agreement  (the  "Servicing  Agreement"),  both  dated  of even  date
herewith.  Capitalized terms used herein but not defined shall have the meanings
assigned to such terms in the Master Purchase and Sale Agreement.

         Guarantor acknowledges and represents to Purchaser that it is receiving
direct and indirect  financial  and other  benefits as a result of this Guaranty
and the obligations secured hereunder; represents to Purchaser that after giving
effect to this Guaranty and the contingent  obligations  evidenced hereby it is,
and will be, solvent;  acknowledges  that this Guaranty is operative and binding
as to it; and  acknowledges  that neither  Purchaser nor any officer,  employee,
agent,   attorney   or  other   representative   of   Purchaser   has  made  any
representation,  warranty or statement to Guarantor to induce it to execute this
Guaranty.

         Guarantor  agrees to pay on demand all costs and expenses of every kind
incurred by Purchaser:  (a) in enforcing this Guaranty; (b) in collecting on any
obligations of any Seller or any Guarantor;  (c) in realizing upon or protecting
any collateral for this Guaranty;  and (d) for any other purpose related to this
Guaranty.

         This  Guaranty  shall  inure  to the  benefit  of and be  binding  upon
Purchasers  and  Guarantors,   and  their  respective  successors  and  assigns;
provided,  however,  that this  Guaranty  may not be assigned  by any  Guarantor
without the prior written consent of Purchaser.


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         This  Guaranty  shall be construed in  accordance  with the laws of the
State of  Texas  and the  obligations,  rights  and  remedies  pursuant  to this
Guaranty shall be determined in accordance  with such laws without giving effect
to the conflict of laws  principles  thereof.  This Guaranty is  performable  in
Dallas County, Texas, which is proper venue for all legal proceedings. Guarantor
expressly  consents to the personal  jurisdiction  of the courts of the State of
Texas.

         Executed and delivered as of the 12th day of January, 1999.


                                     ACE Motor Company


                                     By:      /s/ Charles Norman
                                              -------------------------
                                              Charles Norman, President



                                     AutoCorp Financial Services, Inc.


                                     By:      /s/ Charles Norman
                                              -------------------------
                                              Charles Norman, President



                                     AutoCorp Equities, Inc.


                                     By:      /s/ Charles Norman
                                              -------------------------
                                              Charles Norman, President










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