<PAGE>
 
                                                                  EXHIBIT 10.7.1

                             CHRYSLER CORPORATION
                                        
                                     DODGE
                                        
                          SALES AND SERVICE AGREEMENT
                                        


       FAA Poway D, Inc. dba Poway Dodge
--------------------------------------------------------------------------------
                  (DEALER Firm Name and D/B/A, if applicable)
located at    13750 Poway Rd.         Poway,  CA.
          ----------------------------------------------------------------------
                  (STREET)                     (CITY)                (STATE)
a(n)        Corporation                          hereinafter called DEALER, and 
    ---------------------------------------------
      (INDIVIDUAL, CORPORATION OR PARTNERSHIP)

Chrysler Corporation, a Delaware corporation, hereinafter sometimes referred to
as "CC" , have entered into this Chrysler Corporation Dodge Sales and Service
Agreement, hereinafter referred to as "Agreement", the terms of which are as
follows:

________________________________________________________________________________
INTRODUCTION

The purpose of the relationship established by this Agreement is to provide a
means for the sale and service of specified Dodge vehicles and the sale of CC
vehicle parts and accessories in a manner that will maximize customer
satisfaction and be of benefit to DEALER and CC.

While the following provisions, each of which is material, set forth the
undertakings of this relationship, the success of those undertakings rests on a
recognition of the mutuality of interests of DEALER and CC, and a spirit of
understanding and cooperation by both parties in the day to day performance of
their respective functions. As a result of such considerations, CC has entered
into this Agreement in reliance upon and has placed its trust in the personal
abilities, expertise, knowledge and integrity of DEALER's principal owners and
management personnel, which CC anticipates will enable DEALER to perform the
personal services contemplated by this Agreement.

It is the mutual goal of this relationship to promote the sale and service of
specified CC products by maintaining and advancing their excellence and
reputation by earning, holding and furthering the public regard for CC and all
CC dealers.


________________________________________________________________________________
1.   PRODUCTS COVERED

DEALER has the right to order and purchase from CC and to sell at retail only
those specific models of CC vehicles, sometimes referred to as "specified CC
vehicles," listed on the Motor Vehicle Addendum, attached hereto and
incorporated herein by reference. CC may change the models of CC vehicles listed
on the Motor Vehicle Addendum by furnishing DEALER a superseding Motor Vehicle
Addendum. Such a superseding Motor Vehicle Addendum will not be deemed or
construed to be an amendment to this Agreement.


________________________________________________________________________________
2.   DEALER'S MANAGEMENT

CC has entered into this Agreement relying on the active, substantial and
continuing personal participation in the management of DEALER's organization by:

     NAME                                     POSITION
Hardy M. Travis                       Secretary/Treasurer
-------------------------          -----------------------------

_________________________          _____________________________
<PAGE>
 
DEALER represents and warrants that at least one of the above named individuals
will be physically present at the DEALER's facility (sometimes referred to as
"Dealership Facilities") during most of its operating hours and will manage all
of DEALER's business relating to the sale and service of CC products. DEALER
shall not change the personnel holding the above described position(s) or the
nature and extent of his/her/their management participation without the prior
written approval of CC.


________________________________________________________________________________
3.   DEALER'S CAPITAL STOCK OR PARTNERSHIP INTEREST

If DEALER is a corporation or partnership, DEALER represents and agrees that the
persons named below own beneficially the capital stock or partnership interest
of DEALER in the percentages indicated below. DEALER warrants there will be no
change affecting more than 50% of the ownership interest of DEALER, nor will
there be any other change in the ownership interest of DEALER which may affect
the managerial control of DEALER without CC's prior written approval.

<TABLE>
<CAPTION>
                                  Voting   Non-Voting   Partnership   Active
Name                               Stock      Stock       Interest    Yes/No
<S>                               <C>      <C>          <C>           <C>
 
First America Automotive, Inc.       100%    ________%     ________%    No
-----------------------------     ------                              -------
_____________________________     ______%    ________%     ________%  _______
_____________________________     ______%    ________%     ________%  _______
_____________________________     ______%    ________%     ________%  _______
_____________________________     ______%    ________%     ________%  _______
Total                                100%    ________%     ________%
                                  ------
</TABLE>

________________________________________________________________________________
4.   SALES LOCALITY

DEALER shall have the non-exclusive right, subject to the provisions of this
Agreement, to purchase from CC those new specified CC vehicles, vehicle parts,
accessories and other CC products for resale at the DEALER's facilities and
location described in the Dealership Facilities and Location Addendum, attached
hereto and incorporated herein by reference. DEALER will actively and
effectively sell and promote the retail sale of CC vehicles, vehicle parts and
accessories in DEALER's Sales Locality. As used herein, "Sales Locality" shall
mean the area designated in writing to DEALER by CC from time to time as the
territory of DEALER's responsibility for the sale of CC vehicles, vehicle parts
and accessories, although DEALER is free to sell said products to customers
wherever they may be located.  Said Sales Locality may be shared with other CC
dealers of the same line-make as CC determines to be appropriate.


________________________________________________________________________________
5.   ADDITIONAL TERMS AND PROVISIONS

The additional terms and provisions set forth in the document entitled "Chrysler
Corporation Sales and Service Agreement Additional Terms and Provisions" marked
"Form 91 (C-P-D)," as may hereafter be amended from time to time, constitute a
part of this Agreement with the same force and effect as if set forth at length
herein, and the term "this Agreement" includes said additional terms and
provisions.


________________________________________________________________________________
6.   FORMER AGREEMENTS, REPRESENTATIONS OR STATEMENTS

This Chrysler Corporation Dodge Sales and Service Agreement and other documents,
(or their successors as specifically provided for herein) which are specifically
incorporated herein by reference constitute the entire agreement between the
parties relating to the purchase by DEALER of those new specified CC vehicles,
parts and accessories from CC for resale; and it cancels and supersedes all
earlier agreements, written or oral, between CC and DEALER relating to the
purchase by DEALER of Dodge vehicles, parts and accessories, except for (a)
amounts owing by CC to DEALER, such as payments for warranty service performed
and incentive programs, or (b) amounts owing or which may be determined to be
owed, as a result of an audit or investigation, by DEALER to CC due to DEALER's
purchase from CC of vehicles, parts, accessories and other goods or services, or
(c) amounts DEALER owes 
<PAGE>
 
to CC as a result of other extensions of credit by CC to DEALER. No
representations or statements, other than those expressly set forth herein or
those set forth in the applications for this Agreement submitted to CC by DEALER
or DEALER's representatives, are made or relied upon by any party hereto in
entering into this Agreement.


________________________________________________________________________________
7.   WAIVER AND MODIFICATION

No waiver, modification or change of any of the terms of this Agreement or
change or erasure of any printed part of this Agreement or addition to it
(except the filling in of blank spaces and lines) will be valid or binding on CC
unless approved in writing by the President or a Vice President or the National
Dealer Placement Manager of Chrysler Corporation.


________________________________________________________________________________
8.   AMENDMENT

DEALER and CC recognize that this Agreement does not have an expiration date and
will continue in effect unless terminated under the limited circumstances set
forth in Paragraph 28. DEALER and CC further recognize that the passage of time,
changes in the industry ways of doing business and other unforeseen
circumstances may cause CC to determine that it should amend all Chrysler
Corporation Dodge Sales and Service Agreements. Therefore, CC will have the
right to amend this Agreement to the extent that CC deems advisable, provided
that CC makes the same amendment in Chrysler Corporation Dodge Sales and Service
Agreements generally. Each such amendment will be issued in a notice sent by
certified mail or delivered in person to DEALER and signed by the President or a
Vice President or the National Dealer Placement Manager of Chrysler Corporation.
Thirty-five (35) days after mailing or delivery of such notice to DEALER, this
Agreement will be deemed amended in the manner and to the extent set forth in
the notice.


________________________________________________________________________________
9.   ARBITRATION

Any and all disputes arising out of or in connection with the interpretation,
performance or non-performance of this Agreement or any and all disputes arising
out of or in connection with transactions in any way related to this Agreement
(including, but not limited to, tile validity, scope and enforceability of this
arbitration provision, or disputes under rights granted pursuant to the statutes
of the state in which DEALER is licensed) shall be finally and completely
resolved by arbitration pursuant to the arbitration laws of the United States of
America as codified in Title 9 of the United States Code, (S)(S) 1-14, under the
Rules of Commercial Arbitration of the American Arbitration Association
(hereinafter referred to as the "Rules") by a majority vote of a panel of three
arbitrators. One arbitrator will be selected by DEALER (DEALER's arbitrator).
One arbitrator will be selected by CC (CC's arbitrator). These arbitrators must
be selected by the respective parties within ten (10) business days after
receipt by either DEALER or CC of a written notification from the other party of
a decision to arbitrate a dispute pursuant to this Agreement. Should either CC
or DEALER fail to select an arbitrator within said ten-day period, the party who
so fails to select an arbitrator will have its arbitrator selected by the
American Arbitration Association upon the application of the other party. The
third arbitrator must be an individual who is familiar with business
transactions and be a licensed attorney admitted to the practice of law within
the United States of America, or a judge. The third arbitrator will be selected
by DEALER's and CC's arbitrators. If said arbitrators cannot agree on a third
arbitrator within thirty (30) days from the date of the appointment of the last
selected arbitrator, then either DEALER's or CC's arbitrator may apply to the
American Arbitration Association to appoint said third arbitrator pursuant to
the criteria set forth above. The arbitration panel shall conduct the
proceedings pursuant to the then existing Rules.

Notwithstanding the foregoing, to the extent any provision of the Rules conflict
with any provision of this Paragraph 9, the provisions of this Paragraph 9 will
be controlling.

CC and DEALER agree to facilitate the arbitration by: (a) each party paying to
the American Arbitration Association one-half(112) of the required deposit
before the proceedings commence; (b) making available to one another and to the
arbitration panel, for inspection and photocopying all documents, books and
records, if determined by the arbitrator to be relevant to the dispute; (c)
making available to one another and to the arbitration panel personnel directly
or in directly under their control, for testimony during hearings and prehearing
proceedings if determined by the arbitration panel to be relevant to the
dispute; (d) conducting arbitration hearings to the greatest extent possible on
consecutive business days; and (e) strictly observing the time periods
established by the Rules or by the arbitration panel for the submission of
evidence and of briefs.
<PAGE>
 
Unless otherwise agreed to by CC and DEALER, a steno-graphic record of the
arbitration shall be made and a transcript there of shall be ordered for each
party, with each party paying one-half (1/2) of the total cost of such recording
and transcription. The stenographer shall be state-certified, if certification
is made by the state, and the party to whom it is most convenient shall be
responsible for securing and notifying such stenographer of the time and place
of the arbitration hearing(s).

If the arbitration provision is invoked when the dispute between the parties is
either the legality of terminating this Agreement or of adding a new CC dealer
of the same line make or relocating an existing CC dealer of the same line make,
CC will stay the implementation of the decision to terminate this Agreement or
add such new CC dealer or approve the relocation of an existing CC dealer of the
same line-make until the decision of the arbitrator has been announced,
providing DEALER does not in any way attempt to avoid the obligations of this
Paragraph 9, in which case the decision at issue will be immediately
implemented.

Except as limited hereby, the arbitration panel shall have all powers of law and
equity, which it can lawfully assume, necessary to resolve the issues in dispute
including, without limiting the generality of the foregoing, making awards of
compensatory damages issuing both prohibitory and mandatory orders in the nature
of injunctions and compelling the production of documents and witnesses for pre-
arbitration discovery and/or presentation at the arbitration hearing on the
merits of the case. The arbitration panel shall not have legal or equitable
authority to issue a mandatory or prohibitory order which: (a) extends or has
effect beyond the subject matter of this Agreement or (b) will govern the
activities of either party for a period of more than two years; nor shall the
arbitration panel have authority to award punitive consequential or any damages
whatsoever beyond or in addition to the compensatory damages allowed to be
awarded under this Agreement.

The decision of the arbitration panel shall be in written form and shall include
findings of fact and conclusions of law.

It is the intent and desire of DEALER and CC to hereby and forever renounce and
reject any and all recourse to litigation before any judicial or administrative
forum and to accept the award of the arbitration panel as final and binding,
subject to no judicial or administrative review, except on those grounds set
forth in 9 USC (S) 10 and (S) 11. Judgment on the award and/or orders may be
entered in any court having jurisdiction over the parties or their assets. In
the final award and/or order, the arbitration panel shall divide all costs
(other than attorney fees, which shall be borne by the party incurring such fees
and other costs specifically provided for herein) incurred in conducting the
arbitration in accordance with what the arbitration panel deems just and
equitable under the circumstances. The fees of DEALER's arbitrator shall be paid
by DEALER. The fees of CC's arbitrator shall be paid by CC.


________________________________________________________________________________
10.  SIGNATURE

This Agreement becomes valid only when signed by the President or a Vice
President or the National Dealer Placement Manager of Chrysler Corporation and
by a duly authorized officer or executive of DEALER if a corporation; or by one
of the general partners of DEALER if a partnership; or by DEALER if an
individual.

IN WITNESS WHEREOF, the parties hereto have signed this Agreement which is
finally executed at    AUBURN HILLS            ,Michigan, in
                    ---------------------------
triplicate, on           May 09, 1997
              -------------------------------

                              FAA POWAY D, Inc. 
                               dba Poway Dodge
--------------------------------------------------------------------------------
                 (Dealer Firm Name and D/B/A/, if applicable)

By: /s/                     
   -----------------------------------------------------------------
                     (Individual Duly Authorized to Sign)

                             President
--------------------------------------------------------------------
                                    (Title)


                          CHRYSLER CORPORATION

By: /s/
   -----------------------------------------------------------------

                       National Dealer Placement Manager
--------------------------------------------------------------------  
                                    (Title)
<PAGE>
 
                            MOTOR VEHICLE ADDENDUM
                                        
                                      TO
                                        
                             CHRYSLER CORPORATION

                          SALES AND SERVICE AGREEMENT
                                        


               FAA Poway D,Inc.
              ---------------------------------------------------
                               (Dealer Firm Name)


               Poway Dodge
              ---------------------------------------------------
                                     (DBA)

               Poway                               CA
              ---------------------------------------------------
                       (City)                    (State)



As of the effective date of this Motor Vehicle Addendum to the Chrysler
Corporation Sales and Service Agreement between Dealer and Chrysler Corporation,
Dealer, as an authorized Chrysler Corporation dealer, has a non-exclusive right
to purchase the following new models of Motor Vehicles:

All Passenger cars of the Dodge line make.
All trucks of the Dodge line make.



This Motor Vehicle Addendum shall remain in effect unless and until superseded
by a new Motor Vehicle Addendum furnished Dealer by Chrysler Corporation.



Effective Date: MAY 09 1997
               -----------------
              
                                             CHRYSLER CORPORATION


                                By /s/                                   
                                  ----------------------------------------
                                                 (Signature)

                                   National Dealer Placement Manager
                                ------------------------------------------
                                                   (Title)
<PAGE>
 
                     NOTICE OF SALES LOCALITY DESCRIPTION
                                        
                                      TO
                             CHRYSLER CORPORATION
                        SALES AND SERVICE AGREEMENT(S)
                                        

Effective MAY 09 1997, DEALER will have the non-exclusive right, subject
to the provisions of the Chrysler Corporation Sales and Service Agreement(s), to
purchase from CC for resale at retail (which includes lease and rental units)
such new CC vehicles as are described in the Motor Vehicle Addendum to DEALER'S
Chrysler Corporation Sales and Service Agreement(s), and parts and accessories
therefor, in the following communities and/or areas of which some or all may be
defined by census tracts as defined  by the U.S. Department of Commerce or by
the service areas of the U.S. Post Office Stations servicing said communities
and/or areas which will constitute DEALER'S Sales Locality.

<TABLE> 
<CAPTION> 
  STATE     COUNTY       CITY         STATE     COUNTY       CITY         STATE     COUNTY        CITY
  <S>      <C>          <C>           <C>      <C>          <C>           <C>      <C>          <C> 
  CALIF    SAN DIEGO    ALPINE        CALIF    SAN DIEGO    BONITA        CALIF    SAN DIEGO    CHULA VIST       
  CALIF    SAN DIEGO    CORONADO      CALIF    SAN DIEGO    DEL MAR       CALIF    SAN DIEGO    EL CAJON         
  CALIF    SAN DIEGO    IMPRIL BCH    CALIF    SAN DIEGO    JAMUL         CALIF    SAN DIEGO    LA JOLLA         
  CALIF    SAN DIEGO    LAKESIDE      CALIF    SAN DIEGO    LA MESA       CALIF    SAN DIEGO    LEMON GR         
  CALIF    SAN DIEGO    NATL CTY      CALIF    SAN DIEGO    NESTOR        CALIF    SAN DIEGO    PACIFIC BC       
  CALIF    SAN DIEGO    POWAY         CALIF    SAN DIEGO    SAN DIEGO     CALIF    SAN DIEGO    SANTEE            
  CALIF    SAN DIEGO    SOLANA BCH    CALIF    SAN DIEGO    SPRING VLY                                    
</TABLE>

   The above Sales Locality is hereby designated as the territory of DEALER'S
responsibility for the sale of CC vehicles and vehicle parts and accessories
therefor, and will be used by CC to determine DEALER'S  Minimum Sales
Responsibility (MSR) and to measure DEALER'S sales performance in relation to
such MSR, and to evaluate DEALER'S performance pertaining to other matters
relating to DEALER'S operations.

   The Sales Locality described above will continue to be employed for the
foregoing purposes until changed by written notice to DEALER.

                                                CHRYSLER Corporation


   FAA POWAY D, INC.       POWAY DODGE       By: /s/                   
----------------------------------------        -------------------------------
   (Dealer Firm Name)         (DBA Name)


       POWAY       , CA                   Title:  NATIONAL DEALER PLACEMENT MGR
----------------------------------------        -------------------------------
    (City)                  (State)