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                                                                   EXHIBIT 10.20

                              ALLOCATION AGREEMENT

        This ALLOCATION AGREEMENT ("Agreement") is made as of the 1st day of
January, 2002, by and among each of the undersigned companies (the "Companies",
or individually, "Company"):

                              WESTCORP ("Westcorp")
                     WESTERN AUTO INVESTMENTS, INC. ("WAI")
                        WESTERN CONSUMER PRODUCTS ("WCP")
                       WESTERN FINANCIAL BANK (the "Bank")
                       WESTRAN SERVICES CORP. ("Westran")
                            WFS FINANCIAL INC ("WFS")
                     WFS FINANCIAL AUTO LOANS, INC. ("WFAL")
                   WFS FINANCIAL AUTO LOANS 2, INC. ("WFAL2")
                          WFS FUNDING, INC. ("Funding")
                         WFS INVESTMENTS, INC. ("WFSII")
                      WFS RECEIVABLES CORPORATION ("WFSRC")
                    WFS RECEIVABLES CORPORATION 2 ("WFSRC2")
                           WFS WEB INVESTMENTS ("WWI")
                     WESTFIN INSURANCE AGENCY, INC. ("WFIA")
                     WESTHRIFT LIFE INSURANCE COMPANY ("WT")

        This Agreement shall replace and supersede the Allocation Agreement
dated as of January 1, 2000 existing among the various Companies.

                                    RECITALS

        A. Westcorp is the sole shareholder of Westran and WCP, each of which is
a California corporation, and WFSRC2 which is a Nevada Corporation, and is the
sole shareholder of the Bank, a federally chartered savings bank.

        B. The Bank is the majority shareholder of WFS, a California
corporation, and is the sole shareholder of WFIA, and WAI each of which is an
active California corporation, and of WT, an active Arizona corporation.

        C. The Bank is also the sole shareholder of The Hammond Company, The
Mortgage Bankers, Western Reconveyance Company, WestFin Securities Corporation
and Western Consumer Services Company, none of which are currently conducting
business and, therefore, they are not parties to this Agreement.

        D. WFS is the sole shareholder of WFAL, WFAL2, WFSII, Funding, WWI and
WFSRC.

        E. Companies desire to obtain management and administrative services
from each other.



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        F. Companies are willing to provide such management and administrative
services to each other on the terms and conditions described below.

        G. WFS, cognizant of the fact that WWI does not have operations
generating income to cover the costs related to maintaining WWI, desires to
reimburse or compensate the other Companies for all expenses incurred by
Companies on behalf of WWI for the benefit of WFS.

        H. Companies desire to set forth the terms of their relationship in
order to ensure that, in accordance with Office of Thrift Supervision ("OTS")
regulations, each Company functions as and remains a corporate entity separate
and apart from each other Company.

                                    AGREEMENT

        In consideration of the mutual promises set forth herein, and in
reliance upon the recitals set forth above, the parties agree as follows:

        1. Services Performed By One Company For the Benefit of Other Companies.
Certain services are performed by one Company ("Performing Company") for itself
and for other Companies ("Benefiting Company"). These costs are not always
directly traceable to each Benefiting Company; or such tracing cannot be
economically or practically accomplished; or the value of such goods and
services are not sufficiently substantial, as a portion of Performing Company's
total expenditure for such goods and services, as to be separately calculated.
Therefore, each Benefiting Company agrees that it shall reimburse Performing
Company for aggregate categories of such goods and services at the rates and
using the methods specified for each category in the attached Exhibit "A", as
amended from time to time, which is incorporated herein and made part of this
Agreement. The Companies have determined that the method and rate for each
category most accurately reflect the amount of services devoted by Performing
Company to each Benefiting Company. Methods and rates shall be calculated as of
the effective date of this agreement and recalculated each January 1st for the
upcoming year, or more frequently if a material change occurs.

        Performing Companies and the services currently provided by them are
described in a note to Exhibit A and may be changed from time to time by a
change to the note.

        Pursuant to Recital G, above, WFS shall reimburse other Companies for,
or shall be directly responsible for, all service costs incurred by a Company on
behalf of WWI for the benefit of WFS.

        2. Direct Costs. Direct costing shall be used when a specific service or
product directly benefits a Company and the costs of the service or product is
readily identifiable and measurable. For example, invoices from third party
suppliers of goods or services, will be



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treated as direct costs and paid directly by Benefiting Company as incurred.
Where appropriate, Companies shall enter into separate agreements for such goods
and services.

        Pursuant to Recital G, above, WFS shall reimburse other Companies for,
or shall be directly responsible for, all direct costs incurred by a Company on
behalf of WWI for the benefit of WFS.

        3. Space and Office Services. A Company, from time to time and at
different times, may permit another Company to occupy certain space at specific
locations owned or leased by Company. At particular locations, certain office
services, including without limitation, receptionist, telecommunications, and
photocopying services, may be included in the occupancy arrangement. Because
additional locations and services may be requested and provided and locations
and services may be changed or canceled, locations, services and the
compensation for them are as set forth in Exhibit "B", as amended from time to
time, attached hereto and incorporated herein.

        Pursuant to Recital G, above, WFS shall reimburse other Companies for,
or shall be directly responsible for, all direct costs incurred by a Company on
behalf of WWI for the benefit of WFS.

        4. Director/Officer Costs. An employee of Westcorp ("Executive") devotes
substantially all his time to other Companies and each Benefiting Company
recognizes it should reimburse Westcorp for time spent by Executive on
Benefiting Company's business. The allocation of Executive's compensation to
each Benefiting Company is included in Exhibit "A".

        Certain employees of the Companies serve as directors and officers of
other Companies in addition to their regular job functions or devote a
substantial amount of their time to other Companies' business. Their salaries
and benefits are paid by their employer ("Employer"). Therefore, this Agreement
provides for Benefiting Company to reimburse Employer on a monthly basis for
that portion of the time spent by employees on Benefiting Company's business.
This service will be provided by Employer to Benefiting Company on a flat fee
basis for officers and directors and is intended to cover those instances where
specific employees devote more than an incidental or indivisible segment of time
to the affairs of Company in the capacity of an officer or director. In those
instances where employees spend a substantial amount of time on a Company's
business, the service is provided on a direct cost basis. The flat fee shall be
an hourly rate, which is a blended rate calculated as the average compensation
of all employees except Executive, regardless of their Employer, who serve as
officers and directors of Companies. Because the directors and officers change
from time to time, as will the calculation of the fee, the specific persons and
current fee are shown on Exhibit "C", as amended from time to time, attached
hereto and incorporated herein by reference. Each person




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shall estimate the number of hours per month which he/she devotes to a Company
as an officer or director thereof and shall notify the controller of his/her
Company annually or upon any material change in the estimate.

        Pursuant to Recital G, above, WFS shall reimburse other Companies for,
or shall be directly responsible for, all Director/Officer costs incurred by a
Company on behalf of WWI for the benefit of WFS.

        5. Time and Method of Payment. Reimbursement for allocated costs shall
be payable by each Company to others Companies on a monthly basis by the 20th
day of each month for expenses and costs incurred during the prior month. The
Accounting Department, under the direction of the Controller, shall administer
the reimbursement and reflect the reimbursement on the separate books and
records of each Company.

        6. Term.

                6.1 This Agreement shall commence as of the date stated above
and shall continue until terminated by the parties.

                6.2 This Agreement may be terminated immediately for breach of
any covenant, obligation, or duty herein contained or for violation of law,
ordinance, statute, rule or regulation (collectively referred to as "law")
governing the conduct of any party hereto.

                6.3 Termination shall not affect the obligations of the
Companies with respect to any event occurring before termination. Each Company
shall be bound by and responsible for any transaction or expense properly agreed
to or incurred by another Company in connection with services performed
hereunder but not settled, paid or reimbursed prior to the date of any such
termination. Upon termination of this Agreement, the fee referred to above will
be prorated, but the due date thereof shall not be changed.

        7. Representations and Warranties of Company. Each Company on its behalf
alone represents and warrants to and for the benefit of other Companies as
follows:

                7.1 Corporate Existence and Qualifications. Company is a
corporation or association duly organized, validly existing and in good standing
under the laws of the United States or of the States of California or Arizona,
as applicable, with full corporate power to own its properties and to carry on
its business as now owned and operated by Company.

                7.2 Licenses; Compliance with Laws. Company has all licenses,
franchises, permits and authorizations necessary for the lawful conduct by
Company of its business. Company has not violated, and is not in violation of,
any such licenses, franchises, permits or authorizations or any applicable
statutes, laws, ordinances, rules or regulations of any federal,



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state, or local governmental bodies, agencies or subdivisions having, asserting
or claiming jurisdiction over it or over any part of its operations.

        8. Covenants Regarding Corporate Existence.

                8.1 Preservation of Corporate Existence and Qualifications. Each
Company shall keep in full effect its existence, rights and franchises as a
corporation or association under the laws of the jurisdiction in which organized
and will obtain and preserve its qualifications to carry on business as a
foreign corporation in each jurisdiction in which such qualification is or shall
be necessary.

                8.2 Observation of Corporate Formalities. Each Company shall at
all times observe the applicable legal requirements for the recognition of
Company as a corporate entity separate and apart from any other Company,
including without limitation the following:

                        (a) Each Company shall maintain corporate records and
books of account separate from those of other Companies;

                        (b) Each Company shall not at any time commingle its
funds with those of other Companies;

                        (c) Each Company shall hold meetings of its Board of
Directors as appropriate to authorize its corporate actions;

                        (d) Each Company shall hold meetings of its
shareholder(s) as appropriate and as required by the Corporations Code of the
jurisdiction in which organized to authorize its corporate actions;

                        (e) Each Company shall file all reports required by the
Secretary of State in all jurisdictions in which Company is licensed or
qualified, including the annual statement by whatever name denominated, in a
timely manner; and

                        (f) Each Company shall ensure that yearly franchise
taxes are paid in a timely manner so as to maintain its corporate existence
uninterrupted.

                8.3 Advertising. Each Company will at all times hold itself out
to the public as an entity separate from any other Company and its advertising
and marketing shall reflect such separate corporate existence.

                8.4 OTS Regulations. Each Company shall comply with all
applicable OTS regulations. If required by 12 C.F.R. Section 563.37(b), any
instrument evidencing borrowing by Company shall indicate that no other Company
is responsible for any such debt.

        9. Liability; Consultation with Counsel. No Performing Company shall
assume responsibility or liability with respect to the business or affairs of
another Company except to the extent provided for in this Agreement. Each
Benefiting Company under this Agreement



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("Indemnitor") shall indemnify, defend and hold harmless the Performing
Companies against and in respect of any and all claims, demands, losses, costs,
expenses, obligations, liabilities, damages, recoveries and deficiencies
(collectively the "Claims), including without limitation interest penalties and
attorney's fees, that such Performing Company shall incur or suffer, which
arise, result from or relate to (i) conduct by Indemnitor of its business and
operations and (ii) breach by Indemnitor of its obligations pursuant to this
Agreement. Notwithstanding anything contained herein to the contrary,
Indemnitor's obligations pursuant to this section shall not be applicable to
Claims arising directly from Performing Company's bad faith, gross negligence or
willful misconduct. This Agreement shall create no right, benefit or privilege
in favor of any person not a party hereto, and no person not a party hereto
shall have any recourse against Performing Company for any advice, service or
facility provided or omitted by Performing Company pursuant to this Agreement.
Performing Company may consult with legal counsel (who may also be counsel to
Indemnitor) concerning any questions that may arise with respect to its duties
and obligations hereunder, and it shall be fully protected in respect of any
action taken or omitted by it hereunder in good faith reliance on any opinion of
such counsel with respect to any such duty or obligation.

        10. General.

                10.1 This Agreement may be modified, amended or superseded in
whole or in part, at any time, by a writing executed by the parties hereto.

                10.2 This Agreement shall be governed by the laws of California,
except to the extent any such laws are superseded by federal law or regulation.

                10.3 This Agreement may be executed in counterparts, all of
which, taken together shall constitute one agreement.

                10.4 No Company shall assign this Agreement without the prior
written consent of the other Companies, which consent shall not unreasonably be
withheld.

                Wherefore, the undersigned have executed this Agreement on the
date set forth below to be effective as of the date first set forth above.


WESTCORP

By:                                             Date: January 15, 2002
   --------------------------------------
   Joy Schaefer, President & COO

WESTERN AUTO INVESTMENTS, INC.

By:                                             Date: January 15, 2002
   --------------------------------------
   Mark Olson, Vice President & Controller



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WESTERN CONSUMER PRODUCTS

By:                                             Date: January 15, 2002
   --------------------------------------
   Mark Olson, Controller

WESTERN FINANCIAL BANK

By:                                             Date: January 15, 2002
   --------------------------------------
   James E. Tecca, President

WESTRAN SERVICES CORP.

By:                                             Date: January 15, 2002
   --------------------------------------
   Shelley Chase, Vice President

WFS FINANCIAL INC

By:                                             Date: January 15, 2002
   --------------------------------------
   Thomas A. Wolfe, President

WFS FINANCIAL AUTO LOANS, INC.

By:                                             Date: January 15, 2002
   --------------------------------------
   Susan Tyner, Vice President

WFS FINANCIAL AUTO LOANS 2, INC

By:                                             Date: January 15, 2002
   --------------------------------------
   Lee Whatcott. Vice President & CFO

WFS INVESTMENTS, INC.

By:                                             Date: January 15, 2002
   --------------------------------------
   J. Keith Palmer,
   Vice President & Treasurer

WFS FUNDING, INC.

By:                                             Date: January 15, 2002
   --------------------------------------
   Lee A. Whatcott,
   Senior Vice President & CFO

WFS RECEIVABLES CORPORATION

By:                                             Date: January 15, 2002
   --------------------------------------
   Susan Tyner, Vice President

WFS RECEIVABLES CORPORATION 2

By:                                             Date: January 15, 2002
   --------------------------------------
   J. Keith Palmer,
   Vice President & Treasurer

WFS WEB INVESTMENTS

By:                                             Date: January 15, 2002
   --------------------------------------
   Thomas Wolfe, President

WESTFIN INSURANCE AGENCY, INC.

By:                                             Date: January 15, 2002
   --------------------------------------
   Shelley Chase, Assistant Vice President




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WESTHRIFT LIFE INSURANCE COMPANY

By:                                             Date: January 15, 2002
   --------------------------------------
   Joy Schaefer, President



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