EXHIBIT 10.30

                                    GUARANTEE

            THIS GUARANTEE (this "Guarantee"), dated as of January 5, 1999, is
made by Hometown Auto Retailer, Inc., a Delaware corporation having its
principal office at 831 Straits Turnpike, Watertown, Connecticut 06795 (the
"Guarantor"), in favor of Falcon Financial, LLC, a Delaware limited liability
company (together with its successors and assigns, the "Secured Party").

                              PRELIMINARY STATEMENT

            Rellum Realty Co., a partnership organized under the law of the
State of New Jersey ("Borrower") with an office at Route 31, P .0. Box 5000,
Clinton, New Jersey 08809 has requested that Secured Party permit certain
modifications to be made to the Leases for real property situate at Route 173,
Phillipsburg, New Jersey and Route 31 & Van Syckle Avenue, Clinton, New Jersey,
which Leases were delivered in connection with the Loan (as defined in the
Security Agreement (the "Security Agreement"), dated February 19, 1998, between
the Secured Party and the Borrower). Capitalized terms used but not otherwise
defined in this Guarantee shall have the same meanings ascribed to such terms in
the Security Agreement.

            NOW, THEREFORE, in consideration of the foregoing, the benefits
accruing to the Borrower, to satisfy an express condition to Secured Party's
permitting the making of such modifications to the Leases and the Loan, and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Guarantor hereby agrees as follows:

      1. Guarantee of Borrower's Obligations to Secured Party. The Guarantor
hereby irrevocably, absolutely and unconditionally guarantees to the Secured
Party the full and punctual payment and performance, when due, and in accordance
with their terms (at maturity, upon acceleration following default, or
otherwise) of all of the Obligations, whether now existing or subsequently
arising, including without limitation payment of all principal, interest, yield
maintenance amounts, prepayment premiums, indebtedness, fees, charges, expenses
(including reasonable attorneys' fees and expenses) and other monetary
obligations arising under or in connection with the Note, the Security Agreement
or any of the other Loan Documents, and compliance with the terms, conditions,
covenants and other obligations arising under or in connection with the Note,
the Security Agreement or any of the other Loan Documents. Obligations as used
herein shall include, without limitation, all advances made pursuant to the Note
and all protective advances made by the Secured Party in connection with the
Loan Documents, but shall specifically exclude any amounts due and owing under
any other note made by Borrower for the benefit of Secured Party and not related
to the transactions contemplated in the Loan Documents.

      2. Nature of Obligations: Interest.

            (a) This Guarantee is a guarantee of payment and performance. The
obligations of the Guarantor under this Guarantee are direct and primary
obligations. The liability of Guarantor hereunder is independent of the
Obligations, and a separate action or actions may be brought and prosecuted
against Guarantor irrespective of whether action is brought against Borrower or
any other guarantor of the Obligations or whether Borrower or and

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other guarantor of the Obligations is joined in any such action or actions. The
Guarantor understands and agrees that the Secured Party may, but is not required
to, proceed against the Guarantor under this Guarantee without first or ever
proceeding against any other person or party. Without limiting the generality of
the foregoing, the obligations of the Guarantor shall remain in force
irrespective of (a) any defect in, or invalidity, illegality or unenforceability
of the Obligations or the Loan Documents, (b) the existence or absence of any
legal action to enforce the Obligations or the Loan Documents or any security
therefor, the issuance of any judgment therefor or the execution of any such
judgment, (c) any claim, defense or offset which the Guarantor or Borrower may
have, (d) any other circumstance which might otherwise constitute a defense
available to or discharge of a guarantor or surety of any type or (e) the death,
or the bankruptcy, dissolution, liquidation, winding up or termination of the
Borrower.

            (b) The obligations of Guarantor hereunder shall not be released,
diminished, impaired, reduced, dependent upon or affected by anyone or more of
the following: (i) the genuineness, validity, regularity or enforceability of,
or the existence of any default with respect to, the Obligations, any security
therefor, or any related instrument, documents, obligation, transaction or
matter; (ii) the nature, extent, condition, value or continued existence of any
security given in connection with the Obligations; (iii) any action or failure
to take action by any holder of the Obligations under or with respect to this
Guaranty or the Obligations, any security therefor, or any related documents,
transaction or matter; (iv) any other dealings between any holder of the
obligations and Secured Party; (v) any exculpatory language or provisions
limiting or restricting Secured Party's rights or remedies against Borrower
under the Loan Documents; or (vi) any claim by or on behalf of Borrower of any
credit or right of setoff with respect to the Note or any of the Obligations.
This Guaranty is irrevocable and the obligations of the Guarantor hereunder
shall terminate and cease only at the time Secured Party receives payment in
full of all of the Obligations or the Guarantor pays the Obligations to the full
and maximum extent of its liability hereunder.

            (c) Guarantor agrees that this Guarantee shall continue to be
effective or be reinstated, as the case may be, if at any time, payment of the
Obligations or any part thereof is rescinded or must otherwise be restored by
Secured Party upon or as a result of the bankruptcy or reorganization of
Borrower or otherwise. If after receipt of any payment of, or the proceeds of
any collateral for, all or any part of the Obligations, Secured Party is
compelled to surrender or voluntarily surrenders such payment or proceeds to any
person because such payment or application of proceeds is or may be avoided,
invalidated, recaptured or set aside as a preference, fraudulent conveyance,
impermissible setoff, or for any other reason, whether or not such surrender is
the result of: (i) any judgment, decree or order of any court or administrative
body having jurisdiction over Secured Party; or (ii) any settlement or
compromise by Secured Party of any claims as to any of the foregoing, with any
person (including Borrower), then the Obligations or affected part thereof shall
be reinstated and continue and this Guarantee shall be reinstated and continue
in full force as to such Obligations or part thereof as if such payment or
proceeds had not been received, notwithstanding any previous cancellation of any
instrument delivered to evidence the satisfaction thereof. The provisions hereof
shall survive the termination of this Guarantee and any satisfaction and
discharge by Borrower by virtue of any payment, court order, or any federal or
state law.

            (d) Interest. If the Guarantor fails to make when due any payment
required to be made by it under this Agreement (a "Payment"), then, to the
extent permitted by law and subject to the limitations set forth in Section
15.12 of the Security Agreement, such Payment shall bear interest from the due
date thereof until paid at the Default Rate,

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compounded monthly. Guarantor agrees to pay interest accrued hereunder on
demand. All calculations of interest hereunder will be made on the actual number
of days elapsed on the basis of a 360-day year of twelve 30-day months, but in
no event shall calculations result in the Secured party contracting for,
charging or receiving interest in excess of the maximum amount permitted by
applicable law. It is understood and agreed that the payment of interest at the
Default Rate, as required in this paragraph 2(d), is included in Guarantor's
obligation hereunder to pay, when due, the Obligations.

      3. Additional Agreements and Waivers of the Guarantor .

            WITHOUT LIMITING PARAGRAPHS 1 AND 2 HEREOF, GUARANTOR HEREBY
ACKNOWLEDGES RECEIPT OF COPIES OF THE LOAN DOCUMENTS AND AS GUARANTOR OF THE
BORROWER'S OBLIGATIONS THEREUNDER, HEREBY CONFIRMS AND MAKES ALL OF THE
STATEMENTS, ACKNOWLEDGMENTS, WAIVERS AND AGREEMENTS SET FORTH THEREIN (WHICH ARE
HEREBY INCORPORATED BY REFERENCE AS IF SET FORTH HEREIN IN THEIR ENTIRETY) BOTH
WITH RESPECT TO THE BORROWER'S AND GUARANTOR'S OBLIGATIONS AND ACKNOWLEDGES THAT
IT MAKES ALL OF THE WAIVERS AND SPECIAL AGREEMENTS ("WAIVERS") SET FORTH IN THIS
GUARANTEE, AND THAT EACH AND ALL SUCH WAIVERS ARE BEING MADE KNOWINGLY,
INTENTIONALLY, VOLUNTARILY, WITHOUT DURESS, AND ONLY AFTER EXTENSIVE
CONSIDERATION OF THE RAMIFICATIONS OF SUCH WAIVERS BY THE GUARANTOR IN
CONSULTATION WITH ITS LEGAL COUNSEL; THE GUARANTOR FURTHER ACKNOWLEDGES THAT THE
GUARANTOR'S GUARANTEE AND SUCH WAIVERS ARE A MATERIAL INDUCEMENT TO THE SECURED
PARTY TO ENTER INTO THE LOAN DOCUMENTS, AND THAT THE SECURED PARTY WOULD NOT
MAKE THE LOAN WITHOUT SUCH GUARANTEES AND WAIVERS. THE GUARANTOR ACKNOWLEDGES
AND AGREES THAT NEITHER THE SECURED PARTY NOR THE BORROWER, NOR ANY OF THEIR
RESPECTIVE AFFILIATES, AGENTS OR REPRESENTATIVES HAS MADE AND NO SUCH PERSON IS
MAKING OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATIONS OR WARRANTIES WITH
RESPECT TO THE GUARANTEE (OTHER THAN THOSE REPRESENTATIONS AND WARRANTIES OF THE
GUARANTOR HEREUNDER).

            (a) The Guarantor understands and agrees that the Secured Party may
(and hereby authorizes Secured Party to) take the following actions, at any time
or from time to time, without the consent of or notice to the Guarantor, without
incurring any responsibility to the Guarantor, and without impairing, reducing,
modifying, amending, releasing, discharging or in any way affecting the
obligations of the Guarantor or giving the Guarantor any recourse or defense
against the Secured Party:

                  (i) Accept or modify, amend, accelerate, extend or renew any
of the Obligations or any security therefor, or provisions of the Note, the
Security Agreement or any other Loan Document, and this Guarantee will apply to
the Obligations as so accepted, created, modified, amended, accelerated,
extended or renewed;

                  (ii) Change the manner, place or terms of payment of the
Obligations, release, surrender, substitute, settle or compromise, or otherwise
alter or modify all or any of the Obligations, any security therefor, any Person
liable thereon, including any endorsers, accommodation parties or guarantors, or
any liability incurred directly or indirectly in respect thereof or in
connection with this Guarantee;

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                  (iii) Subordinate the payment of all or any part of the
Obligations or any security therefor to the payment of or security for any other
liability (whether due or not) of the Borrower to its creditors, including the
Secured Party;

                  (iv) Exercise or refrain from exercising any rights or
remedies against the Guarantor, the Borrower or any other Person (including any
guarantor) or otherwise act or refrain from acting or take or fail to take any
action of any type whatsoever, and generally deal with the Borrower, the
Guarantor, endorser, accommodator, any other person, any indebtedness of the
Borrower to the Secured Party, or any security for any such indebtedness or
obligation, as the Secured Party sees fit;

                  (v) Consent to or waive any breach of any act, omission or
default, or reinstate following a default, under the Note, the Security
Agreement or any other Loan Documents in accordance with the terms thereof;

                  (vi) Grant to the Borrower any other indulgence, concession or
compromise with respect to all or any part of any of the Obligations;

                  (vii) Apply any sums by whomsoever paid or howsoever realized
to any Obligations or other liabilities of Borrower or Guarantor to the Secured
Party regardless of what Obligations, liability or liabilities remain unpaid,
provided that payments by the Guarantor pursuant to this Guarantee shall be
applied to the Obligations or its obligations or liabilities hereunder, but in
such order as the Secured Party may determine; or

                  (viii) Fail to record or file against or possess any
collateral or property or Person whatsoever, or to perfect or protect any lien
or encumbrance, or sell, exchange, purchase, foreclose, realize upon or
otherwise deal with in any manner or order any property or Person at any time
securing or guaranteeing the Obligations or liabilities incurred directly or
indirectly in respect thereof or in connection with this Guarantee, the
Obligations or liabilities.

            (b) The Guarantor understands and agrees that its obligations under
this Guarantee, and Secured Party's rights to enforce this Guarantee, shall not
in any way be affected, diminished or impaired by the following actions:

                  (i) Any insolvency, bankruptcy, liquidation, reorganization,
readjustment, composition, death, dissolution, winding up, assignment for the
benefit of creditors, receivership or trusteeship involving the Borrower, the
Guarantor, any of their respective Affiliates or any other Person liable in
respect of the Obligations as an obligor, endorser, guarantor, pledgor or
otherwise;

                  (ii) Any merger, consolidation, or sale of all or
substantially all of the assets, or of a controlling interest in, the Borrower,
the Guarantor, any of their respective Affiliates or any other person liable in
respect of the Obligations as an obligor, endorser, guarantor, pledgor or
otherwise;

                  (iii) The settlement by the Secured Party with Borrower or the
Guarantor, or the release or compromise by the Secured Party of any claims
against Borrower or the Guarantor; or

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                  (iv) The existence of any other circumstances which might
constitute a legal or equitable discharge of a surety or guarantor under
applicable Law.

            (c) Waiver of Claims and Set-Offs. With respect to all Obligations
and any other liabilities or obligations hereunder, the Guarantor hereby waives
and agrees not to assert or take advantage of any of the following:

                  (i) Any right to require the Secured Party to proceed against
the Borrower or any other person or to resort to, proceed against or exhaust any
security obtained from the Borrower at any time or to pursue any other remedy in
its power before proceeding against any security obtained from the Guarantor;

                  (ii) The defense of the statute of limitations in any action
hereunder or for the collection of any indebtedness or the performance of any
Obligation;

                  (iii) Any defense that may arise by reason of the incapacity,
lack of authority, death or disability of, insolvency or bankruptcy of Borrower
or any other Person, or revocation, illegibility or unenforceability hereof or
of any of the Obligations or Loan Documents, or the failure of the Secured Party
to file or enforce a claim against the estate (either in administration,
bankruptcy, or any other proceeding) of the Borrower or any other Person;

                  (iv) Demand, diligence presentment, protest, notice of
dishonor, nonpayment or default, suit or taking of any action and notice of any
other kind to any Person, including, without limiting the generality of the
foregoing, notice of acceptance of this Guarantee and notice of liability to
which may apply, notice under the Uniform Commercial Code (including Section
9-504(3) thereof) of any jurisdiction, and notice of the existence, creation or
incurring of any new or additional indebtedness or obligation or of any action
or non-action on the part of the Borrower, the Secured Party, any endorser or
guarantor under any instrument, or creditor of the Borrower, or any other Person
whomsoever, in connection with any Obligation or evidence of indebtedness or in
connection with any Obligation or any security therefor;

                  (v) All rights and defenses arising out of an election of
remedies by the Secured Party, even though that election of remedies, such as
but not limited to a non-judicial foreclosure under the Uniform Commercial Code
with respect to security for any Obligations, has destroyed or otherwise
impaired, the Guarantor's rights (including rights of subrogation and
reimbursement against the Borrower) or recourse against Borrower, any other
Person or any property;

                  (vi) Any right to be informed by Secured Party or any other
Person of the financial condition of Borrower or any other guarantor of the
Obligations or any change therein or any other circumstances bearing upon the
risk of nonpayment or nonperformance of the Obligations, or any duty on the part
of the Secured Party to disclose to the Guarantor or any other Person any facts
the Secured Party may now or hereafter know about the Borrower or any other
Person or the Obligations or any security therefor, regardless of whether the
Secured Party knows or has reason to believe that any such facts materially
increase the risk beyond that which the Guarantor intends to assume or knows or
has reason to believe that such facts are unknown to the Guarantor or has a
reasonable opportunity to communicate such facts to the Guarantor, it being
understood and agreed that the Guarantor

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represents, acknowledges and agrees that Guarantor has the ability and assumes
the responsibility for keeping informed of the financial condition of Borrower
and any other guarantors of the Obligations and of other circumstances affecting
such nonpayment and nonperformance risks and Guarantor is fully responsible for
being and keeping informed of the financial condition of the Borrower, the
condition of the Collateral and of all circumstances bearing on the risk of
nonpayment or nonperformance of any Obligations; and

                  (vii) Any and all surety defenses, including any defense based
on lack of due diligence by the Secured Party in collection, protection or
realization upon any Collateral.

            (d) Waiver of Deficiency: Appraisement. Etc. The Guarantor hereby
expressly waives: (i) any defense to the recovery of a deficiency against the
Borrower after any non-judicial sale of collateral under any mortgage or
security agreement, notwithstanding that such sale may result in a loss by a
Guarantor of the right to recover the deficiency from Borrower, (ii) any
appraisement, valuation, stay, extension, moratorium redemption or similar law
or similar rights for marshalling; and (iii) the benefit of all principles or
provisions of law, statutory or otherwise, which are or might be in conflict
with the terms of this Guarantee, and agrees that the obligations of the
Guarantor shall not be affected by any circumstances, whether or not referred to
in this Guarantee, which might otherwise constitute a legal or equitable
discharge of guarantors. Without limiting the generality of any of the
foregoing, until such time as all Obligations hereunder have been indefeasibly
satisfied, the Guarantor hereby waives any right to be reimbursed by Borrower or
any other guarantor of the Obligations for any payment of the Obligations made
directly or indirectly by Guarantor or from any property of Guarantor, whether
arising by way of any statutory I contractual or other right of subrogation,
contribution, indemnification or otherwise. Without limiting the foregoing, the
Guarantor understands that in the absence of the waivers made in this paragraph
3, a Guarantor might have a defense against an action by the Secured Party to
recover a deficiency from a Guarantor following a non-judicial foreclosure sale
of real property or other collateral securing the Obligations, and the guarantor
is specifically waiving those defenses and all other defenses. The Guarantor
expressly agrees to remain liable for any deficiency remaining after foreclosure
of any mortgage or security interest securing any of the Obligations, whether or
not the liability of the Borrower with respect to any of the Obligations for
such deficiency is discharged pursuant to statute or judicial decision.

      4. Subordination. Guarantor hereby subordinates any indebtedness,
liabilities or obligations of Borrower to Guarantor to the Obligations.
Guarantor agrees that Secured Party shall be entitled to receive payment of all
Obligations before Guarantor receives payment of any indebtedness, liabilities
or obligations of Borrower to Guarantor. Any payments on such indebtedness,
liabilities or obligations of Borrower to Guarantor, if Secured Party so
requests, shall be collected, enforced and received by Guarantor as trustee for
Secured Party and be paid over to Secured Party on account of the Obligations,
but without reducing or affecting in any manner the liability of Guarantor under
the other provisions of this Guarantee.

      5. Setoff: Non-Waiver .

            (a) Setoff. In addition to any rights and remedies of any Secured
Party provided by law, Secured Party shall have the right, without prior notice
to Guarantor , any such notice being expressly waived by Guarantor to the extent
permitted by applicable

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law, upon the occurrence and during the continuance of a Default or an Event of
Default, to set-off and apply against the Obligations, whether matured or
unmatured, any amount owing from Secured Party to Guarantor, including all
deposits, accounts and moneys of Guarantor then or thereafter maintained with
Secured Party, at or at any time after, the happening of any of the above
mentioned events.

            (b) Nonwaiver. No security interest or right of setoff shall be
deemed to have been waived by any act or conduct on the part of Secured Party or
by any failure to exercise such right of setoff or to enforce such security
interest, or by any delay in so doing; and every right of setoff and security
interest shall continue in full force and effect until such right of setoff or
security interest is specifically waived or released by an instrument in writing
executed by Secured Party.

      6. Amounts Reclaimed.

            (a) In the event that, any payments made to the Secured Party with
respect to the Obligations are required to be rescinded or must otherwise be
restored or surrendered by the Secured Party in the event of the bankruptcy,
insolvency, reorganization or similar event involving the Borrower, the
Guarantor, any of its respective Affiliates, or any other Person who may be
liable in respect of the Obligations as obligor, endorser, guarantor or pledgor
or otherwise, agree that this Guarantee shall continue in effect or shall be
reinstated, as the case may be, and that the Guarantor shall remain liable under
this Guarantee for the payment and performance in full of the Obligations,
including without limitation, any portion so required to be rescinded, restored
or surrendered by the Secured Party.

            (b) In the event that, pursuant to any proceeding before any court,
administrative body or trustee in bankruptcy having jurisdiction, or any
settlement or compromise of such a proceeding, a claim is made upon the Secured
Party for repayment or recovery of any amount received in payment of the
Obligations, the Guarantor agrees that such proceeding or settlement or
compromise shall be binding upon the Guarantor, and that in addition to the
other obligations of the Guarantor under this Guarantee, the Guarantor shall be
liable to the Secured Party for the entire amount so repaid or recovered, to the
same extent as if such amount had never been received by the Secured Party.

            (c) Any acknowledgment or new promise in respect of the Obligations,
whether by payment or otherwise, and whether made by Borrower, the Guarantors,
any of their respective Affiliates or any other Person liable in respect of the
Obligations as obligor, endorser, guarantor, pledgor or otherwise, shall toll
the running of any statute of limitations which may have begun to run against
the Secured Party in favor of the Guarantor or, if the limitations period has
expired, shall negate the operation of the statute of limitations in favor of
the Guarantor. The provisions of this Section 6 shall survive indefinitely.

      7 .Representations and Warranties. The Guarantor makes the following
representations, warranties and covenants which survive the execution and
delivery of this Guarantee:

            (a) Affiliate's Identity. With respect to a Guarantor which is an
entity, Schedule A attached hereto, correctly and completely sets forth such
Guarantor's: (i) legal name, (ii) type of entity, (iii) jurisdiction of
organization, (iv) other jurisdictions in which it is qualified to do business,
(v) tax identification number, (vi) chief executive office and (vii)

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mailing address. Schedule A also sets forth a correct and complete description
of the relationship of the Guarantor, whether an entity or a natural person, to
the Borrower, and the full legal name and residence address of each Guarantor
who is a natural person.

            (b) Organizational Status and Power. The Guarantor which is an
entity is duly organized, validly existing and in good standing under the laws
of its jurisdiction of organization, and is duly qualified to do business and in
good standing in each jurisdiction where the conduct of its business or the
character of its assets makes such qualification necessary. The Guarantor has
all requisite power to own its properties and to carry on its business as now
being conducted and as proposed to be conducted, and to execute, deliver and
perform its obligations under this Guarantee and any other Loan Document to
which it is a party.

            (c) Authority. The execution, delivery and performance by the
Guarantor of this Guarantee and any other Loan Document to which the Guarantor
is a party are within the powers of the Guarantor and have been duly authorized
by all necessary corporate, stockholder and other actions and do not contravene
any provision of the Guarantor's Certificate of Incorporation, by-laws, or
organizational documents, any existing law or any legal order applicable to, or
license or permit granted to it. or any agreement or instrument to which it is a
party or to which it or any of its assets are subject.

            (d) Binding Effect; Solvency; Enforceability. The transactions
contemplated by this Guarantee are in furtherance of Guarantor's ordinary
business purposes, with no contemplation of insolvency and with no intent to
delay, hinder or defraud any present or future creditors. The Guarantor is (and,
after giving effect to this Guarantee, will be) solvent and will not have an
unreasonably small capital for the conduct of its business and the payments of
anticipated obligations. The Guarantor's assets and cash flow enable it to meet
its present obligations in the ordinary course of business as they become due,
and the Guarantor has not and does not believe that it will incur debts and
obligations beyond its ability to pay. This Guarantee and each of the Loan
Documents to which the Guarantor is a party have been duly authorized, executed
and delivered by the Guarantor and constitute the legal, valid and binding
obligations of the Guarantor, enforceable against the Guarantor in accordance
with their respective terms.

            (e) Litigation: No Violation of Orders or Laws; Governmental
Approvals. Except as set forth on Schedule B attached hereto, there are no
actions, suits, investigations or proceedings pending, or to the Guarantor's
knowledge, after due inquiry, threatened or proposed, against or affecting the
Guarantor, or any of the properties or rights of the Guarantor. To the
Guarantor's knowledge, after due inquiry, there is no basis for any claims being
asserted against the Guarantor except to the extent that any such claims have
been fully disclosed in writing to the Secured Party. The Guarantor is not, nor
will the Guarantor be after or as a result of giving effect to the transactions
contemplated herein, in default under or in violation of any Requirements of
Law. Neither any actions by or with any governmental or public boy or authority,
or any subdivision thereof, nor any other legal formality is required in
connection with the entering into, performance, or enforcement of the Guarantee
by the Guarantor .

            (f) No Conflicts with Agreements, Etc. Neither the execution and
delivery by the Guarantor of this Guarantee or any of the Loan Documents to
which the Guarantor is a party, nor the fulfillment of or compliance with the
terms and provisions hereof

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or thereof, will conflict with, or result in a breach or violation of the terms
of, or constitute a default under, or result in the creation of any Lien (other
than Liens created pursuant to the Loan Documents) on any assets of the
Guarantor pursuant to (i) the organizational documents of the Guarantor which is
an entity, or (ii) any material agreement to which the Guarantor is a party or
to which the Guarantor's assets are subject or (iii) any Requirements of Law to
which the Guarantor is subject.

            (g) Consents, Etc. No consent, approval or authorization of or
registration or filing with any Person is required in connection with the
execution, delivery or performance by the Guarantor of this Guarantee or any of
the Loan Documents to which the Guarantor is a party, or as a condition to the
legality, validity or enforceability of this Guarantee or any such Loan
Document.

            (h) Guarantor has copies of and is fully familiar with each and
every document executed and delivered to Secured Party by Borrower, including
without limitation, each of the Loan Documents.

            (i) Guarantor has derived or expects to derive a financial advantage
from the Loan and any other extension of credit and from each and every renewal,
extension, release of collateral or other relinquishment of legal rights made or
granted or to be made or granted by Secured Party to Borrower in connection with
the Obligations.

            (j) Disclosure. The financial statements of Guarantor submitted to
Secured Party present fairly the financial condition of Guarantor. Neither this
Guarantee nor any other document, certificate or statement furnished to the
Secured Party by or on behalf of the Guarantor contains any misstatement of a
material fact or omits to state any material fact necessary in order to make the
statements contained herein and therein, in light of the circumstances under
which they were made, not misleading. The Guarantor is not aware of any facts
(other than general industry conditions) that individually or in the aggregate
have a material adverse effect or, so far as the Guarantor can now reasonably
foresee, are likely to have a material adverse effect in the future.

      8. Information. The Guarantor will promptly furnish to the Secured Party,
at the sole cost and expense of the Guarantor, all such information regarding
the Guarantor's and its Affiliates' business condition and financial condition
as the Secured Party may from time to time request. The Guarantor hereby
authorizes Secured Party and its agents and representatives at any time and from
time to time to obtain from, disclose to and discuss with any Franchisor,
creditor of the Guarantor or any other Person, information concerning or
relating to the financial condition, operations and other matters relating to
the Guarantor, its business, property and assets and hereby consents to the
release to Secured Party by any such Person, at any time and from time to time,
of information relating to the Guarantor, its business, financial condition,
prospects, property and assets upon request of Secured Party and without notice
to or consent from the Guarantor. The Guarantor hereby consents to the
disclosure by the Secured Party of any and all information (financial or
otherwise) concerning the Guarantor to any Person in connection with the sale or
other disposition of the Loan (including any securitization thereof). Guarantor
hereby agrees to deliver to Secured Party notice of any Default or Event of
Default or of any other event or condition which could have a Material Adverse
Effect; (b) the Guarantor hereby agrees, to the extent failure to do so could
have a Material Adverse Effect, to pay all taxes and other charges imposed by
any Government Authority upon Guarantor or its property as and when they become
due; and (c)

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the Guarantor hereby agrees, to the extent failure to do so could have a
Material Adverse Effect, to comply with all Requirements of Law and Contractual
Obligations.

      9. NO JURY TRIAL. EACH OF THE GUARANTOR AND BY ITS ACCEPTANCE HEREOF
SECURED PARTY HEREBY WAIVES All RIGHS IN ANY LITIGATION OR OTHER PROCEEDING
RELATING TO OR ARISING OUT OF THIS GUARANTEE, OR ANY OF THE OTHER LOAN
DOCUMENTS. THE GUARANTOR COVENANTS AND AGREES NOT TO SEEK TO CONSOLIDATE ANY
SUCH LITIGATION OR PROCEEDING IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY
OTHER ACTION IN WHICH A JURY TRIAL CANNOT OR HAS NOT BEEN WAIVED. THE GUARANTOR
FURTHER WAIVES, TO THE FULL EXTENT PERMITTED BY LAW, ANY RIGHT TO AN APPRAISAL
OF ANY COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, INCLUDING, WITHOUT
LIMITATION, ANY SUCH RIGHTS PROVIDED BY STATUTE.

      10. Miscellaneous.

            (a) Payment of Expenses. The Guarantor hereby agrees to pay for all
cash and expenses of the Secured Party arising in connection with this
Guarantee, including without limitation, the administration and enforcement of,
or preservation of rights under this Guarantee (including without limitation,
the reasonable fees and expenses of counsel for the Secured Party and all costs
of collection, and all other costs and expenses associated with court and/or
administrative proceedings through the appellate level, incurred by reason of
any action, suit, proceeding, hearing, motion or application before any court or
administrative body in which Secured Party may be or become a party by reason of
this Guarantee, including, but not limited to, bankruptcy and administrative
proceedings, as well as any other of the foregoing where a proof of claim is by
law required to be filed, or in which it becomes necessary to defend or uphold
the terms hereof (the "Costs"), in the event that (a) there shall occur any
default under this Guarantee; (b) Secured Party is made party to any litigation
merely because of the existence of this Guarantee; (c) it becomes necessary, by
reason of acts of or omissions of Guarantor for Secured Party to seek the advice
of counsel with respect to this Guarantee; or (d) it becomes necessary for
Secured Party to seek the advice of or retain counsel by reason of any request
of Guarantor. Said Costs shall be paid in addition to the amounts guaranteed in
accordance with the provisions hereof .

            (b) Waiver of Notice of Acceptance. Notice of acceptance of this
Guarantee is hereby waived.

            (c) Entire Agreement. This Guarantee and the other Loan Documents to
which the Guarantor is a party represents the entire understanding between the
Secured Party and the Guarantor. None of the terms or provisions of this
Guarantee may be waived, altered, modified, or amended except in each instance
by a specific written instrument duly executed by the Secured Party.

            (d) Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be sent by certified registered or
express mail, return receipt requested or sent by Federal Express or other
nationwide overnight courier service capable of providing delivery confirmation
or delivered by hand. Each such notice shall be deemed duly given when so hand
delivered or if mailed, three days after the date of deposit in the United
States mails. Notices shall be addressed as follows:

<PAGE>

             If to the Guarantor: To it at its office set forth above;

             If to the Borrower: To it at its office set forth above;

             If to the Secured Party:

             Falcon Financial, LLC
             2015 West Main Street
             Stamford, CT 06902
             Attention: Loan Administration Department

             with a copy to:

             Thacher Proffitt & Wood
             50 Main Street
             White Plains, NY 10606
             Attention: Thomas M. Leslie, Esq.

            (e) Binding Effect; Assignment; Benefit of Agreement. This Guarantee
shall be binding upon and inure to the benefit of parties hereto and their
respective successors in interest and assigns. This Guarantee (i) is freely
assignable by Secured Party, in whole or in part, at any time or from time to
time, without notice to or consent of Guarantor or Borrower, and (ii) is not
assignable by the Guarantor or the Borrower without the prior written consent of
the Secured Party, which consent may be withheld or delayed by the Secured Party
in its sole discretion. The provisions of paragraph 10(j) are for the benefit of
and may be enforced by the Borrower .

            (f) Interpretation: Construction: Severability.

                  (i) The terms of this Guarantee have been fully reviewed and
negotiated by the Borrower and the Guarantor in consultation with independent
legal counsel of their respective choice. The Guarantor represents and warrants
that it has personally reviewed this Guarantee, and that it has the requisite
experience and sophistication .to understand its terms and conditions and the
consequences of the duties assumed and rights waived herein. In the event of an
ambiguity in or dispute regarding the interpretation of this Guarantee, the
interpretation shall not be resolved by any rule providing for interpretation
against the party who cause the uncertainty to exist or against the drafting
party.

                  (ii) Except as may be otherwise noted in context, all
references to "paragraphs" shall be deemed to refer to the paragraphs or
subparagraphs, as appropriate, of this Guarantee. References to "Schedules" mean
the Schedules attached to and made a part of this Guarantee. The descriptive
headings used in this Guarantee are for convenience only and shall not be deemed
to affect the meaning or construction of any provision hereof .

                  (iii) Whenever possible this Guarantee and each provision
hereof shall be interpreted in such manner as to be effective, valid and
enforceable under applicable law. If and to the extent that any such provision
shall be held invalid and unenforceable by any court of competent jurisdiction,
such holding shall not invalidate or render unenforceable any other provisions
hereof, and any determination that the application of any provision hereof to
any person or under any circumstance is illegal and unenforceable shall not
affect the

<PAGE>

legality, validity and enforceability of such provision as it may be applied to
any other person or in any other circumstance.

            (g) Further Assurances. The Guarantor agrees at any time and from
time to time, at Guarantor's sole cost and expense, to obtain, procure, execute
and deliver , file and affix or cause to be obtained, procured, executed,
delivered, filed and affixed such further agreements, instruments, documents,
powers (including stock powers, and powers of attorney) and information, and to
do or cause to be done all such further acts and things (including the
execution, delivery and filing of financing statements, payment of filing fees
and transfer, gains and recording taxes) and do and cause to be done all such
other acts as the Secured Party may reasonably request, from time to time, in
its sole discretion.

            (h) Term; Survival. This Guarantee is in full force and effect on
the date hereof and shall continue until one year and one day after all
Obligations of the Guarantor hereunder have been indefeasibly paid or satisfied
in full. All representations, warranties, agreements and covenants contained in
this Guarantee shall survive the execution and delivery of this Guarantee, and
all of the waivers made and indemnification obligations undertaken by the
Guarantor and the provisions of paragraphs 2 through 10 shall survive the
termination, discharge or cancellation for any reason of this Guarantee.

            (i) Cumulative Rights of and No Waiver by Secured Party. The Secured
Party's rights, powers, privileges and remedies under this Guarantee, any Loan
Document, any other agreement or applicable law are cumulative and not exclusive
and may be exercised successively or concurrently and shall not be waived,
precluded or limited by any failure or delay in the exercise thereof or by the
Secured Party's exercise, or partial exercise, of any thereof or by any course
of dealing between the Guarantor and the Secured Party. No notice to or demand
on the Guarantor in any case shall entitle the Guarantor to any other or further
notice or demand in similar or other circumstance or constitute a waiver of the
right of the Secured Party to any other or further action in any circumstance
without notice or demand.

            (j) Guarantor's Waiver of Claims. The Guarantor hereby irrevocably
waives, relinquishes and agrees not to assert any claim (as defined in 11 U.S.C.
Section 101 ), including, without limitation, any right or claim of subrogation,
payment or reimbursement, that the Guarantor now or hereafter may have against
any Borrower under any Loan Document or against any other security held by or
available to the Secured Party for any Obligations or the payment thereof
because, arising out of or on account of any payments or transfers made by the
Guarantor, or any payment or transfer which the Guarantor agreed to or is
obligated to make, for any reason, whether any such right or claim is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, secured or unsecured.

            (k) Time of the Essence. Time is of the essence with respect to any
payments to be made and obligations to be performed by the Guarantor under this
Guarantee.

            (l) Governing Law. This Guarantee shall be governed by and construed
in accordance with the laws of the State of New York.

<PAGE>

            (m) Counterpart. This Guarantee may be signed in counterpart, each
of which shall be deemed an original and all of which taken together shall
constitute one and the same instrument.

            (n) Descriptive Headings. The descriptive headings used in this
Guarantee are for convenience only and shall not be deemed to affect the meaning
or construction of any provision hereof .

                                    [Signature Page Follows]

<PAGE>


            THIS GUARANTEE CONTAINS WAIVERS OF VARIOUS RIGHTS, INCLUDING
(WITHOUT LIMITATION) WAIVERS OF RIGHTS OF JURY TRIAL. THE GUARANTOR HEREBY MAKES
AND ACKNOWLEDGES THAT IT MAKES ALL OF THE WAIVERS SET FORTH IN THIS GUARANTEE
KNOWINGLY, INTENTIONALLY, VOLUNTARILY, WITHOUT DURESS, AND ONLY AFTER EXTENSIVE
CONSIDERATION OF THE RAMIFICATIONS OF SUCH WAIVERS WITH ITS ATTORNEY; THE
GUARANTOR FURTHER ACKNOWLEDGES THAT SUCH WAIVERS ARE A MATERIAL INDUCEMENT TO
THE SECURED PARTY TO MAKE THE LOAN TO THE BORROWER AND THAT THE SECURED PARTY
WOULD NOT HAVE ENTERED INTO THE SECURITY AGREEMENT AND ACCEPTED THE NOTE WITHOUT
SUCH WAIVERS.

            IN WITNESS WHEREOF, the parties hereto have caused this Guarantee to
be executed and delivered as of the date first above written.

ATTEST:                               GUARANTOR:

                                      HOMETOWN AUTO RETAILERS, INC.

(SEAL)                                By:
                                         ---------------------------------------

                                      Name:

                                      Title:

<PAGE>

                               RIDER TO GUARANTEE

            It is understood and agreed that notwithstanding anything herein
contained to the contrary, the Guarantee by the Guarantor shall not, without the
consent of the Guarantor, cover any increase or enlargement of the Obligations,
as of the date hereof, except for (i) any protective advances made in connection
with the Loan Documents and (ii) any interest which shall become due and owing,
including interest at the Default Rate.

<PAGE>

                                 ACKNOWLEDGMENT

STATE OF NEW YORK        )
         ---------------

                         ) SS.

COUNTY OF NEW YORK       )
          ----------

            BE IT REMEMBERED THAT, on this 5th day of January, 1999, before
me, the subscriber named below, personally appeared John C. Rudy, who, being by
me duly sworn on his oath, deposed and made proof to my satisfaction that he is
CFO of Hometown Auto Retailers, Inc., the corporation named in, and the person
who signed the within instrument; and I having first made known to him the
contents thereof, he did acknowledge that he signed, sealed, and delivered the
same as such officer on behalf of the corporation as its voluntary act and deed,
made by virtue of the authority of its board of directors, for the uses and
purposes therein expressed.


                                                --------------------------------
                                                        Notary Public

My Commission Expires:                                  (Notarial Seal)

                                                        DANlELLE HOLLAND
                                                Notary Public, State of New York
                                                         No.41-4944537
                                                   Qualified in Queens County
                                                Commission Expires November 2000

<PAGE>

                                   SCHEDULE A

Legal Name of Guarantor:                       Existing Indebtedness
------------------------                       ---------------------

Hometown Auto Retailers, Inc.

                                    Loans made and to be made to Guarantor and
                                    others by General Electric Capital ("GEC")
                                    which loans are referred to in the
                                    Intercreditor Agreement by and between
                                    Secured Party and GEC

Type of Entity:
---------------

Corporation

Jurisdiction of Organization:
-----------------------------

Delaware

Other Jurisdictions
Where Qualified:
----------------

Chief Executive Office:
-----------------------

HOMETOWN AUTO RETAILERS, INC.
831 Straits Turnpike
Watertown, CT 06795

Relationship to Borrower:
-------------------------

Equity Holders/

Controlling Persons:
--------------------

<PAGE>

                                   SCHEDULE B

Pending/Threatened Proceedings:
-------------------------------
             None