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                                                                   Exhibit 4.4

THIS UGLY DUCKLING CORPORATION 10% SUBORDINATED DEBENTURE (THIS "DEBENTURE") IS
ISSUED IN EXCHANGE FOR AND RETIREMENT OF THAT CERTAIN UGLY DUCKLING HOLDINGS,
INC. 18% SUBORDINATED DEBENTURE DATED AUGUST 31, 1993, IN THE ORIGINAL PRINCIPAL
AMOUNT OF $15,000,000.00, AND THAT CERTAIN FIRST AMENDED UGLY DUCKLING HOLDINGS,
INC. 18% JUNIOR SUBORDINATED REVOLVING DEBENTURE DATED OCTOBER 1, 1995 IN THE
ORIGINAL PRINCIPAL AMOUNT OF $5,000,000.00 (COLLECTIVELY, THE "ORIGINAL
DEBENTURES"), AS OF THE IPO COMPLETION DATE, WHICH DATE SHALL BE STATED ON THE
FACE OF THIS DEBENTURE WHEN DETERMINED. THE IPO COMPLETION DATE SHALL BE THE
FIRST DAY OF THE FIRST CALENDAR MONTH AFTER UGLY DUCKLING CORPORATION COMPLETES
THE SALE OF ITS EQUITY SECURITIES IN A PUBLIC OFFERING REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THIS DEBENTURE IS NOT EFFECTIVE UNTIL THE
IPO COMPLETION DATE AND THE ORIGINAL DEBENTURES SHALL REMAIN IN FULL FORCE AND
EFFECT UNTIL THE IPO COMPLETION DATE.

                            UGLY DUCKLING CORPORATION
                           10% SUBORDINATED DEBENTURE


$14,000,000.00                                                    June 21, 1996
                                                               PHOENIX, ARIZONA

         FOR VALUE RECEIVED, Ugly Duckling Corporation, a Delaware corporation
("Maker"), hereby promises to pay to the order of Verde Investments, Inc., an
Arizona corporation ("Payee"), the principal sum of Fourteen Million Dollars
($14,000,000.00) ("Principal") and interest thereon at a fixed rate of ten
percent (10%) per annum ("Interest"), all in United States currency.

         1. Loan. This Debenture evidences a single advance loan of Fourteen
Million Dollars ($14,000,000.00) (the "Loan").

         2. Payments. This Debenture shall be payable in monthly installments of
Interest only and annual installments of Principal. On the last day of each
calendar month, Maker shall pay all accrued and unpaid Interest. On each
anniversary of the date hereof, Maker shall pay not less than Two Million
Dollars ($2,000,000.00) of Principal. If not sooner paid, the balance of the
Principal and all accrued and unpaid Interest shall be due and payable on the
seventh anniversary of the IPO Completion Date (the "Maturity Date"). If the due
date of any payment is on a day other than a business day, such payment shall be
due and made on the next succeeding business day but such extension of time for
payment shall not constitute a waiver of any Interest. If at any time Payee is
in default with respect to any Senior Indebtedness, as hereinafter defined, then
Payee may suspend payment of this Debenture until all such defaults are cured
and all Senior Indebtedness is current (the "Permitted Suspension"). Interest
shall continue to accrue during the Permitted Suspension. All payments under
this Debenture shall be made to Payee at 2525 East
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Camelback Road, Suite 1150, Phoenix, Arizona 85016, or at such other address as
Payee may designate from time to time.

         3. Prepayments. Principal may be prepaid at any time.

         4. Late Charge. In the event any payment becoming due hereunder is not
made in full within ten (10) days after receipt of notice from Payee that such
payment is late, then without prejudice to any other remedy available to the
Payee, Maker shall immediately pay to Payee a charge of five percent (5%) of the
amount due and not paid to compensate Payee for the delay and inconvenience
caused by the late payment (the "Late Charge"). The Late Charge shall not be
applied to but shall be in addition to Principal and Interest.

         5. Subordination. The indebtedness evidenced by this Debenture shall be
subordinate and subject in right of payment, to the extent and in the manner
hereinafter set forth, to the prior payment in full of all of the Maker's Senior
Indebtedness. For purposes hereof, the Maker's "Senior Indebtedness" shall mean
the principal of and unpaid interest on (i) indebtedness of the Maker or
indebtedness with respect to which the Maker is a guarantor, whether outstanding
on the date hereof or hereafter created, to banks, insurance companies or other
lending institutions regularly engaged in the business of lending money, which
is for money borrowed by the Maker, whether or not secured, and (ii) any
deferrals, renewals or extensions of any such indebtedness issued in exchange
for such Senior Indebtedness.

         6. Liquidation. In the event of any liquidation, reorganization,
dissolution or winding up of the Maker (whether in bankruptcy, insolvency,
reorganization or receivership proceedings, or upon an assignment for the
benefit of creditors, or any other marshaling of the assets and liabilities of
the Maker, or otherwise) the assets of Maker may be distributed in payment of
the Senior Indebtedness, but not the Junior Debenture, prior to any distribution
to Payee as follows:

                  (a) All Senior Indebtedness shall first be paid in full in
         cash, or provision made for such payment, before any holder of this
         Debenture shall be entitled to receive any payment or distributions
         from or by the Maker on account of the Principal of, or Interest on,
         the indebtedness evidenced by this Debenture;

                  (b) Any payment or distribution of assets of the Maker of any
         kind or character, whether in cash, property or securities, to which
         any holder of this Debenture would be entitled except for the
         provisions of this Section shall be paid or delivered by the Maker or
         by any trustee in bankruptcy, receiver, assignee on behalf of
         creditors, or other liquidating agent making such payment or
         distribution, directly to the holders of Senior Indebtedness or their
         representatives, or to such trustees under any indenture pursuant to
         which any instruments evidencing any of such Senior Indebtedness may
         have been issued, ratably according to the aggregate amounts remaining
         unpaid on account of the Senior Indebtedness held or represented by
         each, to the extent necessary to pay all Senior Indebtedness in full
         after giving effect to any concurrent payment or distribution, or
         provision therefor, to the holders of such Senior Indebtedness; and

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                  (c) In the event that any payment or distribution of assets of
         the Maker of any kind or character, whether in cash, property or
         securities, shall be received by any holder of this Debenture before
         all Senior Indebtedness is paid in full, or provision made for its
         payment, such payment or distribution shall be held in trust for the
         benefit of, and shall be paid over or delivered to, the holders of such
         Senior Indebtedness or their representative or representatives, or to
         the trustee or trustees under any indenture pursuant to which any
         instruments evidencing any of such Senior Indebtedness may have been
         issued ratably as aforesaid, for application to the payment of all
         Senior Indebtedness remaining unpaid to the extent necessary to pay all
         such Senior Indebtedness after giving effect to any concurrent payment
         or distribution, or provision therefor, to the holders of such Senior
         Indebtedness.

                  (d) Subject to the payment in full of all Senior Indebtedness,
         the holder of this Debenture shall be subrogated to the rights of the
         holders of Senior Indebtedness to receive payments or distributions of
         assets of the Maker made on the Senior Indebtedness until the Principal
         of and Interest of this Debenture shall be paid in full, and for
         purposes of such subrogation, no such payments or distributions to the
         holders of Senior Indebtedness of cash, property or securities, which
         otherwise would be payable or distributable to the holder of this
         Debenture, shall as between the Maker, its creditors other than the
         holders of Senior Indebtedness, and the holder of this Debenture, be
         deemed to be a payment by the Maker to or on account of this Debenture,
         it being understood that the provisions of this Section are intended
         solely for the purpose of defining the relative rights of the holder of
         this Debenture, on the one hand, and the holders of Senior
         Indebtedness, on the other hand.

         7. Non-Impairment. Nothing contained in this Debenture is intended to
or shall impair, as between the Maker, the Maker's creditors other than the
holders of Senior Indebtedness, and any holder of this Debenture, the obligation
of the Maker to pay to the holder of this Debenture the Principal and Interest
on this Debenture, as and when the same shall become due and payable in
accordance with its terms, and which (subject to the rights of the holders of
Senior Indebtedness) is intended to rank equally with all other general
obligations of the Maker. Nor is this Debenture intended to or shall affect the
relative rights of the holder of this Debenture and creditors of the Maker other
than the holders of Senior Indebtedness. Nothing contained herein shall prevent
the holder of this Debenture from exercising all remedies otherwise permitted by
applicable law upon the occurrence of an Event of Default (as that term is
hereinafter defined), subject to the rights, if any, under this Debenture of the
holders of Senior Indebtedness in respect of cash, property or securities of the
Maker received upon the exercise of any such remedy.

         8. Events of Default. Each of the following events shall constitute a
material default under this Debenture ("Events of Default").

                  (a) The Maker fails to pay any amount or perform any
         obligation under this Debenture with respect to the payment of
         Principal, Interest, Late Charges or any other amount and does not cure
         that failure within ten (10) days after written notice from the Payee
         unless such failure is the result of a Permitted Suspension; or

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                  (b) The Maker shall apply for, consent to, or acquiesce in,
         the appointment of a trustee, receiver, sequestrator or other custodian
         for the Maker, or make a general assignment for the benefit of
         creditors; or

                  (c) The Maker shall permit or suffer to exist the commencement
         of bankruptcy, reorganization, debt arrangement or other case or
         proceeding under any bankruptcy or insolvency law, except for any
         involuntary proceeding initiated or consented to by the Payee, or any
         dissolution, winding up or liquidation proceeding in respect of the
         Maker; or

                  (d) Maker breaches any representation, warranty or covenant of
         Maker stated in this Debenture and Maker has not cured such breach
         within thirty (30) days, or any longer cure period provided herein,
         after written notice from Payee.

         9. Remedies. Upon the occurrence of an Event of Default, Payee shall
have the following rights and remedies.

                  (a) Interest shall automatically accrue at the rate of fifteen
         percent (15%) per annum (the "Default Interest") and the outstanding
         Principal, all accrued and unpaid Interest, all unpaid Late Charges and
         all other amounts payable pursuant hereto shall then accrue Default
         Interest from the date of occurrence of the Event of Default until the
         Event of Default is fully cured or, if payment of all amounts due
         hereunder has been accelerated, then until this Debenture is paid in
         full.

                  (b) Payee may accelerate the Maturity Date and demand
         immediate payment of all amounts due under the Debenture, all without
         additional notice, demand or cure period.

                  (c) Payee may, but shall not be required to, perform any
         obligation and or pay any amount that Payee determines is reasonably
         required to cure any or all defaults of Maker, and all amounts paid and
         costs incurred by Payee in curing any and all defaults of Maker shall
         be included in this Debenture and shall be payable by Maker, together
         with Default Interest until paid.

                  (d) Payee may exercise all other rights and remedies of Payee
         at law or in equity and this Debenture is a full recourse obligation
         enforceable by Payee against Maker, subject to the limitations stated
         herein.

         10. Representations, Warranties and Covenants of Maker. As of the date
hereof and at all times until all amounts payable hereunder are paid in full,
Maker represents, warrants and covenants unto Payee as follows:

                  (a) Maker is a corporation duly organized and validly existing
         under the laws of the State of Delaware and is qualified to transact
         business in the State of Arizona. Maker has all requisite power and
         authority and rights to own and operate its properties and to carry on
         its businesses as now conducted and to execute, deliver and perform
         this Debenture.

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                  (b) The execution, delivery and performance of this Debenture
         are within the Maker's powers and have been duly authorized by all
         necessary action of Maker. The execution, delivery and performance of
         this Debenture by Maker will not violate the Certificate of
         Incorporation or Bylaws of Maker or any subsidiaries of Maker or
         violate any legal requirements affecting Maker or any of its
         subsidiaries or violate any agreement to which Maker or the
         Subsidiaries are bound or to which they are a party. All governmental
         or regulatory orders, consents, permits, authorizations and approvals
         required for the execution, delivery and performance of this Debenture
         by Maker have been obtained and are in full force and effect and no
         additional governmental or regulatory actions, filings or registrations
         with respect to the execution, delivery and performance of this
         Debenture are required.

                  (c) This Debenture has been duly executed and delivered by
         Maker and is a legally valid and binding obligation of Maker
         enforceable against Maker in accordance with its terms, except as
         enforceability may be limited by bankruptcy, insolvency,
         reorganization, or similar laws affecting creditor's rights generally
         and by general principals of equity.

                  (d) The financial statements and all financial data previously
         delivered to Payee in connection with the Debenture and or relating to
         Maker are true, correct and complete in all material respects and
         fairly present the financial position of the parties who are the
         subject thereof, and no material adverse change has occurred in such
         financial statements and, except for this Debenture and other borrowing
         in the ordinary course of business, no recourse borrowings have been
         made by Maker since the date thereof.

                  (e) Within sixty (60) days after each fiscal quarter of Maker,
         Maker shall deliver to Payee a balance sheet and income statement of
         Maker including a statement of the total indebtedness of Maker and a
         statement that no Event of Default has occurred under this Debenture,
         all certified by Maker's chief financial officer. Within one hundred
         five (105) days after each fiscal year of Maker, Maker shall deliver to
         Payee a similar balance sheet and income statement and a statement that
         no Event of Default has occurred under this Debenture, all certified by
         Maker's chief financial officer.

         11. Governing Law. This Debenture is governed by the laws of the State
of Arizona.

         12. No Waiver. If the Payee delays in exercising or fails to exercise
any of its rights under this Debenture, such delay or failure shall not
constitute a waiver of any of the Payee's rights, or of any breach, default or
failure of condition of or under this Debenture. No waiver by the Payee of any
of its rights, or of any such breach, default or failure of condition shall be
effective, unless the waiver is expressly stated in a writing signed by the
Payee. All of the Payee's remedies in connection with this Debenture or under
applicable law shall be cumulative, and the Payee's exercise of any one or more
of those remedies shall not constitute an election of remedies.


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         13. Binding Effect. This Debenture inures to the benefit of, and binds,
the respective successors and assigns of the Maker and the Payee.

         14. Attorney's Fees and Costs. Upon the occurrence of any Event of
Default, if an attorney is retained by Payee to enforce this Debenture or to
represent Payee in any legal action relating to this Debenture or Maker, then
Maker shall pay to Payee all reasonable attorney's fees and costs incurred by
Payee, whether or not any judicial proceeding has been commenced.

         15. Notice. Any notice to Maker provided for in this Debenture shall be
given by personal delivery, by mailing such notice by certified mail addressed
to Maker at the address stated below or by "overnight" delivery service. Notices
shall be deemed delivered and received upon actual receipt in the case of
personal delivery, within three (3) days after deposit into the Untied States
mail or within twenty-four (24) hours after delivery to an "overnight" delivery
service.

         16. Time.  Time is of the essence of each term of this Debenture.

         17. Modification and Assignment. This Debenture may not be amended and
no obligation hereunder shall be discharged or waived unless such amendment,
discharge or waiver is evidenced by a written instrument signed by any of the
entities constituting Payee. Maker acknowledges that Payee may assign and
negotiate this Debenture and that this Debenture shall be enforceable by any
such assignee.


                            Ugly Duckling Corporation,
                            a Delaware corporation
                            2525 East Camelback Road, Suite 1150
                            Phoenix, Arizona  85016

                            By:      /s/ Steven P. Johnson
                                     ___________________________________

                            Name:    Steven P. Johnson
                                     ___________________________________

                            Its:     Sr. Vice President
                                     ___________________________________

                            Date:    June 21, 1996
                                     ___________________________________



Accepted and Approved by Payee:

Verde Investments, Inc.,
an Arizona corporation

By:      /s/ Steven P. Johnson
         ___________________________________

Name:    Steven P. Johnson
         ___________________________________

Its:     Vice President
         ___________________________________

Date:    June 21, 1996
         ___________________________________



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