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                                                                    EXHIBIT 10.3

                           [UGLY DUCKLING LETTERHEAD]
                           UGLY DUCKLING CORPORATION
                                 March 25, 1998

                                                    VIA FACSIMILE (847-304-3338)

Mr. Farhaan Hassan
GE Capital
Asset Based Financing
800 Hart Road, Suite 200
Barrington, Illinois  60010

         Re:      Requests for GECC approvals

Dear Farhaan:

         Over the last few weeks I have submitted requests for GECC's approval
of four matters relating to the Ugly Duckling Amended and Restated Loan
Agreement (the "Loan Agreement"). You asked that I combine these four requests
in a single letter. The four requests are restated as follows:

         1.       TIMING OF CONTRACT PAYMENTS. Section 4.1 of the Loan Agreement
                  provides that all remittances received by the Borrower shall
                  be deposited into the depository account "...as soon as
                  possible, but no later than two business days following
                  receipt..." Apparently, the agreements between Ugly Duckling
                  and all other contract owners provide for deposit within three
                  business days. I understand that you are aware of this and are
                  willing to allow Ugly Duckling to deposit receipts within
                  three business days rather than the two business days required
                  by the Loan Agreement.

         2.       SALE LEASEBACK. Ugly Duckling Corporation has entered into a
                  nonbinding commitment letter to sell and leaseback
                  substantially all of the properties owned by the Ugly Duckling
                  entities. The Buyer and Landlord is Imperial Credit Commercial
                  Investment Corp. or one of its affiliates ("Imperial").
                  Enclosed is a copy of the Commitment Letter between Ugly
                  Duckling and Imperial. We hope to close the sale/leaseback
                  transaction within the next 30 days. The proceeds of the
                  transaction will be used by Ugly Duckling for working capital.
                  GECC has a lien on substantially all the assets of Ugly
                  Duckling. However, GECC does not have mortgages on the Ugly
                  Duckling properties. Therefore, the Ugly Duckling properties
                  can be conveyed without a release of the security interests of
                  GECC in the assets of Ugly Duckling. Nonetheless, I would like
                  to obtain GECC's consent to the sale/leaseback transaction.

         3.       CYGNET FINANCE INVESTMENT. Section 13.15 of the Loan Agreement
                  provides that Ugly Duckling Corporation shall not invest more
                  than $20 million into Cygnet Finance, Inc. Last October, you
                  agreed to increase the $20 million limit to $30 million. The
                  investment in Cygnet Finance, Inc. is now or soon will be, in
                  excess of $30 million. Eric Splaver of Ugly Duckling has
                  spoken to you about an increase in the investment limitation
                  to $40 million. I would appreciate your acknowledgment of the
                  increase in the Cygnet investment limitation to $40 million.














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Farhaan Hassan
March 25, 1998
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         4.       GREENWICH SECURITIZATION COMMITMENT. Ugly Duckling has entered
                  into a securitization commitment with Greenwich Capital
                  Markets. I have never requested GECC's consent to this
                  securitization arrangement between Ugly Duckling and
                  Greenwich. Enclosed is the commitment letter setting forth the
                  terms of this securitization commitment. I would appreciate
                  your acknowledgment and approval of the securitization
                  arrangement between Ugly Duckling and Greenwich.

         Please acknowledge GECC's approval of these four requests by signing
this letter and returning it to me at your earliest convenience.

         Thank you for your cooperation.

                                             Cordially,


                                             /s/ Steven P. Johnson
                                             Steven P. Johnson
                                             General Counsel

SPJ:ag

                Accepted and approved this 30 day of March, 1998.

                                    General Electric Capital Corporation

                                    By:      /s/ Farhaan Hassan
                                             -----------------------------------
                                    Name:    Farhaan Hassan
                                             -----------------------------------
                                    Its:     Account Executive
                                             -----------------------------------



































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