FORM 10-KSB
                    U.S. SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

                  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934
                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998

     Commission  file  number  0-18819
                             MONACO FINANCE, INC.
                             --------------------
                (Name of small business issuer in its charter)

   Colorado                                     84-1088131
   --------                                     ----------
(State or other                              (IRS  Employer  
 jurisdiction of                           Identification  No.)
 incorporation or 
  organization)


370  17th  Street,  Suite  5060
-------------------------------
Denver,  Colorado                                        80202
-----------------                                     ----------- 
(Address  of  principal  executive  offices)          (Zip  Code)

          Issuer's  telephone  number:          (303)  592-9411


     SECURITIES  REGISTERED  UNDER  SECTION  12(B)  OF  THE  EXCHANGE  ACT:

     Class  A  Common  Stock,  $.01  Par  Value
     ------------------------------------------
     Title  of  Class

     SECURITIES  REGISTERED  UNDER  SECTION  12(G)  OF  THE  EXCHANGE  ACT:

     Class  A  Common  Stock,  $.01  Par  Value
     ------------------------------------------
     Title  of  Class

     Check  whether  the  issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
__X___ Yes   _____  No

     Check  if  disclosure  of  delinquent  filers  in response to Item 405 of
Regulation  S-B  is  not  contained  in  this  form, and no disclosure will be
contained,  to  the  best  of  Registrant's  knowledge, in definitive proxy or
information  statements  incorporated  by  reference  in Part III of this Form
10-KSB  or  any  amendments  to  this  Form  10-KSB.  [    ]
                                                      ------

     State  issuer's  revenues for its most recent fiscal year.   $20,829,747.

     State  the  aggregate  market  value  of  the  voting  stock  held  by
non-affiliates  (based  on  the average bid and asked prices of such stock) of
the  Registrant:

     As  of  March  30,  1999:    Approximately  $243,000.

     As  of  March  30,  1999,  there  were 2,554,558 shares of Class A Common
Stock,  $.01  par   value and 254,743 shares of Class B Common Stock, $.01 par
value,  outstanding.

     DOCUMENTS  INCORPORATED  BY  REFERENCE
     Proxy  Statement  for the 1999 Annual Meeting to be filed within 120 days
after  the  fiscal  year  (Part  III).
     Transitional  Small  Business  Disclosure  Format:            Yes  No   X
                                                                            --
     Total  number  of  pages:


                                     <PAGE>

                             MONACO FINANCE, INC.
                        1998 FORM 10-KSB ANNUAL REPORT
                               TABLE OF CONTENTS

               PAGE  NUMBER
               ------------
          PART  I
Item  1.    Description  of  Business, pg. 3
Item  2.    Description  of  Property, pg. 8
Item  3.    Legal  Proceedings, pg. 8
Item  4.    Submission  of  Matters  to  a  Vote  of  Security
             Holders, pg. 8
    PART  II
Item  5.    Market  for  Common  Equity  and  Related
             Stockholder  Matters, pg. 8
Item  6.    Management's  Discussion  and  Analysis  of
             Financial  Condition  and  Results  of  Operation, pg. 10
Item  7.    Financial  Statements, pg. 20
Item  8.    Changes  In  and  Disagreements  With  Accountants
             on  Accounting  and  Financial  Disclosure, pg. 55
    PART  III
Item  9.    Directors  and  Executive  Officers,  Promoters  and
             Control  Persons,  Compliance  With  Section  16(a)
             of  the  Exchange  Act, pg. 55
Item  10.   Executive  Compensation, pg. 55
Item  11.   Security  Ownership  of  Certain  Beneficial  Owners
             and  Management, pg. 55
Item  12.   Certain  Relationships  and  Related  Transactions, pg. 55
     PART  IV
Item  13.   Exhibits  and  Reports  on  Form  8-K, pg. 
            Signatures, pg. 55


                                     <PAGE>

------
     PART  I

ITEM  1.  DESCRIPTION  OF  BUSINESS.
------------------------------------
     Monaco  Finance,  Inc.  (the  "Company")  is a specialty consumer finance
company  which  has  engaged  in  the  business  of  underwriting,  acquiring,
servicing  and  securitizing  automobile  retail  installment  contracts
("Contract(s)").  The  Company  has  provided  special  finance  programs (the
"Program(s)")  to  assist  purchasers  of  vehicles  who  do  not  qualify for
traditional  sources of bank financing due to their adverse credit history, or
for  other  reasons  which  may  indicate  credit or economic risk ("Sub-prime
Customers"). The Company has acquired Contracts in connection with the sale of
new  and used vehicles, to customers, from automobile dealers (the "Dealer(s)"
or  the "Dealer Network") located in forty-eight states, the majority of which
were  acquired  from four states. The Company has also purchased portfolios of
sub-prime  loans from third parties other than dealers.  At December 31, 1998,
the  Company's loan portfolio had an outstanding balance of approximately $107
million.

     See  the  discussion  of  Subsequent  Events  in  Item  6.  Management's
Discussion  and  Analysis  of  Financial  Condition  and Results of Operation.

AUTO  FINANCE  PROGRAM
----------------------

GENERAL
-------
     The  Company's  automobile finance programs have been conducted under the
name  Monaco Finance Auto Program ("MFAP").  At December 31, 1998, the Company
had  agreements with Dealers located in forty-eight states for the purchase of
Contracts  that  meet  the  Company's  financing  standards,  requirements and
criteria.    The  Contracts  are  purchased without recourse and are generally
purchased for a  processing  fee  and discount ranging from $150 to $1,095 per
contract.   The purchase price primarily depends upon the particular financing
option used, the length of the Contract, and the model year and mileage of the
automobile  financed. To date, the obligors under the Contracts generally have
made  down  payments  ranging  between  10%  and 20% of the sales price of the
vehicle  financed  including  the value of a trade-in, if any.  Generally, the
remaining  balance of the purchase price plus taxes, title fees and insurance,
where  applicable,  is  financed  over  a  period of 24 to 60 months at annual
interest  rates ranging between 17% and 25%. At December 31, 1998 the original
annual  percentage  rate  of  interest  of  the  Company's  portfolio averaged
approximately  21% and the original weighted average term of the portfolio was
approximately 51 months. From inception through December 31, 1998, the Company
originated  and  acquired 36,638 Contracts with an aggregate principal balance
of  approximately  $334  million.

PURCHASE  AGREEMENTS  (DEALERS)
-------------------------------
     The  Company  has  acquired  Contracts  from  franchised  and independent
Dealers  who have entered into dealer agreements with the Company.  The dealer
agreements  generally  are  in  standard  form  requiring  that  Contracts  be
originated  in  accordance  with the Company's Program guidelines and that the
Contracts  be  secured by a perfected first lien on the vehicle financed.  The
Company  underwrites  each  Contract  prior  to acceptance.  The Contracts are
non-recourse  to  the  selling  Dealer  except for certain representations and
warranties.

     The  Company  has  marketed its MFAP through independent contractors. The
independent  contractors  reside  in  the geographical area where the Programs
were marketed. In addition to enlisting new Dealers into the Company programs,
the  independent  contractors  assisted  Dealers  by  familiarizing  them with
Monaco's  Programs and procedures.  In February 1999, the Company discontinued
these  agreements  with  all  independent  contractors.

LOAN  PORTFOLIO  ACQUISITIONS
-----------------------------
     In  1998,  the  Company  acquired,  at a discount, two portfolios of auto
loans  with  a face value of approximately $95 million from third parties. The
Company  completed  the first acquisition of approximately $81 million of auto
loans, at a discount, from certain affiliates of Pacific USA Holdings Corp. In
February  1998,  the Company acquired approximately $14 million of auto loans,
at  a  discount,  from an unrelated third party.  At this time, the Company is
not  actively  seeking  to  acquire  auto  loan  portfolios.

FINANCING  SOURCES
------------------
     From  inception  through  1991,  the  Company financed the acquisition of
Contracts through loans from its principal stockholders and banks.  In October
1991,  the  Company  expanded  its  financing  sources by completing its first
asset-backed  automobile  receivables  securitization.    In 1992, the Company
entered  into  a  secured  revolving line of credit with Citicorp Leasing Inc.
("Citicorp")  to  finance  Contracts.   In 1994, the Company securitized $34.1
million  of  its  Contracts  and  in 1995 it obtained a $150 million revolving
secured  warehouse  line  and securitized $43.1 million in Contracts. In 1997,
the  Company securitized $51.4 million of its Contracts and entered into a $75
million  Warehouse  Line  of Credit.  In 1998 the Company entered into a $73.9
million  Portfolio Purchase Credit Facility, and received capital of $5.3 mil-
lion  and secured loans of $1.9 million  from  Pacific  USA  Holdings Corp. as
well as  secured loans from Pacific  Southwest  Bank  of $.95 million.   Since
1993,the Company has used revolving lines of credit, private placement borrow-
ings, common  stock, warrant exercises,  and  its Automobile Receivable-Backed
Securitization Program  and the corresponding  Revolving  Notes  and Warehouse
Notes as its primary sources of capital.
  Subsequent to December 31, 1998, significant events have occurred which have
negatively  and  materially  impacted the Company's financing sources (see the 
discussion  in  Subsequent  Events).

     Reference  is  made  to Management's Discussion and Analysis of Financial
Condition and Results of Operation and the Notes to the Consolidated Financial
Statements  for  details  regarding  the  Company's  financing  sources.

OPERATIONS,  COMPETITION  AND  REGULATION
-----------------------------------------

UNDERWRITING  GUIDELINES
------------------------
     The  Company  targets  customers  who do not qualify for traditional bank
financing  primarily  due to their adverse credit history or for other reasons
which  may  indicate  credit  or  economic  risk.

     The  Company  has  developed  underwriting guidelines and standards based
upon  many  factors  including, but not limited to the amount and terms of the
Contract,  the  customer's residence and employment stability, credit history,
ability  to pay, discretionary income and debt ratio. In addition, the Company
uses a proprietary credit scoring system to evaluate the likeliness of default
and,  in  conjunction with the company's risk models, calculates the predicted
loss,  if  any, in the event of default. In reviewing a customer's credit, the
Company  evaluates  (i)  the credit application; (ii) the customer's cash flow
statement of monthly cash receipts and expenses to determine debt ratios; and,
(iii)  credit  bureau  reports  as  well as other information and verifies the
accuracy  of  all  information with respect to the customer as well as the car
being  financed.

RISK  ADJUSTED  YIELDS
----------------------
     The  Company  reports interest income earned on its loan portfolio on the
accrual  basis.    Under this method, interest income represents the estimated
risk  adjusted  yield on the Company's Contracts.  The estimated risk adjusted
yield  for the Company's loan portfolio takes into account: (1) the face value
of  the contracts in the portfolio; (2) the annual percentage rate of interest
on  the  Contracts;  (3) the purchase discounts; (4) the estimated pre-payment
amount  and timing; (5) the estimated frequency or occurrence of defaults; and
(6)  the  estimated  severity  of  losses  resulting from defaults.  Since the
computation of risk adjusted yields uses estimates as well as actual data, the
risk adjusted yields as originally estimated may not equal the actual yield on
the  monthly  pools.  Actual yield on the monthly pools can only be determined
when  the Contract is repaid or defaulted. In the event the Company's estimate
of  risk  adjusted  yield  is  less than actual, the difference is accreted to
income.  Likewise,  in the event the Company's estimate of risk adjusted yield
is  greater  than  actual,  the  difference  is  charged  to  expense.

ANALYSIS  OF  CREDIT  LOSSES
----------------------------
     At  the time Contracts are purchased or originated, the Company estimates
future  losses  of  principal based on the type and terms of the Contract, the
credit  quality  of  the  borrower  and  the  underlying  value of the vehicle
financed.    This estimate of loss is based on the Company's risk model, which
takes  into  account  historical  data  from  similar  contracts originated or
purchased  by the Company since its inception in 1988. However, since the risk
model  uses  past  history  to  predict  the  future,  changes in national and
regional  economic  conditions, borrower mix and other factors could result in
actual  losses  differing  from  initially  predicted  losses.

     The  allowance  for  credit  losses  has  been established utilizing data
obtained  from  the  Company's  risk  models  and  is continually reviewed and
adjusted  in  order to maintain the allowance at a level which, in the opinion
of  management,  provides  adequately  for  current and future losses that may
develop  in  the  present  portfolio.

     The provision for credit losses represents estimated current losses based
on  the  Company's  risk  analysis  and  static  pooling  reserve  analysis of
historical trends and expected future results. The provision for credit losses
also  represents  estimated losses on all Contracts purchased prior to January
1, 1995 with zero discounts ("100% Contracts") and on all Contracts originated
by CarMart which have been, and will continue to be, provided for by additions
to  the  Company's  allowance for credit losses as determined by the Company's
risk  analysis.

     Effective January 1, 1995, upon the acquisition of certain Contracts from
its  Dealer Network, a portion of future interest income, as determined by the
Company's  risk  analysis,  is capitalized into Automobile Receivables (excess
interest  receivable)  and  correspondingly used to increase the allowance for
credit  losses  (unearned  interest  income).    Subsequent receipts of excess
interest  are  applied  to  reduce  excess  interest  receivable.

     Unearned  discounts result from the purchase of Contracts from the Dealer
Network  at less than 100% of the face amount of the note.  All such discounts
are  used  to  increase  the  allowance  for  credit  losses.

SERVICING  AND  MONITORING  OF  CONTRACTS
-----------------------------------------
     The Company has serviced all of the Contracts it purchased or originated.
From  time to time, the Company has acquired loan portfolios under short-term,
third party interim servicing agreements. After December 31, 1998, the Company
intends  to  transfer  loan  servicing  to  an  unrelated third party servicer
acceptable  to  Daiwa  (see  Subsequent  Events).    In  the event the Company
acquires  additional  Contracts it intends to outsource the collection of same
through  third  party  servicers.    At  December  31,  1998,  the  Company's
collections  and  asset  recovery  and  remarketing  department  employed  70
individuals  to  perform  these  functions.  The  collection  department  uses
internally  developed software augmented by vendor provided systems.  In 1996,
the  Company  completed  the  installation of its first predictive dialer, and
installed  an  updated  system  in  1998.    A  predictive dialer enhances the
productivity  of  the  Company's  collection  efforts by making it possible to
contact  more  customers  in  a  shorter  period  of  time.

     Upon  the  funding  of  a  Contract, the accounting department boards the
Contract  on  its  servicing system, which allows the Company to track payment
history  from  inception  to final payoff or other disposition.  The servicing
system  also  automatically  sends  a  payment  coupon  book  to the customer.
Contract  payments,  if  sent  by  mail,  go  directly  to  a lock box and are
forwarded  daily  by  a  third-party  servicer to a bank holding the Company's
accounts.    Where  required, Trust receipts are subsequently forwarded to the
appropriate  Trust account.  As payments are processed, the customer's account
is  automatically  updated.

     A  customer service representative calls each customer, greeting them and
welcoming  them to the Company. The Company begins its collection process when
a  customer  is five days late in making a monthly or bi-weekly payment with a
friendly reminder telephone call and a past due mailing notice.  At this time,
the collector assigned to the account attempts to obtain a promise to pay.  If
successful,  the  collector will follow up to determine if the promise is met.
If  the  customer  reneges on his or her promise, the collector again contacts
the  customer  in  an  effort  to  collect  and, at this time, explains to the
customer his or her obligation under the contract to repay the Company and the
consequences if timely payment is not made.  These consequences include, among
other  things,  repossession  of  the  vehicle financed and a further damaging
credit  history  for the customer.  In certain cases, if the failure to pay is
the result of unforeseen emergencies such as sickness or temporary layoff, the
collector  will  attempt  to  work  out  a  new  payment schedule to bring the
customer  current.

     In  the  event  the  customer  is  not willing or able to meet his or her
obligation  to the Company under the terms of the contract, and an alternative
payment schedule cannot be agreed to, the collector turns the Contract over to
a  collection  supervisor for further action. At this time, the supervisor can
decide  to continue to work with the customer to bring the Contract current or
can  remit  the  Contract  to  the  manager  of the collections department for
repossession.   A decision to repossess generally starts when a Contract is 90
days into delinquency. All Contracts 120 days past due must be must be charged
off  under  Company  policy  as of December 31, 1998.  Generally, repossession
action takes place as a last resort and when no other arrangement can be made.

MARKETING  AND  ADVERTISING
---------------------------
     The  Company  has utilized independent contractors and corresponding sale
and  informational brochures to market its Programs to its Dealer Network.  In
February  1999,  the  Company  discontinued these agreements and is attempting
strategic marketing relationships to generate Contract purchases.  There is no
assurance  that these relationships will be developed or if they are that they
will be profitable to the Company.  Furthermore, the development of additional
Contract  purchases requires a financing source the Company does not presently
have  and  may  not  be  able  to  obtain.    See  Subsequent  Events.

THE  USED  CAR  INDUSTRY  AND  THE  SUBPRIME  FINANCING  MARKET
---------------------------------------------------------------
     The  used  car  industry  in  the United States can be characterized as a
mature and steady market.  Industry estimates place the used-vehicle market in
1996  at  approximately  40  million  units  sold  annually.  Since  1994, the
compounded annual growth rate of total used car sales was approximately 9% and
Management expects that growth to continue, although no such assurances can be
given  for  reasons  including  national and regional economic conditions. The
increase  in  new  car leasing in recent years has flooded the used car market
with  late-model, low-mileage used cars: According to Andersen Consulting, 3.1
million  cars  came  to the used car market in 1997 when their leases expired.
That  trend, coupled with the rising price tags for new cars - typically twice
that of a used car - has made purchasing a quality used car more attractive to
customers.

     The  typical  automobile  finance  company generally classifies borrowers
into four general and subjective credit categories labeled A, B, C, and D. The
subprime  financing  market  is characterized by lower quality credit lenders,
typically,  C  and  D  rated paper.  Generally, C and D rated paper represents
borrowers  who  cannot qualify for financing through traditional sources, such
as  banks,  credit unions or captive finance companies, due primarily to their
adverse  credit  and  employment  history.  Automobile finance companies often
purchase C and D credit paper at a discount to its face value. The discount is
designed  to compensate the lender for the credit risk of these contracts.  In
the  past  several  years,  discount  percentages  have  been declining due to
increased  price  competition.    The subprime market is also characterized by
higher  charge-off  and  delinquency  ratios  than  the "prime" segment of the
automobile  finance  market.

     According  to  the  Federal  Reserve  Board, total outstanding automobile
credit  was  approximately  $416  billion in 1997.  Industry analysts estimate
that  the  subprime automobile financing market comprises approximately 26% of
the automobile finance market. Industry analysts project this market growth to
continue,  with  estimated  annual  origination's  of  approximately  $70-$100
billion.

COMPUTERIZED  INFORMATION  SYSTEM
---------------------------------
     Monaco  Finance  has invested significant time, money and human resources
in  the  enhancement of its information systems.  The business requires Monaco
to timely respond to customer and dealer needs. The Company's network computer
and communication systems have undergone major changes to increase efficiency.
In  early  1996,  the systems were upgraded  with Pentium Servers, running the
latest  release  of Novell Netware.  All front-office  and back-office desktop
computers  have been modified and enhanced to provide greater accessibility to
network  information  via  100-Base-T  intelligent  switching  technology.
Protection  and  security  have  been  built into the infrastructure utilizing
anti-virus  software  and  audit  compliant  password utilities throughout the
entire  network.  These enhancements and upgrades are a part of new technology
being employed at Monaco. The Company also implemented a new predictive dialer
system  in  1998.

     The  "Year  2000" issue affects the Company's installed computer systems,
network  elements,  software applications and other business systems that have
time-sensitive  programs  that  may not properly reflect or recognize the Year
2000.    Because  many computers and computer applications define dates by the
last  two  digits of the year, "00" may not be properly identified as the Year
2000.    This  error  could  result  in  miscalculations  or  system failures.

     The  Company  is  conducting a review of its computer systems to identify
those  areas that could be affected by the "Year 2000" issue and is developing
an  implementation  plan  to  ensure  compliance.    The Company is using both
internal and external sources to identify, correct and reprogram, and test its
systems  for  Year  2000 compliance. Because third party failures could have a
material  impact  on  the Company's ability to conduct business, confirmations
are  being requested from our processing vendors and suppliers to certify that
plans  are  being  developed  to  address  the  Year  2000  issue. The Company
presently believes that, with modification to existing software and investment
in  new  software, the Year 2000 problem will not pose significant operational
concerns  nor  have  a material impact on the financial position or results of
operation  in  any  given  year.        For  recent developments regarding the
Company's  business and financial position,  see  Subsequent  Events.

FUTURE  EXPANSION  AND  STRATEGY
--------------------------------
     Given  the  recent  changes  in  the  Company's  financing  sources  (see
Subsequent  Events),  the  Company  will  be  seeking  to obtain new financing
sources.    In  the  event  the  Company obtains new financing sources it will
attempt  to implement a business strategy based upon joint ventures with third
parties.    This  strategy will include purchasing Contracts having (i) higher
discounts  to  face  (ii)  shorter terms and (iii) lower amounts financed.  No
assurance  can be nor is given that new and adequate sources of financing will
be  obtained.  Furthermore, no assurance can be nor is given that the business
strategy  will  be  implemented,  and  if  implemented  will  be  successful.

     During  1998,  the  Company  acquired  contracts  from  approximately 358
dealers in 48 states, the majority of which were purchased in four states.  In
order  to reduce operating expenses by the end of 1998 the Company reduced its
marketing  representatives  from  16  to  2.

     PORTFOLIO  ACQUISITIONS:  In  January  1998,  the  Company  completed the
acquisition of $81 million in auto loans from affiliates of Pacific USA and in
February  1998  the  Company  acquired approximately $14 million of auto loans
from  an  independent  third  party.

     FUNDING  AND  FINANCING  STRATEGIES:  From  inception  through  1991, the
Company financed the acquisition of Contracts through loans from its principal
stockholders  and  banks.  In October 1991, the Company expanded its financing
sources  by  completing  its  first  asset-backed  automobile  receivables
securitization.  In 1992, the Company entered into a secured revolving line of
credit with Citicorp Leasing Inc. ("Citicorp") to finance Contracts.  In 1994,
the Company securitized $34.1 million of its Contracts and in 1995 it obtained
a  $150 million revolving secured warehouse line and securitized $43.1 million
in  Contracts. In 1997, the Company securitized $51.4 million of its Contracts
and  entered into a $75 million Warehouse Line of Credit.  In 1998 the Company
entered  into  a  $73.9  Portfolio Purchase Credit Facility.  In addition, the
Company  received capital of $5,300,000 as well as secured loans of $1,900,000
from Pacific USA Holdings Corp.  The Company also received a secured loan from
Pacific  Southwest  Bank  for $.95 million.   Since 1993, the Company has used
revolving lines of credit, private placement borrowings, common stock, warrant
exercises, and its Automobile Receivable-Backed Securitization Program and the
corresponding  Revolving  Notes  and Warehouse Notes as its primary sources of
capital.    Subsequent  to December 31, 1998, significant events have occurred
which  have negatively and materially impacted the Company's financing sources
(see  the  discussion  in  "Subsequent  Events").

     RISK  EVALUATION  AND UNDERWRITING: As discussed in more detail elsewhere
herein,  the  Company  has  developed  proprietary  credit  scoring  and  risk
evaluation  systems  which predicts the frequency of default and the resultant
predicted  loss after repossession and sale of financed vehicles.  This system
assists  the  Company's  credit buyers and underwriters in pricing loans to be
acquired.    Credit  buyers  can negotiate interest rates, loan term, purchase
discount and fees and terms of the deal, including such items as down payment,
in  order to achieve a desired risk adjusted rate of return for each Contract.

     CENTRALIZED  OPERATING  STRUCTURE: Management believes the centralization
of  all  operations  in  one  location results in a consistent, cost effective
means  of  operating  a  sub-prime  automobile  loan  business.

     COLLECTIONS MANAGEMENT: Management believes that collections and recovery
are vital to the successful operation of the Company. The Company has invested
substantial  amounts  of  time, money and resources in developing an efficient
collections  department. The results of the Company's efforts are evidenced by
its  percentage of delinquent contracts, which at February 28, 1999, was 8.81%
over  30  days past due. This percentage consisted of 6.36% 30 to 59 days past
due,  1.65%  60  to  89  days past due and 0.8% over 90 days past due.  Due to
recent  events, subsequent to December 31, 1998 the Company intends to utilize
a  third party servicer to service the Contracts (see discussion in Subsequent
Events).

     CONTROLLING  INTEREST:  As a result of the Asset Purchase Agreement dated
January  8,  1998,  Pacific  USA  Holdings Corp. ("Pacific USA") increased its
voting  power in the Company to 65.3%.  Pacific USA is the beneficial owner of
59.0% of the Company's outstanding voting stock. Pacific USA is a diverse U.S.
holding company whose businesses include technology, real estate, and consumer
finance.



COMPETITION
-----------
     In  connection  with  its  business  of  financing vehicle purchases, the
Company  competes  with  entities,  many  which may have significantly greater
financial resources and management experience than the Company.  The Company's
target  market  consists  of  persons  who  are  generally  unable  to  obtain
traditional  vehicle  financing  because  of their prior credit history.  Many
financial  institutions,  finance companies and lenders have entered into this
market.    The Company regularly monitors their lending programs and marketing
efforts.   The Company has maintained its growth by implementing and marketing
Programs  and  providing  prompt  service  to  the  Dealer  Network.  Although
competition  has  been  decreasing, if others do enter the market, competition
for  the  Company's  target  customer  could increase, adversely affecting the
Company's  business.

REGULATION
----------
     The  Company's  operations  are  subject  to  regulation, supervision and
licensing  under various federal, state and local statutes and ordinances.  To
date, the Company has conducted business in the States of Arizona, California,
Colorado,  Connecticut,  Delaware,  Florida,  Georgia,  Iowa, Idaho, Illinois,
Indiana,  Kansas,  Maryland,  Michigan,  Mississippi,  Missouri,  Nevada,  New
Jersey,  New  Mexico,  North Carolina, Nebraska, Ohio, Oklahoma, Pennsylvania,
South  Carolina,  South Dakota, Tennessee, Texas, Virginia and Washington and,
accordingly,  the  laws  of  those states, as well as applicable federal laws,
govern  the  Company's  operations.    Compliance  with  existing  laws  and
regulations applicable to the Company has not had a material adverse effect on
the  Company's operations.  Management believes that the Company maintains all
requisite  licenses  and  permits  and  is  in substantial compliance with all
applicable  local,  state  and  federal  regulations.

EMPLOYEES  AND  FACILITIES
--------------------------
     At  December  31,  1998,  the Company employed 124 persons on a full time
basis.     There were 3 executive officers, 15 in credit, 53 in collections, 8
in  asset  recovery, 9 in remarketing, 6 in Loss Control, 11 in accounting and
human resources, 2 in marketing, 7 in MIS-computer department, 4 in risk and 6
in  administrative  functions.

     After  December  31, 1998, the  Company, at the mandate of Daiwa, intends
to transfer loan servicing to  an unrelated third  party  servicer  acceptable
to Daiwa (see Subsequent Events). As a result, approximately 50 employees will
be eliminated from the Company's  operations.

     In April 1994, the Company amended and restated its lease of office space
for  its  executive  offices  located  at 370 17th Street, Suite 5060, Denver,
Colorado  80202, where it maintains approximately 24,716 square feet of space.
The  Company currently pays $47,022 per month under a lease ending October 31,
1999,  with  adjustments  for  monthly  payments  on  a  periodic  basis.

     Effective December 1, 1996, the Company entered into a sublease agreement
for  6,571 square feet of office space located at 370 17th Street, Suite 4960,
Denver,  Colorado,  80202.  The  Company pays $2,742 per month, plus occupancy
costs,  under a sublease endingOctober 31, 1999. Currently the office space is
not  being  used  and  attempts  are  being  made  to  sublease  the  space.

     On  March  31,  1994,  the  Company's  lease  at  1319 S. Havana, Aurora,
Colorado  80010  was  terminated  and  the  operations  of  the retail CarMart
Dealership  at  that  location  were  transferred  to  890  S. Havana, Aurora,
Colorado  80010.    This  property is owned by a corporation, certain of whose
shareholders  are  officers  of  the  Company.    The  Company  entered into a
seven-year  lease  commencing  March  24,  1994 and ending March 23, 2001.  In
September  1995,  the  Company  amended  the  lease  to  include an additional
property  at  894  S.  Havana, Aurora, Colorado 80010.  The Company was paying
$15,238 per month on a triple net basis.  The lease called for periodic rental
adjustments  over  its term.  It is the Company's belief that the terms of the
related  party  lease  were  generally  no less favorable than could have been
obtained  from  unrelated  third party lessors for properties of similar size,
condition and location. Effective November 1998, the Company was released from
this  lease.

     Through  January  31,  1996,  the  Company  operated  a  retail  CarMart
Dealership located at 1005 Motor City Drive, Colorado Springs, Colorado 80906.
The  dealership  began  full operation on April 30, 1991.  The Company entered
into  a twelve-month lease (commencing April 30, 1991 and ending May 1, 1992).
Rent  was  $1,200  per month.  The Company extended the lease on this property
until  May  31,  1998  with  monthly  rent  of  $1,800  on a triple net basis.
Effective March 15, 1996, the Company entered into a sublease agreement on the
property  for  the  entire  lease term at an amount approximately equal to the
Company's obligation.  On May 31, 1998 this lease expired and was not renewed.

     The  Company  also  had  a  used  car  retail  lot  located at 4940 South
Broadway,  Englewood,  Colorado 80110 and began full operation on May 1, 1994.
The  Company  entered  a lease, commencing March 22, 1994 and ending March 31,
1997.  In  January  1997,  the  Company  extended  the lease for an additional
three-year period through March 2000. The Company may, at its sole discretion,
extend  the  lease  for  an  additional  3-year period through March 2003.  On
January  15,  1996, the Company closed this retail lot.  The Company currently
pays  $10,450  per  month.  The  lease calls for periodic adjustments over the
term.  Effective March 15, 1996, the Company entered into a sublease agreement
on  the property for the entire lease term at an amount approximately equal to
the  Company's  obligation.

ITEM  2.    DESCRIPTION  OF  PROPERTY.
--------------------------------------
     The  Company  does  not  own  any  real property.  The Company leases its
office  facilities and its closed Company Dealerships as described in Item 1.,
"Description  of  Business  -  Employees  and  Facilities,"  above.

ITEM  3.    LEGAL  PROCEEDINGS.
-------------------------------
     Although not subject to any material litigation at this time, the Company
and  its  Subsidiaries  at  times are subject to various legal proceedings and
claims  that  arise  in  the  ordinary  course  of business. In the opinion of
management  of the Company, based in part on the advice of counsel, the amount
of  any  ultimate  liability with respect to these actions will not materially
affect  the  results  of  operations,  cash flows or financial position of the
Company. It is the Company's and its Subsidiaries' policy to vigorously defend
litigation,  however,  the  Company  and its Subsidiaries have, and may in the
future,  enter  into settlements of claims where management deems appropriate.


ITEM  4.    SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS.
------------------------------------------------------------------------

On  November  12,  1998,  a special meeting of shareholders of the Company was
held  for  the  following  purposes:

     1.     To consider and approve a proposal to amend the Company's Articles
of  Incorporation  with  respect  to  its  8% Cumulative Convertible Preferred
Stock-  Series  1998-1  (the  "Preferred  Stock") to (i) change the Conversion
Ratio  of  the Preferred Stock from one share of Class A Common Stock for each
two  shares  of  Preferred  Stock that are converted to four shares of Class A
Common  Stock  for  each two shares of Preferred Stock that are converted, and
(ii)  to provide that the market price of the Class A Common Stock that causes
automatic  conversion  of  the  Preferred  Stock into shares of Class A Common
Stock  shall be proportionately adjusted in the event of any issuance of Class
A  Common  Stock  as  a  dividend  or  other distribution or in the event of a
subdivision  or combination of the outstanding shares of Class A Common Stock.

     2.          To consider and approve a proposal to authorize the Company's
Board  of  Directors  to  effect,  in  its  discretion, a reverse split of the
outstanding  shares  of  the Company's Class A Common Stock and Class B Common
Stock  on  the  basis  of one share for each five shares then outstanding (the
"Reverse  Stock  Split").

The  aforementioned  proposals  were  passed  with  the  following  votes,
respectively:

<TABLE>

<CAPTION>



<S>  <C>              <C>                  <C>               <C>

1.  14,622,056 FOR;  3,049,576 WITHHELD;  853,158 AGAINST;  and 104,164 ABSTAIN.
2.  15,438,381 FOR;          0 WITHHELD;  771,334 AGAINST;  and 71,652 ABSTAIN.
<FN>

</TABLE>



     The  one  for five reverse stock split was effected on November 19, 1998.

ITEM  5.    MARKET  FOR  COMMON  EQUITY  AND  RELATED  STOCKHOLDER  MATTERS.
---------------------------------------------------------------------------

     The  Common  Stock  is  traded  in  the  over-the-counter  market  and is
currently  quoted  on  the Electronic Bulletin Board under the symbol "MONFA."
The  Common  Stock  was  quoted on the Nasdaq SmallCap Market under the symbol
"MONFA"  until  it  was  delisted  effective November, 1998.  For the past two
fiscal  years,  the  high  and  low closing bid prices of the Common Stock, as
adjusted  for  the  reverse  stock  split,  were  as  follows:


                                     <PAGE>

CLASS  A  COMMON  STOCK

<TABLE>

<CAPTION>



<S>                      <C>       <C>

                         Low Bid   High Bid
Quarter Ending 03/31/97  $  8.750  $  12.500
Quarter Ending 06/30/97     5.625     10.315
Quarter Ending 09/30/97     3.125      6.250
Quarter Ending 12/31/97     3.440       9.69

Quarter Ending 03/31/98  $  2.190  $   4.375
Quarter Ending 06/30/98     2.500      4.375
Quarter Ending 09/30/98     0.780      2.815
Quarter Ending 12/31/98     0.125      2.030

<FN>

</TABLE>


     The  over-the-counter  quotations  set  forth herein reflect inter-dealer
prices,  without retail mark-up, mark-down or commission and may not represent
actual  transactions.

     As  of  March 1, 1999, there were approximately 300 record holders of the
Company's  Class  A  Common  Stock  and  3 record holders of Company's Class B
Common  Stock.

     The  Board  of  Directors currently intends to retain earnings to finance
the  Company's  operations.  The  Company has never paid cash dividends on its
Common  Stock  and  does  not  anticipate  a  change  in  this  policy  in the
foreseeable  future.   Certain of the Company's loan agreements and the 1999-1
Preferred Stock discussed below contain covenants that restrict the payment of
cash  dividends.

     During  the  fiscal year ended December 31, 1998, the Company sold equity
securities  that  were  not  registered  under  the Securities Act of 1933, as
amended  (the  "Securities  Act")  as  follows:

     In  connection  with  an automobile loan portfolio purchase in January of
1998  the  Company  issued  2,433,457  shares  of  the Company's 8% Cumulative
Convertible  Preferred  Stock,  Series  1998-1 (the "1998-1 Preferred Stock").
Due  to a repurchase by the seller of a portion of those loans in 1998, 85,870
shares  of  the  1998-1 Preferred Stock were surrendered to the Company.  Each
2.5  shares  of  the 1998-1 Preferred Stock is convertible into 1 share of the
Company's  Class  A Common Stock, or an aggregate of up to 1,021,824 shares of
Class A Common Stock.  Each share of the 1998-1 Preferred Stock has a value of
$2.00  for  a  total  liquidation  preference  of  $4,695,174.

     On  November  30,  1998, Pacific USA converted $536,750 of unsecured debt
and $300,000 of secured debt into 418,375 shares of 8% Cumulative Subordinated
Preferred  Stock,  Series 1999-1 (the "1999-1 Preferred Stock") of the Company
valued  at  $2.00 per share.  The 1999-1 Preferred Stock is subordinate to the
1998-1  Preferred  Stock  with respect to payment of dividends, redemption and
upon any liquidation of the Company.  The 1999-1 Preferred Stock has no voting
rights  other than as provided in the articles of incorporation or as required
by law.  The Company has the right to redeem the 1999-1 Preferred Stock at any
time  and  from  time  to time, in whole or in part, for cash in the amount of
$2.00  per  share  plus  accrued  but  unpaid  dividends.  However, the 1999-1
Preferred Stock  cannot be redeemed as  long as any  1998-1 Preferred Stock is
issued  and  outstanding.  Dividends  on the 1999-1 Preferred Stock are at the
annual  rate  of  8%  ($.16  per  share) payable quarterly in shares of 1999-1
Preferred  Stock. No dividends other than those payable solely in common stock
can be paid with respect to the common stock unless all accumulated and unpaid
dividends  on the  1999-1 Preferred Stock have been declared and paid in full.
The total liquidation preference for the 1999-1 Preferred Stock is $836,750.



                                     <PAGE>

ITEM  6.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL CONDITION AND
------------------------------------------------------------------------------
RESULTS  OF  OPERATION
----------------------

FORWARD-LOOKING  STATEMENTS
---------------------------
     This  Annual  Report  on form 10-KSB contains forward-looking statements.
Statements  that  are  not  historical  facts,  including  statements  about
management's  expectations  for  fiscal  1999  and beyond, are forward-looking
statements.  Without  limiting  the  foregoing, the words "believe," "expect,"
"anticipate,"  "intends,"  "forecast,"  "project"  and  similar  expressions
generally  identify  forward-looking  statements.  Additional  written or oral
forward-looking  statements  may  be  made by the Company from time to time in
filings  with  the  Securities  and  Exchange  Commission  or  otherwise. Such
forward-looking  statements are within the meaning of that term in Section 27A
of  the  Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange  Act  of  1934,  as amended. Such statements may include, but are not
limited  to,  projections  of  revenues,  income,  or  loss,  adequacy  of the
allowance  for  credit losses, availability of Contracts meeting the Company's
desired  risk  parameters,  capital expenditures, plans for future operations,
financing  needs, plans or availability, objectives relating to the Automobile
Receivables  and  the  related  allowance  and  plans  relating to products or
services  of  the  Company,  as well as assumptions relating to the foregoing.

     Forward-looking  statements  are  inherently  subject  to  risks  and
uncertainties,  some of which cannot be predicted or quantified. Future events
and  actual  results  could  differ  materially  from  those  set  forth  in,
contemplated by, or  underlying the forward-looking statements.  Statements in
this  Annual  Report, including the Notes to Consolidated Financial Statements
and  "Management's  Discussion and Analysis of Financial Condition and Results
of  Operations,"  describe  factors, among others, that could contribute to or
cause  such differences. Additional factors that could cause actual results to
differ  materially from those expressed in such forward-looking statements are
set  forth  in  Exhibit  99 to this Annual Report on Form 10-KSB. Such factors
include,  but  are  not  limited  to, the Company's dependence upon additional
capital  to  expand  operations,  its  reliance  on debt financing, its recent
losses  and  the  effect  of the discontinuance of the CarMart operations, its
reliance  on securitizations, its cost of capital and associated interest rate
risks,  the  risks  of  lending  to higher-risk borrowers, the risk of adverse
economic  changes,  the  risk  associated  with  delayed  repossessions,  the
potential  inadequacy  of  its  loan  loss  reserves, the risk associated with
extensive  regulation, supervision and licensing, the possibility of uninsured
losses,  the  risk  associated with substantial competition, its dependence on
key  personnel,  insurance risks, "Year 2000" risks, the effect of outstanding
options  and  warrants,  the fact that the Company has, to date, not paid cash
dividends on its Common Stock, the risk associated with not meeting the NASDAQ
maintenance  requirements  and  the  risk  associated  with  one  controlling
shareholder.

SUMMARY
-------
     The  Company's  revenues  and (loss) from continuing operations primarily
are  derived  from  the  Company's  loan  portfolio  consisting  of  Contracts
purchased  from  the  Dealer  Network,  Contracts  purchased  from third-party
originators,  Contracts  financed  from  vehicle  sales  at  the  Company's
Dealerships  and  Contracts  purchased  through  portfolio  acquisitions.

     The  average  discount  on all Contracts purchased pursuant to discounted
Finance  Programs during the fiscal years ended December 31, 1998 and 1997 was
approximately 7.3% and 5.5%, respectively. The Company has serviced all of the
loans  that  it owns. However, from time to time, the Company may acquire loan
portfolios  under  short-term, third party interim servicing agreements. After
December  31, 1998, the Company, at the mandate of Daiwa, intends to  transfer
loan servicing to an unrelated third  party  servicer acceptable to Daiwa (see
Subsequent Events).The loan  portfolio at December 31, 1998 carries a contract
annual  percentage  rate of  interest that  averages approximately 21%, before
discounts,  and  has an  original weighted  average  term of  approximately 51
months. The average amount financed per  Contract  for  the  years  ended Dec-
ember 31, 1998 and 1997 was approximately  $9,652  and  $10,432, respectively.

RESULTS  OF  OPERATION
----------------------
<TABLE>

<CAPTION>

OVERVIEW
--------
     INCOME  STATEMENT  DATA
     -----------------------
                                                      Years  ended  December  31,
                                                      ---------------------------


<S>                                                         <C>          <C>

 (dollars in thousands, except share amounts). . . . . . .        1998         1997 
Total revenues . . . . . . . . . . . . . . . . . . . . . .  $   20,830   $   12,639 
Total costs and expenses . . . . . . . . . . . . . . . . .  $   30,003   $   21,994 
Net (loss) before income taxes . . . . . . . . . . . . . .     ($9,173)     ($9,355)
Income tax expense . . . . . . . . . . . . . . . . . . . .  $    1,542            - 
Net (loss) . . . . . . . . . . . . . . . . . . . . . . . .    ($10,715)     ($9,355)
Preferred stock dividends. . . . . . . . . . . . . . . . .  $      374            - 
Net (loss) . . . . . . . . . . . . . . . . . . . . . . . .    ($11,089)     ($9,355)
Net (loss) per common share - basic and assuming dilution.      ($5.04)      ($5.91)
Weighted average number of common shares outstanding . . .   2,199,035    1,582,546 
<FN>

</TABLE>




<TABLE>

<CAPTION>

                                          INCOME  STATEMENT  DATA
                                  AS  A  %  OF  OUTSTANDING  LOAN  PORTFOLIO
                                        YEARS  ENDED  DECEMBER  31,
                                        ----------------------------
<S>                                               <C>            <C>

 . . . . . . . . . . . . . . . . . . . . . . . .          1998          1997 
Average Interest Bearing Loan Portfolio Balance.  $132,917,638   $76,924,302 
Interest Income. . . . . . . . . . . . . . . . .          15.5%         16.1%
Interest Expense . . . . . . . . . . . . . . . .           8.4%          7.4%
 . . . . . . . . . . . . . . . . . . . . . . . .           7.1%          8.7%
Operating Expenses . . . . . . . . . . . . . . .          12.1%         16.2%
Provision for Credit Losses. . . . . . . . . . .           2.0%          5.0%
Other Income . . . . . . . . . . . . . . . . . .         (0.2%)        (0.3%)
 . . . . . . . . . . . . . . . . . . . . . . . .          13.9%         20.9%
Net (loss) before income taxes . . . . . . . . .         (6.8%)       (12.2%)
Income tax expense . . . . . . . . . . . . . . .           1.2%            - 
Net (loss) . . . . . . . . . . . . . . . . . . .         (8.0%)       (12.2%)
Preferred stock dividends. . . . . . . . . . . .            .3%            - 
Net (loss) available to common stockholders. . .         (8.3%)       (12.2%)
<FN>

</TABLE>





<TABLE>

<CAPTION>

     BALANCE  SHEET  DATA
                                  December  31,
                                  -------------
<S>                          <C>         <C>

 (dollars in thousands) . .       1998        1997 
Total assets. . . . . . . .  $ 119,879   $  90,598 
Total liabilities . . . . .  $ 110,713   $  82,076 
Retained earnings (deficit)   ($27,577)   ($16,489)
Stockholders' equity. . . .  $   9,166   $   8,522 

<FN>

</TABLE>




CONTINUING  OPERATIONS
----------------------
<TABLE>

<CAPTION>


     SELECTED  OPERATING  DATA
                                              Years  ended  December  31,
                                              ---------------------------
<S>                                                     <C>       <C>

(dollars in thousands, except where noted) . . . . . .     1998      1997 
Interest income. . . . . . . . . . . . . . . . . . . .  $20,617   $12,394 
Other income . . . . . . . . . . . . . . . . . . . . .  $   213   $   245 
Provision for credit losses. . . . . . . . . . . . . .  $ 2,682   $ 3,874 
Operating expenses . . . . . . . . . . . . . . . . . .  $16,096   $12,446 
Interest expense . . . . . . . . . . . . . . . . . . .  $11,225   $ 5,674 
Operating expenses as a % of average receivables . . .       12%       16%
Contracts from Dealer Network and Portfolio Purchases.   11,189     3,189 
Average amount financed (dollars). . . . . . . . . . .  $ 9,652   $10,432 
<FN>

</TABLE>



REVENUES
--------
     Total  revenues  for  the  year  ended  December 31, 1998, increased $8.2
million  when compared to 1997 primarily due to an increase of $8.2 million in
interest  income.    The  rate  of  interest  income earned for the year ended
December  31,  1998  was  15.5% based on an average interest bearing portfolio
balance  of  $132,917,638  as  compared to a rate of interest income earned of
16.1%  based  on  an average interest bearing portfolio balance of $76,924,302
for  the  year  ended  December  31,  1997.    The decrease in effective yield
reported by the Company for the year ended December 31, 1998, when compared to
1997, was due primarily to changes in the Company's ability to more accurately
estimate  risk  adjusted yields as a result of the Company's implementation of
its  credit  scoring  system in late 1996. Acquisition of Contracts with lower
interest  rates  and  discounts  due to increased competition in the sub-prime
automobile  finance  industry and the Company's strategy to acquire loans with
perceived  higher  credit quality also adversely affected risk adjusted yields
in  1998.

     The lower reported interest rate of 15.5% in 1998 and 16.1% in 1997, when
compared  to  the  contract annual percentage rate of interest ( approximately
21%  at  December  31,  1998  and  23% at December 31, 1997), results from the
Company's  use of the excess interest method of accounting.  Under this method
the Company uses part of its interest income as well as contract discounts and
a  provision for credit losses to establish its allowance for credit losses on
its  portfolio  over  their  entire  life.

     During  1998,  the  Company's  net  Automobile Receivables increased from
$74.2  million  at  December  31, 1997 to $107.2 million at December 31, 1998.
During  1998,  the  Company  originated/purchased 11,508 loans totaling $111.1
million  with  an  average  amount  financed  of  $9,652  as  compared to loan
originations  of  3,189 totaling $33.3 million with an average amount financed
of $10,432 for 1997.  The average discount on all Contracts purchased was 7.3%
and  5.5%  for  the  years  ended  December  31,  1998 and 1997, respectively.

     The  increase  in  the  number  and  dollar  value  of  loan
originations/purchases  during  1998,  as  compared  to  1997,  was  primarily
attributable  to  the significant portfolio acquisitions done in 1998, as well
as  a  change  in the Company's business philosophy in the latter part of 1997
and  for  1998.    This  change  resulted  from  completion  of  the Company's
proprietary credit scoring system, the closing of its CarMart retail sales and
financing  operations  and the cessation of its deep discount loan acquisition
programs.    All  of these measures were in accordance with the Company's loan
acquisition strategy to acquire loans that the Company believes have increased
credit  quality.

     At  December  31, 1998, only $.3 million of the Company's Auto Receivable
Loan  Portfolio  was  generated  from  the  discontinued CarMart operations as
compared  to  $1.4  million  of  its  portfolio  at  December  31,  1997.

COSTS  AND  EXPENSES
--------------------
     The  provision for credit losses decreased $1.2 million from $3.9 million
in  1997  to  $2.7  million  in  the comparable 1998 period. The provision for
credit  losses represents estimated current losses based on the Company's risk
analysis of historical trends and expected future results. The decrease in the
provisions  for  credit  losses  primarily  was due to the recording of a $3.6
million  provision  in  the  fourth  quarter  of 1997 related to the Company's
static  pooling  reserve analysis.  Net charge-offs as a percentage of Average
Net  Automobile  Receivables  increased  from  16.8% in 1997 to 22.5% in 1998.
Although  the  Company  believes  that  its  allowance  for  credit  losses is
sufficient  for  the  life  of  its  current portfolio, a provision for credit
losses  may  be charged to future earnings in an amount sufficient to maintain
the  allowance.  The  Company had 3.3% of its loan portfolio over 60 days past
due  at  December  31,  1998  compared  with  1.6%  at  December  31,  1997.

     The Company believes that the increase in net charge-offs as a percentage
of Average Net Automobile Receivables is due to the portfolio mix. The Company
acquired  a  large  portfolio  in  January 1998 that had predicted losses of a
higher  rate  than  the 1997 portfolio.  These losses were adequately reserved
for  at  the  time  the  portfolio  was  purchased.

     Effective  October  1,  1996,  the  Company adopted a new methodology for
reserving  for  and  analyzing  its  loan  losses.  This  accounting method is
commonly referred to as static pooling. The static pooling reserve methodology
allows  the  Company to stratify its Automobile Receivables portfolio, and the
related  components of its Allowance for Credit Losses (i.e. discounts, excess
interest, charge offs and recoveries) into separate and identifiable quarterly
pools.  These  quarterly  pools,  along  with the Company's estimate of future
principal  losses  and  recoveries,  are  analyzed  quarterly to determine the
adequacy of the Allowance for Credit Losses. The method previously used by the
Company  to  analyze  the  Allowance  for Credit Losses was based on the total
Automobile  Receivables  portfolio.

     As  part  of  its  adoption  of  the static pooling reserve method, where
necessary,  the  Company  adjusted  its  quarterly  pool allowances to a level
necessary  to cover all anticipated future losses (i.e. life of loan) for each
related  quarterly  pool  of  loans.

     Under  static pooling, excess interest and discounts are used to increase
the  Allowance  for  Credit Losses and represent the Company's primary reserve
for  future  losses  on its portfolio. To the extent that any quarterly pool's
excess  interest  and  discount  reserves  are  insufficient  to absorb future
estimated  losses,  net  of  recoveries,  adjusted  for  the impact of current
delinquencies,  collection  efforts,  and  other economic indicators including
analysis  of  the Company's historical data, the Company will provide for such
deficiency  through  a  charge  to  the  Provision  for  Credit Losses and the
establishment of an additional Allowance for Credit Losses. To the extent that
any  excess  interest and discount reserves are determined to be sufficient to
absorb  future  estimated  losses,  net  of recoveries, the difference will be
accreted  into interest income on an effective yield method over the estimated
remaining  life  of  the  related  quarterly  static  pool.

     Operating  expenses increased $3.65 million, or 29.3%, from $12.4 million
in  1997  to  $16.1  million  in  1998.  This increase primarily was due to an
increase  of $1,596,233 in consulting and professional fees and an increase in
salaries  and  benefits of $1,047,757. The major components of the increase in
operating  expenses  are  as  follows:

<TABLE>

<CAPTION>

                                             YEARS  ENDED  DECEMBER  31,

<S>                                <C>       <C>       <C>

(dollars in thousands)                1998      1997   INCREASE (DECR.)
Salaries and benefits . . . . . .  $ 6,398   $ 5,350   $          1,048 
Depreciation and amortization . .    2,353     1,983                370 
Consulting and professional fees.    4,187     2,591              1,596 
Telephone . . . . . . . . . . . .      559       508                 51 
Travel and entertainment. . . . .      291       223                 68 
Loan origination fees . . . . . .     (300)     (286)               (14)
Rent/Office/Postage . . . . . . .    1,148     1,114                 34 
All other . . . . . . . . . . . .    1,460       963                497 
=================================  ========  ========  =================
 . . . . . . . . . . . . . . . . .  $16,096   $12,446   $          3,650 
<FN>

</TABLE>



     Interest  expense  increased $5.5 million, or 97.8%, from $5.7 million in
1997 to $11.2 million in 1998.  This increase primarily was due to an increase
in  borrowings  in  1998 used to finance the Company's portfolio acquisitions.
An  increase in interest rates in 1998 as a result of a paydown in 1997 of the
Company's  automobile receivables-backed notes at interest rates between 6.45%
and 7.6% and borrowings on the warehouse line of credit with Daiwa at interest
rates  of  2.5%  over  LIBOR  on  85%  of  the  amount advanced and 12% on the
remaining 15% of the amount advanced and borrowings on the Company's Portfolio
Purchase  Credit  Facility  with  Daiwa at an interest rate of 1.0% over LIBOR
(increasing  to  3.5%  over LIBOR on 85% of the amount advanced and 15% on the
remaining  15% of the amount advanced effective July 1, 1998) also contributed
to  the  increase.    From  December  31,  1997 through December 31, 1998, net
increases  (decreases)  in  the  Company's  debt  were  as  follows:

<TABLE>

<CAPTION>

 (dollars  in  thousands)
<S>                                      <C>

Notes payable - LaSalle . . . . . . . .   ($6,326)
Warehouse note payable - Daiwa. . . . .    13,581 
Portfolio purchase note payable - Daiwa    39,298 
Promissory  note payable. . . . . . . .     1,714 
Convertible subordinated debt . . . . .    (1,385)
Senior subordinated debt. . . . . . . .    (2,333)
Convertible senior subordinated debt. .      (945)
Automobile receivables-backed notes . .   (15,207)
     Total. . . . . . . . . . . . . . .  $ 28,397 

<FN>

</TABLE>



     The  average  annualized interest rate on the Company's debt was 8.1% for
1998  versus  7.4%  for  1997.   This increase was primarily due to additional
borrowings  on the Company's lines of credit at higher interest rates than the
Company's  automobile  receivables-backed notes that were redeemed or paid off
in  1997.

     The  annualized  net  interest  margin  percentage,  representing  the
difference  between  interest  income  and interest expense divided by average
finance  receivables,  decreased  from  8.7%  in  1997  to  7.1% in 1998. This
decrease  was  due primarily to the amortization of excess interest receivable
as  described  in Note 2 of the Notes to Consolidated Financial Statements and
an  increase  in  the  average annualized interest rate on the Company's debt.


NET  INCOME  (LOSS)
-------------------
     Net  loss  increased  $1.7 million from $(9.4) million in 1997 to $(11.1)
million  in  1998.  This  increase  in loss was primarily due to the following
changes  on  the  Consolidated  Statements  of  Operations:

<TABLE>

<CAPTION>

 (INCREASE) DECREASE TO NET (LOSS)

                         YEARS  ENDED
                         DECEMBER  31
<S>                            <C>

(in millions of dollars)
Interest  and other income. .  $ 8.2 
Provision for credit losses .    1.2 
Operating expenses. . . . . .   (3.6)
Interest expense. . . . . . .   (5.6)
Income tax expense. . . . . .   (1.5)
Preferred stock dividends . .   (0.4)
 Net (increase) to net (loss)  $(1.7)

<FN>

</TABLE>





LIQUIDITY  AND  CAPITAL  RESOURCES
----------------------------------
     The Company's cash flows for the years ended 1998 and 1997 are summarized
as  follows:
<TABLE>

<CAPTION>

     CASH  FLOW  DATA
                                       YEARS  ENDED  DECEMBER  31,
<S>                                            <C>        <C>

(dollars in thousands). . . . . . . . . . . .      1998      1997 
Cash flows provided by (used in):
Operating activities. . . . . . . . . . . . .  $ 10,329   $ 1,055 
Investing activities. . . . . . . . . . . . .   (46,338)     (309)
Financing activities. . . . . . . . . . . . .    35,767    (1,216)
Net (decrease)  in cash and cash equivalents.  $   (242)  $  (470)
<FN>

</TABLE>



     The  Company's  business has been and will continue to be cash intensive.
The  Company's  principal  need  for  capital is to fund cash payments made to
Dealers  and  to  third-party  originators  in  connection  with  purchases of
installment  contracts  and  the  purchase of existing loan portfolios. In the
past,  these  purchases  have  been  financed  through  the Company's capital,
warehouse  lines of credit, securitizations and cash flows from operations. In
1998 the Company did not complete any securitizations due primarily to adverse
market conditions during the fourth quarter of 1998.  Furthermore, the Company
does  not  anticipate  any  securitizations  in  1999.

     In  order  for  the  Company  to  continue  the  purchase  of installment
contracts  it  will  be  necessary  to  obtain a line of credit or alternative
financing. The Company does not presently have and may not be able to obtain a
line  of  credit or other such financing (see Subsequent Events).  The failure
to  obtain  financing  will  have  a  material adverse effect on the Company's
business,  financial  condition,  results  of  operations  and  ability to pay
operating  expenses.  Subsequent to December 31, 1998, the Company was advised
by Pacific that it can no longer be relied upon to provide capital or loans to
fund  the  Company's working capital needs.  Although Pacific has continued to
provide  certain  additional secured loans to the Company, no assurance can be
given  that such funding will continue.  At the present time, the Company does
not  generate sufficient cash flow from its operations to pay for its overhead
and  other  expenses.

     The  Company  on  November  1, 1996, obtained a $3 million term loan from
Pacific  USA Holdings Corp., which was converted to 300,000 shares of  Class A
Common  Stock  as  of  April 25, 1997, as described in Note 4 to the Company's
Consolidated  Financial  Statements.

     The  Agreements  underlying  the  terms  of  the  Company's  Automobile
Receivable  -  Backed  Securitization  Program ("Securitization Program"), the
Portfolio Purchase Line of Credit, and the Warehouse Line of Credit with Daiwa
Finance  Corp.,  described  below,  contain  certain  covenants  which, if not
complied  with,  could  materially restrict the Company's liquidity. Under the
terms  of  the  Portfolio  Purchase  Line  of Credit and the Warehouse Line of
Credit  approximately  80%  and  90%,  respectively,  of  the  face  amount of
Contracts,  in  the  aggregate,  was  originally  advanced  to the Company for
purchasing qualifying Contracts. The balance must be financed through capital.
Subsequent  to December 31, 1998 the Company received verbal notice from Daiwa
that  the Company is in violation of certain non-portfolio performance related
covenants  (see  Subsequent  Events).



     During  1993, the Company completed the Note Offering described in Note 5
of  the  Notes to Consolidated Financial Statements. In the Note Offering, the
Company  sold  7%  Convertible  Subordinated  Notes in the aggregate principal
amount  of  $2,000,000.  The  purchasers  of  the Notes exercised an option to
purchase  an additional $1,000,000 aggregate principal amount on September 15,
1993.  The  principal  amount of the Notes, plus accrued interest thereon, was
due  March 1, 1998. On March 1, 1998, the Company repaid $692,500 of principal
amount  of  the  Notes. The maturity date of the remaining principal amount of
the  Notes  of  $692,500  was  extended to April 15, 1998, without penalty, at
which  time  the Company repaid the remaining principal amount. The Notes were
convertible  into  Class  A Common Stock of the Company prior to maturity at a
conversion  price  of  $3.42  per  share,  subject to adjustment for dilution.
Certain  of  these Notes with an aggregate principal amount of $1,615,000 were
converted  in  1994  and  1995,  resulting in the issuance of 94,444 shares of
Class  A  Common  Stock.

     On  November  1,  1994, the Company sold in a private placement unsecured
Senior  Subordinated  Notes  ("Rothschild  Notes")  in the principal amount of
$5,000,000  to  Rothschild North America, Inc. Interest is due and payable the
first day of each quarter commencing on January 1, 1995. Principal payments in
the  amount  of  $416,667 are due and payable the first day of January, April,
July  and  October  of  each  year,  commencing  January  1,  1997. The unpaid
principal  amount  of  the  Notes,  plus  accrued  and unpaid interest, is due
October  1,  1999. In  June of 1998 the Company and  Rothschilds  ammended the
Note Purchase Agreement to  require principal payments of $450,000 on the last
day of each March,  June,  September  and December. Subsequent to December 31,
1998 the Company received  verbal notice  from  Rothschild  that  the  Company
is  in  violation  of  certain  non-portfolio  performance  related  covenants
(see Subsequent Events).

     In  November 1994, MF Receivables Corp. I. ("MF I"), the Company's wholly
owned special purpose subsidiary, sold, in a private placement, $23,861,823 of
7.6%  automobile receivables-backed notes ("Series 1994-A Notes").  The Series
1994-A  Notes  accrued  interest  at  a  fixed  rate  of  7.6%  per  annum.

     On  July 24, 1997, the Company redeemed the outstanding principal balance
of its Series 1994-A Notes.  The bonds were redeemed at their principal amount
of  $1,220,665.33  plus accrued interest to July 24, 1997.  Upon redemption of
the  Series  1994-A  Notes,  the  underlying  automobile  receivables  of
approximately $2.5 million were pledged under the terms of the Revolving Note.

     In  May  of  1995,  MF I issued its Floating Rate Auto Receivables-Backed
Note  ('Revolving Note" or "Series 1995-A Note"). MF I acquires Contracts from
the  Company  which  are  pledged  under  the  terms of the Revolving Note and
Indenture  for  up  to  $40 million in borrowing.  Subsequently, the Revolving
Note  is  repaid  by  the  proceeds from the issuance of secured Term Notes or
repaid  from  collection  of principal payments and interest on the underlying
Contracts.    The  Revolving  Note can be used to borrow up to an aggregate of
$150  million  through  May  16,  1998.    The Term Notes have a fixed rate of
interest and likewise are repaid from collections on the underlying Contracts.
An  Indenture  and  Servicing  Agreement  require  that  the  Company and MF I
maintain  certain  financial  ratios,  as  well  as  other  representations,
warranties and covenants.  The Indenture requires MF Receivables to pledge all
Contracts  owned  by  it  for  repayment  of the Revolving Note or Term Notes,
including  all  future  Contracts  acquired  by  MF  I.

     The Series 1995-A Note bears interest at LIBOR plus 75 basis points.  The
initial funding of this Note was $26,966,489 on May 16, 1995.  The Company, as
servicer,  provides  customary  collection  and  servicing  activities for the
Contracts.  The  maximum  limit  for  the  Series  1995-A Note is $40 million.

     On  December  4,  1997,  the  Company  redeemed the outstanding principal
balance of its Series 1995-A Note.  The bonds were redeemed at their principal
amount  of  $12,271,457  plus  accrued  interest  to  December  4, 1997.  Upon
redemption  of  the  Series 1995-A Note, the underlying automobile receivables
were  pledged under the terms of the Warehouse Line of Credit. At December 31,
1997,  the  1995-A  Note  did  not  have  an  outstanding  principal  balance.

     On  September 15, 1995, MF I issued the Series 1995-B Term Notes ("Series
1995-B  Notes") in the amount of $35,552,602.  The Series 1995-B Notes accrued
interest  at  a  fixed  note  rate  of  6.45%  per  annum.

     On  December  12,  1997,  the  Company redeemed the outstanding principal
balance  of  its  Series  1995-B  Notes.    The  bonds  were redeemed at their
principal  amount  of  $5,822,934  plus accrued interest to December 12, 1997.
Upon  redemption  of  the  Series  1995-B  Notes,  the  underlying  automobile
receivables  were pledged under the terms of the Warehouse Line of Credit with
Daiwa  Finance  Corporation.

     In  June  1997, MF Receivables Corp. II ("MF II"), a wholly owned special
purpose  subsidiary  of the Company, sold, in a private placement, $42,646,534
of  Class  A  automobile  receivables-backed  notes ("Series 1997-1A Notes" or
"Term  Note")  to  an  outside  investor  and $2,569,068 of Class B automobile
receivables-backed  notes  ("Class  B  Notes")  to  Monaco  Funding  Corp.,  a
wholly-owned  special  purpose  subsidiary of the Company.  The Series 1997-1A
Notes  accrue  interest at a fixed rate of 6.71% per annum and are expected to
be fully amortized by December 2002; however, the debt maturities are based on
principal payments received on the underlying receivables, which may result in
a different final maturity.  An Indenture and Servicing Agreement require that
the  Company  and  MF  II  maintain certain financial ratios, as well as other
representations,  warranties  and  covenants.

     In  connection  with  the  purchase  of the Class B Notes, Monaco Funding
Corp.  borrowed  $2,525,000  from a financial institution ("Promissory Note").
The  Promissory  Note accrues interest at a fixed rate of 16% per annum and is
collateralized by the proceeds from the Class B Notes.   The Class B Notes are
expected  to be fully amortized by December 2002; however, the debt maturities
are  based on principal payments received on the underlying receivables, which
may result in a different final maturity.  Monaco Funding Corp. is required to
maintain  certain  covenants  and  warranties  under  the  Pledge  Agreement.

     As of December 31, 1998, the Series 1997-1A Notes Note had a note balance
of  $17,213,594.  The  underlying  receivables backing the 1997-1A notes had a
balance of  $19,728,112  as of  December 31,1998  (See Subsequent Events). The
Promissory Note was repaid in  April  1998.

     The  assets  of MF I, MF II and Monaco Funding Corp. are not available to
pay  general  creditors  of  the  Company.  All  cash collections in excess of
disbursements  to the Series 1997-1A and Promissory Note noteholders and other
general  disbursements  are  paid  to  MF  I  and  MF  II  on a monthly basis.

     On January 9, 1996, the Company entered into a Purchase Agreement for the
sale  of  an  aggregate  of  $5 million in principal amount of 12% Convertible
Senior  Subordinated  Notes  due  2001  (the  "12% Notes"). This agreement was
subsequently  amended  and  passed  by  the  Company's  Board  of Directors on
September  10,  1996. Interest on the 12% Notes is payable monthly at the rate
of  12% per annum and the 12% Notes were convertible, subject to certain terms
contained in the Indenture, into shares of the Company's Class A Common Stock,
par value $.01 per share, at a conversion price of $4.00 per share, subject to
adjustment under certain circumstances.  The 12% Notes were issued pursuant to
an  Indenture  dated  January  9,  1996,  between the Company and Norwest Bank
Minnesota, N.A., as trustee.  The Company agreed to register, for public sale,
the  shares  of  restricted  Common  Stock issuable upon conversion of the 12%
Notes.  The 12% Notes were sold pursuant to an exemption from the registration
requirements  under  the  Securities  Act  of  1933,  as  amended.

     On June 12, 1998, the Company and the related noteholders agreed to amend
the Indenture to cancel the conversion feature of the 12% Notes and to require
principal  payments  of  $135,000  per  month  commencing  in  June 1998.  The
maturity date of the 12% Notes was also amended to the earlier of the maturity
date  of  the Rothschild Notes or October 1, 1999.  Subsequent to December 31,
1998  the  Company  received  verbal  notice from the 12% Noteholders that the
Company is in violation of certain non-portfolio performance related covenants
(see  Subsequent  Events).

     In  January  1996,  the  Company  entered into a revolving line of credit
agreement  with  LaSalle National Bank  ("LaSalle") providing a line of credit
of  up  to  $15 million, not to exceed a borrowing base consisting of eligible
accounts receivable to be acquired. The scheduled maturity date of the line of
credit  was extended from January 1, 1998 to March 23, 1998, at which time the
outstanding  balance  on the line of credit was paid in full. At the option of
the  Company,  the interest rate charged on the loans was either .5% in excess
of  the  prime rate charged by lender or 2.75% over the applicable LIBOR rate.
The  Company  was obligated to pay the lender a fee equal to .25% per annum of
the  average  daily unused portion of the credit commitment. The obligation of
the lender to make advances was subject to standard conditions. The collateral
securing  payment  consisted  of all Contracts pledged and all other assets of
the  Company. The Company had agreed to maintain certain restrictive financial
covenants. The scheduled maturity date of the line of credit was extended from
January  1,  1998  to March 23, 1998, at which time the outstanding balance on
the  line  of  credit  was  paid  in  full.

     On  or  about  March  23,  1998,  the  Company entered into a senior debt
financing  facility with LaSalle that had an outstanding balance of $50,000 at
December  31,  1998.

     On  October  9,  1996,  the  Company  entered  into a Securities Purchase
Agreement  with  Pacific USA Holdings Corp. ("Pacific") whereby, amongst other
things,  Pacific  agreed  to  acquire  certain shares of the Company's Class A
Common  Stock.  On November 1, 1996, the Company entered into a Loan Agreement
with  Pacific  whereby Pacific loaned the Company $3 million ("Pacific Loan").
On  February  7, 1997, the Securities Purchase Agreement was terminated by the
parties,  however,  the  Pacific  Loan  and its corresponding Installment Note
remained  in  effect.

     On April 25, 1997, the Company executed a Conversion and Rights Agreement
(the  "Conversion  Agreement")  with  Pacific.      The  Conversion  Agreement
converted  the  entire  $3,000,000  outstanding  principal  amount  of  the
installment note made by Pacific to the Company into 300,000 restricted shares
of the Company's Class A Common Stock.  The Conversion Agreement also released
the  Company  from  all liability under the Loan Agreement executed on October
29, 1996 between the Company and Pacific pursuant to which the $3 million loan
was  made.

     In  December  1997,  MF  Receivables Corp. III ("MF III"), a wholly owned
special  purpose  subsidiary  of  the  Company,  entered  into  a  $75 million
Warehouse  Credit  Facility  with  Daiwa  Finance  Corporation ("Daiwa").  All
advances  received  under  the  line  of  credit  are secured by eligible loan
Contracts  and  all  proceeds  received  from  those Contracts.  The scheduled
maturity  date  in  respect  to  any  advance  under the line of credit is the
earlier  of  364  days  following the date of the advance or December 3, 1999.
Under  the  MFIII  Credit Agreement, 85% of the amount advanced to the Company
accrues  interest at a rate equal to LIBOR plus 2.5% per annum.  The remaining
15%  of  the amount advanced accrues interest at a rate of 12% per annum.  The
Company is obligated to pay Daiwa an unused facility fee equal to .375% of the
average  daily  unused  portion  of  the  credit  agreement.  The MFIII Credit
Agreement  requires  the  Company  to  maintain  certain  standard  ratios and
covenants.    At  December  31, 1998, the Company had borrowed $43.581 million
against  this  line  of  credit. The assets of MF III are not available to pay
general  creditors  of  the  Company.    See  Subsequent  Events.

     In  January  1998,  MF  Receivables  Corp.  IV  ("MF IV"), a wholly owned
special  purpose  subsidiary  of  the  Company,  entered  into  a  $73,926,565
Portfolio  Purchase  Credit  Facility (the "Credit Facility") with Daiwa.  The
proceeds  from  the  Credit  Facility  were  used  to acquire an $81.1 million
portfolio  from  Pacific  USA  Holdings  Corp. and certain of its subsidiaries
(Note  5).  All  advances  received  under  the Credit Facility are secured by
eligible  purchased  loan  Contracts  and  all  proceeds  received  from those
Contracts.  The scheduled maturity date with respect to the advances under the
Credit  Facility  is the earlier of January 6, 1999 or the disposition date of
the  eligible purchased loan Contract. The Company believes this maturity date
was  verbally  extended by Daiwa.  Under the Credit Facility, prior to July 1,
1998,  85%  of  the  amount advanced to the Company accrued interest at a rate
equal  to LIBOR plus 1.0% per annum. Effective July 1, 1998, the interest rate
on  this  advance  changed to LIBOR plus 3.5% per annum.  The remaining 15% of
the  amount  advanced  accrued interest at a rate of LIBOR plus 1.0% per annum
prior  to  July  1,  1998.   Effective July 1, 1998, the interest rate on this
advance  changed  to 15% per annum. The Credit Facility Agreement requires the
Company  to  maintain  certain standard ratios and covenants.  At December 31,
1998,  the  Credit  Facility  had  an  outstanding balance of $39,298,048. The
assets  of  MF  IV  are not available to pay general creditors of the Company.
See  Subsequent  Events.

     On June 30, 1998, the Company and Pacific USA, a related party, agreed to
enter  into a $5.0 million Loan Agreement ("Pacific USA Note"). Effective July
1,  1998,  the  Company  and  Pacific USA entered into a Conversion and Rights
Agreement  whereby  $4,463,250 of the principal amount of the Pacific USA Note
was  converted  into 939,632 restricted shares of the Company's Class A Common
Stock.  As  consideration  for  the conversion, the Company agreed, subject to
shareholder  approval,  which was obtained on November 12, 1998, to change the
conversion  ratio  of  the  Company's Preferred Stock held by Pacific USA. The
remaining  unconverted  principal  balance of the Pacific USA Note of $536,750
was converted into 268,375 shares of the Company's Series 1999-1 8% Cumulative
Subordinated  Preferred  Stock  as  of  December  31,  1998.

     On  September 8, 1998 the Company and Pacific Southwest Bank entered into
a  Promissory  Note  agreement  whereby  Pacific  Southwest  lent  the Company
$950,000.  The  Promissory Note accrues interest at the prime rate plus 1% per
annum. All outstanding principal, plus accrued and unpaid interest, is due six
months from the date of the Promissory Note.  Subsequent to December 31, 1998,
the  Company is past due on principal payments related to the Promissory Note.
See  Subsequent  Events.

     On  September  30,  1998  the  Company  and  Pacific  USA entered in to a
Promissory Note agreement whereby Pacific USA lent the Company $1,000,000. The
Note  was modified on October 31, 1998 to increase the principal balance by an
additional  $400,000.   Effective December 31, 1998 the Note was modified when
Pacific  USA converted $300,000 of the Note balance into 150,000 shares of the
Company's  Series  1999-1 8% Cumulative Subordinated Preferred Stock.  A third
modification,  also  effective  December  31,  1998,  increased  the principal
balance by an additional $800,000. The Promissory Note accrues interest at the
prime  rate  plus  1%  per  annum. All outstanding principal, plus accrued and
unpaid  interest,  is  due  six  months  from the date of the Promissory Note.

     In  March  1996,  the  Company  announced that its Board of Directors had
authorized  the  purchase  of  up  to  100,000 shares of Class A Common Stock,
representing  approximately  10%  of  its  Class  A  Common Stock outstanding.
Subject  to applicable securities laws, repurchases may be made at such times,
and  in  such  amounts,  as  the Company's management deems appropriate. As of
December 31, 1998, the Company had repurchased 26,900 shares of Class A Common
Stock.

     The  Company  has  never paid cash dividends on its Common Stock and does
not  anticipate  a change in this policy in the foreseeable future. Certain of
the  Company's  loan agreements contain covenants that restrict the payment of
cash  dividends.

     Effective November 23, 1998 the Company initiated a 1 for 5 reverse stock
split.  To effect the split, the Company's authorized, issued, and outstanding
$.01 par Class A and B common stock was decreased from 12,772,790 to 2,554,558
shares  and  from  1,273,715  to  254,743  shares,  respectively.  All periods
presented  and  related footnote disclosures have been adjusted to reflect the
reverse  split.

     The  Company's  Class  A  Common  Stock is traded in the over-the-counter
market  and  is  currently  quoted  on  the  Electronic  Bulletin  Board.

     The  Company's  cash  needs  have  been  funded  through a combination of
earnings  and cash flow from operations, its existing Warehouse Line of Credit
and  securitizations,  as  well  as  capital and secured loans provided by its
major  shareholder and Senior Lender, Pacific USA Holdings Corp. Subsequent to
December 31, 1998, the Company was advised by Pacific that it can no longer be
relied  upon to provide capital or loans to fund the Company's working capital
needs.    Although Pacific has continued to provide certain additional secured
loans  to  the  Company,  no  assurance  can  be  given that such funding will
continue.   Also, subsequent to December 31, 1998, the Company received verbal
notification  from  Daiwa  that (i) MFIII and MFIV are in violation of certain
covenants  unrelated  to performance of the portfolio under the Warehouse Line
of Credit and the Portfolio Purchase Credit Facility (collectively the "Credit
Facilities");  and  (ii)  that a  servicer  event of default has occurred.

    In  connection  with  the foregoing, Daiwa mandated a transfer of
servicing  to a successor servicer to be appointed by Daiwa.  As a result, the
Company is not receiving nor can it expect to receive monthly distributions of
excess  funds  from  the  Credit  Facilities, through dividends from MFIII and
MFIV,  unless  and  until  Daiwa is paid in full.  At this time the Company is
unable  to  determine  whether or not it will receive any future cash flows or
other  residual  interests from the loan portfolios collateralizing the Credit
Facilities.    As  a result of the servicing transfer mandated by Daiwa, it is
possible  there  will  be  a  degradation in the performance level of the loan
portfoilios.


SUBSEQUENT  EVENTS
------------------
     On or about January 16, 1999, in connection with the June 26, 1997 Master
Financing  Securitization,  the  Company's  wholly-owned  special  purpose
corporation,  MFII,  redeemed the outstanding Class A Certificates for a total
redemption  price of approximately $16.7 million. The transaction was financed
through  the existing Warehouse Credit Facility with Daiwa Finance Corporation
and  MFIII.  Following  the  redemption, the Company, MFII, and MFIII, entered
into  an  arrangement whereby the assets of MFII, consisting of  $18.7 million
of  Automobile  Backed  Consumer  Contracts  were  transferred  to  MFIII.

     In  February  of  1999  the  Company  was  advised by Pacific, who is the
Company's  major  shareholder,  Senior  Lender,  and  major  source of working
capital, that it no longer  intends to continue to  contribute capital or loan
funds to meet the Company's  working  capital  requirements.   Notwithstanding
the  foregoing,  Pacific  has  continued  to  provide  certain  secured  loans
to the Company. However, no assurance can or is given that such financing will
continue in the future.

     For  the  first  time  since  the  Company's  inception,  the  Company's
independent  auditors  have  added an explanatory paragraph to the independent
auditor's  report  regarding  certain  substantial  matters  which,  in  their
opinion,  raise substantial doubt about the Company's ability to continue as a
going  concern.

     In  February  and  March  of  1999  the Company, MFIII, and MFIV received
verbal  notification  from  Daiwa  that  there  existed  certain violations of
non-portfolio  performance  related covenants in the credit agreement and that
as  a  result  (i)  no  additional  funds would be advanced to MFIII under the
Warehouse  Line  of Credit; (ii) Daiwa has mandated that the Company cooperate
in  transferring the servicing of the auto loans to a successor servicer to be
appointed  by Daiwa; and (iii) except for servicing related fees and expenses,
Daiwa  is  collecting  all cash flows in excess of Daiwa's regularly scheduled
principal  and  interest  payments under the Credit Facilities.  In connection
with  the  foregoing  (i)  MFIII  and  MFIV are in the process of finalizing a
proposed  servicing  agreement  with  a successor servicer (an unrelated third
party)  selected  by Daiwa; and (iii) the Company is assisting in facilitating
the  servicing  transfer.  As a result of the  servicing transfer  mandated by
Daiwa, it is possible there will  be a degradation in the performance level of
the  loan  portfolios.

     In  February  1999,  the Company failed to make certain payments and as a
result  is  in  default  of  certain  payment covenants pertaining to both the
Rothschild Notes and the 12% Notes (collectively the "Sub Debt").  The Company
believes  the  Sub  Debt  lenders  have certain enforcement rights under their
respective  Sub  Debt agreements. These rights, in the opinion of the Company,
are  subject to specific subordination and "stand-still" provisions as long as
the  Company  has  senior debt outstanding.  As of April 13, 1999, the Company
had  approximately  $3,860,000  of  senior  debt  outstanding.

     Subsequent  to  December  31, 1998, the Company was past due on principal
payments  to  Pacific  Southwest  Bank  under a secured loan agreement.  As of
April  13, 1999, no action has been taken by Pacific Southwest Bank to enforce
their rights or otherwise accelerate payment of the debt. No assurance is, nor
can be given that Pacific Southwest Bank will not exercise any or all of their
rights  under  the  secured  loan  agreement  in  the  future.

OTHER
-----

ACCOUNTING  PRONOUNCEMENTS
--------------------------
     In  February  1998,  the  FASB  issued  Statement of Financial Accounting
Standards  No.  132,  "Employers'  Disclosure  about  Pensions  and  Other
Postretirement  Benefits"  ("Statement  132"),  which  revises  employers'
disclosures  about  pension and other postretirement benefit plans.  Statement
132  does  not  change  the  measurement  or  recognition  of those plans, but
requires  additional  information  on  changes in benefit obligations and fair
values  of  plan assets and eliminated certain disclosures previously required
by  SFAS  Nos.  87,  88  and  106.    Statement 132 is effective for financial
statements  with  fiscal  years  beginning  after  December  15,  1997.

During  June  1998,  the  FASB  issued  Statement  No.  133,  "Accounting  for
Derivative Instruments and Hedging Activities."  Statement 133 establishes new
standards  by  which derivative financial instruments must be recognized in an
entity's  financial  statements.  Besides requiring derivatives to be included
on  balance  sheets at fair value, Statement 133 generally requires that gains
and  losses  from  later  changes  in  a derivative's fair value be recognized
currently in earnings.  Statement 133 is required to be adopted by the Company
in 2000.  Management, however, does not expect the impact of this statement to
have  a  material  impact  on  the financial statement presentation, financial
position  or  results  of  operations.

     The  Company  has not determined what additional disclosures, if any, may
be  required  by  the provisions of Statements 132 and 133 but does not expect
adoption  of  these  statements  to  have  a material effect on its results of
operations.

SOFTWARE  AND  DATA  LICENSING
------------------------------
     Effective  November 30, 1998, Pacific USA Holdings Corp. ("Pacific") paid
the  Company  $200,000  in  cash  and  entered  into  a  software  license and
development  agreement  and  a  data  licensing  agreement  (the  "License
Agreements")  with  the  company.  Pursuant  to  the  license  agreements, the
Company, as licensor, granted to Pacific, as licensee, a perpetual, fully paid
up,  nontransferable,  exclusive license covering certain proprietary software
and  historical  data  developed  by  the  Company  with  respect  to consumer
automobile  loans,  including  risk  analysis (the "Monaco Software"). Pacific
acquired  the  right  to  make  modifications,  changes or improvements to the
Monaco  Software  (referred  to  as the "Advanced Software").  Pacific has the
right  to develop and market the Advanced Software as it deems fit in its sole
discretion.   Pacific granted to the Company a fully paid up, nontransferable,
nonexclusive license limited to use of the Advanced Software for the Company's
internal business purposes only. This license will terminate 90 days following
any  change  in  control  of  the Company. In addition, Pacific has a right of
first  refusal  to  purchase  the  Monaco  Software.

INFLATION
---------
     Inflation  was not a material factor in either the sales or the operating
expenses  of  the  Company  from  inception  to  December  31,  1998.

YEAR  2000  ISSUE
-----------------
     The  "Year  2000" issue affects the Company's installed computer systems,
network  elements,  software applications and other business systems that have
time-sensitive  programs  that  may not properly reflect or recognize the Year
2000.    Because  many computers and computer applications define dates by the
last  two  digits of the year, "00" may not be properly identified as the Year
2000.    This  error  could  result  in  miscalculations  or  system failures.

     The  Company  is  conducting a review of its computer systems to identify
those  areas that could be affected by the "Year 2000" issue and is developing
an  implementation  plan  to  ensure  compliance.    The Company is using both
internal and external sources to identify, correct and reprogram, and test its
systems  for  Year  2000 compliance. Because third party failures could have a
material  impact  on  the Company's ability to conduct business, confirmations
are  being requested from our processing vendors and suppliers to certify that
plans  are  being  developed  to  address  the  Year  2000  issue. The Company
presently believes that, with modification to existing software and investment
in  new  software, the Year 2000 problem will not pose significant operational
concerns  nor  have  a material impact on the financial position or results of
operation  in any given year.  The total cost of modifications and conversions
is  not  expected  to  be  material  and  will  be  expensed  as  incurred.

FUTURE  EXPANSION  AND  STRATEGY
--------------------------------
     See  the  section  of  Part  1,  Item  I  labeled  "Future  Expansion and
Strategy".
                                     <PAGE>

ITEM  7.  FINANCIAL  STATEMENTS
-------------------------------


                     MONACO FINANCE, INC. AND SUBSIDIARIES



                               TABLE OF CONTENTS
                               -----------------



Independent  Auditors'  Report                                    F  -  1

Consolidated  Financial  Statements

     Consolidated  Balance  Sheet                                 F  -  2

     Consolidated  Statements  of  Operations                     F  -  3

     Consolidated  Statements  of  Stockholders'  Equity          F  -  4

     Consolidated  Statements  of  Cash  Flows                    F  -  5

Notes  to  Consolidated  Financial  Statements                    F  -  6



                                     <PAGE>




                         INDEPENDENT AUDITOR'S REPORT


To  the  Board  of  Directors  and  Stockholders
Monaco  Finance,  Inc.  and  Subsidiaries
Denver,  Colorado

We have audited the accompanying consolidated balance sheet of Monaco Finance,
Inc.  and  Subsidiaries  as of December 31, 1998, and the related consolidated
statements  of  operations, stockholders' equity, and cash flows for the years
ended  December 31, 1998 and 1997. These consolidated financial statements are
the  responsibility  of  the  Company's  management.  Our responsibility is to
express  an  opinion  on  these  financial  statements  based  on  our audits.

We  conducted  our  audits  in  accordance  with  generally  accepted auditing
standards.  Those  standards  require  that  we  plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material  misstatement. An audit includes examining, on a test basis, evidence
supporting  the  amounts and disclosures in the financial statements. An audit
also  includes  assessing  the  accounting  principles  used  and  significant
estimates  made  by  management,  as  well as evaluating the overall financial
statement  presentation. We believe that our audits provide a reasonable basis
for  our  opinion.

In our opinion,  the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of  Monaco Finance,
Inc. and Subsidiaries as of  December  31, 1998, and the  consolidated results
of their operations and  their cash  flows  for  the years ended December  31,
1998 and 1997 in conformity with  generally  accepted  accounting  principles.

The accompanying consolidated financial statements have been prepared assuming
the  Company  will  continue as a going concern. As discussed in Note 2 to the
consolidated  financial  statements, the Company has suffered recurring losses
and  has  experienced  difficulty  in  obtaining  funding  to  continue  their
operations  that  raise  substantial  doubt about its ability to continue as a
going  concern.    In  addition,  as  discussed in Note 10 to the consolidated
financial  statements,  subsequent  to  year  end,  the  servicing  of a large
majority  of the Company's automobile loans receivable was transferred to a an
unrelated  third  party  servicer  which  will result in lower income and cash
flows to the Company.  The financial statements do not include any adjustments
relating to the recoverability and classification of recorded asset amounts or
the  amounts and classifications of liabilities that might be necessary should
the  Company  be  unable  to  continue  as  a  going  concern.




                                       /s/ Ehrhardt Keefe Steiner & Hottman PC
                                       ---------------------------------------
                                           Ehrhardt Keefe Steiner & Hottman PC
March  21,  1999
Denver,  Colorado

                                     <PAGE>

<TABLE>

<CAPTION>

                     MONACO FINANCE, INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEET
                          --------------------------
                               DECEMBER 31, 1998
                               -----------------


<S>                                                            <C>

Assets
 Cash and cash equivalents                                     $    515,679 
 Restricted cash                                                  5,501,967 
 Automobile receivables - net (Notes 3 and 5)                   107,201,241 
 Other receivables                                                   66,527 
 Repossessed vehicles held for sale                               3,048,171 
 Deferred income taxes (Note 7)                                           - 
 Furniture and equipment, net of accumulated
 depreciation of $2,660,985                                       2,173,295 
 Other assets                                                     1,371,854 

   Total assets                                                $119,878,734 

Liabilities and Stockholders' Equity
Accounts payable                                               $  1,234,377 
Accrued expenses and other liabilities                            1,431,127 
Notes payable (Note 5)                                               50,000 
Warehouse note payable (Note 5)                                  43,581,000 
Portfolio purchase note payable (Note 5)                         39,298,048 
Promissory notes payable (Note 5)                                 2,850,000 
Convertible subordinated debt (Note 5)                                    - 
Senior subordinated debt (Note 5)                                   999,998 
Convertible senior subordinated debt (Note 5)                     4,055,000 
Automobile receivables-backed notes (Note 5)                     17,213,594 
   Total liabilities                                            110,713,144 

Commitments and contingencies (Note 4)

Stockholders' equity (Note 6)
 Series 1998-1 preferred stock; no par value; 10,000,000
   shares authorized; 2,347,587 shares issued; $4,695,174
   liquidation preference.                                        4,695,174 
 Series 1999-1 preferred stock; no par value; 585,725 shares
   authorized; 418,375 shares issued; $836,750 liquidation
   preference subordinate to 1998-1                                 836,750 
 Class A common stock, $.01 par value; 30,000,000 shares
    authorized, 2,554,559 shares issued                             127,728 
 Class B common stock, $.01 par value; 2,250,000 shares
   authorized, 254,743 shares issued                                 12,737 
 Additional paid-in-capital                                      31,070,567 
 Accumulated (deficit)                                          (27,577,366)
  Total stockholders' equity                                      9,165,590 

Total liabilities and stockholders' equity                     $119,878,734 
<FN>
See  notes  to  consolidated  financial  statements.
</TABLE>

                                     F - 2
                                     <PAGE>

                     MONACO FINANCE, INC. AND SUBSIDIARIES

<TABLE>

<CAPTION>

                          CONSOLIDATED STATEMENTS OF OPERATIONS
                          -------------------------------------

                                                       FOR  THE  YEARS  ENDED
                                                            DECEMBER  31,
                                                            -------------
<S>                                                    <C>             <C>

                                                            1998         1997
                                                       ------------   -----------
Revenues
 Interest . . . . . . . . . . . . . . . . . . . . . .  $ 20,617,095   $12,394,091 
 Other income . . . . . . . . . . . . . . . . . . . .       212,652       244,816 
  Total revenues. . . . . . . . . . . . . . . . . . .    20,829,747    12,638,907 

Costs and expenses
 Provision for credit losses (Note 3) . . . . . . . .     2,682,122     3,873,719 
 Operating expenses . . . . . . . . . . . . . . . . .    16,095,678    12,445,704 
 Interest expense (Note 5). . . . . . . . . . . . . .    11,224,798     5,674,484 
  Total costs and expenses. . . . . . . . . . . . . .    30,002,598    21,993,907 

Net (loss) before income taxes. . . . . . . . . . . .    (9,172,851)   (9,355,000)
Income tax expense (Note 7) . . . . . . . . . . . . .     1,541,582             - 

Net (loss). . . . . . . . . . . . . . . . . . . . . .   (10,714,433)   (9,355,000)
Preferred stock dividends (Note 6). . . . . . . . . .       374,127             - 

Net (loss) applicable to common stockholders. . . . .  $(11,088,560)  $(9,355,000)

Loss per common share - basic and diluted (Note 6). .  $      (5.04)  $     (5.91)

Weighted average number of common shares outstanding.     2,199,035     1,582,546 

<FN>
See  notes  to  consolidated  financial  statements.

</TABLE>


                                     F - 3

                                     <PAGE>

                     MONACO FINANCE, INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                -----------------------------------------------
<TABLE>
<CAPTION>                
                                                                FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
                                                                ----------------------------------------------



                                                               Preferred Stock                                     Class A 
                                                    1998-1                                1999-1                 Common Stock
                                            Shares         Amount            Shares                Amount           Shares
                                        ---------------------------   ------------------------------------------   ---------
<S>                                     <C>              <C>          <C>                   <C>                    <C>

Balance, December 31, 1996                            -            -                     -                      -  1,129,676

Exercise of stock options                             -            -                     -                      -      1,020

Conversion of shares                                  -            -                     -                      -     10,000

Conversion of installment note payable                -            -                     -                      -    300,000

Net (loss) for the year                               -            -                     -                      -          -

Balance, December 31, 1997                            -            -                     -                      -  1,440,696

Shares issued - portfolio acquisition         2,347,587    4,695,174                     -                      -    162,231

Conversion of note to equity                          -            -               418,375                836,750    939,632

Exercise of stock options                             -            -                     -                      -      8,000

Issuance of stock                                     -            -                     -                      -      4,000

Imputed value on issuance of warrants                 -            -                     -                      -          -

Net (loss) for the year                               -            -                     -                      -          -

Balance, December 31, 1998                    2,765,962  $ 5,531,924             2,765,962  $           5,531,924  2,554,559



                                        Class A                        Additional
                                     Common Stock  Class B Common Stock  Paid-in      Retained
                                        Amount      Shares    Amount     Capital      Earnings         Total
                                      -----------  -----------------   -----------  -------------  ------------
<S>                                    <C>         <C>       <C>       <C>          <C>            <C>
Balance, December 31, 1996             $  56,484   264,743   $13,237   $22,066,089  $ (7,133,806)  $ 15,002,004 

Exercise of stock options                     51         -         -         9,377             -          9,428 

Conversion of shares                         500   (10,000)     (500)            -             -              - 

Conversion of installment note payable    15,000         -         -     2,850,000             -      2,865,000 

Net (loss) for the year                        -         -         -             -    (9,355,000)    (9,355,000)

Balance, December 31, 1997                72,035   254,743    12,737    24,925,466   (16,488,806)     8,521,432 

Shares issued - portfolio acquisition      8,111         -         -     1,614,193             -      6,317,478 

Conversion of note to equity              46,982         -         -     4,416,268             -      5,300,000 

Exercise of stock options                    400         -         -        20,840             -         21,240 

Issuance of stock                            200         -         -         9,800             -         10,000 

Imputed value on issuance of warrants          -         -         -        84,000             -         84,000 

Net (loss) for the year                        -        -         -             -   (11,088,560)   (11,088,560)

Balance, December 31, 1998             $ 127,728   254,743   $12,737   $31,070,567  $(27,577,366)  $  9,165,590 

<FN>
See  notes  to  consolidated  financial  statements.

</TABLE>

                                     F - 4



                                     <PAGE>

------
                     MONACO FINANCE, INC. AND SUBSIDIARIES
                     -------------------------------------
<TABLE>

<CAPTION>

CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS
-----------------------------------------


                                                                                    For the Years Ended
                                                                                       December 31,
                                                                                           1998               1997
<S>                                                                                <C>                    <C>

Cash flows from operating activities
 Net loss                                                                          $        (11,088,560)  $ (9,355,000)
 Adjustments to reconcile net income to net cash provided by operating activities
  Depreciation                                                                                1,156,182        936,055 
  Provision for credit losses                                                                 2,682,122      3,873,719 
  Amortization of excess interest                                                             7,130,593      4,532,301 
  Amortization of other assets                                                                1,216,460      1,046,924 
  Deferred tax asset                                                                          1,541,582              - 
  Loss on sale of fixed assets                                                                  196,042              - 
  Other                                                                                         (34,037)        (8,611)
  Change in assets and liabilities
   Receivables                                                                                7,106,832       (995,897)
   Prepaids and other assets                                                                    138,220        196,868 
   Accounts payable                                                                            (303,414)       685,953 
   Accrued liabilities and other                                                                586,854        142,795 
                                                                                             21,417,436     10,410,107 
    Net cash provided by operating activities                                                10,328,876      1,055,107 

Cash flows from investing activities
 Retail installment sales contracts purchased                                              (105,893,845)   (37,458,258)
 Proceeds from payments on contracts                                                         61,025,599     38,064,381 
 Purchase of furniture and equipment                                                         (1,473,036)      (926,322)
 Proceeds from sale of fixed assets                                                               3,291         10,726 
    Net cash (used in) investing activities                                                 (46,337,991)      (309,473)
Cash flows from financing activities
 Net borrowings under lines-of-credit                                                        46,553,499     31,125,549 
 Net decrease (increase) in restricted cash                                                   2,578,066     (3,616,289)
 Proceeds from notes                                                                          8,150,000     65,021,526 
 Payments on notes                                                                          (21,006,048)   (92,287,986)
 Proceeds from exercise of stock options                                                         21,240          9,428 
 Increase in debt issue and conversion costs                                                   (529,504)    (1,467,762)
    Net cash provided by (used in) financing activities                                      35,767,253     (1,215,534)

Net decrease in cash and cash equivalents                                                      (241,862)      (469,900)

Cash and cash equivalents, beginning of year                                                    757,541      1,227,441 

Cash and cash equivalents, end of year                                             $            515,679   $    757,541 

<FN>
See  notes  to  consolidated  financial  statements.
</TABLE>


                                     F - 5
                                    <PAGE>


                     MONACO FINANCE, INC. AND SUBSIDIARIES

                         NOTES TO FINANCIAL STATEMENTS


NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES
----------------------------------------------------------

Monaco  Finance,  Inc. (the "Company") is a specialty consumer finance company
which  has  engaged  in the business of underwriting, acquiring, servicing and
securitizing  automobile  retail  installment  contracts  ("Contract(s)"). The
Company has provided special finance programs (the "Program(s)") to purchasers
of  vehicles  who do not qualify for traditional sources of bank financing due
to  their  adverse  credit  history,  or  for other reasons which may indicate
credit  or economic risk ("Sub-prime Customers). In 1997 and 1998, the Company
has  acquired  Contracts in connection with the sale of used and, to a limited
extent,  new  vehicles, to customers, from automobile dealers (the "Dealer(s)"
or  the "Dealer Network") located in forty-eight states, the majority of which
were  acquired  from four states. The Company has also purchased portfolios of
sub-prime  loans  from third parties other than dealers. At December 31, 1998,
the  Company's loan portfolio had an outstanding balance of approximately $117
million.

Pacific  USA  Holdings  Corp.  and  related  entities  ("Pacific USA") holds a
controlling  interest  in  the  Company  at  December  31,  1998  (Note  6)

PRINCIPLES  OF  CONSOLIDATION
-----------------------------

The Company's consolidated financial statements include the accounts of Monaco
Finance,  Inc.  and its wholly-owned subsidiaries, MF Receivables Corp. I ("MF
I"),  MF  Receivables Corp. II ("MF II"), MF Receivables Corp. III ("MF III"),
MF  Receivables  Corp.  IV  ("MF  IV"),  MF  Funding,  and  MF  Funding  Corp
(collectively the "Subsidiaries").  All intercompany accounts and transactions
have  been  eliminated  in  consolidation.

CASH  AND  CASH  EQUIVALENTS
----------------------------

For  purposes  of cash flow reporting, cash and cash equivalents include cash,
money  market  funds,  government securities, and certificates of deposit with
maturities  of  less  than  three  months.

RESTRICTED  CASH
----------------

Restricted  cash  represents  cash  collections  related  to  the  Automobile
Receivables-Backed  Notes  and  the  Warehouse  Line of Credit (Note 5).  On a
monthly  basis,  all  cash  collections  in  excess  of  disbursements  to the
noteholders  of  the Automobile Receivables-Backed Notes, or to  Daiwa Finance
Corporation,  and  other  general  disbursements, are  paid to MF I, MF II, MF
III,  and  MF  IV.  At  December  31,  1998  and  1997, the Company had $0 and
$1,652,596  of  its  restricted  cash  balances  invested  in  overnight  U.S.
government  securities,  respectively.

                                     F - 6
                                     <PAGE>

                     MONACO FINANCE, INC. AND SUBSIDIARIES

                         NOTES TO FINANCIAL STATEMENTS


NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)
-----------------------------------------------------------------------

FINANCE  RECEIVABLES
--------------------

Finance  receivables  primarily represent receivables generated from portfolio
purchases  as  well  as  Contracts  purchased from the Dealer Network and from
Contracts from the retail sale of automobiles at the Company's CarMart stores.
In  1997  and  1998,  the Company also purchased loan portfolios of previously
originated  automobiles.  At  December  31,  1998 and 1997, approximately $0.3
million  and  $1.4  million,  respectively, of the Automobile Receivables loan
portfolio  were  generated  from  the  CarMart  operations.

After  December 31, 1998, the Company intends to transfer loan servicing to an
unrelated  third  party  servicer.

STATIC  POOL  ACCOUNTING
------------------------

The  Company  utilizes  static  pooling  to  reserve  for and analyze its loan
losses.  The static pooling reserve methodology allows the Company to stratify
its  Automobile  Receivables  portfolio,  and  the  related  components of its
Allowance  for Credit Losses (i.e. discounts, excess interest, charge offs and
recoveries)  into  separate  and identifiable quarterly pools. These quarterly
pools,  along  with  the  Company's  estimate  of  future principal losses and
recoveries,  are analyzed quarterly to determine the adequacy of the Allowance
for  Credit  Losses.

As part of its adoption of the static pooling reserve method, where necessary,
the  Company  adjusts  its  quarterly  pool allowances to a level necessary to
cover  all  anticipated  future  losses  (i.e.  life of loan) for each related
quarterly  pool  of  loans.

Under  static  pooling, excess interest and discounts are used to increase the
Allowance  for  Credit  Losses and represent the Company's primary reserve for
future losses on its portfolio. To the extent that any quarterly pool's excess
interest  and  discount  reserves  are insufficient to absorb future estimated
losses,  net  of recoveries, adjusted for the impact of current delinquencies,
collection  efforts,  and  other economic indicators including analysis of the
Company's  historical  data,  the  Company  will  provide  for such deficiency
through  a  charge to the Provision for Credit Losses and the establishment of
an  additional  Allowance  for  Credit  Losses.  To the extent that any excess
interest  and  discount  reserves  are  determined  to be sufficient to absorb
future  estimated  losses,  net of recoveries, the difference will be accreted
into interest income on an effective yield method over the estimated remaining
life  of  the  related  monthly  static  pool.
                                     F - 7
                                     <PAGE>

                     MONACO FINANCE, INC. AND SUBSIDIARIES

                         NOTES TO FINANCIAL STATEMENTS


NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)
-----------------------------------------------------------------------

REPOSSESSED  VEHICLES  HELD  FOR  RESALE
----------------------------------------

Repossessed  vehicles held for resale consist of repossessed vehicles awaiting
liquidation.  Repossessed vehicles are carried at estimated actual cash value.
At December 31, 1998 and 1997, approximately 843 and 484 repossessed vehicles,
respectively,  were  awaiting  liquidation.    Included  are vehicles held for
resale,  vehicles which have been sold for which payment has not been received
and  unlocated  vehicles,  which  a portion of the value may be recovered from
insurance  proceeds.

FURNITURE  AND  EQUIPMENT
-------------------------

Furniture  and equipment are stated at cost.  Major additions are capitalized,
whereas  maintenance,  replacements and repairs are expensed.  Depreciation is
provided  for in amounts sufficient to allocate the cost of depreciable assets
to  operations  over  their  estimated  service  lives using the straight-line
method.

REVENUE  RECOGNITION
--------------------

Interest  income  from  finance  receivables  is recognized using the interest
(actuarial)  method.    Accrual  of  interest income on finance receivables is
suspended  when  a  loan  is contractually delinquent for ninety days or more.
The  accrual is resumed when the loan is less than ninety days delinquent, and
collectible  past-due  interest  income  is  recognized  at  that  time.   Any
discounts  recognized  from the purchase of installment contracts are added to
the  allowance  for credit losses.  Insurance income was recognized as earned.

CREDIT  LOSSES
--------------

Provisions for credit losses are continually reviewed and adjusted to maintain
the  allowance at a level considered adequate to cover losses over the life of
the  loans  in  the existing portfolio.  The Company's charge-off policy is to
automatically  charge-off, net of estimated recoveries, all Contracts over 100
days  contractually  past  due.

EXCESS  INTEREST
----------------

Upon  the  acquisition of certain Contracts from its Dealer Network, a portion
of  future  interest  income, as determined by the Company's risk analysis, is
capitalized  into  Automobile  Receivables  (excess  interest  receivable) and
correspondingly  used  to  increase  the allowance for credit losses (unearned
interest  income).    Subsequent  receipts  of  excess interest are applied to
reduce  excess  interest  receivable.

                                     F - 8
                                     <PAGE>

                     MONACO FINANCE, INC. AND SUBSIDIARIES

                         NOTES TO FINANCIAL STATEMENTS


NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)
-----------------------------------------------------------------------

LOAN  ORIGINATION  FEES  AND  COSTS
-----------------------------------

Fees  received  and direct costs incurred for the origination of Contracts are
offset  and any excess fees are deferred and amortized to interest income over
the contractual lives of the Contracts using the interest method.  Unamortized
amounts,  if  any,  are recognized in income at the time Contracts are sold or
paid in full. Direct costs incurred in excess of fees received are expensed as
incurred.

CONCENTRATION  OF  CREDIT  RISKS
--------------------------------

The  Company's  customers  are  not  concentrated  in  any specific geographic
region.    However,  their  primary  concentration  of  credit risk relates to
lending  to  individuals  who  cannot  obtain traditional bank financing.  The
Company  places its temporary cash investments with high quality institutions,
and  by  policy,  limits the amount of credit exposure to any one institution.
The  Company  does,  however,  on  occasion  exceed the FDIC federally insured
limits and at December 31, 1998 and 1997 exceeded the amount by $5,666,759 and
$9,840,730,  respectively.

EARNINGS  PER  SHARE
--------------------

Basic  earnings per share is calculated by dividing net income attributable to
common  shareholders  by  the  weighted  average  number  of  common  shares
outstanding.    Dilutive  earnings  per  share is computed similarly, but also
gives  effect  to the impact convertible securities, such as convertible debt,
stock  options and warrants, if dilutive, would have on net income and average
common  shares  outstanding  if  converted  at  the beginning of the year. The
Company  has incurred losses in each of the periods covered in these financial
statements, thereby making the inclusion of convertible securities in the 1997
and  1998 dilutive earnings per share computations antidilutive.  Accordingly,
convertible securities have already been excluded from the previously reported
primary  and  fully  diluted  earnings  per  share  amounts and do not require
restatement.    Basic  and  dilutive  earnings per share are the same for each
period  presented.

<TABLE>

<CAPTION>

                ANTIDILUTIVE SECURITIES EXCLUDED FROM DILUTIVE EARNINGS PER SHARE



                             Exercise or Conversion   Potentially Dilutive
Security                              Price                  Shares           Expiration Date
---------------------------  -----------------------  --------------------  --------------------
<S>                          <C>                      <C>                   <C>

Stock Options                $       2.655 - $33.125               203,500  1/6/2002 - 3/26/2008
Warrants                     $        4.125 - $30.00                75,300  11/7/2000 -1/20/2001
Convertible Preferred Stock  $                  5.00             1,106,385                     -
<FN>

</TABLE>


                                     F - 9
                                     <PAGE>

                     MONACO FINANCE, INC. AND SUBSIDIARIES

                         NOTES TO FINANCIAL STATEMENTS


NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)
-----------------------------------------------------------------------

INCOME  TAXES
-------------

The  Company  recognizes  deferred  tax  liabilities  and  assets  based  on
differences  between  the  financial  statement  and  tax  basis of assets and
liabilities  using  enacted  tax  rates  in  effect  for the year in which the
differences  are  expected  to  reverse.

USE  OF  ESTIMATES
------------------

The  preparation  of  financial statements in conformity with general accepted
accounting  principles  requires  management  to  make  certain  estimates and
assumptions  that affect the reported amounts of assets and liabilities at the
date of financial statements and the reported amounts of revenues and expenses
during the reporting period. Management believes that such estimates have been
based on reasonable assumptions and that such estimates are adequate, however,
actual  results  could  differ  from  those  estimates.

In  connection  with  the  purchase  of  Contracts, the Company is required to
estimate  the number and dollar amount of loans expected to result in defaults
and  to  estimate the amount of loss that will be incurred under each default.
The  Company  currently  provides  allowances  for  these  losses based on the
historical  performance of the Contracts which are tracked by the Company on a
static pool basis. The actual losses incurred could differ materially from the
amounts  that  the  Company  has  estimated  in  preparing  the  historical
consolidated  financial statements.  Furthermore, transfer of the portfolio to
another  servicer  may  adversely  impact  the  performance  of the portfolio.

SUPPLEMENTAL  DISCLOSURES  OF  CASH  FLOW  INFORMATION
------------------------------------------------------
<TABLE>
<CAPTION>
                                 DECEMBER  31,
                        1998                      1997
                        ----                      ----
<S>                  <C>                      <C>
CASH  PAYMENTS  FOR:
 INTEREST            $  11,065,786            $  5,562,880
 INCOME  TAXES            $  4,363            $      3,108
---------------          ----------          -------------
<FN>
</TABLE>

Non-cash  investing  and  financing  activities:

In  April  1997,  Pacific  USA Holdings Corp. ("Pacific") converted the entire
$3,000,000 outstanding principal amount of an installment note payable made by
Pacific  to  the  Company  into 300,000 shares of the Company's Class A Common
Stock.  See  Note  5.

Included  as  part  of  the  consideration paid for the January 1998 portfolio
acquisition  from  Pacific  USA  Holdings  Corp.  (Notes 5 and 6), the Company
issued  162,231  shares  of Class A Common Stock valued at $2.00 per share and
2,433,457  shares  of 8% Cumulative Convertible Preferred Stock, Series 1998-1
valued  at  $2.00 per share. As of September 30, 1998, Pacific USA repurchased
certain  loans  that  have  resulted  in  the  surrender  of  85,870 shares of
Preferred  Stock.

                                    F - 10
                                     <PAGE>

                     MONACO FINANCE, INC. AND SUBSIDIARIES

                         NOTES TO FINANCIAL STATEMENTS


NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)
-----------------------------------------------------------------------

Supplemental  Disclosures  of  Cash  Flow  Information  (continued)
-------------------------------------------------------------------

Effective July 1, 1998, Pacific USA Holdings Corp. converted $4,463,250 of its
$5.0  million  Promissory  Note (Note 5) into 939,632 restricted shares of the
Company's  Class  A  Common  Stock.

Effective  December  31,  1998,  Pacific  USA  Holdings  Corp.  converted  the
remaining  $536,750  of its $5.0 million Promissory Note (Note 5) and $300,000
of  its  $1.4  million  Promissory  Note  (Note  5)  into 418,375 shares of 8%
Cumulative  Subordinated  Preferred  Stock,  Series 1999-1 valued at $2.00 per
share.

RECENTLY  ISSUED  ACCOUNTING  STANDARDS
---------------------------------------

In  February 1998, the FASB issued Statement of Financial Accounting Standards
No.  132,  "Employers'  Disclosure  about  Pensions  and  Other Postretirement
Benefits"  ("Statement  132"),  which  revises  employers'  disclosures  about
pension and other postretirement benefit plans.  Statement 132 does not change
the  measurement  or  recognition  of  those  plans,  but  requires additional
information  on  changes in benefit obligations and fair values of plan assets
and eliminated certain disclosures previously required by SFAS Nos. 87, 88 and
106.    Statement  132 is effective for financial statements with fiscal years
beginning  after  December  15,  1997.

During  June  1998,  the  FASB  issued  Statement  No.  133,  "Accounting  for
Derivative Instruments and Hedging Activities."  Statement 133 establishes new
standards  by  which derivative financial instruments must be recognized in an
entity's  financial  statements.  Besides requiring derivatives to be included
on  balance  sheets at fair value, Statement 133 generally requires that gains
and  losses  from  later  changes  in  a derivative's fair value be recognized
currently in earnings.  Statement 133 is required to be adopted by the Company
in 2000.  Management, however, does not expect the impact of this statement to
have  a  material  impact  on  the financial statement presentation, financial
position  or  results  of  operations.

The  Company  has  not  determined what additional disclosures, if any, may be
required  by  the  provisions  of  Statements  132 and 133 but does not expect
adoption  of  these  statements  to  have  a material effect on its results of
operations.

RECLASSIFICATIONS
-----------------

Certain 1997 balances have been reclassified in order to conform with the 1998
presentation.

                                    F - 11
                                     <PAGE>

                     MONACO FINANCE, INC. AND SUBSIDIARIES

                         NOTES TO FINANCIAL STATEMENTS


NOTE  2  -  CONTINUED  OPERATIONS
---------------------------------

The  accompanying  financial  statements have been prepared on a going concern
basis  which  contemplates  the  realization  of  assets  and  liquidation  of
liabilities  in  the  ordinary  course  of  business.    During the year ended
December  31, 1998, the Company continued to suffer recurring losses in excess
of  $11,000,000,  resulting  in  an  accumulated  deficit  of  approximately
$27,600,000.    In  addition,  subsequent  to  year  end  the Company lost its
financing  sources  (Note  10).  The  Company  will  be  seeking to obtain new
financing  sources.  In the event the Company obtains new financing sources it
will  attempt  to implement a business strategy based upon joint ventures with
third  parties.    This  strategy will include purchasing Contracts having (i)
higher  discounts to face (ii) shorter terms and (iii) lower amounts financed.
No  assurance  can  be nor is given that new and adequate sources of financing
will  be  obtained.    Furthermore,  no assurance can be nor is given that the
business  strategy will be implemented, and if implemented will be successful.
The  consolidated  financial  statements  do  not include any adjustments that
might  be  necessary  if the Company is unable to continue as a going concern.


NOTE  3  -  AUTOMOBILE  AND  RELATED  RECEIVABLES
-------------------------------------------------

Net  Automobile  receivables  consist  of  the  following:

<TABLE>

<CAPTION>



                                                           December 31,
                                                          --------------        
                                                        1998           1997
                                                   --------------  ------------
<S>                                                <C>             <C>

Retail installment sales contracts                 $  85,370,939   $37,103,262 
Retail installment sales contracts-Trust (Note 4)     19,742,374    37,323,549 
Total finance receivables                            105,113,313    74,426,811 
Allowance for credit losses                           (9,872,318)   (6,850,499)

Automobile receivables - direct                       95,240,995    67,576,312 

Excess interest receivable                             6,307,075     4,849,209 
NAFCO loan loss reimbursement receivable (Note 5)      4,034,830             - 
Accrued interest                                       1,426,838     1,121,161 
Other                                                    191,503       647,033 
Automobile related receivables                        11,960,246     6,617,403 

Automobile receivables - net                       $ 107,201,241   $74,193,715 

<FN>

</TABLE>


                                    F - 12

                                     <PAGE>

                     MONACO FINANCE, INC. AND SUBSIDIARIES

                         NOTES TO FINANCIAL STATEMENTS


NOTE  3  -  AUTOMOBILE  AND  RELATED  RECEIVABLES  (CONTINUED)
--------------------------------------------------------------

The  total  finance  receivables  are  scheduled  to  be collected as follows:
<TABLE>
<CAPTION>
                  December  31,
 <S>            <C>
 1999            $  6,407,564
 2000              15,852,017
 2001              31,988,330
 2002              41,099,055
 2003              9,766,347
======          =============
                $  105,113,313
<FN>
</TABLE>

Although  these  are  the  scheduled  collections,  they  are  not necessarily
indicative  of  actual  cash  flows.    See  Subsequent  Events

At  December  31,  1998,  the accrual of interest income was suspended on $1.7
million  of  principal  amount  of  retail  installment  sales  contracts.

At  the  time  installments  sale  contracts  ("Contracts")  are originated or
purchased,  the Company estimates future losses of principal based on the type
and  terms  of  the  Contract,  the  credit  quality  of  the borrower and the
underlying  value  of the vehicle financed.  This estimate of loss is based on
the  Company's  risk  model,  which  takes  into  account historical data from
similar  contracts  originated or purchased by the Company since its inception
in  1988.    However,  since  the  risk model uses past history to predict the
future, changes in national and regional economic conditions, borrower mix and
other factors could result in actual losses differing from initially predicted
losses.

The  allowance  for  credit  losses,  as presented below, has been established
utilizing  data  obtained  from  the  Company's risk models and is continually
reviewed  and adjusted in order to maintain the allowance at a level which, in
the  opinion  of management, provides adequately for current and future losses
that  may  develop  in  the present portfolio. This allowance is reported as a
reduction  to  Automobile  Receivables.



                                    F - 13
                                     <PAGE>

                     MONACO FINANCE, INC. AND SUBSIDIARIES

                         NOTES TO FINANCIAL STATEMENTS


NOTE  3  -  AUTOMOBILE  AND  RELATED  RECEIVABLES  (CONTINUED)
--------------------------------------------------------------
<TABLE>

<CAPTION>




                                                 Allowance for Credit
                                                        Losses
                                                ----------------------
<S>                                             <C>

Balance as of December 31, 1996. . . . . . . .  $           9,518,962 

Provisions for credit losses . . . . . . . . .              3,873,719 
Unearned interest income . . . . . . . . . . .              2,825,819 
Unearned discounts . . . . . . . . . . . . . .              2,354,792 
Retail installment sale contracts charged off.            (22,643,864)
Recoveries . . . . . . . . . . . . . . . . . .             10,921,071 

Balance as of December 31, 1997. . . . . . . .              6,850,499 

Provisions for credit losses . . . . . . . . .              2,682,122 
Unearned interest income . . . . . . . . . . .              8,588,458 
NAFCO loan loss reimbursement (see Note 6) . .             11,737,935 
Unearned discounts . . . . . . . . . . . . . .              3,631,346 
Retail installment sale contracts charged off.            (39,138,587)
 . . . . . . . . . . . . . . . . . . . . . . .             15,520,545 

Balance as of December 31, 1998. . . . . . . .  $           9,872,318 

<FN>

</TABLE>



The  provision for credit losses is based on estimated losses on all Contracts
purchased  prior to January 1, 1995 with zero discounts ("100% Contracts") and
for  all  Contracts  originated  by  CarMart  which  have been provided for by
additions  to  the  Company's allowance for credit losses as determined by the
Company's risk analysis. Also, the 1998 provision for credit losses includes a
$2.65  million charge for a change in estimate related to the Company's static
pooling  reserve  analysis  (Note  11).

Upon  the  acquisition of certain Contracts from its Dealer Network, a portion
of  future  interest  income, as determined by the Company's risk analysis, is
capitalized  into  Automobile  Receivables  (excess  interest  receivable) and
correspondingly  used  to  increase  the allowance for credit losses (unearned
interest  income).  Receipts  of  excess interest are applied to reduce excess
interest  receivable.  For  the  years  ended  December  31,  1998  and  1997,
respectively,  $7,130,593  and  $4,532,301  of  excess  interest  income  was
amortized  against  excess  interest  receivable.

Unearned  discounts  result  from  the  purchase  of Contracts from the Dealer
Network  at less than 100% of the face amount of the note.  All such discounts
are  used  to  increase  the  allowance  for  credit  losses.


                                    F - 14
                                     <PAGE>

                     MONACO FINANCE, INC. AND SUBSIDIARIES

                         NOTES TO FINANCIAL STATEMENTS


NOTE  3  -  AUTOMOBILE  AND  RELATED  RECEIVABLES  (CONTINUED)
--------------------------------------------------------------

The  December  31, 1998, excess interest receivable balance of $6,307,075 will
be  amortized  as  follows:
<TABLE>

<CAPTION>




Year Ended December 31,  Amortization
                         -------------
<S>                      <C>

1999. . . . . . . . . .  $   3,973,058
2000. . . . . . . . . .      1,806,776
2001. . . . . . . . . .        459,491
2002. . . . . . . . . .         65,612
2003. . . . . . . . . .          2,138

                         $   6,307,075
                         -------------
<FN>

</TABLE>



NOTE  4  -  COMMITMENTS  AND  CONTINGENCIES
-------------------------------------------

OPERATING  LEASES
-----------------

The  Company  leases  office  space,  car  lot facilities, computer and office
equipment  for  varying periods.  Leases that expire generally are expected to
be  renewed  or replaced by other leases, or in the case of the former CarMart
facilities,  the  Company  has  options  to  extend  the  leases.

In  April 1994, the Company amended and restated its lease of office space for
its executive offices located at 370 17th Street, Suite 5060, Denver, Colorado
80202,  where  it  maintains  approximately  24,716 square feet of space.  The
Company  currently  pays  $43,312  per  month under a lease ending October 31,
1999,  with  adjustments  for  monthly  payments  on  a  periodic  basis.

Effective  December 1, 1996, the Company entered into a sublease agreement for
6,571  square  feet  of  office  space located at 370 17th Street, Suite 4960,
Denver,  Colorado,  80202.  The  Company pays $1,807 per month, plus occupancy
costs, under a sublease ending October 31, 1999. This office space was vacated
subsequent  to  year  end  and  the Company is attempting to find a sublessor.

On  March  31,  1994,  the Company's lease at 1319 S. Havana, Aurora, Colorado
80010  was  terminated  and the operations of the retail CarMart Dealership at
that location were transferred to 890 S. Havana, Aurora, Colorado 80010.  This
property  is  owned by a corporation all of whose shareholders are officers of
the Company.  The Company entered into a seven-year lease commencing March 24,
1994  and  ending  March  23, 2001. In September 1995, the Company amended its
seven-year  lease  to  include the property at 894 S. Havana, Aurora, Colorado
80010.    The  Company currently pays $15,238 per month on a triple net basis.
The  lease  calls  for  periodic  rental adjustments over the term.  It is the
Company's  belief  that  the terms of the related party lease are generally no
less  favorable  than  could  have  been  obtained  from unrelated third party
lessors for properties of similar size, condition and location. Effective June
1, 1996, the Company entered into a sublease agreement on the property located
at 890 S. Havana for the entire lease term at an amount approximately equal to
the  Company's obligation.  Effective December 11, 1998 all lease and sublease
agreements  were  terminated  upon  sale  of  the  property.

                                    F - 15
                                     <PAGE>

                     MONACO FINANCE, INC. AND SUBSIDIARIES

                         NOTES TO FINANCIAL STATEMENTS


NOTE  4  -  COMMITMENTS  AND  CONTINGENCIES  (CONTINUED)
--------------------------------------------------------

OPERATING  LEASES  (CONTINUED)
------------------------------

Effective January 15, 1996 and January 31, 1996, the Company closed its retail
CarMart  Dealerships located at 4940 S. Broadway, Englewood, Colorado and 1005
Motor  City  Drive,  Colorado Springs, Colorado, respectively.  The Englewood,
Colorado  lease  was extended for a three-year period through March 2000.  The
Company  may, at its sole discretion, extend the Englewood, Colorado lease for
an  additional  three-year  period  through March 2003.  The Company currently
pays $9,833 per month. The Colorado Springs, Colorado  lease expired in May of
1998 and was not renewed by the Company. Effective March 15, 1996, the Company
entered  into  a  sublease  agreement  on both properties for the entire lease
terms  at  an  amount  approximately  equal  to  the  Company's  obligation.

At  December  31,  1998,  future  minimum  rental  payments  applicable  to
noncancelable  operating  leases  were  as  follows:

<TABLE>

<CAPTION>



                         Gross Rental   Sublease   Net Rental
Year Ended December 31,    Payments     Receipts    Payments
                         -------------  ---------  -----------
<S>                      <C>            <C>        <C>

1999. . . . . . . . . .  $     645,275  $ 117,990  $   527,285
2000. . . . . . . . . .        526,566    117,990      408,576
2001. . . . . . . . . .         22,579          -       22,579

                         $   1,194,420  $ 235,980  $   958,440

<FN>

</TABLE>



Total  net  lease  expense  for the years ended December 31, 1998 and 1997 was
$712,302  and  $697,080,  respectively.

CONTINGENCIES
-------------

The  Company  and  its  Subsidiaries  at  times  are  subject to various legal
proceedings  and  claims that arise in the ordinary course of business. In the
opinion  of management of the Company, based in part on the advice of counsel,
the  amount  of  any ultimate liability with respect to these actions will not
materially  affect the results of operations, cash flows or financial position
of the Company. It is the Company's and its Subsidiaries' policy to vigorously
defend  litigation, however, the Company and its Subsidiaries have, and may in
the  future,  enter  into  settlements  of  claims  where  management  deems
appropriate.

                                    F - 16
                                     <PAGE>

                     MONACO FINANCE, INC. AND SUBSIDIARIES

                         NOTES TO FINANCIAL STATEMENTS


NOTE  4  -  COMMITMENTS  AND  CONTINGENCIES  (CONTINUED)
--------------------------------------------------------

EMPLOYMENT  AGREEMENTS
----------------------

The  Company's  two executive officers have entered into employment agreements
(the  "Employment  Agreements")  with  the  Company.

Messrs.  Ginsburg  and  Sandler  are  paid  annual  salaries  of $310,000  and
$290,000,  respectively, under their Employment Agreements and are eligible to
receive  medical  and  hospitalization  insurance and other fringe benefits as
provided  to  the  Company's  other  executive-level  employees,  including
participating  in  stock  option  grants  by  the  Company.    The  Employment
Agreements  have  three-year terms which began in December, 1997. Upon written
notice, the Company may terminate the Employment Agreement for cause.  Each of
these  individuals  has agreed not to compete with the Company for a period of
two years following the termination of his relationship with the Company under
this  Employment  Agreement.  In  exchange for the non-compete agreement, each
individual  is  to  be  paid a non-competition payment of $300,000, to be paid
equally  in  arrears  at  the  end  of  each  of  the  two years following the
individuals'  employment.

LOANS  IN  FUNDING  (COMMITMENTS)
---------------------------------

As  of  December  31,  1998,  there  were no open commitments to extend credit
through  the  normal  course  of  business.

401(K)  EMPLOYEE  SAVINGS  PLAN
-------------------------------

The  Company has a voluntary 401(k) savings plan pursuant to Section 401(k) of
the Internal Revenue Code, whereby participants may contribute a percentage of
compensation,  but  not  in excess of the maximum allowed under the code.  The
plan  provides  for  a  matching contribution by the Company which amounted to
$21,923  and  $24,728  in  1998  and  1997,  respectively.


NOTE  5  -  DEBT
----------------

In  February  and  March  of 1999 the Company, MFIII, and MFIV received verbal
notification from Daiwa that there existed certain violations of non-portfolio
performance related covenants in the credit agreement and that as a result (i)
no  additional  funds  would  be advanced to MFIII under the Warehouse Line of
Credit; (ii) Daiwa has mandated that the Company cooperate in transferring the
servicing  of the auto loans to a successor servicer to be appointed by Daiwa;
and  (iii) except for servicing related fees and expenses, Daiwa is collecting
all cash flows in excess of Daiwa's regularly scheduled principal and interest
payments  under  the  Credit Facilities.  In connection with the foregoing (i)
MFIII and MFIV are in the process of finalizing a proposed servicing agreement
with  a  successor  servicer (an unrelated third party) selected by Daiwa; and
(iii)  the  Company  is  assisting  in  facilitating  the  servicing transfer.
                                    F - 17
                                     <PAGE>

                     MONACO FINANCE, INC. AND SUBSIDIARIES

                         NOTES TO FINANCIAL STATEMENTS


NOTE  5  -  DEBT  (CONTINUED)
-----------------------------

LASALLE  NATIONAL  BANK
-----------------------

In January 1996, the Company entered into a revolving line of credit agreement
with  LaSalle  National  Bank  ("LaSalle") providing a line of credit of up to
$15  million,  not  to exceed a borrowing base consisting of eligible accounts
receivable  to  be acquired. The scheduled maturity date of the line of credit
was  extended  from  January  1,  1998  to  March  23, 1998, at which time the
outstanding  balance  on  the  line  of  credit  was  paid  in  full.

On  or  about March 23, 1998, the Company entered into a senior debt financing
facility  with  LaSalle that had an outstanding balance of $50,000 at December
31,  1998.

WAREHOUSE  LINE  OF  CREDIT  -  DAIWA  FINANCE  CORPORATION
-----------------------------------------------------------

In  December 1997, MF Receivables Corp. III ("MF III"), a wholly owned special
purpose  subsidiary  of the Company, entered into a $75 million Warehouse Line
of  Credit  with  Daiwa  Finance Corporation ("Daiwa").  All advances received
under  the  line  of  credit  are  secured  by eligible loan Contracts and all
proceeds  received  from  those  Contracts.    The  scheduled maturity date in
respect  to  any  advance  under the line of credit is the earlier of 364 days
following  the  date  of  the  advance  or December 3, 1999.  Under the Credit
Agreement,  85%  of  the  amount advanced to the Company accrues interest at a
rate  equal  to  LIBOR  plus  2.5% per annum.  The remaining 15% of the amount
advanced  accrues  interest  at  a  rate  of  12%  per  annum.  The Company is
obligated  to  pay  Daiwa an unused facility fee equal to .375% of the average
daily  unused  portion of the credit agreement.  The Credit Agreement requires
the  Company  to maintain certain standard ratios and covenants (Note 10).  At
December  31,  1998  and  1997,  the  Company  had  borrowed  $43,581,000  and
$30,000,000,  respectively,  against this line of credit. The assets of MF III
are  not  available  to  pay  general  creditors  of  the  Company.

PORTFOLIO  PURCHASE  CREDIT  FACILITY  -  DAIWA  FINANCE  CORPORATION
---------------------------------------------------------------------

In  January  1998,  MF  Receivables Corp. IV ("MF IV"), a wholly owned special
purpose  subsidiary  of  the  Company,  entered  into  a $73,926,565 Portfolio
Purchase  Credit  Facility  (the  "Credit Facility") with Daiwa.  The proceeds
from  the Credit Facility were used to acquire an $81.1 million portfolio from
Pacific  USA  Holdings  Corp.  and  certain  of its subsidiaries (Note 6). All
advances  received under the Credit Facility are secured by eligible purchased
loan  Contracts and all proceeds received from those Contracts.  The scheduled
maturity  date  with  respect to the advances under the Credit Facility is the
earlier  of  January 6, 1999 or the disposition date of the eligible purchased
loan  Contract.  Under  the Credit Facility, prior to July 1, 1998, 85% of the
amount  advanced to the Company accrued interest at a rate equal to LIBOR plus
1.0%  per  annum.  Effective  July  1, 1998, the interest rate on this advance
changed  to  LIBOR  plus  3.5%  per  annum.    The remaining 15% of the amount
advanced accrued interest at a rate of LIBOR plus 1.0% per annum prior to July
1, 1998.  Effective July 1, 1998, the interest rate on this advance changed to
15%  per annum. The Credit Facility Agreement requires the Company to maintain
certain  standard  ratios  and covenants (Note 10).  At December 31, 1998, the
Credit Facility had an outstanding balance of $39,298,048. The assets of MF IV
are  not  available  to  pay  general  creditors  of  the  Company.
                                    F - 18
                                     <PAGE>

                     MONACO FINANCE, INC. AND SUBSIDIARIES

                         NOTES TO FINANCIAL STATEMENTS


NOTE  5  -  DEBT  (CONTINUED)
-----------------------------

PACIFIC  USA  HOLDINGS  CORP.  -  INSTALLMENT  NOTES
----------------------------------------------------

On  October  9, 1996, the Company entered into a Securities Purchase Agreement
with  Pacific  USA  Holdings  Corp.  ("Pacific")  whereby, among other things,
Pacific  agreed  to  acquire  certain  shares  of the Company's Class A Common
Stock.    On  November 1, 1996, the Company entered into a Loan Agreement with
Pacific  whereby  Pacific  loaned the Company $3 million ("Pacific Loan").  On
February  7,  1997,  the  Securities  Purchase Agreement was terminated by the
parties;  however,  the  Pacific  Loan  and its corresponding Installment Note
remained  in  effect.

On April 25, 1997, the Company executed a Conversion and Rights Agreement (the
"Conversion Agreement") with Pacific.   The Conversion Agreement converted the
entire $3,000,000 outstanding principal amount of the installment note made by
Pacific to the Company into 300,000 restricted shares of the Company's Class A
Common  Stock.    The  Conversion Agreement also released the Company from all
liability  under  the  Loan Agreement executed on October 29, 1996 between the
Company  and  Pacific  pursuant  to  which  the  $3  million  loan  was  made.

PACIFIC  USA  HOLDINGS  CORP.  -  PROMISSORY  NOTE
--------------------------------------------------

On  June  30,  1998,  the  Company and Pacific USA, a related party, agreed to
enter  into a $5.0 million Loan Agreement ("Pacific USA Note"). Effective July
1,  1998,  the  Company  and  Pacific USA entered into a Conversion and Rights
Agreement  whereby  $4,463,250 of the principal amount of the Pacific USA Note
was  converted  into 939,632 restricted shares of the Company's Class A Common
Stock.  As  consideration  for  the conversion, the Company agreed, subject to
shareholder  approval,  which was obtained on November 12, 1998, to change the
conversion  ratio  of  the  Company's Preferred Stock held by Pacific USA. The
remaining  unconverted  principal  balance of the Pacific USA Note of $536,750
was converted into 268,375 shares of the Company's Series 1999-1 8% Cumulative
Subordinated  Preferred  Stock  as  of  December  31,  1998.

On  September  8,  1998  the Company and Pacific Southwest Bank entered into a
Promissory Note agreement whereby Pacific Southwest lent the Company $950,000.
The  Promissory Note accrues interest at the prime rate plus 1% per annum. All
outstanding  principal,  plus  accrued  and unpaid interest, is due six months
from  the  date  of the Promissory Note.  Subsequent to December 31, 1998, the
Company is past due on principal payments related to the Promissory Note (Note
10).

                                    F - 19
                                     <PAGE>

                     MONACO FINANCE, INC. AND SUBSIDIARIES

                         NOTES TO FINANCIAL STATEMENTS


NOTE  5  -  DEBT  (CONTINUED)
-----------------------------

PACIFIC  USA  HOLDINGS  CORP.  -  PROMISSORY  NOTE  (CONTINUED)
---------------------------------------------------------------

On  September  30, 1998 the Company and Pacific USA entered in to a Promissory
Note  agreement  whereby Pacific USA lent the Company $1,000,000. The Note was
modified  on  October  31,  1998  to  increase  the  principal  balance  by an
additional  $400,000.   Effective December 31, 1998 the Note was modified when
Pacific  USA converted $300,000 of the Note balance into 150,000 shares of the
Company's  Series  1999-1 8% Cumulative Subordinated Preferred Stock.  A third
modification,  also  effective  December  31,  1998,  increased  the principal
balance by an additional $800,000. The Promissory Note accrues interest at the
prime  rate  plus  1%  per  annum. All outstanding principal, plus accrued and
unpaid  interest,  is  due  six  months  from the date of the Promissory Note.

Convertible  Subordinated  Debentures
-------------------------------------

On March 15, 1993, the Company completed a private placement of $2,000,000, 7%
Convertible  Subordinated  Notes  (the  "Notes")  with  interest  payable
semiannually  commencing  September  1, 1993.  Additionally, the purchasers of
the  Notes  exercised an option to purchase an additional $1,000,000 aggregate
principal  amount of the Notes on September 15, 1993.  The principal amount of
the  Notes,  plus  accrued  and unpaid interest, was due on March 1, 1998.  On
March  1,  1998,  the  Company  repaid  one-half,  or  $692,500,  of  the then
outstanding principal amount of the Notes.  The maturity date of the remaining
principal  amount  of  the  notes  of $692,500 was extended to April 15, 1998,
without  penalty,  at  which  time  the Company repaid the remaining principal
amount.  Notes with an aggregate principal amount of $1,615,500 were converted
resulting  in  the  issuance  of  94,444  shares  of  Class  A  Common  Stock.

Senior  Subordinated  Note  -  Rothschild
-----------------------------------------

On November 1, 1994 the Company sold, in a private placement, unsecured Senior
Subordinated  Notes  ("Rothschild  Notes")  in  the  gross principal amount of
$5,000,000  to  Rothschild  North America, Inc. ("Rothschild")  The Rothschild
Notes  accrue  interest  at  a fixed rate per annum of 9.5% through October 1,
1997, and for each month thereafter, a fluctuating rate per annum equal to the
lesser  of  (a)  11.5%  or  (b)  3.5%  above  LIBOR.

Interest  was  due  and  payable  the  first day of each quarter commencing on
January  1,  1995.   Principal payments in the amount of $416,667 were due and
payable  the  first  day  of  January,  April,  July  and October of each year
commencing  January  1,  1997.

                                    F - 20
                                     <PAGE>

                     MONACO FINANCE, INC. AND SUBSIDIARIES

                         NOTES TO FINANCIAL STATEMENTS


NOTE  5  -  DEBT  (CONTINUED)
-----------------------------

Senior  Subordinated  Note  -  Rothschild  (continued)
------------------------------------------------------

On  June  15,  1998,  the  Company  and  Rothschild  amended the Note Purchase
Agreement  to  require  principal payments of $450,000 on the last day of each
March,  June,  September  and  December.   In lieu of the principal payment of
$416,667 due on July 1, 1998, the Company made a payment to Rothschild on June
30,  1998  of  $600,000. The unpaid principal amount of the Senior Notes, plus
accrued and unpaid interest, is due October 1, 1999.  At December 31, 1998 the
outstanding balance was $999,998.  Subsequent to December 31, 1998 the Company
received  verbal  notice  from  Rothschild that the Company is in violation of
certain  non-portfolio  performance  related  covenants  (Note  10).

SENIOR  SUBORDINATED  NOTES  -  BLACK  DIAMOND
----------------------------------------------

On January 9, 1996, the Company entered into a Purchase Agreement for the sale
of  an aggregate of $5.0 million in principal amount of 12% Convertible Senior
Subordinated Notes due 2001 (the "12% Notes"). This agreement was subsequently
amended  and  approved by the Company's Board of Directors and approved by the
Company's  Shareholders  on  September  10, 1996. Interest on the 12% Notes is
payable  monthly  at  the  rate  of  12%  per  annum  and  the  12% Notes were
convertible,  subject to certain terms contained in the Indenture, into shares
of  the  Company's  Class  A  Common  Stock,  par  value  $.01 per share, at a
conversion  price  of  $4.00  per  share,  subject to adjustment under certain
circumstances.    The  12%  Notes  were  issued pursuant to an Indenture dated
January  9,  1996,  between  the  Company and Norwest Bank Minnesota, N.A., as
trustee.    The  Company  agreed  to  register, for public sale, the shares of
restricted  Common  Stock  issuable upon conversion of the 12% Notes.  The 12%
Notes  were  sold  pursuant to an exemption from the registration requirements
under  the  Securities  Act  of  1933,  as  amended.

On  June  12, 1998, the Company and the related noteowners agreed to amend the
Indenture  to  cancel  the  conversion feature of the 12% Notes and to require
principal  payments  of  $135,000  per  month  commencing  in  June 1998.  The
maturity date of the 12% Notes was also amended to the earlier of the maturity
date  of  the Rothschild Notes or October 1, 1999.  The outstanding balance of
the  12%  Notes as of December 31, 1998 was $4,055,000. Subsequent to December
31,  1998 the Company received verbal notice from the 12% Noteholders that the
Company is in violation of certain non-portfolio performance related covenants
(Note  10).

AUTOMOBILE  RECEIVABLES  -  BACKED  NOTES
-----------------------------------------

In November 1994, MF Receivables Corp. I. ("MF I"), the Company's wholly owned
special  purpose subsidiary, sold, in a private placement, $23,861,823 of 7.6%
automobile  receivables-backed  notes  ("Series  1994-A  Notes").   The Series
1994-A  Notes accrued interest at a fixed rate of 7.6% per annum.  On July 24,
1997,  the  Company  redeemed  the outstanding principal balance of its Series
1994-A Notes.  The bonds were redeemed at their principal amount of $1,220,665
plus  accrued interest to July 24, 1997.  Upon redemption of the Series 1994-A
Notes,  the  underlying  automobile  receivables of approximately $2.5 million
were pledged under the terms of the Floating Rate Auto Receivables-Backed Note
as  described  below.
                                    F - 21
                                     <PAGE>

                     MONACO FINANCE, INC. AND SUBSIDIARIES

                         NOTES TO FINANCIAL STATEMENTS


NOTE  5  -  DEBT  (CONTINUED)
-----------------------------

AUTOMOBILE  RECEIVABLES  -  BACKED  NOTES  (CONTINUED)
------------------------------------------------------

In  May  of  1995,  MF I issued its Floating Rate Auto Receivables-Backed Note
("Revolving  Note" or "Series 1995-A Note").  On December 4, 1997, the Company
redeemed  the  outstanding  principal  balance of its Series 1995-A Note.  The
bonds  were  redeemed  at  their  principal amount of $12,271,457 plus accrued
interest  to December 4, 1997.  Upon redemption of the Series 1995-A Note, the
underlying  automobile  receivables  were  pledged  under  the  terms  of  the
Warehouse Line of Credit. At December 31, 1997 the 1995-A Note did not have an
outstanding  principal  balance.

On  September  15,  1995,  MF  I  issued the Series 1995-B Term Notes ("Series
1995-B  Notes") in the amount of $35,552,602.  The Series 1995-B Notes accrued
interest  at  a fixed note rate of 6.45% per annum.  On December 12, 1997, the
Company redeemed the outstanding principal balance of its Series 1995-B Notes.
The  bonds  were redeemed at their principal amount of $5,822,934 plus accrued
interest  to  December  12, 1997.  Upon redemption of the Series 1995-B Notes,
the  underlying  automobile  receivables  were  pledged under the terms of the
Warehouse  Line  of  Credit.

In  June  1997,  MF  Receivables  Corp.  II  ("MF II"), a wholly owned special
purpose  subsidiary  of the Company, sold, in a private placement, $42,646,534
of  Class  A  automobile  receivables-backed  notes ("Series 1997-1A Notes" or
"Term  Note")  to  an  outside  investor  and $2,569,068 of Class B automobile
receivables-backed  notes  ("Class  B  Notes")  to  Monaco  Funding  Corp.,  a
wholly-owned  special  purpose  subsidiary of the Company.  The Series 1997-1A
Notes  accrue  interest at a fixed rate of 6.71% per annum and are expected to
be fully amortized by December 2002; however, the debt maturities are based on
principal payments received on the underlying receivables, which may result in
a  different final maturity. An Indenture and Servicing Agreement require that
the  Company  and  MF  II  maintain certain financial ratios, as well as other
representations,  warranties  and  covenants.

In  connection  with  the  purchase of the Class B Notes, Monaco Funding Corp.
borrowed  $2,525,000  from  a  financial  institution  ("Heartland  Promissory
Note").  The Heartland Promissory Note accrued interest at a fixed rate of 16%
per annum and was collateralized by the proceeds from the Class B Notes.   The
Class  B  Notes, and the Heartland Promissory Note, were repaid in April 1998.

As  of  December  31,  1998,  the  Series  1997-1A Notes had a note balance of
$17,213,594. The underlying receivables backing the Series 1997-1A Notes had a
balance  of  $19,728,112  as  of  December  31,  1998.

The  assets  of  MF I, MF II and Monaco Funding Corp. are not available to pay
general  creditors  of  the  Company.

COMMON  STOCK
-------------

The  Company  has  two  classes of common stock.  The two classes are the same
except  for  the  voting  rights of each.  Each share of Class B stock retains
three  votes  while  each  share  of Class A stock retains one vote per share.
                                    F - 22
                                     <PAGE>

                     MONACO FINANCE, INC. AND SUBSIDIARIES

                         NOTES TO FINANCIAL STATEMENTS


NOTE  6  -  STOCKHOLDERS'  EQUITY
---------------------------------

COMMON  STOCK  (CONTINUED)
--------------------------

Effective  November  23,  1998  the  Company initiated a 1 for 5 reverse stock
split.  To  effect  the  split, the Company's  issued and outstanding $.01 par
Class  A and B common stock was decreased from  12,772,790 to 2,554,558 shares
and from 1,273,715 to 254,743 shares, respectively.  All periods presented and
related  footnote disclosures have been adjusted to reflect the reverse split.

STOCK  OPTION  PLANS
--------------------

The Company has reserved 355,000 of its authorized but unissued Class A Common
Stock  for  a  stock  option  plan  (the  "Plan")  pursuant to which officers,
directors  and  employees  of  the  Company  are eligible to receive incentive
and/or non-qualified stock options.  The Plan, which expires on June 30, 2002,
is  administered  by  a  committee  designated  by  the  Board  of  Directors.
Incentive stock options granted under the Plan are exercisable for a period of
up to 10 years from the date of grant and at an exercisable price which is not
less  than  the  fair  market value of the Class A Common Stock on the date of
grant,  except  that  the  term of an incentive stock option granted under the
Plan  to  a stockholder owning more than 10% of the outstanding Class A Common
Stock  of  the Company must not exceed five years and the exercise price of an
incentive  stock  option  granted  to such a stockholder must not be less than
110%  of  the fair market value of the Class A Common Stock on the date of the
grant.   The Plan also provides for issuance of stock appreciation rights.  At
December 31, 1998 and 1997, the Company has granted options to acquire a total
of  203,500  and 280,500 shares, respectively, of the Company's Class A Common
Stock.   These options are exercisable for a period of up to 10 years from the
date  of  grant and have exercise prices from $2.655 to $33.125 a share, which
represents  bid  prices  of  the  Company's Common Stock at the date of grant.
Through  December  31,  1998,  9,020  of  these  options  have been exercised.

<TABLE>

<CAPTION>



                                                                                 Price
                                                         Options   Warrants    Per Share
                                                         --------  --------  --------------
<S>                                                      <C>       <C>       <C>

Outstanding December 31, 1996                            168,060          -  $9.38 - $33.13
Granted                                                  138,340     25,300  $ 2.66 - $12.2
Canceled                                                 (24,880)         -  $9.40 - $33.15
                                                          (1,020)         -  $ 2.66 - $9.40
Outstanding December 31, 1997                            280,500     25,300  $ 2.66  $33.13

Granted                                                   12,000     50,000  $  3.13  $3.90
Canceled                                                 (81,000)         -  $2.66 - $33.13
Exercised                                                 (8,000)         -  $         2.66

Outstanding December 31, 1998                            203,500     75,300  $ 2.66  $33.13

Weighted average price per share                                             $         7.61

Weighted average remaining contracutal life (in months)                                  79

<FN>

</TABLE>


                                    F - 23
                                     <PAGE>

                     MONACO FINANCE, INC. AND SUBSIDIARIES

                         NOTES TO FINANCIAL STATEMENTS


NOTE  6  -  STOCKHOLDERS'  EQUITY  (CONTINUED)
----------------------------------------------

STOCK  OPTION  PLANS  (CONTINUED)
---------------------------------

The  Company  accounts  for  its stock option plan in accordance with SFAS No.
123,  Accounting  for  Stock-Based  Compensation, which encourages entities to
recognize as expense over the vesting period the fair value of all stock-based
awards on the date of grant.  Alternatively, SFAS No. 123 also allows entities
to  continue  to  apply  the  provisions of APB Opinion No. 25 and provide pro
forma  net  earnings and pro forma earnings per share disclosures for employee
stock  option  grants made in 1995 and future years as if the fair-value-based
method  defined  in  SFAS No. 123 had been applied. The Company has elected to
continue  to  apply  the  provisions of APB Opinion No. 25 and provide the pro
forma  disclosure  provisions  of  SFAS  No.  123.

The  Company  uses  one  of  the  most  widely used option pricing models, the
Black-Scholes  model  (the  Model),  for purposes of valuing its stock options
grants. The Model was developed for use in estimating the fair value of traded
options  which  have  no  vesting  restrictions and are fully transferable. In
addition,  it  requires  the  input of highly subjective assumptions including
the  expected  stock price volatility, expected dividend yields, the risk free
interest rate, and the expected life. Because the Company's stock options have
characteristics  significantly  different  from  those  of traded options, and
because changes in subjective input assumptions can materially affect the fair
value  estimate, in management's opinion, the value determined by the Model is
not  necessarily  indicative  of  the  ultimate  value of the granted options.

Had  compensation  cost  for  the  Company's stock option plan been determined
based  on  the  fair  value  at  the  grant  date  for awards in 1998 and 1997
consistent  with  the  provisions  of FAS 123, the Company's 1998 and 1997 net
loss  and  loss  per  common  share would have been increased to the pro forma
amounts  indicated  below:

<TABLE>

<CAPTION>
                                               December 31,
                                              --------------        
                                            1998           1997
                                       --------------  ------------
<S>                                    <C>             <C>

Net (loss) - as reported               $ (11,088,560)  $(9,355,000)
Net (loss) - pro forma                 $ (11,088,560)  $(9,604,329)
(Loss) per common share - as reported  $       (5.04)  $     (5.90)
(Loss) per common share - pro forma    $       (5.04)  $     (6.07)

<FN>

</TABLE>



Of  the  12,000  options  granted  in  1998,  7,000  options were vested as of
December  31,  1998.

The  fair  value  of each option grant is estimated on the date of grant using
the  Black-Scholes  option-pricing  model  with the following weighted average
assumptions used for grants in 1998:  dividend yield of 0.0%; expected average
annual  volatility  of 156.6%; average annual risk-free interest rate of 5.6%;
and  expected  lives  of  10  years.
                                    
                                    
                                    F - 24
                                     <PAGE>

                     MONACO FINANCE, INC. AND SUBSIDIARIES

                         NOTES TO FINANCIAL STATEMENTS


NOTE  6  -  STOCKHOLDERS'  EQUITY  (CONTINUED)
----------------------------------------------

PREFERRED  STOCK
----------------

In  connection  with  its  portfolio acquisition strategy, the Company entered
into  an  Amended and Restated Asset Purchase Agreement dated as of January 8,
1998  (the  "Asset  Purchase  Agreement"),  with  Pacific  USA  Holdings Corp.
("Pacific  USA")  and  certain  of  its  wholly-owned  or  partially-owned
subsidiaries  -  Pacific  Southwest  Bank  ("PSB"),  NAFCO Holding Company LLC
("NAFCO"),  Advantage Funding Group, Inc. ("Advantage") and PCF Service, LLC -
providing  for,  among  other things, the purchase by the Company of sub-prime
automobile  loans  from NAFCO and Advantage having an unpaid principal balance
of  approximately  $81,115,233  for  a  purchase price of $77,870,623 of which
$73,003,709  was  paid  in  cash.  Daiwa Finance Corporation (Note 5) provided
financing. The Company also agreed to issue Daiwa warrants for the purchase of
50,000 shares of Class A Common Stock for which the Company imputed a value of
$84,000.  The balance of the purchase price of $4,866,914 was paid through the
issuance  of  2,433,457  shares  of  the  Company's  8% Cumulative Convertible
Preferred  Stock,  Series 19981 (the "1998-1 Preferred Stock") valued at $2.00
per  share.  As  of  December  31, 1998, Pacific USA repurchased loans with an
original  purchased  principal  balance  of  approximately  $2.9  million.  In
addition  to  the repurchase proceeds of $2.6 million from Pacific USA, 85,870
shares  of  1998-1  Preferred  Stock  were  surrendered  by Pacific USA to the
Company.  In  consideration  for  converting approximately $4.5 million of the
Pacific  USA  Note  into 939,632 shares of the Company's Class A Common Stock,
the  Company agreed, subject to shareholder approval, to change the conversion
ratio of the 1998-1 Preferred Stock held by Pacific USA. As originally issued,
each share of 1998-1 Preferred Stock was convertible at any time into one-half
share  of  Class  A  Common  Stock. Since shareholder approval was obtained on
November  12,  1998,  each two shares of 1998-1 Preferred Stock is convertible
into  four  shares  of the Company's Class A Common Stock.  As a result of the
five  for  one  reverse  split  of the common shares, the conversion ratio was
amended  to be each 2.5 shares of 1998-1 Preferred Stock is convertible into 1
share  of  the  Company's  Class  A  Common  Stock,  or  an aggregate of up to
1,021,824  shares  of  Class  A  Common  Stock.

As  required  by  the  Asset  Purchase Agreement, PSB entered into a Loan Loss
Reimbursement  Agreement  whereby it agreed to reimburse the Company for up to
15%  of  any  losses  incurred  by  the  Company  in connection with the loans
acquired  from  NAFCO  and Advantage.  In consideration therefore, the Company
issued  162,230  shares  of  Class  A  Common  Stock.  The  Company  allocated
$1,622,304  to  the  cost  of  the purchased loans, which represents the value
assigned  to  the  common  shares.
                                    
                                    
                                    F - 25
                                     <PAGE>

                     MONACO FINANCE, INC. AND SUBSIDIARIES

                         NOTES TO FINANCIAL STATEMENTS


NOTE  6  -  STOCKHOLDERS'  EQUITY  (CONTINUED)
----------------------------------------------

PREFERRED  STOCK  (CONTINUED)
-----------------------------

Pacific  USA was the record owner of 300,000 shares of Class A Common Stock as
of  December  31, 1997. As a result of the December 1997 Option Agreement with
Consumer  Finance Holdings, Inc. ("CFH"), a wholly owned subsidiary of Pacific
USA,  it  was  granted  the power to vote the 166,000 shares of Class B Common
Stock  beneficially  owned  by  the  Messrs.  Ginsburg  and  Sandler (then the
President  and  Executive  Vice President, respectively, of the Company) ("the
Shareholders")  and  a limited power to direct the voting of shares subject to
proxies  held by the Shareholders. Also, under the terms of the Asset Purchase
Agreement  dated January 8, 1998, Pacific USA was issued 162,231 shares of the
Company's Class A Common Stock and under the Conversion Rights Agreement dated
July  1,  1998, Pacific USA was issued 939,632 shares of the Company's Class A
Common  Stock.  As  of  the  date  of this report, 2,554,558 shares of Class A
Common  Stock were issued and outstanding and 254,743 shares of Class B Common
Stock  were  issued and outstanding. The Class A Common Stock has one vote per
share  while  the  Class B Common Stock has three votes per share. The Class A
and  Class  B  Common Stock generally vote together as one class. Accordingly,
Pacific USA may be deemed to be the beneficial owner of approximately 59.0% of
the  combined  outstanding  shares  of  Class  A  and Class B Common Stock and
controls  approximately  65.3%  of  the total voting power. Pacific USA has an
option  expiring in December 2000 to purchase 166,000 shares of Class B Common
Stock,  owned by the Shareholders, while the Shareholders have an option, also
expiring  in  December  2000, to require that Pacific USA purchase all of such
shares. Upon exercise of either the put option or the call option, the Class B
Common  Stock  purchased by CFH will automatically convert into Class A Common
Stock  thereby  reducing the voting power of Pacific USA. As described herein,
Pacific  USA  also has the right, at any time, to convert the shares of 1998-1
Preferred  Stock  into  1,021,824  shares  of  Class  A  Common  Stock.

At  December 31, 1998, dividends on the 1998-1 Preferred Stock are accrued but
not  paid.

On  November  30,  1998,  Pacific USA converted $536,750 of unsecured debt and
$300,000  of  secured  debt  into 418,375 shares of 8% Cumulative Subordinated
Preferred  Stock,  Series 1999-1 (the "1999-1 Preferred Stock") of the Company
valued  at  $2.00  per share. The 1999-1 Preferred Stock is subordinate to the
1998-1  Preferred  Stock  with respect to payment of dividends, redemption and
upon  any liquidation of the Company. The 1999-1 Preferred Stock has no voting
rights  other than as provided in the articles of incorporation or as required
by  law. The Company has the right to redeem the 1999-1 Preferred Stock at any
time  and  from  time  to time, in whole or in part, for cash in the amount of
$2.00  per  share  plus  accrued  but  unpaid  dividends.  However, the 1999-1
Preferred Stock shall not be redeemed so long as any 1998-1 Preferred Stock is
issued  and  outstanding.  Dividends  on the 1999-1 Preferred Stock are at the
annual  rate  of  8%  ($.16  per  share) payable quarterly in shares of 1999-1
Preferred  Stock. No dividends other than those payable solely in common stock
shall  be  paid  with  respect  to the common stock unless all accumulated and
unpaid  dividends  on  the 1999-1 Preferred Stock shall have been declared and
paid  in  full.

                                    F - 26
                                    <PAGE>

                     MONACO FINANCE, INC. AND SUBSIDIARIES

                         NOTES TO FINANCIAL STATEMENTS


NOTE  6  -  STOCKHOLDERS'  EQUITY  (CONTINUED)
----------------------------------------------

OTHER
-----

On  or  about  December  4,  1997, Consumer Finance Holdings, Inc. ("CFH") and
Morris  Ginsburg,  the Company's President, Sandler Family Partners, Ltd., and
Irwin  L.  Sandler,  the Company's Executive Vice President, (collectively the
"Shareholders")  entered  into  an Option Agreement effective as of that date.
CFH  is  a  wholly-owned  subsidiary  of  Pacific USA Holdings Corp. ("Pacific
USA"). Pursuant to the Option Agreement, the Shareholders granted a three-year
option  to  CFH (the "Call Option") to purchase all, but not less than all, of
the  166,000  shares  of  Class  B Common Stock owned by the Shareholders (the
"Option  Shares")  at  a  purchase price of $4.00 per share. Concurrently, CFH
granted  to  each  Shareholder  a three-year option (the "Put Option") to sell
that portion of the Option Shares held by each Shareholder at a price of $4.00
per  share.  The  Put  Option is exercisable with respect to 50% of the Option
Shares  during  the  30-day  period  following  the  second anniversary of the
effective  date  and  50%  during  the  30-day  period  following  the  third
anniversary  of the effective date. The Call Option and Put Option both expire
on  the  third anniversary date of the effective date, or on December 4, 2000.
In  the event that CFH or any of its affiliates exercises the Call Option, and
within  180 days after closing thereof, sells or agrees to sell any portion of
the  Option  Shares  to  a  person  who is not an affiliate of CFH for a price
greater  than  $4.00  per  share,  the  seller  shall  be obligated to pay the
Shareholders  50%  of such excess. The Shareholders agreed not to pledge, sell
or  otherwise  transfer  the  Option Shares at any time during the term of the
Call Option except to the extent of exercise of the Put Option. The obligation
of  CFH under the Put Option is secured by funds in a segregated bank account.

Pursuant  to  the  Option Agreement, each Shareholder granted CFH the right to
vote  all  Option Shares and to direct the exercise of all consensual or other
voting  rights  with respect to any additional shares of the Company's capital
stock  as  to  which  any  Shareholder holds a proxy granted by a third party,
subject  to  any  fiduciary  duty  owed  to the grantor of any such proxy. The
Shareholders  retain  all  other  incidents  of  ownership with respect to the
Option  Shares, including, but not limited to, the right to receive dividends.

The Option Agreement further provides that CFH shall vote or cause to be voted
shares  of  the  Company's  capital  stock,  including  the  Option Shares, to
maintain  Messrs.  Ginsburg  and  Sandler  as  directors  of  the Company. The
Shareholders  agree to use their best efforts to provide CFH with the right to
designate four directors to the Company's board or such larger number as shall
then  be  sufficient to provide CFH with effective control of the board. As of
the  date  hereof,  the  board  consists  of  four  members.
                                    
                                    
                                    F - 27
                                     <PAGE>

                     MONACO FINANCE, INC. AND SUBSIDIARIES

                         NOTES TO FINANCIAL STATEMENTS


NOTE  6  -  STOCKHOLDERS'  EQUITY  (CONTINUED)
----------------------------------------------

OTHER  (CONTINUED)
------------------

Pacific  USA  is the record owner of 1,401,863 shares of Class A Common Stock.
As  a  result  of  the  Option Agreement, it was granted the power to vote the
166,000 shares of Class B Common Stock owned by the Shareholders and a limited
power  to  direct  the  voting  of  shares  subject  to  proxies  held  by the
Shareholders.    As  of  December 31, 1998, 2,554,558 shares of Class A Common
Stock  are  issued  and outstanding and 254,743 shares of Class B Common Stock
are  issued  and  outstanding. The Class A Common Stock has one vote per share
while  the  Class  B  Common  Stock has three votes per share. The Class A and
Class  B Common Stock vote together as one class. Accordingly, Pacific USA may
be deemed to be the beneficial owner of approximately 59.0% of the Class A and
Class  B  Common  Stock  and  controls approximately 65.3% of the total voting
power.  Upon exercise of either the Put Option or the Call Option, the Class B
Common  Stock  purchased by CFH will automatically convert into Class A Common
Stock  thereby  reducing  the  voting  power  of  Pacific  USA.

The  Company,  Sandler  Family Partners, and Messrs. Ginsburg and Sandler have
entered  into  a  Buy-Sell  Agreement  giving the Company the right to buy all
shares  of  its  capital  stock  owned  by Mr. Ginsburg upon his death and all
shares  of its capital stock beneficially owned by Mr. Sandler upon his death.
In  addition,  the  Company  had a right of first refusal to purchase any such
stock  desired  to  be  sold  by Mr. Ginsburg or Sandler Family Partners. This
right of first refusal was exercisable by either the Issuer or the non-selling
Shareholder.  The  parties  to  the  Buy-Sell  Agreement  have agreed that the
purchase rights and obligations under the Option Agreement shall supersede the
purchase  and  right  of  first  refusal  provisions contained in the Buy-Sell
Agreement  during  the  term  of  the  Option  Agreement.


NOTE  7  -  INCOME  TAXES
-------------------------

The  Company  is  required to measure current and deferred tax consequences of
all  events  recognized in the financial statements by applying the provisions
of  enacted  tax  laws  to determine the amount of taxes payable or refundable
currently  or  in  future  years.  The  measurement  of deferred tax assets is
reduced,  if  necessary,  by  the  amount  of  any tax benefits that, based on
available  evidence,  are  not  expected to be realized. The major and primary
source  of  any  differences  is  due to the Company accounting for income and
expense  items  differently  for  financial reporting and income tax purposes.

                                    F - 28
                                     <PAGE>

                     MONACO FINANCE, INC. AND SUBSIDIARIES

                         NOTES TO FINANCIAL STATEMENTS


NOTE  7  -  INCOME  TAXES  (CONTINUED)
--------------------------------------

The  provision  for  income  taxes  is  summarized  as  follows:

<TABLE>

<CAPTION>
                                 For the Years Ended
                                     December 31,
                                 --------------------    
<S>                              <C>            <C>

                                          1998  1997
                                 -------------  -----
Current expense (benefit)
 Federal                         $           -  $   -
 State                                       -      -

                                 $           -  $   -

Deferred expense (benefit)
 Federal                         $           -  $   -
 State                                       -      -
 Change in valuation allowance       1,541,582      -

                                 $   1,541,582  $   -

<FN>

</TABLE>





The  following  is  a  reconciliation of income taxes at the Federal Statutory
rate  with  income  taxes  recorded  by  the  Company.

<TABLE>

<CAPTION>




                                           For the Years Ended
                                                December 31,
<S>                                        <C>            <C>

                                               1998      1997
                                           ------------------
Computed income taxes (benefit) 
   at statutory rate - 34%                  (34.0)%  (34.0)%
State income taxes (benefit), 
   net of Federal income tax benefit          (3.9)    (3.4)
Change in valuation allowance                  54.7     37.4
                                           ==================
                                               16.8%      - %

<FN>

</TABLE>



                                    F - 29
                                     <PAGE>

                     MONACO FINANCE, INC. AND SUBSIDIARIES

                         NOTES TO FINANCIAL STATEMENTS


NOTE  7  -  INCOME  TAXES  (CONTINUED)
--------------------------------------

Deferred  taxes  are  recorded  based  upon  differences between the financial
statements  and  tax  basis of assets and liabilities and available tax credit
carryforwards.  Temporary  differences  and carryforwards which give rise to a
significant  portion  of  deferred tax assets and liabilities were as follows:

<TABLE>

<CAPTION>




                                                   For the Years Ended
                                                        December 31,
                                                   ---------------------        
                                                  1998               1997
                                          ---------------------  ------------
<S>                                       <C>                    <C>

Deferred tax assets
 Federal and state NOL tax carry-forward  $         16,484,059   $ 8,460,033 
 Other                                                 151,580        45,931 
                                                    16,635,639     8,505,964 
 Valuation allowance                               (11,009,306)   (5,336,154)
  Total deferred tax assets                          5,626,333     3,169,810 

Deferred tax liabilities
 Depreciation                                                -       (68,057)
 Allowances and loan origination fees               (5,626,333)   (1,521,974)
 Total deferred tax liability                       (5,626,333)   (1,590,031)

 Net deferred tax asset                   $                  -   $ 1,579,779 

<FN>

</TABLE>



As  of December 31, 1998, the Company had a net operating loss carryforward of
approximately  $43.6  million for federal income tax reporting purposes which,
if  unused,  will expire in 2011 through 2013.  During the year ended December
31,  1998  there  were  transactions  involving changes in ownership that will
significantly  restrict the utilization of net operating loss carryforwards in
the  future.

The  principal  temporary  differences that will result in deferred tax assets
and  liabilities  are  certain  expenses  and  losses  accrued  for  financial
reporting  purposes  not  deductible for tax purposes until paid, depreciation
for  tax  purposes  in excess of depreciation for financial reporting purposes
and  the  utilization  of net operating losses.  The effect of the differences
outlined  above  generated  a  long-term  deferred  tax asset of approximately
$11,000,000.   In 1998, management determined that it was more likely than not
that  the  Company  would  not  realize its deferred tax asset, therefore they
fully  allowed  for  the  entire balance resulting in a charge to current year
income  of  $1,541,582  (Note  11).  Accordingly, there is no net deferred tax
asset  reflected  in  the  accompanying  consolidated  financial  statements.
                                    
                                    
                                    F - 30
                                     <PAGE>

                     MONACO FINANCE, INC. AND SUBSIDIARIES

                         NOTES TO FINANCIAL STATEMENTS


NOTE  8-  DISCLOSURE  ABOUT  FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS
--------------------------------------------------------------------

CASH  AND  CASH  EQUIVALENTS.  RESTRICTED  CASH  AND  ACCRUED INTEREST PAYABLE
------------------------------------------------------------------------------

The  carrying  value  approximates  fair value due to its liquid or short-term
nature.

AUTOMOBILE  RECEIVABLES  -  NET
-------------------------------

The  interest  rates  and  credit  ratings  of  the net Automobile Receivables
outstanding  at  December  31, 1998 are consistent with the interest rates and
credit  ratings on current purchases by the Company of Contracts with the same
maturities  and  collateral; as such, the carrying value of the net Automobile
Receivables   outstanding at December 31, 1998 approximates fair value at that
date.

PROMISSORY  NOTE  PAYABLE,  CONVERTIBLE SUBORDINATED DEBT, SENIOR SUBORDINATED
------------------------------------------------------------------------------
DEBT,  CONVERTIBLE SENIOR SUBORDINATED DEBT  AND AUTOMOBILE RECEIVABLES-BACKED
------------------------------------------------------------------------------
NOTES
-----

THE  CARRYING  AMOUNTS OF NOTES PAYABLE AND DEBT ISSUED APPROXIMATE FAIR VALUE
------------------------------------------------------------------------------
AS  OF  DECEMBER  31,  1998  BECAUSE  INTEREST  RATES  ON  THESE  INSTRUMENTS
-----------------------------------------------------------------------------
APPROXIMATE  MARKET  INTEREST  RATES.
-------------------------------------


NOTE  9  -  RELATED  PARTIES
----------------------------

Effective  November  30,  1998,  Pacific  USA  Holdings Corp. ("Pacific"), the
Company's  major  shareholder  and  Senior Lender paid the Company $200,000 in
cash  to  enter  into  a Software License and Development Agreement and a Data
Licensing  Agreement  (the  "License  Agreements").  Pursuant  to  the License
Agreements,  the  Company,  as  licensor,  granted  to Pacific, as licensee, a
perpetual,  fully paid up, nontransferable, exclusive license covering certain
proprietary    software  and  historical  data  developed  by the Company with
respect  to  consumer  automobile  loans, including risk analysis (the "Monaco
Software").  Pacific  acquired  the  right  to  make modifications, changes or
improvements  to the Monaco Software (referred to as the "Advanced Software").
Pacific  has the right to develop and market the Advanced Software as it deems
fit  in  its sole discretion.  Pacific granted to the Company a fully paid up,
nontransferable,  nonexclusive license limited to use of the Advanced Software
for the Company's internal business purposes only. This license will terminate
90  days  following any change in control of the Company. In addition, Pacific
has  a  right  of  first  refusal  to  purchase  the  Monaco  Software.

                                    F - 31
                                     <PAGE>

                     MONACO FINANCE, INC. AND SUBSIDIARIES

                         NOTES TO FINANCIAL STATEMENTS


NOTE  10  -  SUBSEQUENT  EVENTS
-------------------------------

Subsequent  to  December  31, 1998, the Company was advised by Pacific that it
can  no  longer be relied upon to loan funds on a secured basis to the Company
for  working capital needs.  Although Pacific has continued to provide secured
loans  to  the  Company,  no  assurance  can  be  given that such funding will
continue.   Also, subsequent to December 31, 1998, the Company received verbal
notification  from  Daiwa  that (i) MFIII and MFIV are in violation of certain
covenants  unrelated  to performance of the portfolio under the Warehouse Line
of Credit and the Portfolio Purchase Credit Facility (collectively the "Credit
Facilities");  and  (ii)  that  accordingly  a  servicer  event of default has
occurred.    In  connection  with the foregoing, Daiwa requested a transfer of
servicing  to a successor servicer to be appointed by Daiwa.  As a result, the
Company is not receiving nor can it expect to receive monthly distributions of
excess  funds  from  the  Credit  Facilities, through dividends from MFIII and
MFIV,  unless  and  until  Daiwa is paid in full.  At this time the Company is
unable  to  determine  whether or not it will receive any future cash flows or
other  residual  interests from the loan portfolios collateralizing the Credit
Facilities.

On  or  about  January  16,  1999, in connection with the June 26, 1997 Master
Financing  Securitization,  the  Company's  wholly-owned  special  purpose
corporation,  MFII,  redeemed the outstanding Class A Certificates for a total
redemption  price of approximately $16.7 million. The transaction was financed
through  the existing Warehouse Credit Facility with Daiwa Finance Corporation
and  MFIII.  Following  the  redemption, the Company, MFII, and MFIII, entered
into  an  arrangement whereby the assets of MFII, consisting of  $18.7 million
of  Automobile  Backed  Consumer  Contracts  were  transferred  to  MFIII.

In  February 1999, the Company failed to make certain payments and as a result
is  in  default of certain payment covenants pertaining to both the Rothschild
Notes  and the 12% Notes (collectively the "Sub Debt").  The Company believes,
the  Sub  Debt  lenders have certain enforcement rights under their respective
Sub Debt agreements.  These rights, in the opinion of the Company, are subject
to  specific subordination and "stand-still" provisions as long as the Company
has  senior  debt  outstanding.  As of April 13, 1999 (unaudited), the Company
has  approximately  $3,860,000  of  senior  debt  outstanding.

Subsequent  to  December  31,  1998,  the  Company  was  past due on principal
payments  to Pacific Southwest Bank under a secured loan agreement.  No action
has  been  taken  by PSB to enforce their rights or otherwise force payment of
the debt.  No assurance is, nor can be given that PSB will not exercise any or
all  of  their  rights  under  the  secured  loan  agreement  in  the  future.


NOTE  11  -  SIGNIFICANT  FOURTH  QUARTER  ADJUSTMENTS
------------------------------------------------------

In  December  1998,  management  determined  that  due to a lack of profitable
operating  history,  it  was  more  likely than not that the Company would not
realize  its  deferred  tax  asset  and therefore fully allowed for the entire
balance  resulting in a charge to income of $1,541,582. Additionally, based on
the  Company's  static  pool  reserve  analysis, an increase of $2,650,000 was
recorded  to  the  allowance  for  credit  losses.
                                    F - 32
                                     <PAGE>



ITEM  8.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS ON ACCOUNTING AND
------------------------------------------------------------------------------
FINANCIAL  DISCLOSURE.
----------------------

     NONE

                                   PART III

     Part  III, including the following items, is incorporated by reference to
the  Company's  Proxy  Statement  which  will be filed with the Securities and
Exchange  on  or  before  April  30,  1999:

ITEM  9.  DIRECTORS  AND  EXECUTIVE  OFFICERS,  PROMOTERS AND CONTROL PERSONS,
------------------------------------------------------------------------------
COMPLIANCE  WITH  THE  SECTION  16(A)  OF  THE  EXCHANGE  ACT.
--------------------------------------------------------------

ITEM  10.  EXECUTIVE  COMPENSATION.
-----------------------------------

ITEM  11.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL OWNERS AND MANAGEMENT.
------------------------------------------------------------------------------

ITEM  12.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS.
--------------------------------------------------------------


                                    PART IV

ITEM  13.EXHIBITS  AND  REPORTS  ON  FORM  8-K
----------------------------------------------

(a)  The  following  documents  are  filed  as  part  of  this  Report:


1          Financial  Statements          PAGE  OF  THIS  REPORT
     Independent  Auditors'  Report
     Consolidated  Balance  Sheets  December  31,  1998  and  1997
     Consolidated  Statements  of  Operations For the Years Ended December 31,
1998  and  1997
     Consolidated  Statements  of  Stockholders'  Equity  For  The Years Ended
December  31,  1998  and  1997
     Consolidated  Statements  of  Cash Flows For The Years Ended December 31,
1998  and  1997
     Notes  to  Consolidated  Financial  Statements          -


                                     <PAGE>

------
2.FINANCIAL  STATEMENT  SCHEDULES:
----------------------------------

All  other  statements  or  schedules  for  which  provision  is  made  in the
applicable  regulation  of  the  Securities  and Exchange Commission have been
omitted  because  they  are  not  required  under  related instructions or are
inapplicable,  or  the  information  is  shown in the financial statements and
related  notes.

3.(a)          Exhibits
3.1      Articles of Incorporation, dated August 12, 1986, and Articles of
           amendment,  dated  July  2,  1990  and  August  31,  1990  (1)
3.2      Bylaws  (1)
3.3      Articles of Amendment to the Articles of Incorporation increasing the
         number  of  authorized shares of Class A Common Stock and Preferred 
         Stock (19)
3.4      Articles   of  Amendment  to  the  Articles of Incorporation(20)
3.5      Amended    and    Restated    Bylaws(20)
3.6      Articles  of  Amendment  to  Articles  of  Incorporation(21)
4.4      Form of Mergers and Acquisitions Agreement with the Underwriter (1)
4.5      Preferences,  Limitations  and  Relative  Rights of 8% Cumulative
          Convertible  Preferred  Stock,  Series  1998-1  (19)
4.6      Preferences,  Limitations  and  Relative  Rights of 8% Cumulative
          Convertible    Preferred    Stock,    Series    1999-1(22)
10.1     Employment Agreement between the Registrant and Morris Ginsburg dated
          July  9,  1990  (1)
10.2      Employment Agreement between the Registrant and Irwin L. Sandler
           dated  July  9,1990  (1)
10.3      Lease with BCE Development Properties, Inc., dated December 23, 1988
           (1)
10.4      Key-man  Insurance  Policies on the lives of Messrs.Ginsburg and
           Sandler  (1)
10.5      Form  of  Purchase  Agreement  (re:  Dealers)  (1)
10.6      Agreement  -  Guaranty  Bank  and  Trust  Company  (1)
10.7      Agreement  -  Central  Bank  of  Denver  (1)
10.8      Agreement  -  First  National  Bank  of  Southeast  Denver  (1)
10.9      Agreement  -  Arapahoe  Bank  and  Trust  (1)
10.9      (A) First Amendment to Arapahoe Bank/Monaco Finance Agreement
           dated February  22,  1991  with Assignment of Savings Account and
           Security Agreement (2)
10.10          Agreement  -  Southwest  State  Bank  (1)
10.11          Agreement  -  Lakeside  National  Bank  (2)
10.12          Agreement  -  Western  Funding,  Inc.  (2)
10.13          Form  of  Agreement  -  First  Eagle  (2)
10.14          Form  of  Financing  Agreement  (re:  Floorplan  Financing) (1)
10.15          Stock  Option  Plan  (1)
10.16          Single  Interest  Blanket  Insurance  Policy  (1)
10.17     Lease with Richard A. Boddicker dated September 4, 1990, as amended,
re:  South  Havana  Lot  (1)
10.18         Financing Agreement, Promissory Note and Security Agreement (re:
wholesale  floorplan  financing)  (1)
10.19          Lease  re:    Colorado  Springs  Lot  (3)
10.21          Lease  re:    West  Colfax  Lot  (3)
10.22         Financing Agreement with Citicorp Leasing, Inc., including three
Amendments  (4)
10.23          7%  Subordinated  Note  Agreement  (4)
10.24          Consent  of  Independent  Certified  Public  Accountants  (9)
10.25       Sixth Amendment to Financing Agreement with Citicorp Leasing, Inc.
dated    June  1,  1994  (5)
10.26          Lease  Agreement  between the Registrant and GSC Ltd. Liability
Company,  a  related  party  owned  company(5)
10.27      Note Purchase Agreement for Senior Subordinated Notes to Rothschild
North  America,  Inc.(6)
10.28     Seventh Amendment to Financing Agreement with Citicorp Leasing, Inc.
dated  July  26,  1994
10.29      Eighth Amendment to Financing Agreement with Citicorp Leasing, Inc.
dated  September  7,  1994  (7)
10.30      Ninth Amendment to Financing Agreement  with Citicorp Leasing, Inc.
dated  November  2,  1994  (7)
10.31       Indenture Agreement related to private placement of $23,861,823 of
7.6%  automobile  receivables-backed  notes  (8)
10.32          Form  of  Term Note issued by MF Receivables Corp. I related to
private  placement  of $23,861,823 of 7.6% automobile receivables-backed notes
(8)
10.33       Tenth Amendment to Financing Agreement with Citicorp Leasing, Inc.
dated  November  16,  1994  (10)
10.34     Amended and restated Lease re: Executive Offices at 370 17th Street,
50th  floor,  Denver,  Colorado  80202  with  Brookfield  Republic,  Inc. (10)
10.35         Amended and Restated Indenture Agreement dated as of May 1, 1995
related  to  private  placement  of  $40 million aggregate principal amount of
floating  rate  automobile  receivable-backed  warehouse  notes  (11)
10.36        Form of Warehouse Note issued by MF Receivables Corp I related to
private  placement  of $40 million aggregate principal amount of floating rate
automobile  receivable-backed  warehouse  note  (11)
10.37     MBIA Forward Commitment to Issue related to private placement of $40
million  aggregate  principal  amount  of  floating  rate  automobile
receivables-backed  warehouse  notes  (11)
10.38          Purchase  Agreement  dated  January 9, 1996 by and among Monaco
Finance,  Inc.  and Black Diamond Advisors, Inc. and other purchasers relating
to  $5,000,000  in  12%  Convertible  Senior  Subordinated Notes due 2001 (12)
3.(a)          Exhibits  (continued)
10.39      Indenture dated as of January 9, 1996, between Monaco Finance, Inc.
and  Norwest  Bank  of  Minnesota,  N.A.,  realting to 12 % Convertable Senior
Subordinated  Notes  due  2001  (12)
10.40        Loan and Security Agreement dated as of January 16, 1996, between
Registrant    and  LaSalle  National  Bank  (12)
10.41       Revolving Credit Note in the principal amount of $15 million or so
much  thereof as may be advanced, dated January 16, 1996, payable to the order
of  LaSalle  National  Bank  by  Registrant  (12)
10.42     Letter Agreement dated June 28, 1996, by and between  the Registrant
and  Black  Diamond  Advisors,  Inc.  (13)
10.43      Letter Agreement dated July 3, 1996, by and between  the Registrant
and  David  M.  Ickovic  regarding  director  compensation  (13)
10.44     Securities Purchase Agreement between the Registrant and Pacific USA
Holdings  Corp.  (14)
10.45       Stock Purchase Warrant in favor of Pacific USA Holdings Corp. (14)
10.46        Shareholder option Agreement among Pacific USA Holdings Corp. and
Morris  Ginsburg,  Irwin  Sandler  and  Sandler  Family  Partners,  Ltd.  (14)
10.47         Executive Employment Agreement between the Registrant and Morris
Ginsburg  related  to  the  Securities  Purchase  Agreement  with  Pacific USA
Holdings  Corp.  (14)
10.48          Executive Employment Agreement between the Registrant and Irwin
Sandler  related  to  the  Securities  Purchase  Agreement  with   Pacific USA
Holdings  Corp.  (14)
10.49     Loan Agreement between Pacific USA Holdings Corp. and the Registrant
(14)
10.50       Press Release of the Registrant related to the Securities Purchase
Agreement  with    Pacific  USA  Holdings  Corp.(14)
10.51          Termination Agreement dated as of February 6, 1997, between the
Registrant  and  Pacific  USA  Holdings  Corp.  (15)
10.52         Press Release of the Registrant regarding the termination of the
Securities  Purchase Agreement between the Registrant and Pacific USA Holdings
Corp.  (15)
10.53     Trust and Security Agreement related to the placement of $42,646,534
and  $2,569,068  aggregate  principal  amount of automobile recievables-backed
Class  A  Certificates  and  Class  B  Certificates,  respectively  (16)
10.54          Form  of  Class A Certificate issued by MF Receivables Corp. II
related  to  the  private  placement  of  $42,646,534  of  6.71%  automobile
receivables-backed  notes  (16)
10.55          Form  of  Class B Certificate issued by MF Receivables Corp. II
related to the placement of $2,569,068 of  automobile receivables-backed notes
(16)
10.56     Loan Agreement dated June 26, 1997, between Monaco Funding Corp. and
Heartland  Bank  relating  to  the  $2,525,000  Promissory  Note  (16)
10.57        Option Agreement effective as of December 4, 1997, by and between
Consumer  Finance Holdings, Inc. and Morris Ginsburg, Sandler Family Partners,
Ltd.,  and  Irwin  L.  Sandler  (17)
10.58          Irrevocable Proxy and Power of Attorney dated December 4, 1997,
granted  by  Morris  Ginsburg  (17)
10.59          Irrevocable Proxy and Power of Attorney dated December 4, 1997,
granted  by  Sandler  Family  Partners,  Ltd.  (17)
10.60          Executive  Employment  Agreement  between Registrant and Morris
Ginsburg  (17)
10.61          Executive  Employment Agreement between Registrant and Irwin L.
Sandler  (17)
10.62          First  Amendment  to  Buy-Sell  Agreement  (17)
10.63     Amended and Restated Asset Purchase Agreement dated January 8, 1998,
by  and  among  the  Company,  Pacific  USA Holdings Corp., and certain of its
wholly-owned  or  partially-owned  subsidiaries  (18)
10.64          Loan  Purchase  Agreement dated January 8, 1998 among Advantage
Funding Group, Inc., a Delaware corporation, the Company, Pacific USA Holdings
Corp., a Texas corporation, and Pacific Southwest Bank, a federal savings bank
(18)
10.65     Loan Loss Reimbursement Agreement dated January 8, 1998. between, on
the  one  hand,  Pacific  Southwest  Bank, a federally chartered savings bank,
NAFCO  Holding  Company,  LLC,  a  Delaware  limited  liability  company,  and
Advantage Funding Group, Inc., a Delaware corporation, and, on the other hand,
the  Company  (18)
10.66        Loan Purchase Agreement dated January 8, 1998 among NAFCO Holding
Company,  L.L.C.,  a  Delaware limited liability company, the Company, Pacific
USA Holdings Corp., a Texas corporation, and Pacific Southwest Bank, a federal
savings  bank  (18)
10.67     Interim Servicing Agreement dated as of January 8, 1998, between, on
the  one  hand,  the  Company and, on the other hand, Advantage Funding Group,
Inc., a Delaware corporation, Pacific USA Holdings Corp., a Texas corporation,
and  Pacific  Southwest  Bank,  a  federally  chartered  savings  bank  (18)
10.68     Interim Servicing Agreement dated as of January 8, 1998, between, on
the  one hand, the Company and, on the other hand, NAFCO Holding Company, LLC,
a  Delaware  limited  liability  company,  Pacific USA Holdings Corp., a Texas
corporation,  and  Pacific  Southwest Bank, a federally chartered savings bank
(18)
10.69    Conversion and Rights Agreement dated September 1, 1998, by and
          between    the    Company    and    Pacific    USA    Holdings
          Corp.(20)
10.70    Letter Agreement dated June 25, 1998, by and between the Company and
          Rothschild    North    America,  Inc.,  amending  Note  Purchase 
          Agreement(20)
10.71    Consent and Amendment No. 1 to Indenture and Related Documents by
          and  among  the Company, Black Diamond Advisors, Inc., Heller 
          Financial, Inc.,and others  dated September  9, 1998(20)
10.72    Conversion    and    Rights    Agreement(22)
10.73    Software    License    and    Development    Agreement(22)
10.74    Data    License    Agreement(22)

11       Statement  Re:  Computation  of  Earnings  Per  Share  -  PAGE 59
23       Consent  of  Independent  Certified  Accountants  -  PAGE 60
99       Cautionary Statement Regarding Forward-looking statements- PAGES 61


     Footnotes:
(1)    Incorporated by reference to the Registrant's Registration Statement on
Form S-1 and all Amendments thereto, as filed with the Securities and Exchange
Commission,  Registration  No.  33-35843,  and which was declared effective on
December  11,  1990.

(2)   Incorporated by reference to the Registrant's Annual Report on Form 10-K
for  the  year  ended  December  31,  1990.

(3)   Incorporated by reference to the Registrant's Annual Report on Form 10-K
for  the  year  ended  December  31,  1991.

(4)    Incorporated  by  reference  to  the Registrant's Annual Report on Form
10-KSB  for  the  year  ended  December  31,  1992.

(5)    Incorporated  by reference to the Registrant's Quarterly Report on Form
10-QSB  for  the  quarter  ended  June  30,  1994.

(6)   Incorporated by reference to the Registrant's Form 8-K dated November 3,
1994.

(7)    Incorporated  by reference to the Registrant's Quarterly Report on Form
10-QSB  for  the  quarter  ended  September  30,  1994.

(8)  Incorporated by reference to the Registrant's Form 8-K dated November 18,
1994.

(9)    Incorporated  by  reference  to  the Registrant's Annual Report on Form
10-KSB  for  the  year  ended  December  31,  1993.

(10)  Incorporated  by  reference  to  the  Registrant's Annual Report on Form
10-KSB  for  the  year  ended  December  31,  1994.

(11)  Incorporated  by  reference  to  the Registrant's Form 8-K dated May 18,
1995.

(12)  Incorporated  by reference to the Registrant's Form 8-K dated January 9,
1996.

(13)  Incorporated  by  reference  to the Registrant's Form 8-K dated June 28,
1996.

(14)  Incorporated by reference to the Registrant's Form 8-K dated October 29,
1996.

(15)  Incorporated by reference to the Registrant's Form 8-K dated February 7,
1997.

(16) Incorporated by reference to the Registrant's Form 10-QSB for the quarter
ended  June  30,  1997.

(17)  Incorporated by reference to the Registrant's Form 8-K dated December 4,
1997.

(18)  Incorporated  by reference to the Registrant's Form 8-K dated January 8,
1998.

(19)  Incorporated  by  reference  to the Registrant's Form 8-K dated March 4,
1998.
(20)  Incorporated  by  reference  to  the Registrant's Form 8-K dated
September  1,  1998.
(21)  Incorporated by reference to the Registrant's Form 8-K dated November
12,  1998.
(22)  ncorporated by reference to the Registrant's Form 8-K dated January
16,  1999.


     3.(b)    Reports  on  Form  8-K:

     A  Form  8-K dated October 3, 1997, was filed announcing the execution of
an  Asset  Purchase  Agreement  to  acquire  certain assets from affiliates of
Dallas-based  Pacific  USA  Holdings  Corp.

     A  Form  8-K  dated  December  4,  1997, was filed announcing a change in
control  of  the  Registrant.

     A  Form  8-K  dated  January  8,  1998,  was  filed  announcing  that the
Registrant  had  entered into an Amended and Restated Asset Purchase Agreement
with  Pacific  USA  Holdings  Corp.,  and  certain  of  its  wholly-owned  and
partially-owned  subsidiaries, providing for, among other things, the purchase
by  the  Registrant  of  $81.1  million  of  sub-prime  auto  loans.

     A  Form  8-K  dated March 4, 1998 was filed announcing the voting results
from  the  special  meeting  of  shareholders  held  on  March  4,  1998.

<TABLE>

<CAPTION>

                                         EXHIBIT 11
                           MONACO FINANCE, INC. AND SUBSIDIARIES
                           -------------------------------------
                      COMPUTATION OF EARNINGS (LOSS) PER COMMON SHARE
                      -----------------------------------------------

     YEAR  ENDED  DECEMBER  31,
     --------------------------



<S>                                                             <C>            <C>
                                                                         1998          1997

NET EARNINGS (LOSS)
--------------------------------------------------------------                             

Net (loss)                                                       -$11,088,560   -$9,355,000

AVERAGE COMMON SHARES OUTSTANDING
--------------------------------------------------------------                             

Weighted average common shares outstanding - basic                  2,809,301     1,582,546

Shares issuable from assumed exercise of stock options (a)                (b)           (b)

Shares issuable from assumed exercise of stock warrants (a)               (b)           (b)

Shares issuable from assumed conversion of Preferred Stock (a)            (b)           (b)

Weighted average common shares outstanding -  dilutive              2,809,301     1,582,546


(Loss) per common share - basic and dilutive                           -$3.95        -$5.91



<FN>

     Notes:
     ------
(a)        Dilutive potential common shares are calculated using the treasury stock method.
(b)        The computation of earnings per common share assuming dilution excludes dilutive
potential  common  shares  that  have  an  anti-dilutive  effect  on  earnings  per  share.
</TABLE>




                                     <PAGE>


                                  EXHIBIT 23



                   CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS



The  Board  of  Directors
Monaco  Finance,  Inc.
370  17th,  Suite  5060
Denver,  Colorado  80202

We  hereby  consent to the incorporation by reference of our reports on Monaco
Finance,  Inc.  (the  "Company")  dated  March  30,  1998,  into the Company's
Registration  Statement  on Form S-3 (File No. 33-97976) and on Form S-8 (File
NO.  33-68530),  and  to  all  references  to  our  firm  in such Registration
Statements.

                                      /s/  Ehrhardt Keefe Steiner & Hottman PC
                                      ----------------------------------------
                                           Ehrhardt Keefe Steiner & Hottman PC


March  31,  1998
Denver,  Colorado


                                     <PAGE>

                                  EXHIBIT 99
                        CAUTIONARY STATEMENT REGARDING
                        ------------------------------
                          FORWARD-LOOKING STATEMENTS
                          --------------------------

     The  Company  wishes to take advantage of the "safe harbor" provisions of
the  Private  Securities  Litigation  Reform  Act  of  1995 and is filing this
cautionary  statement  in  connection  with  such safe harbor legislation. The
Company's  Form 10-KSB, any Form 10-QSB, any Form 8-K, or any other written or
oral  statements  made  by  or  on  behalf  of  the  Company  may  include
forward-looking  statements  which  reflect  the  Company's current views with
respect  to  future  events  and  financial  performance. The words "believe,"
"expect,"  "anticipate,"  "intends,"  "forecast,"  "project,"  and  similar
expressions  identify  forward-looking  statements.

     The  Company  wishes  to  caution  investors  that  any  forward-looking
statements  made  by  or on behalf of the Company are subject to uncertainties
and  other  factors  that could cause actual results to differ materially from
such  statements.  These  uncertainties and other factors include, but are not
limited  to,  the Risk Factors listed below (many of which have been discussed
in prior SEC filings by the Company). Though the Company has attempted to list
comprehensively  these  important  factors,  the  Company  wishes  to  caution
investors  that  other  factors  may  in  the  future prove to be important in
affecting the Company's results of operations. New factors emerge from time to
time and it is not possible for management to predict all of such factors, nor
can  it assess the impact of each such factor on the business or the extent to
which  any  factor,  or  combination  of  factors, may cause actual results to
differ  materially  from  forward-looking  statements.

     Investors  are  further  cautioned  not  to  place undue reliance on such
forward-looking statements as they speak only of the Company's views as of the
date  the statement was made. The Company undertakes no obligation to publicly
update  or  revise  any forward-looking statements, whether as a result of new
information,  future  events,  or  otherwise.


                                 RISK FACTORS
                                 ------------

     ADVERSE  FINANCIAL CONDITION.  The Company's cash flow from operations is
not  sufficient  to  cover  its  overhead  and  other  operating  expenses.
Historically,  the Company's cash needs have been funded through a combination
of  cash  flow  from operations, credit lines, securitizations and capital and
secured  loans  provided  by  various  persons  including  the Company's major
shareholder and senior lender, Pacific USA Holdings Corp. The Company has been
advised  by Pacific that it can no longer be relied upon to provide capital or
loans to fund the Company's working capital requirements. Although Pacific has
continued  to  provide  certain  additional  secured  loans to the Company, no
assurance  can  be  given  that  such  funding will continue. In addition, the
Company  has been verbally notified by its principal lenders that certain loan
and/or  payment  covenants  have been violated by the Company or by certain of
its  special  purpose  subsidiaries.  As  a result, further advances under the
warehouse  line  of  credit  are unavailable, loan servicing for a substantial
portion  of  the Contracts has been or will be transferred from the Company to
third  parties  and excess funds in the special purpose subsidiaries are being
applied  against  the  indebtedness  of  those  subsidiaries rather than being
remitted  to  the  Company. Thus, substantial sources of revenue are no longer
available to the Company. In addition, the Company's independent auditors have
expressed substantial doubt about the Company's ability to continue as a going
concern.  Given these recent events, the Company is actively seeking to obtain
new financing sources. Also, it is attempting to implement a business strategy
based  upon joint ventures with third parties. No assurance can be or is given
that  new  and adequate sources of financing will be obtained. In addition, no
assurance  can  be  or is given that the business strategy will be implemented
or,  if  implemented,  will  be  successful.  Failure  to  meet  loan covenant
requirements will have a material adverse effect on the ability of the Company
to  obtain  new  sources  of  financing.

     DEPENDANCE UPON ADDITIONAL CAPITAL TO MAINTAIN OPERATIONS.  The Company's
business  has been and will continue to be cash intensive. Capital is required
primarily  to  purchase  Contracts  from  the  Dealer  Network and to fund the
Company's  negative  cash  flow from operations. The ability of the Company to
continue  operations  will  require additional debt or equity financing. There
can  be  no  assurance that such additional financing will be available to the
Company,  or  if  available,  on  terms  satisfactory  to  the  Company.

     SUBSTANTIAL  LOSSES.  During the fiscal years ended December 31, 1997 and
1998 the Company sustained losses of $9,355,000 and $11,088,560, respectively.
In  1997  and  1998 the Company's policy of acquiring loans through its Dealer
Network,  which  meet its credit criteria and provide acceptable risk adjusted
yields based upon the Company's scoring and risk models, reduced substantially
the  number  and  amount  of  new  loans purchased by the Company during these
periods.  The difficulty in acquiring loans was further exacerbated by intense
competition  in  the  industry  that  drove  down  yields  for  higher-quality
Contracts  to  levels  that were unacceptable to the Company. At the same time
the  Company  was  developing  the  infrastructure and platform to underwrite,
service,  and  collect  a  substantially  greater  portfolio of contracts. The
interest  spread from the Company's approximately $108 million loan balance at
December  31,  1998, was not sufficient to cover costs of doing business. As a
result  of  portfolio  purchases  in late 1997 and 1998 totaling approximately
$100  million,  the  Company increased its loan portfolio significantly. These
portfolio  purchases, together with the Company's ongoing auto loan purchases,
did  result  in  a  significant  increase in interest income, however expenses
continued  to  rise.

     COST  OF  CAPITAL  AND  INTEREST  RATE  RISKS.  A substantial part of the
Company's  operating revenues are derived from the spread between the interest
income  it  collects  on  its  contracts  and  the interest expense it pays on
borrowings  incurred to purchase and retain such contracts. As of December 31,
1997  and 1998, the Company's interest expense as a percentage of revenues was
44.9%  and  53.9%,  respectively. Net interest margin percentage, representing
the difference between interest income and interest expense divided by average
finance  receivables,  decreased  from  9.1%  in  1997  to  7.2%  in 1998. The
Company's  capacity  to  generate  earnings  on  its portfolio of contracts is
dependent  upon  its ability to maintain a sufficient margin between its fixed
portfolio  yield  and its floating or fixed cost of funds. In addition, losses
from  Contract defaults reduce the Company's margins and profits. In the event
interest rates increase due to economic conditions or other reasons, resulting
in  an  increase  in  the  cost  of  borrowed  capital,  it is likely that the
Company's  spread  will  be reduced since the rates charged on the majority of
its  Contracts  are  already  at  the legal limits. If defaults on outstanding
Contracts  increase  resulting  in  larger  credit losses, the availability of
outside  financing  (i)  may  diminish  and (ii) may become more costly due to
higher  interest  rates  or fees. Either of these events could have an adverse
effect  on  the  Company.

     RELIANCE  ON  SECURITIZATIONS.  The  Company  relies  significantly  on
periodically  financing  Contracts  through  asset-backed  securitizations.
Proceeds  from securitizations are used to repay warehouse borrowings, thereby
making  such  facilities  available  for  additional  warehouse  financing.

     The  Company's  ability  to access such securitizations depends upon many
factors,  certain  of  which  are beyond the Company's control.  These factors
among  other  things include delays in completing transactions, willingness of
investors to buy automobile-backed paper, rating agencies providing investment
grade ratings and the ability to obtain credit enhancement provide by monoline
assurance  companies.   In any event, violation by the Company of certain loan
covenants  will  make  it  difficult,  if  not  impossible, for the Company to
securitize  any  finance  contracts  it  may  acquire  in  the  future.

     RISK  OF  LENDING  TO  HIGHER-RISK  BORROWERS. The market targeted by the
Company for financing of the purchase of vehicles consists of individuals with
low  income  levels  and/or  adverse  credit  histories but who fit within the
underwriting  parameters  established  by the Company indicating a probability
that  the  borrower is a reasonable credit risk. The benefit to the Company is
that  higher-risk  borrowers  are  not  able to obtain credit from traditional
financing  sources  and  hence  are  willing  to  pay a relatively high annual
percentage  rate of interest. The risk to the Company is that the default rate
for  such  borrowers  is  relatively  high.  Contracts which, according to the
Company's  model  pose a higher risk of default, will be acquired only if they
have  a  relatively  high  contract rate of interest and/or are purchased at a
relatively  high  discount  from  face  value  in  order to compensate for the
increased  risk.

     ADVERSE  ECONOMIC CHANGES MAY INCREASE DELINQUENCIES. The majority of the
individuals  who  purchase  automobiles  financed  by  the  Company  and other
sub-prime  finance  companies  are  hourly wage earners with little or no cash
reserves.  In  most  cases,  the  ability  of  such  individuals to meet their
required  semi-weekly  or  monthly  payment  on  their installment contract is
completely  dependent  upon  continued  employment.  Job losses generally will
result  in defaults on their consumer debt, including their contracts with the
Company.  An  economic  downturn  or prolonged economic recession resulting in
local,  regional  or  national  unemployment  could  cause a large increase in
delinquencies,  defaults  and  charge-offs. If this would occur, the Company's
cash  reserves  and  allowance  for  losses  may  not be sufficient to support
current levels of operations if the downturn or recession were for a sustained
period  of  time.  Decreases in sales of vehicles as a result of a weakness in
the  economy  or for other reasons may have an adverse affect on the Company's
business  and  that  of  the  Dealers  from  which  it  purchases  Contracts.

     RISK  OF  DELAYED  REPOSSESSIONS.  The  relatively  high  default rate on
Contracts  requires  that  the  Company  repossesses and resells a substantial
number  of  vehicles.  After  a  default  occurs, the condition of the vehicle
securing  the  Contract  in  default  generally  deteriorates  due  to lack of
maintenance  or  otherwise.  The  Company carefully monitors delinquencies and
moves  quickly  to  repossess,  recondition  and  resell  vehicles  secured by
Contracts in default so as to minimize its losses. Any delays in repossessions
could  decrease  loan  loss  recoveries.

     POTENTIAL  INADEQUACY  OF  LOAN  LOSS  RESERVES. The Company maintains an
allowance  for  credit  losses  to  absorb  anticipated  losses  from Contract
defaults  net  of repossession recoveries. The allowance for credit losses has
been established utilizing data obtained from the Company's risk models and is
continually  reviewed  and  adjusted  in  order to maintain the allowance at a
level which, in the opinion of management and the Board of Directors, provides
adequately  for  current  and  future  losses  that may develop in the present
portfolio.  However,  since  the  risk  model uses past history to predict the
future,  changes  in  national and regional economic conditions, borrower mix,
competition  for  higher  quality  Contracts and other factors could result in
actual  losses  differing  from  predicted  losses.

     CHANGE  IN  ACCOUNTING  PRINCIPLE. Effective October 1, 1996, the Company
adopted  a  new  methodology  for reserving for and analyzing its loan losses.
This  accounting  method is commonly referred to as static pooling. The static
pooling  reserve  methodology  allows  the  Company to stratify its Automobile
Receivables  portfolio, and the related components of its Allowance for Credit
Losses  (i.e.  discounts,  excess  interest,  charge offs and recoveries) into
separate  and  identifiable quarterly pools. These quarterly pools, along with
the Company's estimate of future principle losses and recoveries, are analyzed
quarterly  to  determine  the adequacy of the Allowance for Credit Losses. The
method  previously  used  by  the  Company to analyze the Allowance for Credit
Losses  was  based  on  the  total  Automobile  Receivables  portfolio.  In
management's  opinion,  the  static  pool  reserve  method  provides  a  more
sophisticated  and comprehensive analysis of the adequacy of the Allowance for
Credit  Losses  and  is  preferable  to  the  method previously used. With the
adoption  of  the  static  pooling  reserve  method, the Company increased its
Allowance  for Credit Losses by $3.6 million in the fourth quarter of 1997 and
$2.2  million  in  the  fourth  quarter  of  1998

     YEAR  2000  ISSUE.  The "Year 2000" issue affects the Company's installed
computer  systems,  network elements, software applications and other business
systems  that  have  time-sensitive  programs that may not properly reflect or
recognize  the  Year  2000.   Because many computers and computer applications
define  dates  by  the  last  two digits of the year, "00" may not be properly
identified  as  the  Year 2000.  This error could result in miscalculations or
system  failures.

     The  Company  is  conducting a review of its computer systems to identify
those  areas that could be affected by the "Year 2000" issue and is developing
an  implementation  plan  to  ensure  compliance.    The Company is using both
internal and external sources to identify, correct and reprogram, and test its
systems  for  Year  2000 compliance. Because third party failures could have a
material  impact  on  the Company's ability to conduct business, confirmations
are  being requested from our processing vendors and suppliers to certify that
plans  are  being  developed  to  address  the  Year  2000  issue. The Company
presently believes that, with modification to existing software and investment
in  new  software, the Year 2000 problem will not pose significant operational
concerns  nor  have  a material impact on the financial position or results of
operation  in any given year.  The total cost of modifications and conversions
is  not  expected  to  be  material  and  will  be  expensed  as  incurred.

     EFFECT  OF  SUPERVISION  AND  REGULATION  UPON  COMPANY  OPERATIONS.  The
Company's present and proposed operations are subject to extensive regulation,
supervision  and  licensing  under  various federal, state and local statutes,
ordinances  and  regulations  and,  in most of the states in which the Company
conducts  business, limit the interest rates the Company is allowed to charge.
While management believes that it maintains all requisite licenses and permits
and  is in substantial compliance with all applicable federal, state and local
regulations,  there  can  be  no  assurance  that  the Company will be able to
maintain  all requisite licenses and permits, and the failure to satisfy those
and  other regulatory requirements could have a material adverse effect on the
operations  of  the  Company,  including  severe monetary and other penalties.
Further,  the  adoption of additional laws, rules and regulations could have a
material  adverse  effect  on  the  Company's  business.

     POSSIBILITY  OF  UNINSURED LOSSES. The Company requires that all vehicles
financed by it be covered by collision insurance. To reduce the risk that such
collision  insurance will lapse because of nonpayment of premiums, the Company
monitors  premium  payments.  When  notification is received that a policy has
lapsed, the Company immediately contacts the borrower by telephone and sends a
letter indicating that failure to maintain insurance constitutes default under
the  borrower's  Contract.  If  the  borrower  fails  to secure insurance, the
Company may repossess the vehicle. In addition, the Company has the ability to
force  place  collision  insurance  should  the  debtor  fail to pay insurance
premiums  resulting  in  cancellation  of  the  debtor's  insurance  coverage.
Collision  insurance,  in  the  event  of a total vehicle loss, generally will
cover  only for the fair value of the vehicle which often can be substantially
less  than  the  outstanding contract receivable. In addition, the Company may
incur  losses  in situations where the borrower fails to make payments and the
Company  is  unable to locate the car for repossession. Although the Company's
losses to date in such cases have been minimal, there can be no assurance that
this  will  continue  to  be  the  case.

     SUBSTANTIAL  COMPETITION.  In  connection  with its business of financing
vehicle  purchases,  the Company competes with many well-established financial
institutions,  including banks, thrifts, independent finance companies, credit
unions, captive finance companies owned by automobile manufacturers and others
who  finance  used  vehicle  purchases  (some  of  which  are  larger,  have
significantly  greater  financial  resources  and  have  relationships  with
established  captive  dealer networks). Any increased competition could have a
material adverse effect on the Company, including its ability to acquire loans
meeting  its  underwriting  requirements.

     DEPENDENCE ON KEY PERSONNEL. The Company's success depends largely on the
efforts and abilities of senior management. The loss of the services of any of
these  individuals  could  have  a  material  adverse  effect on the Company's
business. The Company maintains insurance policies in the amount of $2,000,000
each  on  the lives of Messrs. Ginsburg and Sandler for the purpose of funding
the  Company's  obligation to purchase shares of its common stock beneficially
owned  by  either  of them upon death (the "Buy-Sell Agreement"). The purchase
obligation  is  limited  to  the insurance proceeds. The purchase price is the
greater  of  book  value  or  80%  of the average closing price of the Class A
Common  Stock  for  the 30 consecutive trading days commencing 45 trading days
before  the  death of the insured. At December 31, 1998 the Company's purchase
obligation  would  have  been  less  than  $2,000,000  with respect to each of
Messrs.  Ginsburg  and Sandler. Any excess insurance proceeds will be used for
general  corporate purposes, including replacement of the decedent. During the
term  of  the  Option  Agreement noted in "Voting Power of Class A and Class B
Common  Stock"  below,  the parties to the Buy-Sell Agreement have agreed that
the  purchase  rights  and  obligations under the Option Agreement, also noted
below,  shall  supersede  the  purchase  and right of first refusal provisions
contained  in the Buy-Sell Agreement during the terms of the Option Agreement.

     The  Company  also  maintains a traveler's accidental death policy on the
lives  of  Messrs.  Ginsburg and Sandler in the amount of $1,000,000 each. The
Company  otherwise  does  not maintain key-man insurance upon the lives of its
executive  officers.

     INSURANCE  RISKS.  The  Company  maintains comprehensive insurance of the
type  and  in  the  amounts  management  believes are customarily obtained for
businesses  similarly  situated,  including  liability  insurance  for  used
vehicles,  sold, repaired or maintained by the Company. However, certain types
of  losses  generally  of  a catastrophic nature are either uninsurable or not
economically  insurable. Any uninsured or partially insured loss could have an
adverse  economic  effect  upon  the  Company.

     EFFECT  OF  OUTSTANDING OPTIONS AND WARRANTS. For the respective terms of
the  warrants and the options granted by the Company pursuant to the Company's
stock  option  plans,  the  holders thereof are given an opportunity to profit
from  a rise in the market price of the Company's Class A Common Stock, with a
resulting  dilution  in  the interests of the other shareholders. Further, the
terms  on  which  the  Company  may  obtain  additional financing during those
periods  may  be  adversely  affected by the existence of such securities. The
holders of such securities may be expected to exercise them at a time when the
Company  might  be able to obtain additional capital through a new offering of
securities  on  more  favorable  terms.  However,  the  exercise prices of all
outstanding  options and warrants are substantially above the market price for
the  Company's  Class  A  Common  Stock.

     NO  CASH  DIVIDENDS.  The holders of Class A and Class B Common Stock are
entitled  to  receive  dividends  when,  as  and  if  declared by the Board of
Directors of the Company out of funds legally available therefor. To date, the
Company has not paid any cash dividends. The Board of Directors of the Company
does  not  intend to declare any cash dividends in the foreseeable future, but
instead  intends  to  retain  all  earnings,  if any, for use in the Company's
business  operations.  The  Company's  credit  facilities  and  preferences
applicable to its preferred stock restrict or prohibit the Company from paying
dividends.  Accordingly, it is unlikely any dividend will be paid on the Class
A  Common  Stock  in  the  foreseeable  future.

     MARKET  FOR  CLASS  A  COMMON  STOCK.  The Company's Class A Common Stock
trades  on  the OTC Bulletin Board under the symbol "MONFA".

     VOTING  POWER  OF  CLASS  A  AND CLASS B COMMON STOCK. As of December 31,
1998,  254,743  shares  of  Class  B Common Stock were issued and outstanding.
These  shares  are  held  by  Messrs.  Ginsburg  and  Sandler  and  by another
individual.  They  are  identical  in all respects to the Class A Common Stock
except that the Class B Common Stock has three votes per share while the Class
A  Common Stock has one vote per share. The Class B Common Stock automatically
converts  into  Class  A Common Stock on a share-for-share basis upon transfer
(excluding  certain  transfers  for estate planning purposes) or upon death of
the holder. As of December 31, 1998, holders of the Class A Common Stock owned
approximately  90.9% of the aggregate issued and outstanding shares of Class A
and  Class  B Common Stock, but had the power to cast approximately 70% of the
combined  votes  of  both  classes.

     On or about December 4, 1997, Consumer Finance Holdings, Inc. ("CFH") and
Morris  Ginsburg,  the Company's President, Sandler Family Partners, Ltd., and
Irwin  L.  Sandler,  the Company's Executive Vice President, (collectively the
"Shareholders")  entered  into  an Option Agreement effective as of that date.
CFH  is  a  wholly  owned  subsidiary  of Pacific USA Holdings Corp. ("Pacific
USA"). Pursuant to the Option Agreement, the Shareholders granted a three-year
option  to  CFH (the "Call Option") to purchase all, but not less than all, of
the  166,000  shares  of  Class  B Common Stock owned by the Shareholders (the
"Option  Shares")  at  a  purchase price of $4.00 per share. Concurrently, CFH
granted  to  each  Shareholder  a three-year option (the "Put Option") to sell
that portion of the Option Shares held by each Shareholder at a price of $4.00
per  share.  The  Put  Option is exercisable with respect to 50% of the Option
Shares  during  the  30-day  period  following  the  second anniversary of the
effective  date  and  50%  during  the  30-day  period  following  the  third
anniversary  of the effective date. The Call Option and Put Option both expire
on  the  third anniversary date of the effective date, or on December 4, 2000.
In  the event that CFH or any of its affiliates exercises the Call Option, and
within  180 days after closing thereof, sells or agrees to sell any portion of
the  Option  Shares  to  a  person  who is not an affiliate of CFH for a price
greater  than  $4.00  per  share,  the  seller  shall  be obligated to pay the
Shareholders  50%  of such excess. The Shareholders agreed not to pledge, sell
or  otherwise  transfer  the  Option Shares at any time during the term of the
Call Option except to the extent of exercise of the Put Option. The obligation
of  CFH under the Put Option is secured by funds in a segregated bank account.

     Pursuant  to the Option Agreement, each Shareholder granted CFH the right
to  vote  all  Option  Shares  and to direct the exercise of all consensual or
other  voting  rights  with  respect to any additional shares of the Company's
capital  stock  as  to  which any Shareholder holds a proxy granted by a third
party,  subject  to  any fiduciary duty owed to the grantor of any such proxy.
The  Shareholders  retain all other incidents of ownership with respect to the
Option  Shares, including, but not limited to, the right to receive dividends.

     The  Option Agreement further provides that CFH shall vote or cause to be
voted  shares  of the Company's capital stock, including the Option Shares, to
maintain  Messrs.  Ginsburg  and  Sandler  as  directors  of  the Company. The
Shareholders  agree to use their best efforts to provide CFH with the right to
designate four directors to the Company's board or such larger number as shall
then  be  sufficient to provide CFH with effective control of the board. As of
the  date  hereof,  the  board  consists  of  four  members.

     CONTROL  BY  PACIFIC  USA.  On November 12, 1998, the shareholders of the
Company  approved  a proposal to amend the Company's Articles of Incorporation
with  respect  to its 8% Cumulative Convertible Preferred Stock- Series 1998-1
(the  "Preferred  Stock"),  all  of  which  is  held  by  Pacific  USA  or its
affiliates,  to,  among  other  things,  change  the  Conversion  Ratio of the
Preferred  Stock from one share of Class A Common Stock for each two shares of
Preferred  Stock that are converted to four shares of Class A Common Stock for
each  two  shares  of  Preferred  Stock  that  are converted. As a result, the
conversion  price of the Preferred Stock into Class A Common Stock was reduced
by  a  factor  of  four.  At  the  date  of  the  special meeting, Pacific USA
controlled  a  majority  of  the  voting power of all classes of the Company's
capital  stock and, accordingly, was able to unilaterally effect the amendment
to  the  Articles.

     Pacific  USA  was  the record owner of 1,401,863 shares of Class A Common
Stock  as  of  December  31, 1998. As a result of the Option Agreement, it was
granted  the power to vote the 166,000 shares of Class B Common Stock owned by
the Shareholders and a limited power to direct the voting of shares subject to
proxies  held  by  the  Shareholders.  Also, as a result of the Asset Purchase
Agreement  dated January 8, 1998, Pacific USA was issued 162,231 shares of the
Company's  Class  A Common Stock. As of December 31, 1998, 2,554,558 shares of
Class A Common Stock were issued and outstanding and 254,743 shares of Class B
Common  Stock  were  issued  and outstanding. The Class A Common Stock has one
vote  per  share while the Class B Common Stock has three votes per share. The
Class  A  and Class B Common Stock vote together as one class on most matters.
Accordingly,  Pacific  USA  may  be  deemed  to  be  the  beneficial  owner of
approximately  59.0%  of the Company's outstanding voting stock. Upon exercise
of  either  the  put  option  or  the  call  option,  the Class B Common Stock
purchased  by CFH will automatically convert into Class A Common Stock thereby
reducing  the  voting power of Pacific USA. Currently, Pacific USA has control
of  65.3%  of  the  voting  power.

     EFFECT  OF  ISSUANCE  OF  PREFERRED  STOCK.  As  of  December  31,  1998,
affiliates  of  Pacific  USA  are  the  record  owners  of 2,347,587 shares of
Cumulative  Convertible  Preferred  Stock, Series 1998-1(the "1998-1 Preferred
Stock"). So long as not less than 300,000 shares of 1998-1 Preferred Stock are
issued  and  outstanding,  the  holders  of the 1998-1 Preferred Stock, voting
separately as a class, are entitled to elect one member of the Company's board
of  directors.  Holders of the 1998-1 Preferred Stock otherwise have no voting
rights  except  as  may  be  required by the laws of the State of Colorado and
except  with  respect  to  any  amendment  to  the  Company's  Articles  of
Incorporation  which  would change any of the rights or preferences enjoyed by
such  stock.  Any  corporate action that requires a vote of the holders of the
1998-1 Preferred Stock of the class shall be deemed to have been approved upon
the  affirmative  vote  by  the  holders  of  a  majority  of  the  issued and
outstanding  1998-1  Preferred  Stock  unless  a  higher voting requirement is
imposed  by  Colorado  law.

     The  holders  of the 1998-1 Preferred Stock are entitled to receive when,
as  and if declared by the board of directors, out of any funds of the Company
legally  available  for  that  purpose,  cumulative dividends from the date of
issuance  at  the  rate  of  8% ($.16) per share of 1998-1 Preferred Stock per
year,  payable  quarterly  in  shares  of the Company's 1998-1 Preferred Stock
valued at $2.00 per share (or in cash if no preferred shares are available for
that  purpose). Dividends on the 1998-1 Preferred Stock are cumulative whether
or  not the Company is legally able to pay such dividends in whole or in part.
No  dividends  (other  than  those payable solely in common stock) may be paid
with  respect  to  the  common stock of the Company unless all accumulated and
unpaid  dividends  on  the 1998-1 Preferred Stock shall have been declared and
paid.

     The  1998-1  Preferred  Stock may be converted in whole or in part at any
time  and from time to time into shares of Class A Common Stock at the rate of
one  share  of  Class  A  Common Stock for each 2.5 shares of 1998-1 Preferred
Stock  so  converted (the "Conversion Ratio").  In the event the closing price
of  the  Class A Common Stock on the NASDAQ Stock Market shall equal or exceed
$6.00  per  share  on  each  trading  day  during any period of 60 consecutive
calendar  days,  all  of  the  1998-1  Preferred  Stock shall be automatically
converted  into  shares  of  Class A Common Stock at the Conversion Ratio. The
Conversion  Ratio  shall be proportionately adjusted as appropriate to reflect
the  effect  of  stock  splits  or  combinations.

     Upon  liquidation,  dissolution or winding up of the Company, the holders
of the 1998-1 Preferred Stock then issued and outstanding shall be entitled to
receive  an amount equal to $2.00 per share of 1998-1 Preferred Stock plus any
accumulated  but  unpaid  dividends  before any payment or distribution of the
assets of the Company is made to or set apart for the holders of Common Stock.

     Effective  as  of  November  30,  1998, Pacific USA converted $536,750 of
unsecured  debt  and  $300,000  of  secured  debt  into  418,375 shares of the
Company's  8%  Cumulative  Subordinated  Preferred  Stock,  Series 1999-1 (the
"1999-1  Preferred  Stock")  valued  at  $2.00 per share. The 1999-1 Preferred
Stock  is subordinate to the 1998-1 Preferred Stock with respect to payment of
dividends,  redemption  and  upon  any  liquidation of the Company. The 1999-1
Preferred Stock has no voting rights other than as provided in the articles of
incorporation  or  as required by law. The Company has the right to redeem the
1999-1 Preferred Stock at any time and from time to time, in whole or in part,
for  cash  in the amount of $2.00 per share plus accrued but unpaid dividends.
However,  the  1999-1  Preferred  Stock  shall  not be redeemed so long as any
1998-1  Preferred  Stock  is  issued  and outstanding. Dividends on the 1999-1
Preferred  Stock  are  at  the  annual  rate  of  8%  ($.16 per share) payable
quarterly  in  shares of 1999-1 Preferred Stock. No dividends other than those
payable  solely in common stock shall be paid with respect to the common stock
unless  all  accumulated  and  unpaid  dividends on the 1999-1 Preferred Stock
shall  have  been  declared  and  paid  in  full.

     Any  additional  issuance's of preferred stock could affect the rights of
the  holders  of  Class  A  Common  Stock  and therefore reduce its value. The
preferred  stock  may be issued in one or more series, the terms of which will
be  determined  at  the time of issuance by the Board of Directors without any
requirement  for  shareholder approval. Such rights may include voting rights,
preferences  as  to  dividends and upon liquidation, conversion and redemption
rights  and  mandatory  redemption  provisions  pursuant  to  sinking funds or
otherwise.  Rights  could  be  granted to holders of preferred stock hereafter
issued  which  could  reduce  the attractiveness of the Company as a potential
takeover  target  or  make  the  removal  of  management  of  the Company more
difficult  or  adversely impact the rights of holders of Class A Common Stock.
The  Company  has no plans for the issuance of any additional preferred stock.

     EFFECT  OF  CONVERTIBLE SECURITIES, OPTIONS, WARRANTS AND OTHER RIGHTS TO
PURCHASE.  As  of  December 31, 1998, the Company had issued, or had agreed to
issue,  options,  warrants  and other rights for the purchase of up to 278,800
shares  of Class A Common Stock at exercise prices ranging from $0.53 to $6.63
per  share.  In  addition,  the  Company has issued convertible securities and
options  to  purchase  convertible  securities for 4,695,174 shares of Class A
Common  Stock  at conversion prices ranging from $3.00 to $4.00 per share. The
shares  of  Class  A Common Stock underlying these securities (the "Underlying
Shares") will be, when issued, "restricted securities" as that term is defined
in  Rule  144  under  the  Securities  Act of 1933, and, unless registered for
public sale, subject to a one-year holding period. However, in many cases, the
Company  has  either  registered the Underlying Shares, as with employee stock
options,  or  has  agreed to register the Underlying Shares upon the demand of
the  holder.  Additionally,  the Company has agreed to give the holders "piggy
back"  registration   rights with respect to their Underlying Shares which, if
available,  would allow registration of the Underlying Shares for public sale.
Upon  effectiveness  of  a registration statement, the shares of stock covered
thereby  can  be  sold  immediately.

     As  of  December  31,  1998, 2,554,558 shares of Class A common Stock and
254,743  shares  of  Class  B Common Stock (convertible on a one-for-one basis
into shares of Class A Common Stock) were issued and outstanding. The options,
warrants,  other  rights  and  convertible securities described above cover an
aggregate  of  approximately  4,973,974  shares  of  Class A Common Stock. Any
significant  exercise  or  conversion  of these securities could substantially
dilute  the  voting  power  of  the then outstanding Class A Common Stock, and
could  result  in  dilution  to  earnings  and  book  value  per  share.

     In  addition,  the  trading market for Class A Common Stock is very thin.
Thus,  any  significant  sales of the Underlying Shares could adversely affect
the  market  price  of  the  Class  A  Common  Stock.



                                     <PAGE>

                                  SIGNATURES

     Pursuant  to  the  requirements  of Section 13 or 15(d) of the Securities
Exchange  Act of 1934, the Registrant has duly caused this report to be signed
on  its  behalf  by  the  undersigned,  thereunto  duly  authorized.

               MONACO  FINANCE,  INC.
               (Registrant)

     April  15,  1999          By          /s/  Morris  Ginsburg
                                           ---------------------
                                            Morris  Ginsburg,  President


     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report  has  been  signed  below  by  the  following  persons on behalf of the
Registrant  and  in  the  capacities  and  on  the  dates  indicated.


April  15,  1999          /s/  Morris  Ginsburg
                          ---------------------
                          Morris  Ginsburg,  President,
                          Chairman  of  the  Board  and
                          Director

April  15,  1999          /s/  Irwin  L.  Sandler
                          -----------------------
                          Irwin  L.  Sandler
                          Executive  Vice  President,
                          Secretary/Treasurer  and
                          Director

April  15,  1999          /s/  Bill  Bradley
                          ------------------
                          Bill  Bradley
                          Director

April  15,  1999          /s/  Bill  Clark
                          ----------------
                          Bill  Clark
                          Director

April  15,  1999          /s/  Bobby  Hashaway
                          --------------------
                          Bobby  Hashaway
                          Director

April  15,  1999          /s/  Leonard  M.  Snyder
                          ------------------------
                          Leonard  M.  Snyder
                          Director

April  15,  1999          /s/  Joe  Cutrona
                          -----------------
                          Joe  Cutrona
                          Director