<PAGE>

                                                                   Exhibit 10.31

                            INVESTOR RIGHTS AGREEMENT

     This INVESTOR RIGHTS AGREEMENT dated as of April 20, 2000 (this
"AGREEMENT") between MOTORCAR PARTS & ACCESSORIES, INC., a New York corporation
(the "COMPANY") and WELLS FARGO BANK, N.A. (the "HOLDER").

                              W I T N E S S E T H:

     WHEREAS, the Company and Holder have entered into that certain Credit
Agreement dated as of April 20, 2000, pursuant to which the Company agreed to
issue a warrant (the "WARRANT") to purchase up to 400,000 shares of its common
stock to Holder; and

     WHEREAS, the Company wishes to grant certain registration rights to Holder
with respect to the shares issued pursuant thereto.

     NOW, THEREFORE, in consideration for the foregoing and of the mutual
covenants and agreements set forth herein, the parties hereto agree as follows:

     SECTION 1. DEFINITIONS. As used herein, the following terms shall have the
following meanings:

     "ADVICE" has the meaning set forth in Section 5.

     "AFFILIATE" means, with respect to any Person, (a) any Person or entity
directly or indirectly controlling or controlled by or under direct or indirect
common control with such Person, (b) any spouse or non-adult child (including by
adoption) of any natural person described in clause (a) above, (c) any relative
other than a spouse or non-adult child (including by adoption) who has the same
principal residence of any natural person described in clause (a) above, (d) any
trust in which any such Persons described in clause (a), (b) or (c) above has a
beneficial interest and (e) any corporation, partnership, limited liability
company or other organization of which any such Persons described in clause (a),
(b) or (c) above collectively own more than fifty percent (50%) of the equity of
such entity. For purposes of this definition, beneficial ownership of more than
ten percent (10%) of the voting common equity of a Person shall be deemed to be
control of such Person.

     "AGREEMENT" means this Investor Rights Agreement dated as of April 20, 2000
between the Company and Holder.

     "BUSINESS DAY" means any day other than a day on which banks are authorized
or required to be closed in the State of New York.


<PAGE>


     "CERTIFICATE OF INCORPORATION" means the Certificate of Incorporation of
the Company as filed with the Secretary of State of the State of New York, as
amended through and including the date hereof.

     "COMMISSION" means the Securities and Exchange Commission or any other
similar or successor agency of the Federal government administering the
Securities Act and/or the Exchange Act from time to time.

     "COMMON STOCK" means the common stock, no par value per share, of the
Company.

     "COMPANY" has the meaning set forth in the first paragraph hereof.

     "CONTROLLING PERSONS" has the meaning set forth in Section 7(a).

     "EFFECTIVE PERIOD" has the meaning set forth in Section 4(b).

     "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor statute, and the rules and regulations of the
Commission promulgated thereunder.

     "HOLDER" shall have the meaning set forth in the first paragraph hereof.

     "INSPECTORS" has the meaning set forth in Section 4(j).

     "MARKET VALUE" means the number of shares of Common Stock to be registered
(or issuable upon the conversion or exchange of other securities to be
registered) pursuant to the demand for registration provided in Section 2 below
multiplied by the then Per Share Price of the Common Stock.

     "NASD" means the National Association of Securities Dealers, Inc.

     "PER SHARE PRICE" means the daily closing price of the Common Stock on the
Nasdaq National Market (or other exchange or quotation system which the Common
Stock is traded on) on the trading day before the Company receives the written
demand for registration.

     "PERSON" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government or other agency or political subdivision thereof.

     "PIGGY-BACK REGISTRATION" has the meaning set forth in Section 3(a).

     "PROSPECTUS" means the prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus


                                       2


<PAGE>


filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by any
prospectus supplement, including a prospectus supplement with respect to the
terms of the offering of any portion of the Registrable Securities covered by a
shelf registration statement, and by all other amendments and supplements to the
prospectus, including post-effective amendments, and in each case including all
material incorporated by reference or deemed to be incorporated by reference in
such prospectus.

     "RECORDS" has the meaning set forth in Section 4(m).

     "REGISTRABLE SECURITIES" means the Shares unless such securities have been
(a) effectively registered under Section 5 of the Securities Act and disposed of
pursuant to an effective Registration Statement, or (b) such securities have
been transferred pursuant to Rule 144 under the Securities Act as amended from
time to time or any successor rule such that, after any such transfer referred
to in this clause (b), such securities may be freely transferred without
restriction under the Securities Act.

     "REGISTRATION STATEMENT" means any registration statement of the Company
that covers any of the Registrable Securities pursuant to the provisions of this
Agreement, and all amendments and supplements to any such registration
statement, including post-effective amendments, in each case including the
Prospectus, all exhibits, and all material incorporated by reference or deemed
to be incorporated by reference in such registration statement

     "RESALE REGISTRATION STATEMENT" has the meaning set forth in Section 2(a).

     "SECTION 7(a) INDEMNITEE" has the meaning set forth in Section 7(a).

     "SECURITIES ACT" means the Securities Act of 1933, as amended from time to
time, or any successor statute, and the rules and regulations of the Commission
promulgated thereunder.

     "SHARES" means the shares of Common Stock issuable or issued, as the case
may be, to Holder upon exercise of the Warrant.

     "SUSPENSION NOTICE" has the meaning set forth in Section 5(a).

     "SUSPENSION PERIOD" means the period from the date on which Holder receive
a Suspension Notice to the date on which Holder receives either the Advice or
copies of the supplemented or amended Prospectus contemplated by Section 4(e).

     "WARRANT" has the meaning set forth in the Recitals hereof.


                                       3


<PAGE>


     SECTION 2. DEMAND REGISTRATION.

          i. DEMAND FOR REGISTRATION. The Holder may, at its option, at any
     time, require the Company to use its best efforts to effect a registration
     of Registrable Securities under the Securities Act (the "Demand
     Registration"); PROVIDED, HOWEVER, that (i) the Company shall not be
     required to effect such Demand Registration unless the Company is requested
     to do so with respect to Registrable Securities having a Market Value of
     not less than $1,000,000; (ii) at its option, the Company shall not be
     required to effect such registration prior to six (6) months immediately
     following the date on which an underwritten public offering of equity
     securities (pursuant to an effective registration statement under the
     Securities Act) is commenced, if such public offering is commenced prior to
     the date of a request for the Demand Registration; PROVIDED, FURTHER that,
     if in the Company's opinion such registration, if not deferred, materially
     and adversely would affect its business or financial condition, the Company
     may defer such registration for a single period (specified in such notice)
     of not more than 180 days; and (iii) the Company shall not be required to
     use its best efforts to effect a registration of Registrable Securities
     under this Section 2 more than twice. At the election of Holder requesting
     a Demand Registration, such registration statement shall be filed under
     Rule 415 promulgated under the Securities Act (a "Resale Registration
     Statement"), and the Company shall use its best efforts to keep a Resale
     Registration Statement continuously effective until the earlier of two (2)
     years from the date of Holder's request and the date on which there are no
     more Registrable Securities remaining unsold thereunder. The Company shall
     cause a Resale Registration Statement to be amended to remove Holder's
     Registrable Securities upon notice to the Company from Holder. The Company
     shall not be required to file and effect more than one (1) Resale
     Registration Statements pursuant to this Section 2(a). If, after a Demand
     Registration becomes effective, the offering of securities thereunder is or
     becomes subject to any stop order, injunction or other order or requirement
     of the Commission that prevents or limits the sale of securities thereunder
     for a period of more than five (5) Business Days, then such Demand
     Registration shall be deemed not to have been effected for purposes of this
     Section 2(a).

          ii. UNDERWRITTEN OFFERINGS. If a Demand Registration is underwritten,
the underwriter must be reasonably acceptable to the Company. In connection with
any Demand Registration, in the event that such Demand Registration involves an
underwritten offering and the managing underwriter or underwriters participating
in such offering advise Holder in writing that the total number of Registrable
Shares to be included in such offering exceeds the amount that can be sold in
(or during the time of) such offering without delaying or jeopardizing the
success of such offering (including the price per share of the Registrable
Shares to be sold), then the amount of Registrable Shares to be offered for the
account of Holder shall be reduced by an amount recommended by such underwriter.


                                       4


<PAGE>


     SECTION 3. PIGGY-BACK REGISTRATION.

          i. REQUEST FOR REGISTRATION. Subject to Section 5(b), each time the
     Company proposes to file a registration statement under the Securities Act
     with respect to an offering by the Company for its own account, (except,
     (i) a registration statement on Form S-4 or S-8 (or any substitute form
     that is adopted by the Commission), (ii) a registration statement filed in
     connection with a dividend reinvestment plan, stock option plan or unit
     investment trusts, or (iii) a registration statement filed in connection
     with an exchange offer or offering of securities solely to the Company's
     existing security holders), and the form of registration statement to be
     used permits the registration of Registrable Securities, then the Company
     shall give written notice of such proposed filing to Holder as soon as
     reasonably practicable (but in no event less than 30 days before the
     anticipated filing date and no less than 40 days before the anticipated
     effective date), and such notice shall offer Holder the opportunity to
     register such Registrable Securities as Holder may request (which request
     shall specify the Registrable Securities intended to be disposed of by
     Holder and the intended method of distribution thereof) up to 20 days
     before the anticipated effective date (a "Piggy-Back Registration"). The
     Company shall cause the managing underwriter or underwriters of a proposed
     underwritten offering to permit the Registrable Securities requested to be
     included in a Piggy-Back Registration to be included on substantially the
     same terms and conditions as any similar securities of the Company or any
     other securityholder included therein and to permit the sale or other
     disposition of such Registrable Securities in accordance with the intended
     method of distribution thereof. Holder shall have the right to withdraw its
     request for inclusion of its Registrable Securities in any Registration
     Statement pursuant to this Section 3 by giving written notice to the
     Company of such withdrawal no later than 2 Business Days prior to the
     anticipated effective date. The Company may withdraw a Piggy-Back
     Registration at any time prior to the time it becomes effective, PROVIDED,
     THAT the Company shall give prompt notice of such withdrawal to Holder if
     requested to be included in such Piggy-Back Registration.

          ii. REDUCTION OF OFFERING. If the managing underwriter or underwriters
     of an underwritten offering with respect to which Piggy-Back Registration
     has been requested as provided in Section 3(a) hereof shall have informed
     the Company, in writing, that in the opinion of such underwriter or
     underwriters the total number of shares which the Company, Holder and any
     other Persons participating in such registration intend to include in such
     offering is such as to materially and adversely affect the success of such
     offering (including without limitation any material decrease in the
     proposed public offering price), then the number of shares to be offered
     for the account of all Persons and Holder (other than the Company)
     participating in such registration shall be reduced or limited pro rata in
     proportion to the respective number of shares requested to be registered by
     such Persons to the extent necessary to reduce the total number of shares
     requested to be included in such offering to the number of shares, if any,
     recommended by such managing underwriter or underwriters; PROVIDED,
     HOWEVER, that the number of


                                       5


<PAGE>


     shares to be offered for the account of the Holder shall in no case be
     reduced to a quantity less than 6 and 2/3% of the total number of shares to
     be offered for the account of all Persons and Holder (including the
     Company) participating in such registration.

          iii. UNDERWRITING. In the case of a Piggy-Back Registration, if the
     Company has determined to enter into an underwriting agreement in
     connection therewith, all Registrable Securities to be included in such
     Registration Statement shall be subject to such underwriting agreement, and
     Holder may not participate in such Registration unless such Holder agrees
     to sell its Registrable Securities on the basis provided for in such
     underwriting arrangements approved by the Company and completes and/or
     executes all reasonable and customary questionnaires, powers of attorney,
     indemnities, underwriting agreements and other reasonable documents which
     must be executed under the terms of such underwriting arrangements.

     SECTION 4. REGISTRATION PROCEDURES. In connection with the obligations of
the Company to effect or cause the registration of any Registrable Securities
pursuant to the terms and conditions of this Agreement, the Company shall use
its best efforts to effect the registration and sale of such Registrable
Securities in accordance with the terms of this Agreement as quickly as
reasonably practicable, and in connection therewith:

          i. Prior to filing a Registration Statement or Prospectus or any
     amendments or supplements thereto, excluding for purposes of this Section
     4(a) documents incorporated by reference after the initial filing of the
     Registration Statement, the Company will furnish to Holder covered by such
     Registration Statement and the underwriters, if any, draft copies of all
     such documents proposed to be filed upon request.

          ii. The Company shall prepare and file with the Commission such
     amendments and post-effective amendments to each Registration Statement as
     may be necessary to keep such Registration Statement effective for a period
     of not more than 60 days or (in the case of a Resale Registration
     Statement) up to the earlier of two (2) years after the date Holder
     requests such Resale Registration Statement and the date on which there are
     no Registrable Securities unsold thereunder (as applicable, the "Effective
     Period"); shall cause the Prospectus to be supplemented by any required
     Prospectus supplements, and, as so supplemented, to be filed pursuant to
     Rule 424 under the Securities Act; and shall comply with the provisions of
     the Securities Act applicable to it with respect to the disposition of all
     Registrable Securities covered by such Registration Statement during the
     Effective Period in accordance with the intended methods of disposition by
     Holder set forth in such Registration Statement or supplement to the
     Prospectus.

          iii. The Company shall furnish to Holder and the underwriters, if any,
     without charge, a copy of each Registration Statement and any
     post-effective amendment thereto and such number of copies of the
     Prospectus (including each preliminary Prospectus) and


                                       6


<PAGE>


     any amendments or supplements thereto and such other documents as such
     Holder or underwriter reasonably may request in order to facilitate the
     public sale or other disposition of the Registrable Securities being sold
     by Holder.

          iv. The Company shall, (i) on or prior to the date on which a
     Registration Statement is declared effective, use its reasonable best
     efforts to cooperate with Holder's efforts to register or qualify the
     Registrable Securities covered by such Registration Statement under such
     other securities or "blue sky" laws of such states of the United States as
     Holder or underwriter reasonably requests; (ii) do any and all other acts
     and things which may be reasonably necessary to enable Holder to consummate
     the disposition of such Registrable Securities owned by Holder in
     accordance with the intended methods for distribution set forth therein;
     and (iii) use its reasonable best efforts to keep each such registration or
     qualification (or exemption therefrom) effective during the Effective
     Period; PROVIDED, HOWEVER, that the Company shall not be required (A) to
     qualify generally to do business in any jurisdiction where it would not
     otherwise be required to qualify or (B) to file any general consent to
     service of process.

          v. The Company shall notify Holder and any underwriter (i) when a
     Prospectus or any Prospectus supplement or post-effective amendment has
     been filed and, with respect to a Registration Statement or any
     post-effective amendment, when the same has become effective, (ii) of any
     request by the Commission or any state securities authority for amendments
     and supplements to a Registration Statement and Prospectus or for
     additional information after the Registration Statement has become
     effective, (iii) of the issuance by the Commission of any stop order
     suspending the effectiveness of a Registration Statement or the initiation
     of any proceedings for that purpose, (iv) of the issuance by any state
     securities commission or other regulatory authority of any order suspending
     the qualification or exemption from qualification of any of the Registrable
     Securities under state securities or "blue sky" laws or the initiation of
     any proceedings for that purpose, and (v) of the happening of any event
     which makes any statement made in a Registration Statement or related
     Prospectus untrue or which requires the making of any changes in such
     Registration Statement or Prospectus so that they will not contain any
     untrue statement of a material fact or omit to state any material fact
     required to be stated therein or necessary to make the statements therein,
     in light of the circumstances under which they were made, not misleading.

          vi. The Company shall use its reasonable best efforts to prevent the
     issuance of any order suspending the effectiveness of a Registration
     Statement, and in the event a stop order is issued, use its reasonable best
     efforts to obtain the withdrawal of any order suspending the effectiveness
     of a Registration Statement at the earliest possible moment.

          vii. If requested by the managing underwriter or underwriters, if any,
     or Holder, the Company shall incorporate in a Prospectus supplement or
     post-effective amendment such information as such managing underwriter or
     underwriters or Holder


                                       7


<PAGE>


     reasonably requests to be included therein, including, without limitation,
     with respect to the Registrable Securities being sold by Holder to such
     underwriter or underwriters, the purchase price being paid therefor by such
     underwriter or underwriters and with respect to any other terms of an
     underwritten offering of the Registrable Securities to be sold in such
     offering, and make all required filings of such Prospectus supplement or
     post-effective amendment.

          viii. The Company shall cooperate with Holder and the managing
     underwriter or underwriters, if any, to facilitate the timely preparation
     and delivery of certificates (which shall not bear any restrictive legends
     unless required under applicable law or agreement) representing securities
     sold under a Registration Statement, and enable such securities to be in
     such denominations and registered in such names as Holder and the managing
     underwriter or underwriters, if any, reasonably may request and keep
     available and make available to the Company's transfer agent prior to the
     effectiveness of such Registration Statement a supply of such certificates.

          ix. The Company shall enter into such customary agreements (including,
     if applicable, an underwriting agreement in customary form) and take such
     other actions as Holder, or the underwriters retained by Holder
     participating in an underwritten public offering, if any, reasonably may
     request in order to expedite or facilitate the disposition of Registrable
     Securities.

          x. The Company shall make available to Holder, any underwriter
     participating in any disposition pursuant to a Registration Statement, and
     any attorney, accountant or other agent or representative retained by
     Holder or underwriter (collectively, the "Inspectors"), all financial and
     other records, pertinent corporate documents and properties of the Company
     (collectively, the "Records"), as shall be reasonably requested to enable
     them to exercise their due diligence responsibility, and cause the
     Company's officers, directors and employees to supply all information
     reasonably requested by any such Inspector in connection with such
     Registration Statement; PROVIDED THAT unless the disclosure of such Records
     is necessary to avoid or correct a misstatement or omission in such
     Registration Statement or the release of such Records is ordered pursuant
     to a subpoena or other order from a court of competent jurisdiction, the
     Company shall not be required to provide any information under this
     paragraph if (i) the Company believes, after consultation with counsel for
     the Company, that to do so would cause the Company to forfeit an
     attorney-client privilege that was applicable to such information or (ii)
     either (A) the Company has requested and been granted from the Commission
     confidential treatment of such information contained in any filing with the
     Commission or documents provided supplementally or otherwise or (B) the
     Company reasonably determines in good faith that such Records are
     confidential and so notifies the Inspectors unless, prior to furnishing any
     such information with respect to (A) or (B), Holder agrees to enter into a
     confidentiality agreement and, PROVIDED, FURTHER, that Holder agrees that
     it will, upon learning that disclosure of such


                                       8
<PAGE>


     Records is sought in a court of competent jurisdiction, give notice to the
     Company and allow the Company, at its expense, to undertake appropriate
     action and to prevent disclosure of the Records deemed confidential.

          xi. The Company shall cause the Registrable Securities to be
     authorized for quotation and/or listing, as applicable, on such exchange or
     quotation system as the Common Stock is listed or quoted.

          xii. The Company shall provide a CUSIP number for all Registrable
     Securities covered by a Registration Statement not later than the effective
     date of such Registration Statement.

          xiii. The Company shall cooperate with Holder and each underwriter
     participating in the disposition of Registrable Securities and their
     respective counsel in connection with any filings required to be made with
     the NASD or any "blue sky" laws.

          xiv. The Company shall appoint a transfer agent and registrar for all
     the shares of Common Stock covered by a Registration Statement not later
     than the effective date of such Registration Statement.

The Company shall have no obligation to file a registration statement pursuant
to this Agreement unless and until Holder shall have furnished the Company all
information and statements about or pertaining to Holder in such reasonable
detail and on such timely basis as is reasonably required by the Company in
connection with the preparation of a Registration Statement.

     SECTION 5. LIMITATIONS ON SALE.

          i. SUSPENSION PERIOD. Holder, upon receipt of any notice (a
     "Suspension Notice") from the Company of the happening of any event of the
     kind described in Section 4(e)(v), forthwith shall discontinue disposition
     of the Registrable Securities pursuant to the Registration Statement
     covering such Registrable Securities until Holder's receipt of the copies
     of the supplemented or amended Prospectus contemplated by Section 4(e) or
     until it is advised in writing (the "Advice") by the Company that the use
     of the Prospectus may be resumed and, if so directed by the Company, Holder
     will, or will request the managing underwriter or underwriters, if any, to
     deliver to the Company (at the Company's expense) all copies then in such
     Holder's or underwriter's possession, of the Prospectus covering such
     Registrable Securities current at the time of receipt of such notice. In
     the event that the Company shall give any Suspension Notice, (i) the
     Company shall use its reasonable best efforts and take such actions as are
     reasonably necessary to end the Suspension Period as promptly as
     practicable and (ii) immediately following expiration of the Suspension
     Period, the Company shall, to the extent it deems necessary, prepare and
     file with the Commission and furnish a supplement or amendment to such
     Prospectus so that, as thereafter deliverable to the Holders of such
     Registrable Securities,


                                       9


<PAGE>


     such Prospectus will not contain any untrue statement of a material fact or
     omit to state a material fact necessary to make the statements therein, in
     light of the circumstances under which they were made, not misleading.

          ii. LOCK-UP. If on any occasion of registration in which the Company
     proposes to file a Registration Statement under the Securities Act with
     respect to the proposed sale of Common Stock pursuant to a
     fully-underwritten public offering, and the managing underwriter or
     underwriters shall request an agreement by Holder not to sell any of the
     Registrable Securities so held by Holder for a period of 180 days after the
     date of the underwriting agreement in order to effect an orderly public
     distribution thereof, then Holder shall enter into and execute such an
     agreement with such managing underwriter or underwriters and the Company
     pertaining to a restriction on the transfer of any equity securities of the
     Company during such period. Holder further agrees, upon request of the
     managing underwriter or underwriters, to enter into and execute an
     agreement with such managing underwriter or underwriters and the Company
     pursuant to the terms of which Holder will agree not to transfer any
     securities of the Company during the seven-day period immediately preceding
     the effectiveness of such registration statement to the extent necessary to
     avoid violation of the Exchange Act.

     SECTION 6. REGISTRATION EXPENSES. With respect to any Demand Registration,
all expenses incurred in connection with registering the Registrable Securities
hereunder including, without limitation, all registration and filing fees, fees
and disbursements of counsel and independent public accountants for the Company,
fees and expenses incurred in connection with complying with state securities or
"blue sky" laws, few of the Nasdaq National Market or other exchange on which
the Common Stock is listed, transfer taxes and fees of transfer agents and
registrars, underwriting fees, discounts and commissions attributable to the
sale or disposition or Registrable Securities, the fees and expenses of legal
counsel and accountants retained by Holder shall be paid by the Company, and the
Holder shall pay any underwriting discounts and commissions attributable to the
sale or disposition of Registrable Securities. With respect to each Piggy-Back
Registration, Holder shall pay all underwriting discounts and commissions
attributable to the sale or disposition of Registrable Securities, and the
Company shall pay all underwriting fees and all fees and expenses of legal
counsel and accountants retained by Holder.

     SECTION 7. INDEMNIFICATION AND CONTRIBUTION.

          i. INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify and
     hold harmless, to the fullest extent permitted by law, Holder, its
     officers, directors, stockholders, employees, agents and underwriters (each
     a "Section 7(a) Indemnitee") and each Person who controls Holder within the
     meaning of either Section 15 of the Securities Act or Section 20 of the
     Exchange Act, or is under common control with, or is controlled by, Holder,
     together with the partners, officers, directors, trustees, stockholders,
     employees and agents of such controlling Person (collectively, the
     "Controlling Persons"), from and against all losses, claims, damages,
     liabilities and


                                       10


<PAGE>


     expenses (including without limitation any reasonable legal or other fees
     and expenses actually incurred in connection with defending or
     investigating any action or claim in respect thereof, PROVIDED, HOWEVER,
     that such legal fees shall be limited to those incurred by one individual
     counsel for all Section 7(a) (collectively, the "Damages")) to which such
     Section 7(a) Indemnitee may become subject under the Securities Act,
     insofar as such Damages (or proceedings in respect thereof) arise out of
     any untrue or alleged untrue statement of material fact contained in any
     Registration Statement or Prospectus (or any amendment thereto) pursuant to
     which Registrable Securities were registered under the Securities Act or
     caused by any omission or alleged omission to state therein a material fact
     necessary to make the statements therein in light of the circumstances
     under which they were made not misleading, or caused by any untrue
     statement or alleged untrue statement of a material fact contained in such
     Prospectus (as amended or supplemented only if the Company shall have
     furnished any amendments or supplements thereto), or caused by any omission
     or alleged omission to state therein a material fact necessary to make the
     statements therein in light of the circumstances under which they were made
     not misleading; PROVIDED, HOWEVER, that the Company shall not be liable in
     any such case to the extent that Damages arise out of or are based upon any
     such untrue statement or omission based upon information relating to such
     Section 7(a) Indemnitee furnished in writing to the Company by such Section
     7(a) Indemnitee (or by a Person authorized to provide such information on
     behalf of such Section 7(a) Indemnitee) for use therein.

          ii. INDEMNIFICATION BY HOLDER. Holder agrees to indemnify and hold
     harmless, to the fullest extent permitted by law the Company, its
     directors, officers, stockholders, employees, agents, attorneys,
     underwriters and investment advisers and each of their employees and
     agents, and each Person, if any, who controls the Company within the
     meaning of either Section 15 of the Securities Act or Section 20 of the
     Exchange Act, or is under common control with, or is controlled by, the
     Company, together with its Controlling Person, from and against all Damages
     to which the Company and any Controlling Persons may become subject under
     the Securities Act insofar as such Damages (or proceedings in respect
     thereof) arise out of or are based upon any untrue or alleged untrue
     statement of material fact contained in any Registration Statement (or any
     amendment thereto) pursuant to which Registrable Securities were registered
     under the Securities Act, or caused by any omission or alleged omission to
     state therein a material fact necessary to make the statements therein in
     light of the circumstances under which they were made not misleading, or
     caused by any untrue statement or alleged untrue statement of a material
     fact contained in any Prospectus (as amended or supplemented if the Company
     shall have furnished any amendments or supplements thereto), or caused by
     any omission or alleged omission to state therein a material fact necessary
     to make the statements therein in light of the circumstances under which
     they were made not misleading, to the extent, but only if and to the extent
     that such Damages arise out of or are based upon any such untrue statement
     or alleged untrue statement or omission or alleged omission based upon
     information relating to Holder furnished in writing to the Company by
     Holder (or by a Person authorized to provide such


                                       11


<PAGE>


     information on behalf of Holder) for inclusion therein; PROVIDED, HOWEVER,
     that Holder shall not be liable in any case to the extent that such Damages
     result from the failure of the Company to amend or take action to correct
     or supplement any such Registration Statement or Prospectus on the basis of
     corrected or supplemented information provided in writing by Holder to the
     Company expressly for such purpose.

          iii. INDEMNIFICATION PROCEDURES. In case any proceeding (including any
     governmental investigation) shall be instituted involving any Person in
     respect of which indemnity may be sought pursuant to either paragraph (a)
     or (b) above, such Person (the "indemnified party") promptly shall notify
     the Person against whom such indemnity may be sought (the "indemnifying
     party") in writing and the indemnifying party shall retain counsel
     reasonably satisfactory to the indemnified party to represent the
     indemnified party and any others the indemnifying party may designate in
     such proceedings and shall pay the reasonable fees and disbursements of
     such counsel relating to such proceeding; PROVIDED, HOWEVER that (i) in the
     case of any proceeding in respect of which indemnity may be sought pursuant
     to both paragraphs (a) and (b) above, the Company shall not be required to
     assume the defense thereof and each party shall bear its own fees and
     expenses of such counsel and (ii) the Company shall not be obligated to pay
     the fees and expenses of more than one individual counsel (together with
     any appropriate or necessary local counsel, if any) for all indemnified
     parties, including the Company. In any such proceeding, any indemnified
     party shall have the right to retain its own counsel, but the fees and
     expenses of such counsel shall be at the expense of such indemnified party
     unless (i) the indemnifying party and the indemnified party shall have
     mutually agreed to the retention of such counsel, or (ii) the indemnifying
     party fails promptly to assume the defense of such proceeding or fails to
     employ counsel reasonably satisfactory to such indemnified party or
     parties, or (iii) (A) the named parties to any such proceeding (including
     any impleaded parties) include both such indemnified party or parties and
     any indemnifying party or an Affiliate of such indemnified party or parties
     or of any indemnifying party, (B) there may be one or more legal defenses
     available to such indemnified party or parties or such Affiliate of such
     indemnified party or parties that are different from or additional to those
     available to any indemnifying party or such Affiliate of any indemnifying
     party and (C) such indemnified party or parties shall have been advised by
     such counsel that there may exist a legal conflict of interest between or
     among such indemnified party or parties or such Affiliate of such
     indemnified party or parties and any indemnifying party or such Affiliate
     of any indemnifying party, in which case, if such indemnified party or
     parties notifies the indemnifying party or parties in writing that it
     elects to employ separate counsel of its choice at the reasonable expense
     of the indemnifying parties, the indemnifying parties shall not have the
     right to assume the defense thereof and such counsel shall be at the
     reasonable expense of the indemnifying parties, it being understood,
     however, that unless there exists a conflict among indemnified parties, the
     indemnifying parties shall not, in connection with any one such proceeding
     or separate but substantially similar or related proceedings in the same
     jurisdiction, arising out of the same general allegations or circumstances,
     be liable for the


                                       12


<PAGE>


     fees and expenses of more than one firm of attorneys at any time for such
     indemnified party or parties. The indemnifying party shall not be liable
     for any settlement of any proceeding effected without its written consent
     (which will not be unreasonably withheld) but, if settled with such consent
     or if there be a final judgment for the plaintiff, the indemnifying party
     agrees to indemnify the indemnified party or parties from and against any
     loss or liability by reason of such settlement or judgment. No indemnifying
     party shall, without the prior written consent (which will not be
     unreasonably withheld) of the indemnified party, effect any settlement of
     any pending or threatened proceeding in respect of which such indemnified
     party is a party, and indemnity could have been sought hereunder by such
     indemnified party, unless such settlement includes an unconditional release
     of such indemnified party from all liability on claims that are the subject
     matter of such proceeding.

          iv. CONTRIBUTION. To the extent that the indemnification provided for
     in paragraph (a) or (b) of this Section 7 is unavailable to an indemnified
     party or insufficient in respect of any Damages, then each indemnifying
     party under such paragraph, in lieu of indemnifying such indemnified party
     thereunder, shall contribute to the amount paid or payable by such
     indemnified party as a result of such Damages in such proportion as is
     appropriate to reflect the relative fault of the Company on the one hand
     and Holder on the other hand in connection with the statements or omissions
     that resulted in such Damages, as well as any other relevant equitable
     considerations. The relative fault of the Company on the one hand and of
     Holder on the other hand shall be determined by reference to, among other
     things, whether the untrue or alleged untrue statement of a material fact
     or the omission or alleged omission to state a material fact relates to
     information supplied by the Company or Holder and the parties' relative
     intent, knowledge, access to information and opportunity to correct or
     prevent such statement or omission.

     If indemnification is available under paragraph (a) or (b) of this Section
7, the indemnifying parties shall indemnify each indemnified party to the full
extent provided in such paragraphs without regard to the relative fault of said
indemnifying party or indemnified party or any other equitable consideration
provided for in this Section 7(d).

     The Company and Holder agree that it would not be just or equitable if
contribution pursuant to this Section 7(d) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the Damages referred to in this Section 7
shall be deemed to include, subject to the limitations set forth above, any
reasonable legal or other expenses incurred (and not otherwise reimbursed) by
such indemnified party in connection with investigating or defending any such
action or claim. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution or indemnification from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 7 are
not exclusive and shall not


                                       13


<PAGE>


limit any rights or remedies which may otherwise be available to any indemnified
party at law or in equity.

          v. SURVIVAL. The parties' indemnification and contribution obligations
pursuant to this Section 7 shall survive the sale, transfer, assignment or other
disposition of any Registrable Securities and shall survive any termination of
this Agreement.

     SECTION 8. FINANCIAL INFORMATION; VOTING RIGHTS.

          i. The Company shall provide to Holder unaudited annual statements of
     income, statements of cash flows and changes in stockholders' equity, and
     an unaudited balance sheet, all prepared in accordance with generally
     accepted accounting principles ("GAAP") consistently applied, dated as of
     the fiscal year end within ninety (90) days after the end of the applicable
     fiscal year. The Company shall provide to Holder unaudited quarterly
     statements of income, statements of cash flows and changes in stockholders'
     equity, and unaudited balance sheets, all prepared in accordance with GAAP
     consistently applied, dated as of the fiscal quarter end within forty-five
     (45) days after the end of the applicable fiscal quarter. The Company shall
     also timely provide to Holder any other interim financial statements or
     balance sheets prepared by or at the request of the Company.

          ii. Until the earlier of (i) the expiration of the Warrant and (ii)
     the sale or disposition by the Holder and/or its Affiliates of 50% of the
     Registrable Shares, the Company shall not, without obtaining the prior
     written consent of the Holder, consolidate with or merge with or into, or
     convey or transfer or lease all or substantially all of its assets to,
     another Person.

     SECTION 9. MISCELLANEOUS.

          i. AMENDMENTS AND WAIVERS. The provisions of this Agreement, including
     the provisions of this sentence, may not be amended, modified or
     supplemented, and waivers or consents to departures from the provisions
     hereof may not be given unless the same are in writing and signed by Holder
     and the Company.

          ii. ASSIGNMENT. Holder may assign to any Affiliate all, but not less
     than all, of its rights hereunder with respect to the Registrable
     Securities. Holder shall promptly notify the Company in writing of any such
     assignment.

          iii. NOTICES. All notices, requests and other communications provided
     for herein shall be given or made in writing:


                                       14


<PAGE>


          if to the Company:              Motorcar Parts & Accessories, Inc.
                                          2727 Maricopa Street
                                          Torrance, California 90503
                                          Attention: Anthony Souza
                                          Facsimile: (310) 459-7052


          with copies to:                 Arter & Hadden LLP
                                          725 South Figueroa Street, Suite 3400
                                          Los Angeles, California 90017
                                          Attention:Jack Goldman, Esq.
                                          Facsimile: (213) 617-9255


          if to Holder:                   Wells Fargo Bank, N.A.
                                          333 South Grand Avenue
                                          Los Angeles, California 90071
                                          Attention: Edith Lim, Vice President
                                          Facsimile: (213) 253-5913


          with copies to:                 Gibson, Dunn & Crutcher LLP
                                          One Montgomery Street
                                          San Francisco, California 94104
                                          Attention: Douglas D. Smith, Esq.
                                          Facsimile: (415) 986-5309


          All such notices, requests and other communications shall be: (i)
     personally delivered, sent by courier guaranteeing overnight delivery or
     sent by registered or certified mail, return receipt requested, postage
     prepaid, or by facsimile in each case given or addressed as aforesaid; and
     (ii) effective upon receipt.

          iv. HEADINGS. The headings in this Agreement are for convenience of
     reference only and shall not limit or otherwise affect the meaning hereof.

          v. GOVERNING LAW. This Agreement shall be governed by and construed in
     accordance with the laws of the State of California without regard to
     principles of conflicts of law.

          vi. SEVERABILITY. In the event that any one or more of the provisions
     contained herein, or the application thereof in any circumstances, is held
     invalid, illegal or unenforceable in any respect for any reason, the
     validity, legality and enforceability of any such provision in every other
     respect and of the remaining provisions contained herein shall not be in
     any way impaired thereby, it being intended that all of the rights and
     privileges of Holder shall be enforceable to the fullest extent permitted
     by law.


                                       15


<PAGE>


          vii. ATTORNEY'S FEES. In any action or proceeding brought to enforce
     any provision of this Agreement or where any provision hereof is validly
     asserted as a defense, the successful party shall, to the extent permitted
     by applicable law, be entitled to recover reasonable attorneys' fees and
     expenses in addition to any other available remedy.

          viii. FURTHER ASSURANCES. Each party shall cooperate and take such
     action as may be reasonably requested by another party in order to carry
     out the provisions and purposes of this Agreement and the transactions
     contemplated hereby.

          ix. COUNTERPARTS. This Agreement may be executed in counterparts, each
     of which shall be deemed an original, and all of which together shall
     constitute one and the same instrument, binding on all parties hereto.

                [the remainder of page intentionally left blank]


                                       16


<PAGE>


          IN WITNESS WHEREOF, the parties hereto have executed and delivered
     this Agreement as of the date first written above.


                                     MOTORCAR PARTS & ACCESSORIES, INC.

                                        By: ____________________________________
                                              Anthony Souza
                                              President/Chief Operating Officer


                                        By: ____________________________________
                                              Michael Nelson
                                              Chief Financial Officer
                                              Assistant Secretary


                                       WELLS FARGO BANK, N.A.

                                        By: ____________________________________
                                              Razia Darnji
                                              Vice President


                                       17