WARRANT AGREEMENT


         WARRANT  AGREEMENT dated as of December 24, 1997,  between Smart Choice
Automotive  Group,  Inc.,  a  Florida  corporation  (the  "Company"),  and Sands
Brothers & Co., Ltd., a Delaware corporation ("Sands Brothers").

                               W I T N E S S E T H

         WHEREAS,  pursuant  to an  investment  banking  agreement  between  the
Company and Sands  Brothers,  dated December 24, 1997, the Company has agreed to
issue to Sands Brothers or its designees warrants ("Warrants") to purchase up to
90,000 shares of Common Stock, par value $.01 per share (the "Common Stock"), of
the Company.

         NOW, THEREFORE,  in consideration of the premises, the payment by Sands
Brothers to the Company of ONE DOLLAR, the agreements herein set forth and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

         1. GRANT.  The Holders (as defined  below) are hereby granted the right
to purchase,  at any time from the date hereof  until 5:30 p.m.,  New York time,
December 24, 2002 (the "Warrant  Exercise Term"), up to Ninety Thousand (90,000)
shares of Common Stock at an initial  exercise  price of Four  ($4.00)  Dollars,
subject to the terms and conditions of this Agreement.

         2.  WARRANT  CERTIFICATES.   The  Warrant  certificates  (the  "Warrant
Certificates") delivered and to be delivered pursuant to this Agreement shall be
in the form set forth in EXHIBIT A, attached hereto and made a part hereof, with
such appropriate insertions,  omissions,  substitutions, and other variations as
required or permitted by this Agreement.

         3.       EXERCISE OF WARRANT.

         3.1 METHOD OF EXERCISE.  The Warrants are initially  exercisable  at an
initial  exercise  price (subject to adjustment as provided in Section 8 hereof)
per share of Common Stock set forth in Section 5 hereof  payable by certified or
official bank check in New York Clearing  House funds,  subject to adjustment as
provided in Section 8 hereof.  Upon surrender of a Warrant  Certificate with the
annexed Form of Election to Purchase duly executed, together with payment of the
Exercise Price (as hereinafter  defined) for the shares of Common Stock issuable
upon exercise of the Warrants (the "Warrant Shares") at the Company's  principal
offices, currently at 5200 S. Washington Avenue, Titusville,  Florida 32780, the
registered  holder of a Warrant  Certificate  ("Holder" or  "Holders")  shall be
entitled to receive a certificate or certificates for the shares of Common Stock
so purchased.  The purchase rights  represented by each Warrant  Certificate are
exercisable at the option of the Holder thereof, in whole or in part (but not as
to fractional shares of the Common Stock underlying the Warrants).  Warrants may
be exercised  to purchase all or part of the shares of Common Stock  represented
thereby.  In the case of  purchase  of less than all the shares of Common  Stock
purchasable under any Warrant Certificate, the Company shall cancel said Warrant
Certificate  upon the  surrender  thereof  and shall  execute  and deliver a new
Warrant Certificate of like tenor for the balance of the shares of Common Stock.

         3.2  EXERCISE BY  SURRENDER  OF  WARRANT.  In addition to the method of
payment  set  forth  in  Section  3.1 and in lieu of any cash  payment  required
thereunder,  the  Holder(s) of the Warrant  shall have the right at any time and
from time to time to exercise  the  Warrants in full or in part by  surrendering
the Warrant  Certificate in the manner specified in Section 3.1. in exchange for
the number of shares of Common  Stock  equal to the product of (x) the number of
shares  as to  which  the  Warrants  are  being  exercised  multiplied  by (y) a
fraction,  the numerator of which is the Market Price (as defined  below) of the
Stock less the Exercise Price and the denominator of which is such Market Price.

         Solely for the  purposes of this  Section  3.2,  Market  Price shall be
calculated  either  (i) on the date on which the  annexed  Form of  Election  is
deemed to have been sent to the Company  pursuant to Section 13 hereof  ("Notice
Date")  or (ii) as the  average  of the  Market  Price  for each of the five (5)
trading days immediately  preceding the Notice Date, whichever of (i) or (ii) is
greater.  The Market  Price for each such day shall be (a) the last sale  price,
regular  way, on such day or, in case no such sale takes place on such day,  the
average of the reported closing bid and asked prices,  regular way, in each case
on the Nasdaq National Market or New York Stock Exchange, as applicable,  or, if
such Stock is not listed or  admitted  to  trading  on such  National  Market or

<PAGE>

Exchange,  on the principal  national  security  exchange or quotation system on
which such Stock is quoted or listed or  admitted  to  trading,  or (b),  if not
quoted or listed or admitted to trading on any national  securities  exchange or
quotation system that reports last sale prices, the average of the last reported
bid and asked  prices of such  Stock on the  Nasdaq  Small Cap Market or, if not
reported on the Nasdaq Small Cap Market,  as reported by the National  Quotation
Bureau  Incorporated,  THE WALL STREET JOURNAL or a similar  generally  accepted
reporting  service,  or, if there are no reported  bid and asked  prices on such
day, the average of the high bid and low asked  prices,  as so reported,  on the
most recent day (not more than 30 days prior to the date in question)  for which
prices have been so  reported,  or (c), in the case of Stock  determined  by the
Company's  Board of  Directors as not having an active  quoted  market or in the
case of other  property,  such fair market value as shall be  determined  by the
Board of Directors.

         4.  ISSUANCE  OF  CERTIFICATES.  Upon  the  exercise  of the  Warrants,
certificates for the Warrant Shares (or other  securities,  properties or rights
underlying  such Warrants,  collectively  referred to as the "Warrant  Shares"),
shall be issued  forthwith  (and in any event such issuance shall be made within
five  business  days of the  exercise)  without  charge  to the  Holder  thereof
including,  without  limitation,  any tax which may be payable in respect of the
issuance  thereof,  and such  certificates  shall  (subject to the provisions of
Section 5 hereof) be issued in the name of, or in such names as may be  directed
by,  the  Holder  thereof;  provided,  however,  that the  Company  shall not be
required to pay any tax which may be payable in respect to any transfer involved
in the issuance and delivery of any such  certificates in a name other than that
of the Holder and the Company  shall not be  required  to issue or deliver  such
certificates  unless or until  the  person or  people  requesting  the  issuance
thereof  shall  have paid to the  Company  the amount of such tax or it shall be
established to the satisfaction of the Company that such tax has been paid.

         The Warrant Certificates and the certificates  representing the Warrant
Shares  shall be executed  on behalf of the  Company by the manual or  facsimile
signature  of the  then  present  Chairman  or Vice  Chairman  of the  Board  of
Directors or President or Vice President of the Company under its corporate seal
reproduced thereon, attested to by the manual or facsimile signature of the then
present Secretary or Assistant  Secretary of the Company.  Warrant  Certificates
shall be dated the date of  execution  by the  Company  upon  initial  issuance,
division, exchange, substitution or transfer.

         5.       EXERCISE PRICE.

         5.1 INITIAL AND ADJUSTED EXERCISE PRICE.  Except as otherwise  provided
in Section 8 hereof,  the Warrants shall be exercisable to purchase Common Stock
at a price of $4.00 per share.  The adjusted  exercise  price shall be the price
which shall result from time to time from any and all adjustments of the initial
exercise price in accordance with the provisions of Section 8 hereof.

         5.2 EXERCISE  PRICE.  The term  "Exercise  Price" herein shall mean the
initial  exercise  price or the  adjusted  exercise  price,  depending  upon the
context.

         6.       REGISTRATION RIGHTS.

         6.1 REGISTRATION UNDER THE SECURITIES ACT OF 1933. Neither the Warrants
nor the Warrant Shares (jointly,  the "Warrant Securities") have been registered
under the  Securities  Act of 1933,  as amended (the  "Act"),  for sale to Sands
Brothers. The Warrants and any Warrant Shares shall bear the following legends:

         The Securities  represented by this certificate were not registered for
         sale by the issuer under the  Securities  Act of 1933,  as amended (the
         "Act"), and may not be offered,  sold, pledged or otherwise transferred
         except  pursuant to (i) an effective  registration  statement under the
         Act, or (ii), to the extent applicable,  Rule 144 under the Act (or any
         similar rule under the Act relating to the  disposition of securities),
         provided  that the  issuer  of this  certificate  is  provided  with an
         opinion of  counsel  reasonably  satisfactory  to the  issuer,  that an
         exemption from registration under such Act is available.

         The  transfer  or  exchange  of  the  securities  represented  by  this
         certificate  is  restricted in  accordance  with the warrant  agreement
         referred to herein.

         6.2 PIGGYBACK  REGISTRATION.  If, at any time commencing after the date
hereof until the expiration of the Warrant  Exercise Term, the Company  proposes
to register any of its securities under the Act on a registration statement that
may be used for the registration of the Warrant Shares (other than in connection
with a merger, pursuant to Form S-8, S-4 or a comparable registration statement,
in connection with a registration requested pursuant to Section 6.3 hereof or in
connection  with an exchange  offer or an offering of  securities  solely to the
Company's  existing  stockholders),  it will give written  notice by  registered
mail,  at least  thirty  (30)  business  days  prior to the  filing of each such
registration  statement,  to  the  Holders  of  the  Warrant  Securities  of its
intention to do so. If any Holder of the Warrant Securities notifies the Company
within  twenty (20) days after receipt of any such notice of its or their desire
to include any  Warrant  Shares in such  proposed  registration  statement,  the
Company shall afford such Holder of the Warrant  Securities  the  opportunity to
have any such Warrant Shares registered under such registration statement.
<PAGE>

         Notwithstanding  the  provisions  of this  Section 6.2, (A) the Company
shall have the right any time after it shall have given written notice  pursuant
to this Section 6.2  (irrespective of whether a written request for inclusion of
any such  securities  shall have been made) to elect to  postpone or not to file
any such proposed registration  statement,  or to withdraw the same after filing
but  prior  to the  effective  date  thereof  and  (B),  if the  underwriter  or
underwriters,  if any,  of any such  proposed  public  offering  shall be of the
reasonable  opinion  that the  total  amount or kind of  securities  held by the
Holders of Warrant  Securities and any other persons or entities  entitled to be
included  in such public  offering  would  adversely  affect the success of such
public offering, then the amount of securities to be offered for the accounts of
Holders of Warrant  Securities shall be reduced pro rata to the extent necessary
to reduce the total amount of securities to be included in such public  offering
to the amount reasonably recommended by the underwriter or underwriters thereof,
whereupon the Company  shall only be obligated to register such limited  portion
(which may be none) of the Warrant  Shares with respect to which such Holder has
provided  notice  pursuant to this Section 6.2. In no event shall the Company be
required  pursuant to this Section 6.2 to reduce the amount of  securities to be
registered by it.

         6.3      DEMAND REGISTRATION.

         (a) Upon the  earlier of (a) June 30, 1999 or (b) the end of any period
in  which  Warrant  Shares  may not be sold or  otherwise  disposed  of by Sands
Brothers  pursuant  to a  contractual  agreement  in  connection  with a  public
offering  in which  Sands  Brothers  is not an  underwriter,  the Holders of the
Warrant  Securities  representing a "Majority" (as hereinafter  defined) of such
Warrant  Securities  (assuming  the  exercise  of all of  the  then  outstanding
Warrants)  shall have the right (which right is in addition to the  registration
rights under Section 6.2 hereof),  exercisable by written notice to the Company,
to have the Company prepare and file with the Commission, on one (1) occasion, a
registration statement on Form S-3 (or if such form is not available, then on an
available registration statement form other than Form S-8 or Form S-4), and such
other documents,  including a prospectus,  as may be necessary in the opinion of
both  counsel for the Company  and counsel for the  Holders,  in order to comply
with the  provisions  of the Act, so as to permit a public  offering and sale of
their respective Warrant Shares for no less than one (1) year by such Holders of
the  Warrant  Securities  who  notify  the  Company  within  ten (10) days after
receiving notice from the Company of such request.
<PAGE>

         (b) The  Company  covenants  and agrees to give  written  notice of any
registration  request  under  this  Section  6.3 by any Holder or Holders to all
other registered Holders of the Warrant Securities within fifteen (15) days from
the date of the  receipt of any such  registration  request;  PROVIDED  that the
Company shall have the right to delay the filing of such registration  statement
(A) for such  reasonable  period of time until the Company  receives or prepares
financial  statements  for the fiscal period most  recently  ended prior to such
written  request,  if necessary to avoid the use of stale financial  statements,
PROVIDED, HOWEVER, that in the event but only in the event that new audited year
end financial  statements  are required,  then for a period of 90 days after the
end of the Company's most recently  completed fiscal year or (B), if the Company
would be required to divulge in such registration statement the existence of any
fact relating to a material  business  situation,  transaction,  negotiation  or
other event not otherwise  required to be  disclosed,  in which case the Company
shall have the  one-time  right to delay  such  filing for a period of no longer
than forty five (45) days.

         (c) All expenses (other than  underwriting  discounts and  commissions)
incurred in connection with registration,  filings or qualification  pursuant to
the  registration  request made pursuant to the  subsection  (a) of this Section
6.3,  including,  without  limitation,  all  registration,  listing,  filing and
qualification  fees, printers and accounting fees and the fees and disbursements
of counsel for the Holders shall be borne by the Company.

         (d) The  Company  shall have the right to  include in the  registration
statement required by this Section 6.3(a) other shares of Common Stock, provided
that in any  underwritten  offering  by the  Holders,  the  number of such other
shares of Common  Stock  shall be reduced  pro rata to the extent  necessary  to
reduce the total amount of securities to be included in such public  offering to
the amount  reasonably  recommended by the underwriter or underwriters  thereof,
whereupon the Company  shall only be permitted to register such limited  portion
(which may be none) of the other shares of Common Stock.

     6.4  COVENANTS OF THE COMPANY WITH RESPECT TO  REGISTRATION.  In connection
with any registration under Section 6.2 or 6.3 hereof, the Company covenants and
agrees as follows:

         (a) The  Company  shall  use its best  efforts  to file a  registration
statement as soon as practicable but in any event within forty five (45) days of
the date  notice is  received  pursuant  to  Section  6.2 or  6.3(a),  except as
otherwise  provided in Section 6.3(b) and shall use its best efforts to have any
such registration  statement  declared  effective within ninety (90) days of the
initial  filing of such  registration  statement,  and shall furnish each Holder
listed as a selling  stockholder  in the  registration  statement such number of
prospectuses as such Holder shall reasonably request.

         (b) Except as provided in Section  6.3(c) above,  the Company shall pay
all  costs   (excluding  fees  and  expenses  of  Holder(s)'   counsel  and  any
underwriting or selling commissions or other charges of any broker-dealer acting
on behalf of Holder(s)),  fees and expenses in connection with any  registration
statement  filed  pursuant to Section 6.2 or 6.3(a)  hereof  including,  without
limitation, the Company's legal and accounting fees, printing expenses, blue sky
fees and expenses.

         (c) The Company will take all necessary action which may be required in
qualifying  or  registering  the Warrant  Shares  included  in the  registration
statement  for offering and sale under the  securities  or blue sky laws of such
states as reasonably  are  requested by the Holder(s) in writing,  provided that
the Company shall not be obligated to qualify to do business in any jurisdiction
where it is not then so qualified or to take any action that would subject it to
general  service of process  where it is not so  subject  or would  subject  the
Company to any tax in any jurisdiction where it is not then so subject.
<PAGE>

         (d) The Company shall  indemnify the Holder(s) of the Warrant Shares to
be sold  pursuant to any  registration  statement  and each person,  if any, who
controls  such  Holders  within the  meaning of Section 15 of the Act or Section
20(a) of the Securities  Exchange Act of 1934, as amended (the "Exchange  Act"),
against all loss, claim,  damage,  expense or liability  (including all expenses
reasonably  incurred in investigating,  preparing or defending against any claim
whatsoever)  to which any of them may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect  thereof) arise out of or are based upon any untrue statement or alleged
untrue  statement of any material fact contained in any  registration  statement
under which the Warrant Shares to be sold by such Holder were  registered  under
the  Securities  Act  pursuant  hereto or any  preliminary  prospectus  or final
prospectus  contained therein,  or any amendment or supplement thereof, or arise
out of or are based upon the  omission or alleged  omission  to state  therein a
material fact required to be stated  therein or necessary to make the statements
therein not misleading,  or any violation or alleged violation of the Securities
Act or any state securities or blue sky laws and will reimburse each such Holder
and each such  controlling  person  for any legal or other  expenses  reasonably
incurred by them in connection  with  investigating  or defending any such loss,
claim, damage, liability or action; provided, however, that the Company will not
be liable  in any such  case if and to the  extent  that any such  loss,  claim,
damage or liability arises out of or is based upon the Company's  reliance on an
untrue  statement or alleged untrue statement or omission or alleged omission so
made in  conformity  with  information  furnished by any such Holder or any such
controlling  person  in  writing  specifically  for  use  in  such  registration
statement or prospectus.

         (e) The  Holder(s)  of the  Warrant  Shares  to be sold  pursuant  to a
registration statement,  and their successors and assigns, shall severally,  and
not jointly,  indemnify the Company, its officers and directors and each person,
if any, who controls the Company  within the meaning of Section 15 of the Act or
Section 20 (a) of the Exchange Act, against all loss,  claim,  damage or expense
or liability  (including  all  expenses  reasonably  incurred in  investigating,
preparing or defending  against any claim  whatsoever)  to which they may become
subject under the Securities Act or otherwise,  insofar as such losses,  claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon  reliance  on any untrue  statement  or  alleged  untrue  statement  of any
material fact contained in the  registration  statement under which such Warrant
Shares  were  registered  under  the  Securities  Act  pursuant  hereto  or  any
preliminary  prospectus or final prospectus  contained therein, or any amendment
or supplement thereof, or arise out of or are based upon the omission or alleged
omission  to state  therein a material  fact  required  to be stated  therein or
necessary to make the statements therein not misleading,  and will reimburse the
Company and each such officer, director, and controlling person for any legal or
other expenses  reasonably  incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action, provided,  however,
that such Holder(s) will be liable hereunder in any such case if and only to the
extent that any such loss, claim,  damage or liability arises out of or is based
upon an untrue  statement  or alleged  untrue  statement  or omission or alleged
omission made in reliance upon and in conformity with information  pertaining to
such Holder(s),  as such,  furnished in writing to the Company by such Holder(s)
specifically for use in such registration statement or prospectus, and provided,
that the  liability  of each Holder  hereunder  shall be limited to the proceeds
received  by such  Holder  from  the  sale of  Warrant  Shares  covered  by such
registration statement.

         (f) Nothing contained in this Agreement shall be construed as requiring
the  Holder(s) to exercise  their  Warrants  prior to the initial  filing of any
registration statement or the effectiveness thereof.

         (g) The  Company  shall  prepare  and  file  with the  Commission  such
amendments and post-effective amendments to the registration statement as may be
necessary to keep the registration  statement effective until the earlier of (i)
when all such Warrant Shares are sold or otherwise  transferred or (ii) December
24, 2004;  cause the prospectus to be  supplemented  by any required  prospectus
supplement,  and as so  supplemented  to be filed pursuant to Rule 424 under the
Securities  Act;  and comply  with the  provisions  of the  Securities  Act with
respect  to the  disposition  of all  securities  covered  by such  registration
statement during the applicable period in accordance with the intended method or
methods  of  distribution  by the  Holders  as set  forth  in such  registration
statement or supplement to the prospectus
<PAGE>

         (h) The  Company  shall  furnish  to each  Holder  participating  in an
underwritten  offering  including  Warrant Shares pursuant to Section 6.2 or 6.3
hereof, and to each underwriter, if any, a signed counterpart, addressed to such
Holder or  underwriter,  of (i)  opinions of counsel to the  Company,  dated the
effective date of such registration  statement and the date of the closing under
the underwriting agreement,  and (ii) "cold comfort" letters dated the effective
date of such  registration  statement  and the  date of the  closing  under  the
underwriting  agreement  signed by the independent  public  accountants who have
issued  a  report  on  the  Company's  financial  statements  included  in  such
registration  statement,  in each case covering  substantially  the same matters
with  respect  to such  registration  statement  (and  the  prospectus  included
therein) and, in the case of such  accountants'  letter,  with respect to events
subsequent to the date of such financial statements,  as are customarily covered
in  opinions  of  issuer's  counsel and in  accountants'  letters  delivered  to
underwriters in underwritten public offerings of securities.

         (i) The Company shall, as soon as practicable  after the effective date
of a registration  statement  relating to any Warrant Shares pursuant to Section
6.2 or 6.3 hereof, and in any event within fifteen (15) months  thereafter,  use
its reasonable  efforts to make  "generally  available to its security  holders"
(within the meaning of Rule 158 under the Act) an earnings statement (which need
not be audited) complying with Section 11(a) of the Act and covering a period of
at least twelve (12)  consecutive  months  beginning after the effective date of
the registration statement.

         (j) The Company shall deliver promptly to each Holder  participating in
an offering  including any Warrant Shares  pursuant to Section 6.2 or 6.3 hereof
who so requests and to any  managing  underwriter  copies of all  correspondence
between  the  Commission  and the  Company,  its  counsel  or  auditors  and all
memoranda  relating to discussions with the Commission or its staff with respect
to  the  registration  statement,  and  shall  permit  each  Holder  to do  such
investigation,  upon  reasonable  advance  notice,  with respect to  information
contained in or omitted from the  registration  statement as it deems reasonably
necessary  to comply with  applicable  securities  laws or rules of the National
Association of Securities  Dealers,  Inc.  ("NASD").  Such  investigation  shall
include access to books, records and properties and opportunities to discuss the
business of the Company with its officers and independent auditors,  all to such
reasonable  extent  and at  such  reasonable  times  and as  often  as any  such
underwriter  shall  reasonably  request  as it deems  necessary  to comply  with
applicable securities laws and NASD rules.

         (k) With respect to a registration  pursuant to Section 6.3 hereof, the
Company shall enter into an underwriting agreement with the managing underwriter
selected for such underwriting by Holders representing a Majority of the Warrant
Shares   requested  to  be  included  in  such   underwriting.   Such   managing
underwriter(s)  shall be  satisfactory  to the  Company and each Holder and such
agreement  shall be  satisfactory  in form and  substance to the  Company,  each
Holder and such managing  underwriters,  and shall contain such representations,
warranties and covenants by the Company and such other terms as are  customarily
contained  in  agreements  of that type used by the  managing  underwriter.  The
Holders  shall  be  parties  to  any  underwriting   agreement  relating  to  an
underwritten sale of their Warrant Shares and may, at their option, require that
any or all the  representations,  warranties  and covenants of the Company to or
for the benefit of such  underwriters  shall also be made to and for the benefit
of such Holders.  Such Holders shall not be required to make any representations
or warranties to or agreements  with the Company or the  underwriters  except as
they may relate to such Holders and their intended methods of distribution.

         (l)      Intentionally deleted.

         (m) For purposes of this Agreement, the term "Majority" in reference to
the Holders representing a Majority of the Warrants or Warrant Shares shall mean
in excess of fifty percent (50%) of the  outstanding  Warrants or Warrant Shares
that (i) are not held by the Company or an affiliate  of the  Company,  officer,
creditor,  employee  or agent  thereof  or any of their  respective  affiliates,
members of their family,  persons acting as nominees or in conjunction therewith
or (ii) have not been resold to the public pursuant to a registration  statement
filed with the Commission under the Act.

         7.  REGISTRATION.  To the  extent  that the  Warrant  Shares  have been
registered  for  resale by the  Company  under a  registration  statement,  such
registration  statement remains effective,  and the Holder(s) have the right and
ability to utilize the prospectus  contained in such  registration  statement in
connection with the resale of the Warrant Shares, then the registration right of
the Holder(s) under Section 6 hereof,  and the corresponding  obligations of the
Company thereunder,  shall be suspended and deferred until such time, if at all,
that such registration statement shall no longer be usable by the Holders.
<PAGE>

         8.       ADJUSTMENTS TO EXERCISE PRICE AND NUMBER OF SECURITIES.

         8.1 COMPUTATION OF ADJUSTED  EXERCISE  PRICE.  For the purposes of this
Section 8 the term  Exercise  Price shall mean the  Exercise  Price per share of
Common  Stock set  forth in  Section 5  hereof,  as  adjusted  from time to time
pursuant to the provisions of this Section 8.

         For  purposes of any  computation  to be made in  accordance  with this
Section 8, the following provisions shall be applicable:

     (i) INTENTIONALLY DELETED.

     (ii) In case of the issuance or sale (otherwise than as a dividend or other
distribution on any stock of the Company) of shares of Stock for a consideration
part or all of which shall be other than cash,  the amount of the  consideration
therefor  other than cash shall be deemed to be the value of such  consideration
as determined in good faith by the Board of Directors of the Company.

     (iii) Shares of Stock issuable by way of dividend or other  distribution on
any capital stock of the Company shall be deemed to have been issued immediately
after the  opening of  business  on the day  following  the record  date for the
determination  of  stockholders  entitled  to  receive  such  dividend  or other
distribution and shall be deemed to have been issued without consideration.

     (iv) The reclassification of securities of the Company other than shares of
Stock into securities  including  shares of Stock shall be deemed to involve the
issuance of such shares of Stock for  consideration  other than cash immediately
prior to the  close of  business  on the date  fixed  for the  determination  of
security  holders  entitled  to  receive  such  shares,  and  the  value  of the
consideration  allocable to such shares of Stock shall be determined as provided
in subsection (ii) of this Section 8.1.

     (v) The number of shares of Stock at any one time outstanding shall include
the aggregate number of shares issued or issuable  (subject to readjustment upon
the actual  issuance  thereof)  upon the exercise of then  outstanding  options,
rights,  warrants  and upon  the  conversion  or  exchange  of then  outstanding
convertible or exchangeable securities.

         8.2      INTENTIONALLY DELETED.

         8.3 SUBDIVISION AND COMBINATION.  In case the Company shall at any time
subdivide or combine the outstanding  shares of Stock,  the Exercise Price shall
forthwith be  proportionately  decreased in the case of subdivision or increased
in the case of combination.

         8.4  ADJUSTMENT IN NUMBER OF  SECURITIES.  Upon each  adjustment of the
Exercise  Price  pursuant  to the  provisions  of this  Section 8, the number of
securities  issuable  upon the exercise of each Warrant shall be adjusted to the
nearest  full amount by  multiplying  a number  equal to the  Exercise  Price in
effect  immediately  prior to such  adjustment  by the number of Warrant  Shares
issuable upon exercise of the Warrants  immediately prior to such adjustment and
dividing the product so obtained by the adjusted Exercise Price.

         8.5 DEFINITION OF STOCK.  For the purpose of this  Agreement,  the term
"Stock" shall mean (i) the class of stock designated as Common Stock or (ii) any
other class of stock resulting from successive changes or  reclassifications  of
such Stock  consisting  solely of changes in par value,  or from par value to no
par  value,  or from no par value to par value.  In the event  that the  Company
shall after the date hereof issue  securities  with  greater or superior  voting
rights than the shares of Stock outstanding as of the date hereof,  the Holders,
at their  option,  may receive upon  exercise of any Warrants  either  shares of
Stock or a like  number of such  securities  with  greater  or  superior  voting
rights.



<PAGE>


         8.6  MERGER  OR  CONSOLIDATION.  In  case of any  consolidation  of the
Company  with,  or merger of the Company  with,  or merger of the Company  into,
another  corporation (other than a consolidation or merger which does not result
in any  reclassification  or change of the outstanding  Stock),  the corporation
formed by such consolidation or merger shall execute and deliver to the Holder a
supplemental  warrant  agreement  providing that the Holder of each Warrant then
outstanding  or to be  outstanding  shall have the right  thereafter  (until the
expiration of such Warrant) to receive,  upon exercise of such warrant, the kind
and amount of shares of stock and other securities and property  receivable upon
such  consolidation  or merger,  by a holder of the number of shares of Stock of
the Company for which such warrant might have been exercised  immediately  prior
to such  consolidation,  merger,  sale or transfer.  Such  supplemental  warrant
agreement  shall  provide  for  adjustments  which  shall  be  identical  to the
adjustments  provided in Section 8. The above provision of this Subsection shall
similarly apply to successive consolidations or mergers.

     8.7 NO ADJUSTMENT OF EXERCISE PRICE IN CERTAIN CASES.  No adjustment of the
Exercise Price shall be made:
     
         (a)      Upon issuance or sale of the Warrants or the Warrant Shares.

         (b) If the  amount  of said  adjustment  shall be less  than two  cents
($0.02) per security issuable upon exercise of the Warrants,  PROVIDED, HOWEVER,
that in such case any  adjustment  that would  otherwise be required  then to be
made shall be carried forward and shall be made at the time of and together with
the next subsequent  adjustment  which,  together with any adjustment so carried
forward,  shall amount to at least two cents ($0.02) per security  issuable upon
exercise of the Warrants.

         8.8  DIVIDENDS AND OTHER  DISTRIBUTIONS.  In the event that the Company
shall at any time  prior to the  exercise  of all  Warrants  declare a  dividend
(other  than a  dividend  consisting  solely of  shares  of Stock) or  otherwise
distribute to all of its stockholders any assets,  properties,  rights, evidence
of indebtedness,  securities (other than shares of Stock), whether issued by the
Company  or by  another,  or any  other  thing  of  value,  the  Holders  of the
unexercised Warrants shall thereafter be entitled,  in addition to the shares of
Stock or other securities and property  receivable upon the exercise thereof, to
receive, upon the exercise of such Warrants, the same property,  assets, rights,
evidences  of  indebtedness,  securities  or any other  thing of value that they
would have been entitled to receive at the time of such dividend or distribution
as if the  Warrants had been  exercised  immediately  prior to such  dividend or
distribution.  At the time of any such  dividend  or  distribution,  the Company
shall  make  appropriate  reserves  to  ensure  the  timely  performance  of the
provisions of this Subsection 8.8.

         9.  EXCHANGE  AND  REPLACEMENT  OF WARRANT  CERTIFICATES.  Each Warrant
Certificate is exchangeable  without expense,  upon the surrender thereof by the
registered  Holder at the  principal  office of the  Company,  for a new Warrant
Certificate of like form, tenor and date representing in the aggregate the right
to purchase  the same number of  securities  in such  denominations  as shall be
designated by the Holder thereof at the time of such surrender.



<PAGE>


         Upon receipt by the Company of evidence  reasonably  satisfactory to it
of the loss, theft,  destruction or mutilation of any Warrant Certificate,  and,
in case of loss,  theft or  destruction,  of  indemnity  or security  reasonably
satisfactory to it, and reimbursement to the Company of all reasonable  expenses
incidental  thereto,  and upon surrender and  cancellation  of the Warrants,  if
mutilated,  the Company will make and deliver a new Warrant  Certificate of like
form and tenor in lieu thereof.

         10.  ELIMINATION  OF  FRACTIONAL  INTERESTS.  The Company  shall not be
required to issue certificates  representing fractions of shares of Common Stock
upon the exercise of the  Warrants,  nor shall it be required to issue script or
pay cash in lieu of  fractional  interests,  it being the intent of the  parties
that all fractional interests shall be eliminated by rounding any fraction up to
the nearest whole number or shares of Common Stock.

         11.  RESERVATION  AND LISTING OF  SECURITIES.  The Company shall at all
times reserve and keep available out of its  authorized  shares of Common Stock,
solely for the  purpose of issuance  upon the  exercise  of the  Warrants,  such
number of shares of Common Stock or other  securities,  properties  or rights as
shall be issuable upon the exercise  thereof.  As long as the Warrants  shall be
outstanding  and the  Company  shall have a class of its  securities  registered
under the Act or the  Exchange  Act,  the Company  shall use its best efforts to
cause all Warrant Shares issuable upon the exercise of the Warrants to be listed
(subject to official notice of issuance) on all security  exchanges on which the
Common  Stock  issued to the public in  connection  herewith  may then be listed
and/or quoted.

         12.  NOTICES TO WARRANT  HOLDERS.  Nothing  contained in this Agreement
shall be  constructed  as  conferring  upon the  Holders the right to vote or to
consent or to receive  notice to  shareholders  in  respect of any  meetings  of
shareholders for the election of directors or any other matter, or as having any
rights  whatsoever as a shareholder  of the Company.  If,  however,  at any time
prior to the expiration of the Warrants and their exercise, any of the following
events shall occur:

                  (a) the  Company  shall take a record of all of the holders of
         its shares of Common Stock for the purpose of entitling them to receive
         a dividend or  distribution  payable  otherwise than in cash, or a cash
         dividend  or  distribution  payable  otherwise  than out of  current or
         retained  earnings,  as indicated by the  accounting  treatment of such
         dividend or distribution on the books of the Company; or

                    (b) the  Company  shall  offer to all of the  holders of its
         Common Stock any  additional  shares of capital stock of the Company or
         securities convertible into or exchangeable for shares of capital stock
         of the Company,  or any option right or warrant to subscribe  therefor;
         or

                  (c) a  dissolution,  liquidation  or winding up of the Company
         (other than in connection with a consolidation  or merger) or a sale of
         all or  substantially  all of its  property,  assets and business as an
         entirety shall be proposed;



<PAGE>


then, in any one or more of said events,  the Company shall give written  notice
of such  event at least  fifteen  (15) days  prior to the date fixed as a record
date  for the  dividend  or the  date of  closing  the  transfer  books  for the
determination  of the issuance of any convertible or exchangeable  securities or
subscription rights, options or warrants or for the determination of the persons
or entitled to vote on such  proposed  dissolution,  liquidation,  winding up or
sale.  Such  notice  shall  specify  such record date or the date of closing the
transfer  books,  as the case may be.  Failure to give such notice or any defect
therein shall not affect the validity of any action taken in connection with the
declaration or payment of any such dividend,  or the issuance of any convertible
or exchangeable  securities or subscription rights,  options or warrants, or any
proposed dissolution, liquidation winding up or sale.

         13. NOTICES. All notices,  requests,  consents and other communications
hereunder  shall be in  writing  and shall be deemed to have been duly made when
delivered, or mailed by registered or certified mail, return receipt requested:

               (a) If to the registered  Holder of the Warrants,  to the address
          of such Holder as shown on the books of the Company; or

               (b) If to the Company, to the address set forth in Section 3
         hereof or to such other  address as the Company may designate by notice
         to the Holders; or

               (c) if to Sands Brothers & Co., Ltd., to 90 Park Avenue, New
         York,  NY  10016,  or to such  other  address  as  Sands  Brothers  may
         designate by notice to the Company and the Holders.

         14. SUPPLEMENTS AND AMENDMENTS. The Company and Sands Brothers may from
time to time  supplement  or amend this  Agreement  without the  approval of any
Holders of Warrant Certificates (other than Sands Brothers) in order to cure any
ambiguity,  to correct or supplement any provision contained herein which may be
defective  or  inconsistent  with any  provision  herein,  or to make any  other
provisions in regard to matters or questions arising hereunder which the Company
and Sands  Brothers may deem  necessary  or desirable  and which the Company and
Sands  Brothers deem shall not adversely  affect the interests of the Holders of
Warrant  Certificates.  Other amendments to this Agreement may be made only with
the written consent of the Holders of the Majority of the Warrant Shares.

         15.  SUCCESSORS.  All the  covenants and  provisions of this  Agreement
shall be binding upon and inure to the benefit of the  Company,  the Holders and
their respective successors and assigns hereunder.



<PAGE>


         16. TERMINATION.  This Agreement shall terminate at the earliest of (i)
such time that all of the Warrant Shares have been sold, (ii) such time that the
Warrant Shares are actually eligible for the removal of restrictions pursuant to
Rule 144(k) under the Act or any  successive  rule, or (iii)  December 24, 2002.
Notwithstanding the foregoing, the indemnification provisions of Section 6 shall
survive such termination.

         17. GOVERNING LAW: SUBMISSION TO JURISDICTION.  This Agreement and each
Warrant Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of New York and for all  purposes  shall be  construed  in
accordance  with the laws of said State  without  giving  effect to the rules of
said State governing conflicts of laws.

         The  Company,  Sands  Brothers  and the Holders  hereby  agree that any
action,  proceeding  or claim  against it arising out of, or relating in any way
to, this  Agreement  shall be brought and enforced in the courts of the State of
New York, and irrevocably submit to such jurisdiction,  which jurisdiction shall
be exclusive.  The Company,  Sands Brothers and the Holders  hereby  irrevocably
waive any objection to such exclusive  jurisdiction or inconvenient  forum.  Any
such process or summons to be served upon any of the Company, Sands Brothers and
the Holders (at the option of the party  bringing  such  action,  proceeding  or
claim) may be served by transmitting a copy thereof,  by registered or certified
mail, return receipt requested,  postage prepaid, addressed to it at the address
as set forth in Section 13 hereof. Such mailing shall be deemed personal service
and  shall  be legal  and  binding  upon the  party  so  served  in any  action,
proceeding or claim. The Company,  Sands Brothers and the Holders agree that the
prevailing  party(ies)  in any such  action or  proceeding  shall be entitled to
recover from the other  party(ies) all of its/their  reasonable  legal costs and
expenses  relating to such action or  proceeding  and/or  incurred in connection
with the preparation therefor.

         18. ENTIRE AGREEMENT;  MODIFICATION. This Agreement contains the entire
understanding  between the parties  hereto  with  respect to the subject  matter
hereof and may not be modified or amended except by a writing duly signed by the
party against whom enforcement of the modification or amendment is sought.

         19.  SEVERABILITY.  If any provision of this Agreement shall be held to
be invalid and  unenforceable,  such  invalidity or  unenforceability  shall not
affect any other provision of this Agreement.

         20.  CAPTIONS.  The caption  headings of the Sections of this Agreement
are for  convenience of reference only and are not intended,  nor should they be
construed, as a part of this Agreement and shall be given no substantive effect.

         21.  BENEFITS OF THIS  AGREEMENT.  Nothing in this  Agreement  shall be
construed to give to any person,  entity or  corporation  other than the Company
and  Sands  Brothers  and  any  other  registered   Holders(s)  of  the  Warrant
Certificates or Warrant Securities any legal or equitable right, remedy or claim
under this  Agreement;  and this  Agreement  shall be for the sole and exclusive
benefit of the Company and Sands Brothers and any other Holder(s) of the Warrant
Certificates or Warrant Securities.

         22.  COUNTERPARTS.  This  Agreement  may be  executed  in any number of
counterparts and each of such counterpart shall for all purposes be deemed to be
an original,  and such  counterparts  shall together  constitute but one and the
same instrument.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first written.

                        Smart Choice Automotive Group, Inc.



                        By: /s/ Ronald W. Anderson
                        --------------------------
                           Ronald W. Anderson
                           Executive Vice President


Attest:


/s/ Robert J. Downing
-------------------------
Secretary


                           Sands Brothers & Co., Ltd.



                        By:  /s/ Alan M. Bluestine
                        --------------------------
                             Authorized Officer



<PAGE>
                                   
THE WARRANT  REPRESENTED BY THIS CERTIFICATE AND THE OTHER  SECURITIES  ISSUABLE
UPON  EXERCISE  THEREOF  WERE NOT  REGISTERED  FOR SALE BY THE ISSUER  UNDER THE
SECURITIES  ACT OF 1933, AS AMENDED (THE "ACT"),  AND MAY NOT BE OFFERED,  SOLD,
PLEDGED  OR  OTHERWISE   TRANSFERRED   EXCEPT   PURSUANT  TO  (i)  AN  EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR (ii), TO THE EXTENT APPLICABLE, RULE 144
UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF
SECURITIES),  PROVIDED THAT THE ISSUER OF THIS  CERTIFICATE  IS PROVIDED WITH AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER, THAT AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT IS AVAILABLE.

THE  TRANSFER OR EXCHANGE OF THE WARRANTS  REPRESENTED  BY THIS  CERTIFICATE  IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.



No.  001                                                       90,000 Warrants

                               WARRANT CERTIFICATE

         This Warrant Certificate  certifies that Sands Brothers & Co., Ltd., or
its registered  assigns, is the registered holder of 90,000 Warrants to purchase
initially,  at any time after the date hereof  until 5:30 p.m.  New York time on
December 24, 2002, up to 90,000 fully paid and  non-assessable  shares of common
stock, par value $.01 per share ("Common Stock") of the Company,  at the initial
exercise price,  subject to adjustment in certain events (the "Exercise Price"),
of $4.00 upon surrender of this Warrant  Certificate and payment of the Exercise
Price at an office or agency of the  Company,  or by  surrender  of this Warrant
Certificate  in  lieu  of  cash  payment,  but  subject  to the  conditions  and
adjustments  set forth herein and in the Warrant  Agreement dated as of December
24,  1997  between  the Company and Sands  Brothers & Co.,  Ltd.  (the  "Warrant
Agreement").  Payment  of the  Exercise  Price  shall  be made by  certified  or
official bank check in New York Clearing House funds payable to the order of the
Company.

         No Warrant  may be  exercised  after 5:30 p.m.,  New York time,  on the
expiration date, at which time all Warrants  evidenced hereby,  unless exercised
prior thereto, shall thereafter be void.

         The Warrants  evidenced by this Warrant  Certificate are part of a duly
authorized  issue of Warrants  issued pursuant to the Warrant  Agreement,  which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument  and to which  reference  is  hereby  made for a  description  of the
rights, limitations of rights, obligations,  duties and immunities thereunder of
the  Company  and the  holders  (the words  "holders"  or  "holder"  meaning the
registered holder or registered holders) of the Warrants.

         The Warrant  Agreement  provides  that,  upon the occurrence of certain
events,  the  Exercise  Price  and  the  type  and/or  number  of the  Company's
securities issuable upon their exercise may, subject to certain  conditions,  be
adjusted. In such event, the Company will, at the request of the holder, issue a
new Warrant Certificate  evidencing the adjustment in the Exercise Price and the
number  and/or type of  securities  issuable  upon the exercise of the Warrants;
provided,  however,  that the  failure of the  Company to issue such new Warrant
Certificates  shall not in any way change,  alter or otherwise impair the rights
of the holder as set forth in the Warrant Agreement.

         Upon due  presentment  for  registration  of transfer  of this  Warrant
Certificate and the executed form of assignment  attached hereto at an office or
agency of the Company, a new Warrant Certificate or Warrant Certificates of like
form and tenor and  evidencing in the aggregate a like number of Warrants  shall
be issued to the transferee(s) in exchange for this Warrant Certificate, subject
to the  limitations  provided herein and in the Warrant  Agreement,  without any
charge  except for any tax or other  governmental  charge  imposed in connection
with such transfer.

         Upon the  exercise of less than all of the  Warrants  evidenced by this
Certificate,  the  Company  shall  forthwith  issue to the  holder  hereof a new
Warrant Certificate representing such number of unexercised Warrants.

         The Company may deem and treat the registered  holder(s)  hereof as the
absolute owner(s) of this Warrant Certificate  (notwithstanding  any notation of
ownership  or other  writing  hereon  made by  anyone),  for the  purpose of any
exercise hereof,  and of any distribution to the holder(s)  hereof,  and for all
other  purposes,  and the  Company  shall not be  affected  by any notice to the
contrary.

         All terms used in this  Warrant  Certificate  which are  defined in the
Warrant  Agreement  shall  have the  meanings  assigned  to them in the  Warrant
Agreement.

<PAGE>

         IN WITNESS WHEREOF,  the Company has caused this Warrant Certificate to
be duly executed under its corporate seal.

Dated as of December 24, 1997

                         Smart Choice Automotive Group, Inc.



                         By:  /s/ Ronald W. Anderson
                         ---------------------------
                            Ronald W. Anderson
                            Executive Vice President

Attest:


/s/ Robert J. Downing
--------------------------
Secretary

<PAGE>



                  ELECTION TO PURCHASE PURSUANT TO SECTION 3.2

         The  undersigned  hereby  irrevocably  elects to  exercise  the  right,
represented  by this Warrant  Certificate,  to purchase  ____________  shares of
Common Stock.

         In  accordance  with the terms of Section 3.2 of the Warrant  Agreement
dated as of December 24, 1997 between Smart Choice  Automotive  Group,  Inc. and
Sands Brothers & Co., Ltd., the undersigned requests that a certificate for such
securities be registered  in the name of  ____________________  whose address is
___________________________   and  that  such   Certificate   be   delivered  to
______________________whose address is ________________________________.

Dated:                                    , 199_

                       Signature    _______________________________
                       (Signature  must  conform in all respects to
                       name of holder as  specified  on the face of
                       the Warrant Certificate)

                       ---------------------------------------
                       (Insert Social Security or Other Identifying Number of
                       Holder)


<PAGE>

                                   ASSIGNMENT

             (To be executed by the registered holder if such holder
                  desires to transfer the Warrant Certificate.)

         FOR VALUE RECEIVED ________________________________ hereby
sells, assigns and transfers unto _____________________________________

                  (Please print name and address of transferee)

this Warrant  Certificate,  together with all right, title and interest therein,
and  does  hereby  irrevocably  constitute  and  appoint  ______________________
Attorney  to  transfer  the  within  Warrant  Certificate  on the  books  of the
within-named Company, with full power of substitution.

Dated:               Signature______________________________
                     (Signature must conform in all respects to name of
                     holder as specified on the face of the Warrant
                     Certificate)

                     ____________________________________________
                     (Insert Social Security or other Identifying
                     Number of Holder)