U.S. SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    Form 10-Q

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

         For the quarterly period ended      September 30, 1997

                                       OR

[  ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934
         For the transition period from __________ to _______________

                         Commission file number 1-14082

                       SMART CHOICE AUTOMOTIVE GROUP, INC.
                       -----------------------------------
             (Exact name of registrant as specified in its charter)


             FLORIDA                                   59-1469577
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
 incorporation or organization)

              5200 S. Washington Avenue, Titusville, Florida 32780
              ----------------------------------------------------
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (407) 269-9680
              (Registrant's telephone number, including area code)

                             Eckler Industries, Inc.
                             -----------------------
            (Former name, former address and former fiscal year, if
                           changed since last report)


         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such report(s), and (2) has been subject to such
filing requirements for the past 90 days.

Yes    X__    No ______


Indicate  number or shares  outstanding of each of the issuer's  classes of
common stock, as of the latest practicable date:

As of November 14, 1997, 9,278,385 shares of the Registrant's Common
Stock were issued and outstanding.



<PAGE>


                                             SMART CHOICE AUTOMOTIVE GROUP, INC.
                                                              Index to Form 10-Q



PART I-FINANCIAL INFORMATION

Item 1.  Financial Statements

 Smart Choice Automotive Group, Inc.

          Condensed Consolidated Balance Sheets as of
                    September 30, 1997 (unaudited) and December 31, 1996      5
          Condensed Consolidated Statements of Operations for the
                   Three Months and Nine Months Ended
                   September 30, 1997 (unaudited)                             7
          Condensed Consolidated Statement of Stockholders' Equity
                   for the Nine Months Ended September 30, 1997               8
          Condensed Consolidated Statements of Cash Flows for the
                   Nine Months Ended September 30, 1997
                   and 1996 (unaudited)                                       9
          Notes to Condensed Consolidated Financial Statements               11

 Liberty Finance Company, Inc. and Affiliates

          Condensed Combined Balance Sheet as of
                   December 31, 1996                                         15
          Condensed Combined Statement of Operations for the
                   Period January 1, 1997 to February 12, 1997 (unaudited)   17
          Condensed Combined Statement of Cash Flows for the
                   Period January 1, 1997 to February 12, 1997 (unaudited)   18
          Condensed Combined Statement of Operations for the
                   Three Months and Nine Months Ended
                   September 30, 1996 (unaudited)                            19
          Condensed Combined Statement of Cash Flows for the
                   Nine Months Ended September  30, 1996 (unaudited)         20

                                                                     -Continued-
                                       1
<PAGE>


                                             SMART CHOICE AUTOMOTIVE GROUP, INC.
                                                              Index to Form 10-Q
                                                                     (Continued)


 Florida Finance Group, Inc., Suncoast Auto Brokers, Inc.
 and Suncoast Auto Brokers Enterprises, Inc.

          Condensed Combined Balance Sheet as of
                   December 31, 1996                                         21
          Condensed Combined Statement of Operations for the
                   Period January 1, 1997 to January 28, 1997 (unaudited)    23
          Condensed Combined Statement of Cash Flows for the
                   Period January 1, 1997 to January 28, 1997 (unaudited)    24
          Condensed Combined Statement of Operations for the
                   Three Months and Nine Months Ended
                   September 30, 1996 (unaudited)                            25
          Condensed Combined Statement of Cash Flows for the
                   Nine Months Ended September 30, 1996 (unaudited)          26

 Two Two Five North Military Trail Corporation d/b/a Miracle Mile
 Motors and Palm Beach Finance Company, Inc.

           Condensed Combined Balance Sheet as of
                    December 31, 1996                                        27
           Condensed Combined Statement of Income for the
                    Period January 1, 1997 to February 14, 1997 (unaudited)  29
           Condensed Combined Statement of Cash Flows for the
                    Period January 1, 1997 to February 14, 1997 (unaudited)  30
           Condensed Combined Statement of Income for the
                    Three Months and Nine Months Ended
                    September 30, 1996 (unaudited)                           31
           Condensed Combined Statement of Cash Flows for the
                    Nine Months Ended September 30, 1996 (unaudited)         32

  Eckler Industries, Inc.

           Condensed Balance Sheet as of December 31, 1996 (unaudited)       33
           Condensed Statement of Operations for the
                    Period January 1, 1997 to January 28, 1997 (unaudited)   35
           Condensed Statement of Cash Flows for the
                    Period January 1, 1997 to January 28, 1997 (unaudited)   36
           Condensed Statement of Operations for the Three Months and
                    Nine Months Ended September 30, 1996 (unaudited)         37
           Condensed Statement of Cash Flows for the
                    Nine Months Ended September 30, 1996 (unaudited)         38

                                       2
<PAGE>


                                             SMART CHOICE AUTOMOTIVE GROUP, INC.
                                                              Index to Form 10-Q
                                                                     (Continued)





Item 2.  Management's Discussion and Analysis of Financial Condition
           and Results of Operations                                         39

PART II-OTHER INFORMATION

Item 2.   Changes in Securities                                              50

Item 6.   Exhibits and Reports on Form 8-K                                   51



                                       3
<PAGE>


                                     PART I

                       SMART CHOICE AUTOMOTIVE GROUP, INC.

                              FINANCIAL INFORMATION


Item 1.   Financial Statements





                                       4
<PAGE>
<TABLE>
<CAPTION>



                                                                                SMART CHOICE AUTOMOTIVE GROUP, INC.
                                                                              Condensed Consolidated Balance Sheets


                                                                    (Unaudited)
                                                      As of  September 30, 1997           As of December 31, 1996

 ASSETS
<S>                                                                      <C>                    <C>

                                                                                                 
   Cash and Cash Equivalents                                        $     897,569                 $      -
   Accounts Receivable                                                  2,233,030                     25,000

   Finance Receivables:
     Principal Balances, Net                                           35,766,667                        -
      Less: Allowance for Credit Losses                                (6,111,271)                       -
---------------------------------------------------------------------------------------------------------------------------
   Finance Receivables, Net                                            29,655,396                        -


   Inventories, at Cost                                                13,301,911                        -
   Land Held for Resale                                                 1,050,000                        -
   Property and Equipment, Net                                          4,983,423                     22,454
   Notes Receivable                                                     4,575,612                    400,000
   Deferred Acquisition Costs                                              33,622                    194,101
   Deferred Debt Costs                                                  1,142,062                     24,735
   Deferred Offering Costs                                                480,183                        -
   Deferred Loan Origination Costs                                        428,459                        -
   Goodwill                                                            27,350,439                        -
   Prepaid Expenses                                                     1,136,220                        -
   Deposits                                                               148,122                     50,000
   Other Assets                                                           126,498                        -
---------------------------------------------------------------------------------------------------------------------------
 
                                                                    $  87,542,546                 $  716,290
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
      See accompanying notes to condensed consolidated financial statements



                                       5
<PAGE>
<TABLE>
<CAPTION>

                                                                                       SMART CHOICE AUTOMOTIVE GROUP, INC.
                                                                                     Condensed Consolidated Balance Sheets


---------------------------------------------------------------------------------------------------------------------------

                                                                                   (Unaudited)
                                                                      As of September 30, 1997    As of December 31, 1996
---------------------------------------------------------------------------------------------------------------------------
<S>                                                                         <C>                           <C>

 LIABILITIES AND STOCKHOLDERS' EQUITY
   Liabilities:
     Bank Overdraft                                                             $          -           $    82,884
     Accounts Payable                                                               4,017,752              438,890
     Accrued Expenses                                                               3,496,298              183,314
     Deferred Income                                                                   48,476                 -
     Floorplan Payable                                                              6,361,858                 -
     Capital Lease Obligations                                                        424,028                 -
     Notes Payable                                                                 46,888,042               60,000
     Convertible Debt                                                                 562,000              262,000
     Acquisition Debt                                                              10,064,475                 -
     Other Liabilities                                                                 73,245                 -
---------------------------------------------------------------------------------------------------------------------------
   Total Liabilities                                                               71,936,174            1,027,088
---------------------------------------------------------------------------------------------------------------------------


   Redeemable Preferred Stock                                                       3,939,851              385,039

   Stockholders' Equity (Deficit):
     Common Stock                                                                      92,784               54,884
     Additional Paid In Capital                                                    20,412,438              (46,933)
     Accumulated Deficit                                                           (7,835,230)            (703,788)
     Unearned Compensation                                                         (1,003,471)                -
---------------------------------------------------------------------------------------------------------------------------
   Total Stockholders' Equity (Deficit)                                            11,666,521             (695,837)
---------------------------------------------------------------------------------------------------------------------------

                                                                                $  87,542,546          $   716,290
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
      See accompanying notes to condensed consolidated financial statements




                                       6
<PAGE>
<TABLE>
<CAPTION>



                                                                                    SMART CHOICE AUTOMOTIVE GROUP, INC.
                                                                        Condensed Consolidated Statements of Operations
                                                                                                            (Unaudited)
------------------------------------------------------------------------------------------------------------------------
                                                                                                       Three Months And
                                                    Three Months Ended       Nine Months Ended        Nine Months Ended
                                                    September 30, 1997      September 30, 1997       September 30, 1996
------------------------------------------------------------------------------------------------------------------------
<S>                                                           <C>                      <C>                    <C>

 Vehicle and Related Revenues:

    Sales at New Car Dealerships                          $  2,624,884            $  2,624,884           $         -
    Sales at Used Car Dealerships                           10,941,288              22,730,067                     -
    Income on Finance Receivables                            2,173,807               4,624,482                     -
    Income from Insurance & Training                           352,347               1,003,603                     -
    Sales of Corvette Parts & Accessories                    4,419,463              12,391,663                     -
------------------------------------------------------------------------------------------------------------------------
                                                            20,511,789              43,374,699                     -
------------------------------------------------------------------------------------------------------------------------

 Cost of Vehicle and Vehicle Related
Revenues:

    Cost of Sales at New Car Dealerships                     2,303,936               2,303,936                     -
    Cost of Sales at Used Car Dealerships                    7,316,758              16,011,303                     -
    Cost of Insurance & Training                                20,205                  56,919                     -
    Cost of Corvette Parts & Accessories Sales               2,935,303               7,844,569                     -
    Provision for Credit Losses                                862,370               2,411,181                     -
------------------------------------------------------------------------------------------------------------------------
                                                            13,438,572              28,627,908                     -
------------------------------------------------------------------------------------------------------------------------
 Net Revenues from Vehicle Sales and Vehicle
    Related Activities                                       7,073,217              14,746,791                     -
------------------------------------------------------------------------------------------------------------------------

 Expenses:
   Operating Expenses                                        5,332,674              15,352,522                  313,397
   Compensation Expense Related to
      Employee Stock Options                                    29,848               3,244,615                     -
-------------------------------------------------------------------------------------------------------------------------
                                                             5,362,522              18,597,137                 (313,397)
-------------------------------------------------------------------------------------------------------------------------

 Income (Loss) from Operations                               1,710,695              (3,850,346)                (313,397)
-------------------------------------------------------------------------------------------------------------------------

 Other Expense (Income):

    Interest Expense                                         1,710,656               3,459,269                     -
    Other Income                                              (135,689)               (249,438)                    -
    Miscellaneous Expense                                        1,047                  71,265
------------------------------------------------------------------------------------------------------------------------

                                                             1,576,014               3,281,096                     -
------------------------------------------------------------------------------------------------------------------------

 Net Income (Loss)                                        $    134,681            $ (7,131,442)          $     (313,397)
------------------------------------------------------------------------------------------------------------------------

Net Income (Loss) Per Share                               $       0.01            $      (0.82)          $     (   0.08)
------------------------------------------------------------------------------------------------------------------------
Weighted Average Number of Shares
    and Share Equivalents Outstanding                        9,252,451               8,692,470                4,153,077
------------------------------------------------------------------------------------------------------------------------
</TABLE>
      See accompanying notes to condensed consolidated financial statements

                                       7
<PAGE>
<TABLE>
<CAPTION>



                                                                                           SMART CHOICE AUTOMOTIVE GROUP, INC.
                                                                      Condensed Consolidated Statement of Stockholders' Equity
                                                                                                                   (Unaudited)

-------------------------------------------------------------------------------------------------------------------------------
                                                                                                              Nine Months Ended
                                                                                                             September 30, 1997
-------------------------------------------------------------------------------------------------------------------------------
                                             Common Stock              Additional       Accumulated     Unearned
                                         Shares          Amount      Paid-in Capital     Deficit    Compensation        Total  
                                        -----------------------      ---------------  -----------   ------------    -----------

<S>                                       <C>             <C>             <C>            <C>             <C>            <C>
Balance at December 31, 1996            5,488,432      $  54,884      $   (46,933)   $  (703,788)    $    --        $  (695,837)

Common stock issued for acquisitions    4,110,952         41,110       14,372,770           --            --         14,413,880

Contribution and retirement   
of common stock                          (331,428)        (3,314)           3,314           --            --                 --

Common stock options granted              
to employees and directors                   --             --          3,480,897           --        (1,211,099)     2,269,798

Common stock options granted to          
lenders and consultants                      --             --          1,054,075           --            --          1,054,075

Treasury stock purchased              
and retired                                (2,000)           (20)         (13,570)          --            --            (13,590)  

Issuance of common stock for           
professional services                      12,429            124           77,682           --            --             77,806

Convertible debt issued at       
a discount                                   --             --            525,000           --            --            525,000

Common stock issued by            
stockholders for cancellation 
of common stock options                      --             --            800,000           --            --            800,000

Contribution to capital                      --             --            159,203           --            --            159,203

Amortization of unearned           
compensation                                 --             --                --            --           207,628        207,628

Net Loss                                     --             --                --      (7,131,442)         --         (7,131,442)
                                        ---------         ------      -----------    -----------     -----------    ----------- 
                                  
Balance at September 30, 1997           9,278,385      $  92,784      $20,412,438    $(7,835,230)    $(1,003,471)   $11,666,521    
                                        =========      =========      ===========    ===========     ===========    ===========    

</TABLE>




                                       8
<PAGE>
<TABLE>
<CAPTION>



                                                                                           SMART CHOICE AUTOMOTIVE GROUP, INC.
                                                                               Condensed Consolidated Statements of Cash Flows
                                                                                                                   (Unaudited)

-------------------------------------------------------------------------------------------------------------------------------
                                                                           Nine Months Ended                 Nine Months Ended
                                                                          September 30, 1997                September 30, 1996
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>                                  <C>

 Cash flows from operating activities:
   Net loss                                                                  $  (7,131,442)                       $   (313,397)
   Adjustments to reconcile net loss to
     net cash provided by (used in) operating activities:
      Provision for credit losses                                                1,130,195                                 --
      Common stock and options issued for consulting fees                          127,806                               3,808
      Loss on disposal of fixed assets                                              16,649                                 --
      Stock option compensation                                                  3,244,615                                 --
      Depreciation and amortization                                              1,257,016                                 --
      Cash provided by (used for), net of effect of acquisitions:                                                          --
         Accounts receivable                                                      (627,785)                                --
         Inventory                                                              (4,432,309)                                --
         Prepaid expenses                                                          238,579                                 --
         Other assets                                                             (423,190)                                --
         Accounts payable                                                        1,275,522                             284,636
         Accrued expenses                                                        3,120,121                              51,733
         Deferred income                                                          (185,335)                                --
         Other liabilities                                                          32,813                                 --
         Customer deposits                                                        (290,247)                                --
         Floorplan payable                                                       2,378,293                                 --
-------------------------------------------------------------------------------------------------------------------------------
 Net cash provided by (used in) operating activities                              (268,699)                            26,780
-------------------------------------------------------------------------------------------------------------------------------

Cash flows from investing activities:
    Increase in finance receivables                                             (6,220,717)                                --
    Cash for acquisitions, net of cash acquired                                 (8,100,020)                                --
    Increase in advances to affiliate                                           (3,184,129)                                --
    Issuance of notes receivable                                                  (630,167)                                --
    Increase in deposits                                                          (822,200)                           (16,899)
    Increase in deferred acquisition costs                                         (51,717)                           (63,537)
    Purchase of property and equipment                                            (656,434)                           (24,586)
    Proceeds from sale of property and equipment                                   138,293                                 --
    Increase in other assets                                                       (47,047)                                --
--------------------------------------------------------------------------------------------------------------------------------
 Net cash used in investing activities                                         (19,574,138)                          (105,022)
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                              Continued on next page


                                       9
<PAGE>
<TABLE>
<CAPTION>




                                                                                      SMART CHOICE AUTOMOTIVE GROUP, INC.
                                                                          Condensed Consolidated Statements of Cash Flows
                                                                                                              (Unaudited)
                                                                                                              (Continued)

--------------------------------------------------------------------------------------------------------------------------
                                                                             Nine Months Ended          Nine Months Ended
                                                                            September 30, 1997         September 30, 1996
--------------------------------------------------------------------------------------------------------------------------
<S>                                                                                <C>                        <C>

 Cash flows from financing activities:
    Principal payments on notes payable                                           $ (2,960,890)              $         --
    Proceeds from issuance of Sirrom debt                                            7,500,000                         --
    Proceeds from issuance of notes payable                                         15,024,902                         --
    Increase in deferred debt and offering costs                                      (667,132)                   (56,478)
    Proceeds from issuance of preferred stock                                          590,000                    135,000
    Proceeds from issuance of common stock                                                  --                      1,000
    Purchase of treasury stock                                                         (13,590)                        --
    Proceeds from issuance of convertible debentures                                 1,350,000                         --
    Bank overdraft                                                                     (82,884)                        --
--------------------------------------------------------------------------------------------------------------------------
 Net cash provided by financing activities                                          20,740,406                     79,522
--------------------------------------------------------------------------------------------------------------------------

 Net increase in cash and cash equivalents                                             897,569                      1,280

 Cash and cash equivalents at beginning of period                                           --
--------------------------------------------------------------------------------------------------------------------------

 Cash and cash equivalents at end of period                                       $    897,569               $      1,280
--------------------------------------------------------------------------------------------------------------------------
</TABLE>
      See accompanying notes to condensed consolidated financial statements

                                       10
<PAGE>

                                             SMART CHOICE AUTOMOTIVE GROUP, INC.
                            Notes to Condensed Consolidated Financial Statements

================================================================================

NOTE 1 - BASIS OF PRESENTATION

The unaudited condensed  consolidated financial statements presented herein have
been  prepared in  accordance  with the  instructions  to Form 10-Q,  and do not
include all of the information and  disclosures  required by generally  accepted
accounting  principles.  These statements should be read in conjunction with the
financial statements and notes thereto for the year ended December 31, 1996. The
accompanying  financial  statements  have not  been  audited  by an  independent
accountant in accordance with generally accepted auditing standards,  but in the
opinion of  management,  such  financial  statements  include  all  adjustments,
consisting only of normal recurring  adjustments and accruals,  to fairly report
the  Company's  financial  position  and results of  operations.  The results of
operations  for the interim  periods  shown in this  report are not  necessarily
indicative of results to be expected for the fiscal year.

NOTE 2 - ACQUISITIONS

     Smart Choice Automotive Group, Inc. (the "Company"), formerly named "Eckler
Industries,   Inc.",   operates  new  vehicle   dealerships  and  a  network  of
self-financed used vehicle dealerships in Florida and underwrites, finances, and
services retail  installment  contracts  generated from the sale of used cars by
its  dealerships.  The Company also  operates  automobile  dealers  training and
insurance  divisions  as well  as  Eckler's,  one of the  largest  suppliers  of
Corvette parts and accessories in the world. On January 28, 1997, pursuant to an
Agreement  and Plan of Merger  by and among  Eckler  Industries,  Inc.  ("EII"),
Eckler Acquisition  Corporation,  Ralph H. Eckler,  Smart Choice Holdings,  Inc.
("SCHI"),  Thomas E. Conlan and Gerald C. Parker,  dated  December 30, 1996 (the
"Agreement"),  EII acquired all of the issued and  outstanding  shares of common
stock of SCHI in exchange for  2,927,939  shares of EII Class A and  1,576,324.5
shares of EII Class B,  common  stock.  Under  the terms of the  Agreement,  the
shareholders  of SCHI  obtained  approximately  64% of the voting rights of EII.
Although EII is the parent of SCHI following the  transaction,  the  transaction
was accounted for as a purchase of EII by SCHI (a reverse  acquisition  in which
SCHI is considered the acquirer for accounting purposes), since the shareholders
of SCHI  obtained  a  majority  of the  voting  rights in EII as a result of the
transaction.  Accordingly,  the  financial  statements  of the  Company  for the
periods prior to January 28, 1997 are those of SCHI, the assets and  liabilities
of EII are recorded at their  estimated  fair values and the accounts of EII are
included in the consolidated  financial  statements from the date of acquisition
(January 28, 1997).

SCHI was incorporated on June 21, 1996 and was a development  stage  corporation
prior to January 28, 1997. On August 16, 1996,  SCHI acquired the stock of First
Choice Auto  Finance,  Inc.  ("FCAF").  On January 28, 1997,  in addition to the
acquisition  of EII,  SCHI  acquired the stock of Florida  Finance  Group,  Inc.
("FFG"), Dealer Insurance Services, Inc. ("DIS"), and

                                       11
<PAGE>


                                             SMART CHOICE AUTOMOTIVE GROUP, INC.
                            Notes to Condensed Consolidated Financial Statements
                                                                     (Continued)

================================================================================

Dealer  Development  Services,  Inc.  ("DDS").  FFG  underwrites,  finances  and
services   automobile  retail  installment   contracts  and  was  based  in  St.
Petersburg,  Florida prior to moving to the Company  headquarters in Titusville,
Florida.  FCAF  was  incorporated  on  March  22,  1994  and had no  significant
operations or assets until it acquired the assets of Suncoast Auto Brokers, Inc.
("SAB"),  and Suncoast Auto Brokers  Enterprises,  Inc.  ("SABE") on January 28,
1997.  FCAF,  based at the Company  headquarters  in  Titusville,  Florida,  now
operates  the three used vehicle lots in St.  Petersburg  and Tampa,  previously
operated by SAB and SABE. DIS is based in Tampa,  Florida and provides insurance
services for automobile  dealers.  DDS is based in Tampa and provides consulting
services and training programs to automobile dealers. The assets and liabilities
of FFG, FCAF, DIS and DDS are recorded at their  estimated fair values and their
accounts are included in the consolidated  financial statements from the date of
acquisition (January 28, 1997).

On February 12, 1997, the Company  acquired the stock of Liberty Finance Company
("Liberty").   On  the  same  date,   FCAF   acquired  the  stock  of  Wholesale
Acquisitions, Inc. ("WA"), and Team Automobile Sales and Finance, Inc. ("Team").
Liberty  underwrites,  finances and services automobile retail service contracts
and was based in Orlando, Florida prior to moving to the Company headquarters in
Titusville, Florida. WA and Team operate five self-financed used vehicle lots in
Orlando,  Florida.  The assets of  Liberty,  WA, and Team are  recorded at their
estimated  fair  values and their  accounts  are  included  in the  consolidated
financial statements from the date of acquisition (February 12, 1997).

On  February  14,  1997,  FCAF  acquired  the assets of Palm Beach  Finance  and
Mortgage  Company  ("PBF") and Two Two Five North Military  Corp.  d/b/a Miracle
Mile Motors ("MMM").  FFG services the receivables  purchased from PBF, and FCAF
operates  the used vehicle lot  previously  operated by MMM located in West Palm
Beach,  Florida.  The assets of PBF and MMM are recorded at their estimated fair
values and their accounts are included in the consolidated  financial statements
from the date of acquisition (February 14, 1997).

On June 27,  1997,  the Company  acquired  the assets of Strata  Holdings,  Inc.
("SHI") and Ready Finance,  Inc.  ("RFI").  FCAF operates the three used vehicle
lots previously operated by SHI in West Palm Beach, Florida and FFG services the
finance  receivables  purchased from RFI. The assets of RFI and SHI are recorded
at  their  estimated  fair  values  and  their  accounts  are  included  in  the
consolidated financial statements from the date of acquisition (June 27, 1997).

On June 30, 1997, the Company  acquired the assets of Roman Fedo, Inc.  ("FEDO")
and Fedo Finance,  Inc.  ("FFI").  FCAF operates the used vehicle lot previously
operated  by FEDO in West Palm  Beach,  Florida  and FFG  services  the  finance
receivables purchased from FFI. The assets of FEDO and FFI are recorded at their
estimated  fair  values and their  accounts  are  included  in the  consolidated
financial statements from the date of acquisition (June 30, 1997).

                                       12
<PAGE>
 

                                             SMART CHOICE AUTOMOTIVE GROUP, INC.
                            Notes to Condensed Consolidated Financial Statements
                                                                     (Continued)

===============================================================================

On August 21, 1997, the Company acquired the assets of Jack Winters Enterprises,
Inc.  ("Winters").  These  assets  consisted of a retail  automobile  dealership
located in Stuart,  Florida for Volvo  automobiles and other consumer  vehicles.
The  business is being  operated by First  Choice  Stuart 2, Inc.,  a 100% owned
subsidiary  of the Company and is doing  business as  Motorcars  of Stuart.  The
assets of Winters are recorded at their  estimated  fair values and the accounts
are  included  in  the  consolidated  financial  statements  from  the  date  of
acquisition (August 21, 1997).

On August 29,  1997,  the Company  acquired the stock of B&B  Enterprises,  Inc.
("B&B"). B&B operates a retail automobile dealership located in Stuart,  Florida
for Nissan  automobiles  and other  consumer  vehicles.  The  business  is being
operated by First Choice Stuart 1, Inc., a 100% owned  subsidiary of the Company
and is doing business as Stuart Nissan.  The assets of B&B are recorded at their
estimated  fair  values  and  the  accounts  are  included  in the  consolidated
financial statements from the date of acquisition (August 29, 1997).

NOTE 3 - SUMMARY OF FINANCE RECEIVABLES

The following is a summary of principal balances, net as of September 30, 1997:

                                                  September 30, 1997

                                                  -----------------

             Contractually Scheduled Payments          $ 48,502,838
             Less: Unearned Finance Charges            ( 12,736,171)
                                                  ------------------

             Principal Balances, Net                   $ 35,766,667
                                                  ==================


NOTE 4 - PRESENTATION OF DEALERSHIP REVENUES AND COST OF REVENUES

Revenues  from  Company  dealership  operations  consist  of  Sales  at New  Car
Dealerships,  Sales at Used Car  Dealerships,  Income  on  Finance  Receivables,
Income from Insurance and Training, and Sales of Corvette Parts and Accessories.
Vehicle and Vehicle  Related  cost of Revenues is  comprised of Cost of Sales at
New Car Dealerships, Cost of Sales at Used Car Dealerships, Provision for Credit
Losses,  Costs  of  Insurance  and  Training  and  Cost of  Corvette  Parts  and
Accessories Sold.


                                       13
<PAGE>


                                             SMART CHOICE AUTOMOTIVE GROUP, INC.
                            Notes to Condensed Consolidated Financial Statements
                                                                     (Continued)

===============================================================================



The prices at which the Company sells cars at its Used Car  Dealerships  and the
interest  rate that it charges to finance  these  sales take into  consideration
that the  Company's  primary  customers are  high-risk  borrowers,  many of whom
ultimately  default.  The Provision for Credit Losses reflects these factors and
is treated by the Company as a cost of both the future finance income derived on
the contract receivables  originated at Company dealerships as well as a cost of
the  sale  of  the  cars  themselves.   Accordingly,   unlike   traditional  car
dealerships,  the Company does not present gross  profit/margin in its Statement
of Operations  calculated as Sales at New and Used Car Dealerships  less cost of
sales at New and Used Car Dealerships.


NOTE 5 - EARNINGS (LOSS) PER SHARE

Earnings  (loss) per share is based upon the weighted  average  number of common
shares  outstanding  during each period.  Common stock equivalents have not been
included since their effect would be antidilutive.


NOTE 6 - SUPPLEMENTAL CASH FLOW INFORMATION

     Cash paid for interest  during the nine months ended September 30, 1997 was
$2,342,707. The Company's non-cash investing and financing activities were as
follows:

Long term debt and capital lease obligations 
incurred in connection with the purchase of
property and equipment                                 $ 1,111,354

Promissory notes issued in connection with
acquisitions (see Note 2)                              $10,984,272

Common stock issued in connection with
acquisitions (see Note 2)                              $14,413,882

Common stock issued for services rendered              $    71,431

Note payable to stockholder cancelled and
contributed to capital                                 $   159,311

Long term debt incurred, proceeds received 
in October 1997                                        $ 1,500,000

Preferred stock issued, proceeds received
in October 1997                                        $ 3,000,000


NOTE 7 - STOCKHOLDERS' EQUITY

During  1997 the Company  authorized  an increase in the par value of its common
stock from $.001 to $.01. All share  information  contained in the  accompanying
financial  statements  have been  retroactively  adjusted  to give effect to the
increase in par value.


                                       14
<PAGE>



                              LIBERTY FINANCE COMPANY, INC. & AFFILIATES
                                        Condensed Combined Balance Sheet

------------------------------------------------------------------------

                                                As of December 31, 1996
------------------------------------------------------------------------

 ASSETS
   Cash and Cash Equivalents                        $           163,184

   Finance Receivables:
      Principal Balances, Net                                12,283,431
      Less: Allowance for Credit Losses                        (900,000)
------------------------------------------------------------------------
   Finance Receivables, Net                                  11,383,431

   Inventories, at Cost                                       2,861,848
   Land Held for Resale                                       1,050,000
   Property and Equipment, Net                                  272,543
   Other Assets                                                  87,908
------------------------------------------------------------------------



                                                      $      15,818,914
------------------------------------------------------------------------



                                       15
<PAGE>



                              LIBERTY FINANCE COMPANY, INC. & AFFILIATES
                                        Condensed Combined Balance Sheet

------------------------------------------------------------------------

                                                As of December 31, 1996
------------------------------------------------------------------------

 LIABILITIES AND STOCKHOLDERS' EQUITY
   Liabilities:
      Accounts Payable                               $          473,088
      Accrued Expenses                                          116,077
      Floorplan Payable                                       1,378,601
      Notes Payable                                          13,059,981
      Related Party Payable                                     197,237
      Other Liabilities                                         113,781
-----------------------------------------------------------------------
   Total Liabilities                                         15,338,765
-----------------------------------------------------------------------

   Stockholders' Equity:
      Common Stock                                                  700
      Stock Subscriptions                                          (600)
      Additional Paid In Capital                                703,044
      Deficit                                                  (222,995)
------------------------------------------------------------------------
   Total Stockholders' Equity                                   480,149
------------------------------------------------------------------------


                                                      $      15,818,914
------------------------------------------------------------------------




                                       16
<PAGE>




                           LIBERTY FINANCE COMPANY, INC. & AFFILIATES
                           Condensed Combined Statement of Operations
                                                          (Unaudited)

----------------------------------------------------------------------
                                               Period January 1, 1997
                                                 to February 12, 1997
----------------------------------------------------------------------

 Vehicle and Related Revenues:
    Sales of Used Vehicles                         $        1,296,130
    Income on Finance Receivables                             458,028
    Income from Insurance & Training                            3,724
    Income from Parts & Accessories                            55,708
----------------------------------------------------------------------
                                                            1,813,590
----------------------------------------------------------------------

 Cost of Vehicle and Vehicle Related Revenues:
    Cost of Used Vehicles Sold                              1,394,719
    Cost of Insurance & Training                                2,524
    Cost of Parts & Accessories Sold                           49,173
    Provision for Credit Losses                                65,315
----------------------------------------------------------------------
                                                            1,511,731
----------------------------------------------------------------------

 Net Revenues from Vehicle Sales and Vehicle
    Related Activities                                        301,859
----------------------------------------------------------------------

 Operating Expenses                                           434,243
----------------------------------------------------------------------

 Loss from Operations                                        (132,384)
-----------------------------------------------------------------------

 Other Expense:
    Interest Expense                                          176,585
----------------------------------------------------------------------
                                                              176,585
----------------------------------------------------------------------

 Net Loss                                         $          (308,969)
-----------------------------------------------------------------------

                                       17
<PAGE>



                             LIBERTY FINANCE COMPANY, INC. & AFFILIATES
                             Condensed Combined Statement of Cash Flows
                                                            (Unaudited)

-------------------------------------------------------------------------
                                                  Period January 1, 1997
                                                    to February 12, 1997
-------------------------------------------------------------------------

 Cash flows from operating activities:
     Net loss                                            $      (308,969)
     Adjustments to reconcile net loss to
     net cash provided by operating activities:
        Depreciation and amortization                            27,846 
        Cash provided by (used for):
           Accounts receivable                                   (35,150)
           Inventory                                             691,586
           Prepaid expenses                                      (25,498)
           Other assets                                           46,244
           Accounts payable                                      218,244
           Accrued expenses                                       28,174
           Floorplan payable                                    (518,081)
-------------------------------------------------------------------------
Net cash provided by operating activities                        124,396
-------------------------------------------------------------------------

 Cash flows from investing activities:
    Decrease in finance receivables                              234,795
    Purchase of property and equipment                            (2,410)
    Increase in other assets                                     (45,375)
-------------------------------------------------------------------------
Net cash provided by investing activities                        187,010
-------------------------------------------------------------------------

 Cash flows from financing activities:
    Net repayments from related party                           (197,237)
    Principal payments on notes payable                         (241,697)
    Distribution to stockholder                                   (5,000)
-------------------------------------------------------------------------
 Net cash used in financing activities                          (443,934)
-------------------------------------------------------------------------

 Net decrease in cash and cash equivalents                      (132,528)

 Cash and cash equivalents at beginning of period                163,184
-------------------------------------------------------------------------

 Cash and cash equivalents at end of period            $          30,656
-------------------------------------------------------------------------

                                       18
<PAGE>
<TABLE>
<CAPTION>



                                                                            LIBERTY FINANCE COMPANY, INC. & AFFILIATES
                                                                           Condensed Combined Statement of  Operations
                                                                                                           (Unaudited)

-------------------------------------------------------------------------------------------------------------------------
                                                                     Three Months Ended                Nine Months Ended
                                                                     September 30, 1996               September 30, 1996
-------------------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>                           <C>

 Vehicle and Related Revenues:
    Sales of Used Vehicles                                                  $ 4,583,912                     $ 12,864,005
    Income on Finance Receivables                                               773,180                        2,237,992
    Income from Insurance & Training                                             54,390                          286,255
    Income from Parts & Accessories                                             371,267                        1,138,395
-------------------------------------------------------------------------------------------------------------------------
                                                                              5,782,749                       16,526,647
-------------------------------------------------------------------------------------------------------------------------

 Cost of Vehicle and Vehicle Related Revenues:
    Cost of Used Vehicles Sold                                                4,113,771                       10,728,584
    Cost of Insurance & Training                                                 41,860                          132,649
    Cost of Parts & Accessories Sold                                            257,668                          733,962
    Provision for Credit Losses                                                 931,434                          993,590
-------------------------------------------------------------------------------------------------------------------------
                                                                              5,344,733                       12,588,785
-------------------------------------------------------------------------------------------------------------------------

 Net Revenues from Vehicle Sales and Vehicle Related
 Activities                                                                     438,016                        3,937,862
-------------------------------------------------------------------------------------------------------------------------

 Operating Expenses                                                           1,092,557                        3,259,890
-------------------------------------------------------------------------------------------------------------------------

 Income (Loss) from Operations                                                 (654,541)                         677,972
-------------------------------------------------------------------------------------------------------------------------

 Other Expense (Income):
    Interest Expense                                                            358,433                          956,478
    Other Expense (Income)                                                        2,102                          (22,977)
    Miscellaneous Expense (Income)                                                 (277)                          34,565
-------------------------------------------------------------------------------------------------------------------------
                                                                                360,258                          968,066
-------------------------------------------------------------------------------------------------------------------------

 Net Loss                                                                  $ (1,014,799)                      $ (290,094)
--------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       19
<PAGE>
<TABLE>
<CAPTION>





                                                                          LIBERTY FINANCE COMPANY, INC. & AFFILIATES
                                                                          Condensed Combined Statement of Cash Flows
                                                                                                         (Unaudited)

---------------------------------------------------------------------------------------------------------------------
                                                                                                   Nine Months Ended
                                                                                                  September 30, 1996
---------------------------------------------------------------------------------------------------------------------
<S>                                                                                                          <C>


 Cash flows from operating activities:
   Net loss                                                                                          $      (290,094)
   Adjustments to reconcile net loss to net
   cash provided by operating activities:
       Depreciation and amortization                                                                          43,714
       Provision for credit losses                                                                         1,081,967
       Cash provided by (used for):
          Inventory                                                                                         (998,735)
          Other assets                                                                                       (49,359)
          Accounts and drafts payable                                                                        640,250
          Accrued expenses                                                                                    (9,767)
          Floorplan payable                                                                                  175,423
---------------------------------------------------------------------------------------------------------------------
 Net cash provided by operating activities                                                                   593,399
---------------------------------------------------------------------------------------------------------------------

 Cash flows from investing activities:
    Increase in finance receivables                                                                       (2,771,381)
    Purchase of property and equipment                                                                       (47,996)
----------------------------------------------------------------------------------------------------------------------
 Net cash used in investing activities                                                                    (2,819,377)
----------------------------------------------------------------------------------------------------------------------

 Cash flows from financing activities:
   Net repayments to related party                                                                          (182,096)
   Distributions to stockholder                                                                             (305,081)
   Proceeds from issuance of notes payable                                                                 2,756,690
---------------------------------------------------------------------------------------------------------------------
 Net cash provided by financing activities                                                                 2,269,513
---------------------------------------------------------------------------------------------------------------------

Net increase in cash and cash equivalents                                                                     43,535

 Cash and cash equivalents at beginning of period                                                              8,368
---------------------------------------------------------------------------------------------------------------------

Cash and cash equivalents at end of period                                                           $        51,903
---------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       20
<PAGE>
<TABLE>
<CAPTION>



                                                                                         FLORIDA FINANCE GROUP, INC.
                                                                                         SUNCOAST AUTO BROKERS, INC.
                                                                             SUNCOAST AUTO BROKERS ENTERPRISES, INC.
                                                                                    Condensed Combined Balance Sheet

---------------------------------------------------------------------------------------------------------------------

                                                                                             As of December 31, 1996
---------------------------------------------------------------------------------------------------------------------
<S>                                                                                                            <C>

 ASSETS
   Cash and Cash Equivalents                                                                        $         20,272

   Finance Receivables:
     Principal Balances, Net                                                                               5,479,404
     Less: Allowance for Credit Losses                                                                    (1,095,645)
 --------------------------------------------------------------------------------------------------------------------
   Finance Receivables, Net                                                                                4,383,759

   Inventories, at Cost                                                                                      440,317
   Property and Equipment, Net                                                                               111,950
   Prepaid Expenses                                                                                           44,705
   Other Assets                                                                                                2,360
---------------------------------------------------------------------------------------------------------------------




                                                                                                      $    5,003,363
---------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       21
<PAGE>
<TABLE>
<CAPTION>





                                                                                         FLORIDA FINANCE GROUP, INC.
                                                                                         SUNCOAST AUTO BROKERS, INC.
                                                                             SUNCOAST AUTO BROKERS ENTERPRISES, INC.
                                                                                    Condensed Combined Balance Sheet

---------------------------------------------------------------------------------------------------------------------

                                                                                             As of December 31, 1996
---------------------------------------------------------------------------------------------------------------------
<S>                                                                                                           <C>

 LIABILITIES AND STOCKHOLDERS' DEFICIT
   Liabilities:
     Accounts Payable                                                                             $           95,093
     Accrued Expenses                                                                                         16,505
     Deferred Income                                                                                         134,571
     Notes Payable                                                                                         5,018,343
     Stockholder Loans                                                                                       345,250
     Related Party Payable                                                                                   811,600
---------------------------------------------------------------------------------------------------------------------
   Total Liabilities                                                                                       6,421,362
---------------------------------------------------------------------------------------------------------------------

   Stockholders' Deficit:
     Common Stock                                                                                              1,600
     Additional Paid In Capital                                                                              220,129
     Deficit                                                                                              (1,639,728)
---------------------------------------------------------------------------------------------------------------------
   Total Stockholders' Deficit                                                                            (1,417,999)
---------------------------------------------------------------------------------------------------------------------


                                                                                                    $      5,003,363
---------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       22
<PAGE>
<TABLE>
<CAPTION>



                                                                                         FLORIDA FINANCE GROUP, INC.
                                                                                         SUNCOAST AUTO BROKERS, INC.
                                                                             SUNCOAST AUTO BROKERS ENTERPRISES, INC.
                                                                          Condensed Combined Statement of Operations
                                                                                                         (Unaudited)

---------------------------------------------------------------------------------------------------------------------
                                                                                              Period January 1, 1997
                                                                                                 to January 28, 1997
---------------------------------------------------------------------------------------------------------------------
<S>                                                                                                          <C>

 Vehicle and Related Revenues:
    Sales of Used Vehicles                                                                          $        225,599
    Income on Finance Receivables                                                                            162,203
    Income from Parts & Accessories                                                                            1,235
---------------------------------------------------------------------------------------------------------------------
                                                                                                             389,037
---------------------------------------------------------------------------------------------------------------------

 Cost of Vehicle and Vehicle Related Revenues:
    Cost of Used Vehicles Sold                                                                               272,312
    Cost of Parts & Accessories Sold                                                                           8,970
    Provision for Credit Losses                                                                                8,538
---------------------------------------------------------------------------------------------------------------------
                                                                                                             289,820
---------------------------------------------------------------------------------------------------------------------

Net Revenues from Vehicle Sales and Vehicle Related Activities                                                99,217
---------------------------------------------------------------------------------------------------------------------

 Operating Expenses                                                                                          152,053
---------------------------------------------------------------------------------------------------------------------

 Loss from Operations                                                                                        (52,836)
----------------------------------------------------------------------------------------------------------------------

 Other Expense:
    Interest Expense                                                                                          64,061
---------------------------------------------------------------------------------------------------------------------
                                                                                                              64,061
---------------------------------------------------------------------------------------------------------------------

 Net Loss                                                                                          $        (116,897)
----------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       23
<PAGE>
<TABLE>
<CAPTION>





                                                                                         FLORIDA FINANCE GROUP, INC.
                                                                                         SUNCOAST AUTO BROKERS, INC.
                                                                             SUNCOAST AUTO BROKERS ENTERPRISES, INC.
                                                                          Condensed Combined Statement of Cash Flows
                                                                                                         (Unaudited)

---------------------------------------------------------------------------------------------------------------------
                                                                                              Period January 1, 1997
                                                                                                 to January 28, 1997
---------------------------------------------------------------------------------------------------------------------
<S>                                                                                                         <C>

 Cash flows from operating activities:
   Net loss                                                                                      $          (116,897)
   Adjustments to reconcile net loss to
   net cash provided by operating activities:
       Depreciation and amortization                                                                           2,750 
       Cash provided by (used for):
          Inventory                                                                                          221,697
          Prepaid expenses                                                                                       650
          Accounts payable                                                                                   (67,993)
          Accrued expenses                                                                                    87,749
          Deferred income                                                                                     (4,464)
---------------------------------------------------------------------------------------------------------------------
 Net cash provided by operating activities                                                                   123,492
---------------------------------------------------------------------------------------------------------------------

 Cash flows from investing activities:
    Increase in finance receivables                                                                          (25,306)
    Increase in other assets                                                                                    (750)
---------------------------------------------------------------------------------------------------------------------
 Net cash used in investing activities                                                                       (26,056)
---------------------------------------------------------------------------------------------------------------------

 Cash flows from financing activities:
   Principal payments on notes payable                                                                       (93,087)
---------------------------------------------------------------------------------------------------------------------
 Net cash used in financing activities                                                                       (93,087)
---------------------------------------------------------------------------------------------------------------------

 Net increase in cash and cash equivalents                                                                     4,349

 Cash and cash equivalents at beginning of period                                                             20,272
---------------------------------------------------------------------------------------------------------------------

 Cash and cash equivalents at end of period                                                        $          24,621
---------------------------------------------------------------------------------------------------------------------
</TABLE>



                                       24
<PAGE>
<TABLE>
<CAPTION>



                                                                                          FLORIDA FINANCE GROUP, INC.
                                                                                          SUNCOAST AUTO BROKERS, INC.
                                                                              SUNCOAST AUTO BROKERS ENTERPRISES, INC.
                                                                           Condensed Combined Statement of Operations
                                                                                                          (Unaudited)

----------------------------------------------------------------------------------------------------------------------
                                                                 Three Months Ended                 Nine Months Ended
                                                                 September 30, 1996                September 30, 1996
----------------------------------------------------------------------------------------------------------------------
<S>                                                                         <C>                               <C>

 Vehicle and Related Revenues:
    Sales of Used Vehicles                                              $   654,557                      $  3,433,326
    Income on Finance Receivables                                           447,974                         1,231,551
----------------------------------------------------------------------------------------------------------------------
                                                                          1,102,531                         4,664,877
----------------------------------------------------------------------------------------------------------------------

 Cost of Vehicle and Vehicle Related Revenues:
    Cost of Used Vehicles Sold                                              517,782                         2,791,134
    Provision for Credit Losses                                              72,115                           255,421
----------------------------------------------------------------------------------------------------------------------
                                                                            589,897                         3,046,555
----------------------------------------------------------------------------------------------------------------------

 Net Revenues from Vehicle Sales and Vehicle
    Related Activities                                                      512,634                         1,618,322
----------------------------------------------------------------------------------------------------------------------

 Operating Expenses                                                         411,039                         1,308,869
----------------------------------------------------------------------------------------------------------------------

 Income from Operations                                                     101,595                           309,453
----------------------------------------------------------------------------------------------------------------------

 Other Expense:
    Interest Expense                                                        192,188                           509,309
----------------------------------------------------------------------------------------------------------------------
                                                                            192,188                           509,309
----------------------------------------------------------------------------------------------------------------------

 Net Loss                                                              $   (90,593)                      $  (199,856)
----------------------------------------------------------------------------------------------------------------------

</TABLE>

                                       25
<PAGE>
<TABLE>
<CAPTION>



                                                                                         FLORIDA FINANCE GROUP, INC.
                                                                                         SUNCOAST AUTO BROKERS, INC.
                                                                             SUNCOAST AUTO BROKERS ENTERPRISES, INC.
                                                                          Condensed Combined Statement of Cash Flows
                                                                                                         (Unaudited)

---------------------------------------------------------------------------------------------------------------------
                                                                                                   Nine Months Ended
                                                                                                  September 30, 1996
---------------------------------------------------------------------------------------------------------------------

<S>                                                                                                          <C>

 Cash flows from operating activities:
   Net loss                                                                                             $  (199,856)
   Adjustments to reconcile net loss to
   net cash used in operating activities:
        Depreciation and amortization                                                                        20,251 
        Cash provided by (used for):
           Accounts receivable                                                                               (27,774)
           Inventory                                                                                         315,729
           Prepaid expenses                                                                                   (8,093)
           Accounts payable                                                                                 (239,387)
           Accrued expenses                                                                                    2,391
           Deferred income                                                                                    68,366
---------------------------------------------------------------------------------------------------------------------
 Net cash used in operating activities                                                                       (68,373)
---------------------------------------------------------------------------------------------------------------------

 Cash flows from investing activities:
    Increase in finance receivables                                                                       (1,299,233)
    Purchase of property and equipment                                                                        (3,514)
    Decrease in other assets                                                                                    (860)
---------------------------------------------------------------------------------------------------------------------
 Net cash used in investing activities                                                                    (1,303,607)
---------------------------------------------------------------------------------------------------------------------

 Cash flows from financing activities:
   Net advances from related party                                                                          (519,937)
   Proceeds from issuance of notes payable                                                                 1,852,224
---------------------------------------------------------------------------------------------------------------------
 Net cash provided by financing activities                                                                 1,332,287
---------------------------------------------------------------------------------------------------------------------

 Net decrease in cash and cash equivalents                                                                   (39,693)

 Cash and cash equivalents at beginning of period                                                             50,701
---------------------------------------------------------------------------------------------------------------------

 Cash and cash equivalents at end of period                                                            $      11,008
---------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       26
<PAGE>
<TABLE>
<CAPTION>



                                                                 TWO TWO FIVE NORTH MILITARY TRAIL CORPORATION
                                                                                     d/b/a MIRACLE MILE MOTORS
                                                                              PALM BEACH FINANCE COMPANY, INC.
                                                                              Condensed Combined Balance Sheet

---------------------------------------------------------------------------------------------------------------

                                                                                       As of December 31, 1996
---------------------------------------------------------------------------------------------------------------
<S>                                                                                                    <C>

 ASSETS
   Cash and Cash Equivalents                                                                  $        192,999

   Finance Receivables:
     Principal Balances, Net                                                                         5,041,682
     Less: Allowance for Credit Losses                                                                (984,000)
---------------------------------------------------------------------------------------------------------------
   Finance Receivables, Net                                                                          4,057,682

   Inventories, at Cost                                                                                799,358
   Property and Equipment, Net                                                                          10,086
   Other Assets                                                                                         48,275
---------------------------------------------------------------------------------------------------------------





                                                                                              $      5,108,400
---------------------------------------------------------------------------------------------------------------
</TABLE>

                                       27
<PAGE>
<TABLE>
<CAPTION>




                                                                   TWO TWO FIVE NORTH MILITARY TRAIL CORPORATION
                                                                                       d/b/a MIRACLE MILE MOTORS
                                                                                PALM BEACH FINANCE COMPANY, INC.
                                                                               Condensed Combined Balance Sheet

-----------------------------------------------------------------------------------------------------------------

                                                                                         As of December 31, 1996
-----------------------------------------------------------------------------------------------------------------
<S>                                                                                                <C>

 LIABILITIES AND STOCKHOLDERS' EQUITY
   Liabilities:
     Accounts Payable                                                                            $       220,887
     Accrued Expenses                                                                                    128,206
     Notes Payable                                                                                       300,000
-----------------------------------------------------------------------------------------------------------------
   Total Liabilities                                                                                     649,093
-----------------------------------------------------------------------------------------------------------------

   Stockholders' Equity:
     Common Stock                                                                                            800
     Additional Paid In Capital                                                                           20,000
     Retained Earnings                                                                                 4,438,507
-----------------------------------------------------------------------------------------------------------------
   Total Stockholders' Equity                                                                          4,459,307
-----------------------------------------------------------------------------------------------------------------



                                                                                                  $    5,108,400
-----------------------------------------------------------------------------------------------------------------
</TABLE>

                                       28
<PAGE>
<TABLE>
<CAPTION>



                                                                       TWO TWO FIVE NORTH MILITARY TRAIL CORPORATION
                                                                                           d/b/a MIRACLE MILE MOTORS
                                                                                    PALM BEACH FINANCE COMPANY, INC.
                                                                              Condensed Combined Statement of Income
                                                                                                         (Unaudited)

---------------------------------------------------------------------------------------------------------------------
                                                                                              Period January 1, 1997
                                                                                                to February 14, 1997
---------------------------------------------------------------------------------------------------------------------
<S>                                                                                                          <C>

 Vehicle and Related Revenues:
    Sales of Used Vehicles                                                                          $      1,334,472
    Income on Finance Receivables                                                                            178,098
---------------------------------------------------------------------------------------------------------------------
                                                                                                           1,512,570
---------------------------------------------------------------------------------------------------------------------

 Cost of Vehicle and Vehicle Related Revenues:
    Cost of Used Vehicles Sold                                                                               942,541
    Provision for Credit Losses                                                                              118,273
---------------------------------------------------------------------------------------------------------------------

                                                                                                           1,060,814
---------------------------------------------------------------------------------------------------------------------

   Net Revenues from Vehicle Sales and Vehicle Related
   Activities                                                                                                451,756
---------------------------------------------------------------------------------------------------------------------

 Operating Expenses                                                                                          207,336
---------------------------------------------------------------------------------------------------------------------

 Income from Operations                                                                                      244,420
---------------------------------------------------------------------------------------------------------------------

 Other Expense:
    Interest Expense                                                                                           3,694
---------------------------------------------------------------------------------------------------------------------
                                                                                                               3,694
---------------------------------------------------------------------------------------------------------------------



 Net Income                                                                                        $         240,726
---------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       29
<PAGE>
<TABLE>
<CAPTION>



                                                                      TWO TWO FIVE NORTH MILITARY TRAIL CORPORATION
                                                                                          d/b/a MIRACLE MILE MOTORS
                                                                                   PALM BEACH FINANCE COMPANY, INC.
                                                                         Condensed Combined Statement of Cash Flows
                                                                                                        (Unaudited)

--------------------------------------------------------------------------------------------------------------------
                                                                                             Period January 1, 1997
                                                                                               to February 14, 1997
--------------------------------------------------------------------------------------------------------------------
<S>                                                                                                         <C>

 Cash flows from operating activities:
   Net income                                                                                   $           240,726
   Adjustments to reconcile net income to
   net cash provided by operating activities:
      Depreciation and amortization                                                                             306 
      Cash provided by (used for):
         Inventory                                                                                           16,202
         Other assets                                                                                        10,184
         Accounts payable                                                                                     9,858
         Accrued expenses                                                                                     9,311
--------------------------------------------------------------------------------------------------------------------
 Net cash provided by operating activities                                                                  286,587
--------------------------------------------------------------------------------------------------------------------

 Cash flows from investing activities:
    Increase in finance receivables                                                                        (363,699)
---------------------------------------------------------------------------------------------------------------------
 Net cash used in investing activities                                                                     (363,699)
---------------------------------------------------------------------------------------------------------------------

 Cash flows from financing activities:
   Distribution to stockholder                                                                              (61,618)
   Proceeds from issuance of notes payable                                                                  100,000
--------------------------------------------------------------------------------------------------------------------
 Net cash provided by financing activities                                                                   38,382
--------------------------------------------------------------------------------------------------------------------

 Net decrease in cash and cash equivalents                                                                  (38,730)

 Cash and cash equivalents at beginning of period                                                           192,999
--------------------------------------------------------------------------------------------------------------------

 Cash and cash equivalents at end of period                                                      $          154,269
--------------------------------------------------------------------------------------------------------------------
</TABLE>
                                       30
<PAGE>
<TABLE>
<CAPTION>



                                                                       TWO TWO FIVE NORTH MILITARY TRAIL CORPORATION
                                                                                           d/b/a MIRACLE MILE MOTORS
                                                                                    PALM BEACH FINANCE COMPANY, INC.
                                                                              Condensed Combined Statement of Income
                                                                                                         (Unaudited)

---------------------------------------------------------------------------------------------------------------------
                                                               Three Months Ended                  Nine Months Ended
                                                               September 30, 1996                 September 30, 1996
---------------------------------------------------------------------------------------------------------------------
<S>                                                                         <C>                                 <C>

 Vehicle and Related Revenues:
    Sales of Used Vehicles                                            $ 2,542,454                        $ 8,510,450
    Income on Finance Receivables                                         311,443                            905,195
---------------------------------------------------------------------------------------------------------------------
                                                                        2,853,897                          9,415,645
---------------------------------------------------------------------------------------------------------------------

 Cost of Vehicle and Vehicle Related Revenues:
    Cost of Used Vehicles Sold                                          1,907,731                          6,706,207
    Provision for Credit Losses                                           537,902                            865,030
---------------------------------------------------------------------------------------------------------------------
                                                                        2,445,633                          7,571,237
---------------------------------------------------------------------------------------------------------------------

 Net Revenues from Vehicle Sales and Vehicle
    Related Activities                                                    408,264                          1,844,408
---------------------------------------------------------------------------------------------------------------------

Operating Expenses                                                        427,724                          1,384,194
---------------------------------------------------------------------------------------------------------------------

 Income (Loss) from Operations                                            (19,460)                           460,214
---------------------------------------------------------------------------------------------------------------------

Other Expense:
   Interest Expense                                                         5,222                             13,828
---------------------------------------------------------------------------------------------------------------------
                                                                            5,222                             13,828
---------------------------------------------------------------------------------------------------------------------

Net Income (Loss)                                                     $   (24,682)                      $    446,386
---------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       31
<PAGE>
<TABLE>
<CAPTION>



                                                                       TWO TWO FIVE NORTH MILITARY TRAIL CORPORATION
                                                                                           d/b/a MIRACLE MILE MOTORS
                                                                                    PALM BEACH FINANCE COMPANY, INC.
                                                                          Condensed Combined Statement of Cash Flows
                                                                                                         (Unaudited)

---------------------------------------------------------------------------------------------------------------------
                                                                                                   Nine Months Ended
                                                                                                  September 30, 1996
---------------------------------------------------------------------------------------------------------------------
<S>                                                                                                        <C>

 Cash flows from operating activities:
   Net income                                                                                            $   446,386
   Adjustments to reconcile net income to
   net cash provided by operating activities:
       Depreciation and amortization                                                                           1,311 
       Cash provided by (used for):
          Inventory                                                                                          (21,501)
          Other assets                                                                                      (105,588)
          Accounts payable and accrued expenses                                                             (154,154)
          Drafts payable                                                                                       6,569
---------------------------------------------------------------------------------------------------------------------
 Net cash provided by operating activities                                                                   173,023
---------------------------------------------------------------------------------------------------------------------

 Cash flows from investing activities:
    Increase in finance receivables                                                                         (458,140)
    Purchase of property and equipment                                                                        (8,851)
----------------------------------------------------------------------------------------------------------------------
 Net cash used in investing activities                                                                      (466,991)
----------------------------------------------------------------------------------------------------------------------

 Cash flows from financing activities:
   Net borrowings under line of credit                                                                       185,000
   Repayment of stockholder loan                                                                             (50,880)
   Distributions to stockholder                                                                             (130,479)
---------------------------------------------------------------------------------------------------------------------
 Net cash provided by financing activities                                                                     3,641
---------------------------------------------------------------------------------------------------------------------

Net decrease in cash and cash equivalents                                                                   (290,327)

 Cash and cash equivalents at beginning of period                                                            304,914
---------------------------------------------------------------------------------------------------------------------

Cash and cash equivalents at end of period                                                             $      14,587
---------------------------------------------------------------------------------------------------------------------

Non-cash investing and financing activities:
    Property distributed to stockholder                                                                 $    101,027
---------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       32
<PAGE>




                                                      ECKLER INDUSTRIES, INC.
                                                      Condensed Balance Sheet
                                                                   (Unaudited)

-----------------------------------------------------------------------------

                                                      As of December 31, 1996
-----------------------------------------------------------------------------

 ASSETS
   Cash and Cash Equivalents                                  $       241,652
   Accounts Receivable                                                153,285
   Inventories, at Cost                                             1,307,525
   Property, Plant and Equipment, Net                               2,512,645
   Deferred Tax Asset                                                 330,610
   Prepaid Expenses                                                 1,385,398
   Other Assets                                                       108,693
-----------------------------------------------------------------------------







                                                              $     6,039,808
-----------------------------------------------------------------------------



                                       33
<PAGE>
<TABLE>
<CAPTION>





                                                                                     ECKLER INDUSTRIES, INC.
                                                                                     Condensed Balance Sheet
                                                                                                 (Unaudited)

-------------------------------------------------------------------------------------------------------------

                                                                                     As of December 31, 1996
-------------------------------------------------------------------------------------------------------------
<S>                                                                                                    <C>

 LIABILITIES AND STOCKHOLDERS' EQUITY
   Liabilities:
     Accounts Payable                                                                       $        545,765
     Accrued Expenses                                                                                309,613
     Notes Payable                                                                                 2,706,206
     Deferred Income Taxes                                                                           402,814
-------------------------------------------------------------------------------------------------------------
   Total Liabilities                                                                               3,964,398
-------------------------------------------------------------------------------------------------------------

   Stockholders' Equity:
     Class A Common Stock:  $.01 Par Value; 10,000,000
        shares authorized; 1,736,750 issued and outstanding                                           17,367
     Class B Common Stock:  $.01 Par Value; 5,000,000
        shares authorized; 510,375 issued and outstanding                                              5,104
     Additional Paid In Capital                                                                    3,419,251
     Note Receivable Class A Common Stock                                                           (326,700)
     Deficit                                                                                      (1,039,612)
-------------------------------------------------------------------------------------------------------------
   Total Stockholders' Equity                                                                      2,075,410
-------------------------------------------------------------------------------------------------------------


                                                                                            $      6,039,808
-------------------------------------------------------------------------------------------------------------
</TABLE>


                                       34
<PAGE>
<TABLE>
<CAPTION>




                                                                                     ECKLER INDUSTRIES, INC.
                                                                           Condensed Statement of Operations
                                                                                                 (Unaudited)

-------------------------------------------------------------------------------------------------------------
                                                                                      Period January 1, 1997
                                                                                         to January 28, 1997
-------------------------------------------------------------------------------------------------------------
<S>                                                                                                <C>

 Vehicle and Related Revenues:
    Income from Parts & Accessories                                                            $     853,881
-------------------------------------------------------------------------------------------------------------
                                                                                                     853,881
-------------------------------------------------------------------------------------------------------------

 Cost of Vehicle and Vehicle Related Revenues:
    Cost of Parts & Accessories Sold                                                                 582,117
-------------------------------------------------------------------------------------------------------------
                                                                                                     582,117
-------------------------------------------------------------------------------------------------------------

 Net Revenues from Vehicle Sales and Vehicle
    Related Activities                                                                               271,764
-------------------------------------------------------------------------------------------------------------

 Operating Expenses                                                                                  432,006
-------------------------------------------------------------------------------------------------------------

 Loss from Operations                                                                               (160,242)
-------------------------------------------------------------------------------------------------------------

 Other Expense (Income):
    Interest Expense                                                                                  23,728
    Other Income                                                                                      (6,412)
------------------------------------------------------------------------------------------------------------
                                                                                                      17,316
-------------------------------------------------------------------------------------------------------------


 Net Loss                                                                                       $   (177,558)
--------------------------------------------------------------------------------------------------------------
</TABLE>


                                       35
<PAGE>
<TABLE>
<CAPTION>



                                                                                    ECKLER INDUSTRIES, INC.
                                                                          Condensed Statement of Cash Flows
                                                                                                (Unaudited)

------------------------------------------------------------------------------------------------------------
                                                                                     Period January 1, 1997
                                                                                        to January 28, 1997
------------------------------------------------------------------------------------------------------------
<S>                                                                                               <C>

 Cash flows from operating activities:
   Net loss                                                                                 $      (177,558)
   Adjustments to reconcile net loss to
   net cash used in operating activities:
       Depreciation and amortization                                                                 37,332 
       Cash provided by (used for):
          Accounts receivable                                                                        (9,325)
          Inventory                                                                                (113,614)
          Prepaid expenses                                                                           56,229
          Accounts payable                                                                          125,680
          Accrued expenses                                                                              637
------------------------------------------------------------------------------------------------------------
 Net cash used in operating activities                                                              (80,619)
------------------------------------------------------------------------------------------------------------

 Cash flows from investing activities:
    Purchase of property and equipment                                                              (21,911)
    Increase in other assets                                                                        (24,687)
------------------------------------------------------------------------------------------------------------
 Net cash used in investing activities                                                              (46,598)
------------------------------------------------------------------------------------------------------------

 Cash flows from financing activities:
   Principal payments on notes payable                                                              (14,136)
   Proceeds from issuance of notes payable                                                           10,750
------------------------------------------------------------------------------------------------------------
 Net cash used in financing activities                                                               (3,386)
------------------------------------------------------------------------------------------------------------

 Net decrease in cash and cash equivalents                                                         (130,603)

 Cash and cash equivalents at beginning of period                                                   241,652
------------------------------------------------------------------------------------------------------------

 Cash and cash equivalents at end of period                                                $        111,049
------------------------------------------------------------------------------------------------------------

</TABLE>


                                       36
<PAGE>
<TABLE>
<CAPTION>



                                                                                                ECKLER INDUSTRIES, INC.
                                                                                     Condensed Statement of  Operations
                                                                                                            (Unaudited)

------------------------------------------------------------------------------------------------------------------------
                                                                       Three Months Ended             Nine Months Ended
                                                                       September 30, 1996            September 30, 1996
------------------------------------------------------------------------------------------------------------------------
<S>                                                                               <C>                              <C>

Vehicle and Related Revenues:
    Sales of Parts & Accessories                                              $ 3,748,599                  $ 12,086,629
------------------------------------------------------------------------------------------------------------------------

Cost of Vehicle and Vehicle Related Revenues:
    Cost of Parts & Accessories Sold                                            2,401,027                     7,843,654
------------------------------------------------------------------------------------------------------------------------

Net Revenues from Vehicle Sales and
    Vehicle Related Activities                                                  1,347,572                     4,242,975
------------------------------------------------------------------------------------------------------------------------

Operating Expenses                                                              1,609,631                     4,408,191
------------------------------------------------------------------------------------------------------------------------

Loss from Operations                                                             (262,059)                     (165,216)
------------------------------------------------------------------------------------------------------------------------

 Other Expense (Income):
    Interest Expense                                                              108,937                       258,601
    Other Expense (Income)                                                         81,298                       (84,203)
------------------------------------------------------------------------------------------------------------------------
                                                                                  190,235                       174,398
------------------------------------------------------------------------------------------------------------------------

Loss Before Income Taxes                                                         (452,294)                     (339,614)
------------------------------------------------------------------------------------------------------------------------

Income Taxes                                                                      154,500                       107,700
------------------------------------------------------------------------------------------------------------------------

Net Loss                                                                     $   (297,794)                $    (231,914)
------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       37
<PAGE>
<TABLE>
<CAPTION>



                                                                                   ECKLER INDUSTRIES, INC.
                                                                         Condensed Statement of Cash Flows
                                                                                               (Unaudited)

-----------------------------------------------------------------------------------------------------------
                                                                                         Nine Months Ended
                                                                                        September 30, 1996
-----------------------------------------------------------------------------------------------------------
<S>                                                                                                <C>

 Cash flows from operating activities:
   Net loss                                                                                    $  (231,914)
   Adjustments to reconcile net loss to
   net cash used in operating activities:
       Deferred income taxes                                                                       (92,600)
       Issuance of common stock for consulting fees                                                146,512
       Loss on disposal of fixed assets                                                                160
       Depreciation and amortization                                                               291,031
       Cash provided by (used for):
          Accounts receivable                                                                      (17,306)
          Inventory                                                                               (429,460)
          Prepaid expenses                                                                        (146,458)
          Accounts payable                                                                         148,837
          Accrued expenses                                                                         101,439
-----------------------------------------------------------------------------------------------------------
 Net cash used in operating activities                                                            (229,759)
-----------------------------------------------------------------------------------------------------------

 Cash flows from investing activities:
    Purchase of property and equipment                                                             (44,465)
    Proceeds of sale of property and equipment                                                       3,600
    Increase in other assets                                                                        (3,018)
-----------------------------------------------------------------------------------------------------------
 Net cash used in investing activities                                                             (43,883)
-----------------------------------------------------------------------------------------------------------

 Cash flows from financing activities:
   Bank overdraft                                                                                  289,994
   Principal payments on notes payable                                                            (135,375)
   Payments on capital leases                                                                      (29,444)
   Proceeds from issuance of long-term debt                                                         17,467
   Proceeds from exercise of stock options                                                         131,000
----------------------------------------------------------------------------------------------------------
 Net cash provided by financing activities                                                         273,642
----------------------------------------------------------------------------------------------------------

 Net increase in cash and cash equivalents                                                              --

 Cash and cash equivalents at beginning of period                                                       --
-----------------------------------------------------------------------------------------------------------

Cash and cash equivalents at end of period                                                 $            --
-----------------------------------------------------------------------------------------------------------
</TABLE>


                                       38
<PAGE>



Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations

         The  following  analysis of the  Company's  financial  condition  as of
September 30, 1997 and the Company's  results of operations for the three months
ended  and nine  months  ended  September  30,  1997 and 1996  should be read in
conjunction with the Company's  financial  statements and notes thereto included
elsewhere in this report.

BACKGROUND

Smart Choice  Automotive  Group,  Inc. (the  "Company"),  formerly named "Eckler
Industries,   Inc.",   operates  new  vehicle   dealerships  and  a  network  of
self-financed used vehicle dealerships in Florida and underwrites, finances, and
services retail  installment  contracts  generated from the sale of used cars by
its  dealerships.  The Company also  operates  automobile  dealers  training and
insurance  divisions  as well  as  Eckler's,  one of the  largest  suppliers  of
Corvette parts and accessories in the world. On January 28, 1997, pursuant to an
Agreement  and Plan of Merger  by and among  Eckler  Industries,  Inc.  ("EII"),
Eckler Acquisition  Corporation,  Ralph H. Eckler,  Smart Choice Holdings,  Inc.
("SCHI"),  Thomas E. Conlan and Gerald C. Parker,  dated  December 30, 1996 (the
"Agreement"),  EII acquired all of the issued and  outstanding  shares of common
stock of SCHI in exchange for  2,927,939  shares of EII Class A and  1,576,324.5
shares of EII Class B,  common  stock.  Under  the terms of the  Agreement,  the
shareholders  of SCHI  obtained  approximately  64% of the voting rights of EII.
Although EII is the parent of SCHI following the  transaction,  the  transaction
was accounted for as a purchase of EII by SCHI (a reverse  acquisition  in which
SCHI is considered the acquirer for accounting purposes), since the shareholders
of SCHI  obtained  a  majority  of the  voting  rights in EII as a result of the
transaction.  Accordingly,  the  financial  statements  of the  Company  for the
periods prior to January 28, 1997 are those of SCHI, the assets and  liabilities
of EII are recorded at their  estimated  fair values and the accounts of EII are
included in the consolidated  financial  statements from the date of acquisition
(January 28, 1997).

SCHI was incorporated on June 21, 1996 and was a development  stage  corporation
prior to January 28, 1997. On August 16, 1996,  SCHI acquired the stock of First
Choice Auto  Finance,  Inc.  ("FCAF").  On January 28, 1997,  in addition to the
acquisition  of EII,  SCHI  acquired the stock of Florida  Finance  Group,  Inc.
("FFG"),  Dealer  Insurance  Services,  Inc.  ("DIS"),  and  Dealer  Development
Services, Inc. ("DDS"). FFG underwrites, finances and services automobile retail
installment  contracts and was based in St. Petersburg,  Florida prior to moving
to the Company  headquarters in Titusville,  Florida.  FCAF was  incorporated on
March 22, 1994 and had no significant operations or assets until it acquired the
assets of Suncoast  Auto  Brokers,  Inc.  ("SAB"),  and  Suncoast  Auto  Brokers
Enterprises,  Inc.  ("SABE") on January  28,  1997.  FCAF,  based at the Company
headquarters in Titusville, Florida, now operates the three used vehicle lots in
St. Petersburg and Tampa,  previously  operated by SAB and SABE. DIS is based in
Tampa,  Florida and provides insurance services for automobile  dealers.  DDS is
based in Tampa  and  provides  consulting  services  and  training  programs  to
automobile  dealers.  The assets and  liabilities  of FFG, FCAF, DIS and DDS are
recorded at their  estimated  fair values and their accounts are included in the
consolidated  financial  statements  from the date of  acquisition  (January 28,
1997).


                                       39
<PAGE>

On February 12, 1997, the Company  acquired the stock of Liberty Finance Company
("Liberty").   On  the  same  date,   FCAF   acquired  the  stock  of  Wholesale
Acquisitions, Inc. ("WA"), and Team Automobile Sales and Finance, Inc. ("Team").
Liberty  underwrites,  finances and services automobile retail service contracts
and was based in Orlando, Florida prior to moving to the Company headquarters in
Titusville, Florida. WA and Team operate five self-financed used vehicle lots in
Orlando,  Florida.  The assets of  Liberty,  WA, and Team are  recorded at their
estimated  fair  values and their  accounts  are  included  in the  consolidated
financial statements from the date of acquisition (February 12, 1997).

On  February  14,  1997,  FCAF  acquired  the assets of Palm Beach  Finance  and
Mortgage  Company  ("PBF") and Two Two Five North Military  Corp.  d/b/a Miracle
Mile Motors ("MMM").  FFG services the receivables  purchased from PBF, and FCAF
operates  the used vehicle lot  previously  operated by MMM located in West Palm
Beach,  Florida.  The assets of PBF and MMM are recorded at their estimated fair
values and their accounts are included in the consolidated  financial statements
from the date of acquisition (February 14, 1997).

On June 27,  1997,  the Company  acquired  the assets of Strata  Holdings,  Inc.
("SHI") and Ready Finance,  Inc.  ("RFI").  FCAF operates the three used vehicle
lots previously operated by SHI in West Palm Beach, Florida and FFG services the
finance  receivables  purchased from RFI. The assets of RFI and SHI are recorded
at  their  estimated  fair  values  and  their  accounts  are  included  in  the
consolidated financial statements from the date of acquisition (June 27, 1997).

On June 30, 1997, the Company  acquired the assets of Roman Fedo, Inc.  ("FEDO")
and Fedo Finance,  Inc.  ("FFI").  FCAF operates the used vehicle lot previously
operated  by FEDO in West Palm  Beach,  Florida  and FFG  services  the  finance
receivables purchased from FFI. The assets of FEDO and FFI are recorded at their
estimated  fair values and their  accounts will be included in the  consolidated
financial statements from the date of acquisition (June 30, 1997).

On August 21, 1997, the Company acquired the assets of Jack Winters Enterprises,
Inc.  ("Winters").  These  assets  consisted of a retail  automobile  dealership
located in Stuart,  Florida for Volvo  automobiles and other consumer  vehicles.
The  business is being  operated by First  Choice  Stuart 2, Inc.,  a 100% owned
subsidiary  of the Company and is doing  business as  Motorcars  of Stuart.  The
assets of Winters are recorded at their  estimated  fair values and the accounts
are  included  in  the  consolidated  financial  statements  from  the  date  of
acquisition (August 21, 1997).

On August 29,  1997,  the Company  acquired the stock of B&B  Enterprises,  Inc.
("B&B"). B&B operates a retail automobile dealership located in Stuart,  Florida
for Nissan  automobiles  and other  consumer  vehicles.  The  business  is being
operated by First Choice Stuart 1, Inc., a 100% owned  subsidiary of the Company
and is doing business as Stuart Nissan.  The assets of B&B are recorded at their
estimated  fair  values  and  the  accounts  are  included  in the  consolidated
financial statements from the date of acquisition (August 29, 1997).


                                       40
<PAGE>


RESULTS OF OPERATIONS

Comparison  of  consolidated  three months ended  September 30, 1997 to combined
three months ended September 30, 1996.

         The  following  table sets forth  revenues  and  expenses in  aggregate
dollars  and  as  a  percentage  of  total  revenue  for  the  Company  and  its
predecessors,  EII,  FFG and  affiliates,  Liberty and  affiliates,  and PBF and
affiliate,  for the three months ended  September 30, 1997 and 1996. As a result
of the acquisitions  discussed above, and the related  differences in cost basis
of the assets and liabilities of the Company after the acquisitions and the cost
bases of the predecessors,  the results of operations for the three months ended
September 30, 1997 and three months ended September 30, 1996 are not comparable.
Such lack of comparability is explained in the discussion below.

<TABLE>
<CAPTION>


                                                      1997                           1996
                                              --------------------           ---------------

                                                         (Dollars in Thousands)

                                                  Company (1)             Combined (2)
<S>                                               <C>          <C>         <C>          <C>

Vehicle and Related Revenues                  $ 20,512       100.0%   $ 13,488        100.0%
Cost of Vehicle and Related  Revenues           13,439        65.5%     10,781         79.9%
                                              --------        ----    --------        -----
Net Revenues from Vehicles Sales and
   Vehicle Related Revenues                      7,073        34.5%      2,707         20.1%
Operating Expenses                               5,362        26.1%      3,854         28.6%
                                              --------        ----    --------        -----
Operating Income                                 1,711         8.3%     (1,147)       (8.5%)
Interest Expense                                (1,711)       (8.3)%      (665)       (4.9%)
Other Income                                       134         0.7%         71          .5%
                                              --------       -----    --------       ------
  Net Income (Loss)                           $    134        (0.7)%   $(1,741)      (12.9%)
                                              ========        =====     =======      ======      
                                                         
</TABLE>

(1)  The  financial  data for 1997 was derived from the  unaudited  consolidated
     financial  statements of the Company.  Because the financial  data for 1997
     includes  data of the Company and its  predecessors  which are presented on
     different cost bases, such data is not comparable to the financial data for
     1996.

(2)  The financial data for 1996 is the sum of the actual results of the Company
     and its four  predecessors  included herein.  Because the financial data of
     the  predecessors  are presented on cost bases  different from those of the
     Company  after the  acquisitions,  the 1996 data is not  comparable  to the
     financial data for 1997.

VEHICLE AND RELATED REVENUES. 

     The Company  experienced  a $7.0  million or a 52% increase in revenues for
the three months ended  September 30, 1997  compared to the combined  results of
the Company and its  predecessors  for the same period in 1996. The increase was
primarily the result of three elements:  (i) the 1997 amounts  include  revenues
from  additional  acquired  companies  which are not reflected as  Predecessors,
including  $2.6  million in new car sales;  (ii)  income on finance  receivables
increased by $0.6 million due to growth of the Company's  receivables  portfolio
since the  merger;  and (iii) used car sales  increased  by  approximately  $3.2
million due to the inclusion of revenues from additional  acquired companies and
the opening of additional used car dealerships.

                                       41
<PAGE>


COST OF VEHICLE AND RELATED REVENUES.  

Cost of vehicle  and related  revenues  was $13.4  million for the three  months
ended  September  30,  1997  compared  to $10.8  million for the Company and its
predecessors  during the same period in 1996,  an  increase  of $2.7  million or
24.7%.  The increase was  primarily the result of the increase in used car sales
and an  additional  $2.3  million  attributable  to new car sales  which are not
reflected in the 1996 amounts.

OPERATING EXPENSES.

Operating expenses consist of selling and marketing,  general and administrative
expenses,  and  depreciation  and  amortization.  Operating  expenses  were $5.4
million for the three months ended  September  30, 1997 compared to $3.9 million
for the Company and its predecessors for the same period in 1996, an increase of
39.1%. The increase  reflects  additional  expenses related to increased company
dealership  activity,  and  continued  development  of corporate  infrastructure
resulting from the merger,  offset only partially by certain  decreases in costs
resulting  from  the  consolidation  of  the  acquired   companies'   management
functions.

INTEREST EXPENSE.  

Interest  expense  totaled $1.7 million for the three months ended September 30,
1997  compared to $0.7 million for the Company and its  predecessors  during the
same  period in 1996,  an  increase  of 157.3%.  This  resulted  primarily  from
interest  on debt  attributable  to the  merger  and  related  acquisitions  and
increased debt on the Company's  revolving  credit facility  associated with the
increased  balance of finance  receivables.  In addition,  the Company  incurred
interest expense on a $3,500,000 note and a $4,000,000 note more fully discussed
in "Liquidity and Capital Resources."

Comparison  of combined  nine months ended  September  30, 1997 to combined nine
months ended September 30, 1996.

         The  following  table sets forth  revenues  and  expenses in  aggregate
dollars  and  as  a  percentage  of  total  revenue  for  the  Company  and  its
predecessors,  EII,  FFG and  affiliates,  Liberty and  affiliates,  and PBF and
affiliate, for the nine months ended September 30, 1997 and 1996. As a result of
the acquisitions  discussed above, and the related  differences in cost basis of
the assets and  liabilities of the Company after the  acquisitions  and the cost
bases of the predecessors,  the results of operations for the past two years are
not comparable. Such lack of comparability is explained in the discussion below.

<TABLE>
<CAPTION>

                                                        1997                   1996
                                            --------------------          --------------
                                                         (Dollars in Thousands)
                                                   Combined (1)              Combined (2)
                                            --------------------------  ---------------------

<S>                                            <C>        <C>       <C>          <C>
                                              
Vehicle and Related Revenues                $ 47,944    100.0%    $  42,694    100.0%
Cost of Vehicle and Related  Revenues         32,072     66.9%       31,050     72.7%
                                              ------    -----     ---------    ------
Net Revenues from Vehicles Sales and
   Vehicle Related Revenues                   15,872     33.1%       11,644     27.3%
Operating Expenses                            19,823     41.3%       10,675     25.0%
                                              ------     ----        ------    ------
Operating Income (Loss)                       (3,951)    (8.2)%         969      2.3%
Interest Expense                              (3,727)    (7.8)%      (1,738)    (4.1)%
Other  Income                                    184      0.3%          180      0.4%
                                            --------     -----    ----------   ------
                                                         
Net Income (Loss)                           $ (7,494)   (15.6)%   $    (589)    (1.4)%
                                            ========    =====     =========    =====          

</TABLE>
                                       42
<PAGE>

(1)  The combined  financial data for 1997 is the sum of the actual results from
     the  Company  and its  predecessors.  It was  derived  from  the  unaudited
     consolidated  financial  statements  of the  Company,  which  includes  the
     unaudited combined  financial  statements of the four predecessors from the
     date of  acquisition to September 30, 1997, and the financial data from the
     unaudited  combined  financial  statements  included  herein  of  the  four
     predecessors  from January 1, 1997 to the date of acquisition.  Because the
     financial  data for 1997 includes data of the Company and its  predecessors
     which are presented on different  cost bases,  such data are not comparable
     to the financial data for 1996.

(2)  The financial data for 1996 is the sum of the actual results of the Company
     and its four  predecessors  included herein.  Because the financial data of
     the  predecessors  are presented on cost bases  different from those of the
     Company  after the  acquisitions,  the 1996 data is not  comparable  to the
     financial data for 1997.

VEHICLE AND RELATED REVENUES.  

     The Company (combined with its predecessors)  experienced a $5.3 million or
12.3% increase in revenues for the nine months ended September 30, 1997 compared
to the combined  results of the Company and its predecessors for the same period
in 1996. The increase was primarily the result of three  elements:  (i) the 1997
amounts  include  revenues  from  additional  acquired  companies  which are not
reflected as predecessors,  including $2.6 million in new car sales; (ii) income
on finance receivables  increased by $1.1 million due to growth of the Company's
receivables  portfolio  since the merger;  and (iii) used car sales increased by
approximately   $800,000  with  the   acquisition   and  opening  of  additional
dealerships locations in 1997.

COST OF VEHICLE AND RELATED REVENUES.  

     Cost of vehicle and related  revenues was $32.1 million for the nine months
ended  September  30,  1997  compared  to $31.1  million for the Company and its
predecessors  during the same period in 1996, an increase of $1 million or 3.3%.
Cost of sales for the 1997 period includes $2.3 million  attributable to new car
sales which are not  reflected in the 1996 amounts.  In addition,  provision for
credit losses  increased by $0.5 million due to  management's  assessment of the
increase  in  finance   receivables   and  the  addition  of  acquired   finance
receivables.  The cost of sales for the Company's used car dealerships decreased
slightly as the  Company  achieved  profit  margins of 33.1% for the nine months
ended September 30, 1997, compared to 27.3% for the same period in 1996.

OPERATING EXPENSES.   

     Operating   expenses   consist  of  selling  and  marketing,   general  and
administrative  expenses, and depreciation and amortization.  Operating expenses
were $19.8  million for the nine months  ended  September  30, 1997  compared to
$10.7 million for the Company and its  predecessors for the same period in 1996,
an  increase  of $9.1  million.  The  increase  included  several  non-recurring
charges,  including: (i) the recognition of compensation expense of $3.2 million
from the issuance of stock  options to attract key  management  personnel;  (ii)
$1.7 million in settlement of various  consulting  agreements of the Company and
consulting  agreements  of its  predecessors;  (iii)  $800,000 in  settlement of
outstanding  stock  options;  (iv)  $400,000  in one-time  accounting  and other
professional fees for predecessors which was required for current reporting as a
merged public company;  and (v) $225,000 in write-off of certain prepaid royalty
expenses.  The increase also reflects  additional  expenses related to increased
company   dealership   activity,   and   continued   development   of  corporate
infrastructure  resulting  from the merger.  For  example,  the Company  greatly
expanded the headquarters staffing in information systems,  credit underwriting,
collections,  and accounting during the period to provide for current and future
growth  while  gradually  phasing out the related  local  dealership  staffs and
equipment  as the systems ran in parallel to ensure  accuracy.  These costs were
offset  only  partially  by  certain  decreases  in  costs  resulting  from  the
consolidation of the acquired companies' management functions.

                                       43
<PAGE>

INTEREST EXPENSE.  

     Interest  expense  totaled $3.7million for the nine months ended September
30, 1997 compared to $1.7 million for the predecessors during the same period in
1996, an increase of $2.0 million or 114%. This resulted primarily from interest
on debt  attributable to the merger and related  acquisitions and increased debt
on the Company's revolving credit facility associated with the increased balance
of finance receivables.  In addition, the Company incurred interest expense on a
$3.5 million note and a $4.0 million note more fully  discussed in "Liquidity of
Capital Resources."

ALLOWANCE FOR CREDIT LOSSES. 

     The allowance for credit losses on finance receivables (the "Allowance") at
the Company's used vehicle  dealerships was 17.1% of the  outstanding  principal
balance as of September 30, 1997. The following  table reflects  activity in the
Allowance,  as well as  information  regarding  charge off activity,  on finance
receivables  originated at the Company  dealerships for the three and six months
ended September 30, 1997.

                                 Three Months Ended       Nine Months Ended
                                  September 30, 1997     September 30, 1997
 Allowance Activity:
 Balance, beginning of period    $  6,165,385           $   4,065,645
 Allowance on acquired finance
    receivables                            --               1,920,307
 Provision for credit losses        1,083,294               2,632,105
      Net charge offs              (1,137,408)             (2,506,786)
                                 ------------           -------------
 Balance, end of period          $  6,111,271           $   6,111,271
                                 ============           =============

 Charge off Activity:
 Principal Balances:
   Collateral Repossessed        $  2,647,897           $   5,049,714
   Other                                   --                  36,637
                                 ------------           -------------
 Total Principal Balances           2,647,897               5,086,351
   Recoveries, net                  1,510,489               2,579,565
                                 ------------           -------------
                                                             
     Net Charge Offs             $  1,137,408           $   2,506,786
                                 ============           ============= 
                                                  
Analysis of the portfolio delinquencies is considered in evaluating the adequacy
of the Allowance. The following table reflects the principal balances of current
and delinquent finance  receivables as a percentage of total outstanding finance
receivable principal balances as of September 30, 1997.

                                                           September 30, 1997
Aging Percentages:
Principal balances current                                       89.13%
Principal balances 31 to 60 days                                  5.04%
Principal balances over 60 days                                   5.83%


                                       44
<PAGE>



LIQUIDITY AND CAPITAL RESOURCES.
------------------------------- 

         The  following  table sets forth the major  components  of the increase
(decrease) in the Company's cash and cash equivalents:
<TABLE>
<CAPTION>


                                                               1997                            1996
                                              -------------------------------------     -----------------

                                                                             
                                            Company (1)  Predecessors (2)  Combined (3)   Combined (4)
                                            -------      ------------      --------       --------
<S>                                            <C>          <C>            <C>            <C>
Net cash provided by (used in) operating                 $
activities                                  $   (269)        453          $     184      $    495
Net cash used in investing activities        (19,574)       (250)           (19,824)       (4,739)
Net cash provided by (used in)
financing activities                          20,740        (502)            20,238         3,959
                                            --------     -------          ---------      --------

Net increase (decrease) in cash and cash
   equivalents                              $    897     $  (299)         $     598      $   (285)
                                            ========     =======          =========      ========
</TABLE>

(1)      The financial data for 1997 was derived from the unaudited consolidated
         financial  statements  of the  Company  which  includes  the  unaudited
         combined financial statements of the four predecessors from the date of
         acquisition to September 30, 1997.  Because the financial data for 1997
         includes data of the Company and its  predecessors  which are presented
         on different cost bases,  such data are not comparable to the financial
         data for 1996.

(2)      The  financial  data for 1997 was derived from the  unaudited  combined
         financial  statements  included  herein of the four  predecessors  from
         January 1, 1997 to the date of acquisition.

(3)      The combined  financial  data is the sum of the actual results for the
         Company and its predecessors.

(4)      The  financial  data for 1996 is the sum of the  actual  results of the
         Company  and  its  four  predecessors  included  herein.   Because  the
         financial  data  of  the  predecessors  are  presented  on  cost  bases
         different  from those of the Company after the  acquisitions,  the 1996
         data is not comparable to the financial data for 1997.

     The  Company  requires   capital  to  support   increases  in  its  finance
receivables,  and vehicle inventory,  parts and accessories inventory,  property
and  equipment,  and working  capital for general  corporate  purposes.  Funding
sources  available  to the  Company  include  operating  cash flow,  third party
investors,  financial  institution  borrowings  and borrowings  against  finance
receivables.  The Company intends to explore selling  (securitizing) its finance
receivables in the future.

     Net cash used in operating activities of $268,699 for the nine months ended
September 30, 1997 is primarily due to increases in stock option compensation of
$3,244,615,  accrued  expenses  of  $3,120,121,  inventory  of  $4,432,309;  and
floorplan  payable of $2,378,293.  The cash provided by operating  activities of
the  predecessor  companies  of  $495,070  for the  same  period  in 1996 can be
attributed to increases in  inventory,  provision for credit losses and accounts
payable.

     Net cash used in investing  activities of  $19,574,138  for the nine months
ended September 30, 1997 is the result of the increase in finance receivables of
$6,220,217,  use of cash in the  acquisition of the  predecessors of $8,100,020,
purchase of property and equipment of $656,434,  issuance of notes receivable of
$630,167 and deposits paid of $822,200. The cash used in investing activities of
the predecessor companies of $4,738,880 for the same period in 1996 is primarily
due to increases in the finance receivables.

                                       45
<PAGE>

     Net cash  provided by  financing  activities  of  $20,740,406  for the nine
months ended  September 30, 1997 is the result of borrowings from Sirrom Capital
Corporation  ("Sirrom") of $7,500,000,  notes payable on finance  receivables of
$10,778,180,  and  issuance of preferred  stock and  convertible  debentures  of
$590,000 and $1,350,000, respectively. Net cash provided by financing activities
of the  predecessor  companies  of  $3,958,605  for the same  period  in 1996 is
primarily  due to the  issuance of notes  payable  and notes  payable on finance
receivables.

     Management of the Company has developed strategies to meet future liquidity
needs. These strategies include: (1) increasing the Company's revolving facility
with Finova  Capital  Corporation  ("Finova")  from $35 million to $100  million
effective on or about  November  30,  1997;  (2)  obtaining  additional  funding
through debt and equity  financing;  and, (3) tighter  control on overall costs.
The Company's  management  believes that these actions will allow the Company to
meet its future liquidity needs until December 31, 1998.

REVOLVING CREDIT FACILITIES.  

     The Company's Finova Revolving  Facility currently has a maximum commitment
of $35 million. The Company has negotiated an increase in the maximum commitment
to $100  million,  effective  November  30,  1997,  $10 million of which will be
allocated for the acquisition of used car inventory.  Under the Finova Revolving
Facility,  the  Company  may borrow up to 55% of the gross  balance of  eligible
finance  contracts.  The Finova  Revolving  Facility expires on November 1, 2000
when its renewal will be subject to renegotiation. The Finova Revolving Facility
is secured by substantially  all of the Company's  receivables.  As of September
30, 1997, the Company's  borrowing  capacity under the Finova Revolving Facility
was  approximately  $35 million and the aggregate  principal amount  outstanding
under the Finova  Revolving  Facility was $28.8  million.  The Finova  Revolving
Facility  bears  interest at the prime rate  (currently  the Citibank N.A. prime
rate) plus 2%.

         The  Company  currently  finances  its used car  inventory  through the
Manheim  Facility  with a maximum  commitment  of $3 million and an  outstanding
balance at September 30, 1997 of $2.6 million.  The Manheim Facility is secured
by the Company's buy here-pay here used car inventory and bears interest at 1.5%
over the prime rate. The Company  intends to repay in full the Manheim  Facility
at the time the maximum commitment of the Finova Facility is increased.

     The Company finances its new car inventory through  manufacturer floorplan
facilities.  The Volvo Facility has a maximum commitment of $3.2 million,  bears
interest  at 1%  above  the  prime  rate,  and  at  September  30,  1997  had an
outstanding balance of approximately $1.98 million. The Nissan Facility has a $3
million maximum  commitment,  bears interest at 1% above prime, and at September
30,  1997 had an  outstanding  balance of  approximately  $1.7  million.  As the
Company acquires additional new car dealerships, it will incur obligations under
applicable manufacturers' floorplan financing arrangements.

LOANS. 

     In March and May 1997,  Sirrom Capital  Corporation  ("Sirrom")  loaned the
Company a total of $7.5 million.  The Company issued a $3.5 million  convertible
note,  convertible  until March 12, 1999 at $6.00 per share;  and a $4.0 million
convertible note, convertible at $7.50 per share until May 12, 2002.

                                       46
<PAGE>


         In  September  1997,  the Company  completed  a private  placement of
convertible  notes in the aggregate  amount of  $1,050,000.  The notes mature on
April 15, 1998,  bear interest at the rate of 8% per annum,  and, after December
14, 1997, are convertible into Common Stock of the Company at a conversion price
of 66  2/3%  of the  average  closing  bid  price  for the  five  trading  dates
immediately  preceding the effective  date of conversion.  The Company  recorded
deferred  interest  of $525,000  as a result of the  discount on the  conversion
price which will be amortized from the date of issuance to the first  conversion
date of the convertible  debt.

         In September  1997,  the Eckler  Subsidiary  borrowed $1.5 million from
Stephens,  Inc. The loan matures on October 15, 1998, bears interest at the rate
of 10% per annum,  and is  secured by all of the assets and common  stock of the
Eckler Subsidiary. The Company guaranteed the debt.

MORTGAGE LOAN AND LINE OF CREDIT.

     The  Company  has a  mortgage  payable  to a bank with a current  principal
balance of  approximately  $2.3 million at a variable  rate of 1.5% above prime.
The mortgage  loan is  collateralized  by the Company's  headquarters  property,
requires monthly principal  payments of $13,333,  plus interest,  and matures on
July 1, 1998.

ACQUISITION  DEBT.

     On the closing of the  acquisitions  during the nine months ended September
30, 1997,  the Company  incurred  debt to certain  stockholders  of the acquired
companies.  The balance as of  September  30,  1997,  for the  acquisition  debt
totaled $10.1 million.  Of this amount,  $4.3 million  matures at the earlier of
December  31,  1997 or when  the  Company  successfully  completes  a  secondary
offering of its common stock to the public.  The remaining $4.9 million  require
monthly  principal  payments of $27,112 plus  interest  which mature on June 27,
1999.  The Company  intends to repay the debt with  proceeds  of a  contemplated
public  offering of its common stock,  or renegotiate  the maturity dates of the
obligations

PREFERRED STOCK

     In September 1997, the Company  completed a $3 million private placement of
Series A  Redeemable  Convertible  Preferred  Stock  (the  "Series  A  Preferred
Stock").  The holders of the Series A Preferred  Stock are committed to purchase
an additional $1 million of such Preferred  Stock upon the occurrence of certain
events.  The Series A Preferred  Stock is convertible for a period of five years
into Common Stock at a conversion price (subject to various  adjustments) which,
at the  option of the  holders  is either  fixed at a rate of 135% of the market
price of such Common Stock on September  30, 1997, or floating at a rate of 100%
of the market price of such Common Stock if converted  before  December 30, 1997
and 90% of the market price if converted any time on or after  December 30, 1997
for a period of five years.  In connection  with the  financing,  the holders of
Series A Preferred Stock also received warrants to purchase 90,000 shares of the
Company's  Common Stock at $8.10 per share (subject to various  adjustments)  at
any time prior to September 30, 2002.


                                       47
<PAGE>

SEASONALITY.  

     Historically, the Company's predecessors,  except for EII, have experienced
higher  revenues  in the first two  quarters  of the  calendar  year than in the
latter  half of the year.  Management  believes  that these  results  are due to
seasonal  buying  patterns  resulting  in part  from the fact  that  many of its
customers  receive income tax refunds  during the first half of the year,  which
are a primary source of down payments on used car purchases.

         EII's business is also subject to seasonal fluctuations.  Historically,
EII's  business has realized a higher  portion of its revenues in the second and
third  quarters of the calendar  year and the lowest  portion of its revenues in
the fourth quarter.  The business of EII is  particularly  dependent on sales to
Corvette  enthusiasts  during the spring and summer months.  This is the time of
year that  Corvette  enthusiasts  are  preparing for upcoming car shows that are
held in the late summer and early fall.

INFLATION.  

     Increases in inflation  generally  result in higher interest rates.  Higher
interest rates on the Company's  borrowings would decrease the  profitability of
the Company's existing portfolio.  The Company cannot seek to limit this risk by
increasing  interest  rates earned on its finance  contracts  since the interest
charged is the maximum  permitted under Florida law.  Instead,  the Company will
seek to limit this risk, to the extent market  conditions  permit, by increasing
the profit margin on the cars sold. To date, inflation has not had a significant
impact on the Company's operations.

RECENT ACCOUNTING PRONOUNCEMENT

         In February  1997,  the  Financial  Accounting  Standards  Board issued
Statement of Financial  Accounting  Standards No. 128 "Earnings Per Share" ("FAS
128").  FAS 128 establishes new standards for computing and presenting  earnings
per share ("EPS").  Specifically,  FAS 128 replaces the  presentation of primary
EPS with a presentation  of basic EPS,  requires dual  presentation of basic and
diluted EPS on the face of the income  statement  for all entities  with complex
capital   structures  and  requires  a  reconciliation   of  the  numerator  and
denominator of the basic EPS computation to the numerator and denominator of the
diluted EPS computation.  FAS 128 is effective for financial  statements  issued
for  periods  ending  after  December  15,  1997,  earlier  application  is  not
permitted.  EPS for the three  and nine  months  ended  September  30,  1997 and
September 30, 1996 computed under FAS 128 would not be materially different than
previously  computed.  

     In June 1997, the Financial  Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, "Reporting  Comprehensive  Income" ("FAS
130") and No.  131,  "Disclosure  about  Segments of an  Enterprise  and Related
Information"  ("FAS 131").  FAS 130  establishes  standards  for  reporting  and
displaying  comprehensive income, its components and accumulated  balances.  FAS
131 establishes  standards for the way the public companies  report  information
about operating  segments in annual financial  statements and requires reporting
of selected information about operating segments in interim financial statements
issued  to the  public.  Both  FAS 130 and FAS  131

                                       48
<PAGE>

are effective for periods beginning after December 15, 1997. Adoption
of these standards is not expected to have a material adverse effect
on the Company's financial statements.




                                       49
<PAGE>

                                     PART II
                       SMART CHOICE AUTOMOTIVE GROUP, INC.

                                OTHER INFORMATION
                                -----------------


Item 2.  CHANGES IN SECURITIES.

     (c) During  the  period  covered by this  Report,  the  Company  issued the
unregistered  equity securities as set forth below. In each case the transaction
involved  a private placement  and  the  Company  relied  on  exemptions   from
registration  under Section 4(2) of the  Securities Act of 1933, as amended (the
"1933 Act") or Regulation D thereunder.

     In August 1997, the Company closed on the acquisition of the assets of Jack
Winters  Enterprises,  Inc., a new car dealership,  and in connection  therewith
issued 18,322 shares of Common Stock to the seller as partial  consideration for
the assets.

     In August 1997, the Company closed on the  acquisition of Stuart Nissan,  a
new car  dealership,  and issued to the sellers 86,546 shares of Common Stock as
partial consideration for the aquisition.

     In September 1997, the Company issued 11,429 shares of the Company's Common
Stock to Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A. in consideration
of legal services rendered to the Company.

     On  September  9, 1997 the Company  issued  1,000 shares of Common Stock to
Pepper O'Donnell & Co. in consideration of public relations services provided to
the Company.

     In September  1997, the Company issued 52,500  warrants to purchase  Common
Stock of the Company in connection  with the issuance of  convertible  debt. The
warrants are exercisable at $7.00 per share through August 29, 2002. The related
$1,050,000 of  convertible  debt may be converted to Common Stock of the Company
at any time after  December  14,  1997 at a  conversion  price of 66 2/3% of the
average  trading  price  of  the  Common  Stock  for  the  five  days  preceding
conversion,  with the conversion ratio decreasing to 62% and 60% respectively if
the shares are not registered by April 15, 1998 and May 15, 1998,  respectively.
These securities were acquired by institutional purchasers.

     On September 30, 1997,  the Company  issued 300 shares of newly  designated
Series A Redeemable  Convertible  Preferred Stock at $10,000 per share, and will
issue an  additional  100  shares  on the  occurrence  of  certain  events.  The
Preferred Stock is convertible into shares of Common Stock at a conversion price
which,  at the option of the  buyers,  is either  fixed at a rate of 135% of the
market price of the Common Stock at the date of issuance of the Preferred Stock,
or  floating  at a rate of 100% if the  market  price  of such  Common  Stock if
converted  during the period 90 days after  issuance of the Preferred  Stock and
90% of the market price if converted at any time after 90 days for a period of 5
years.  In connection with the issuance of the Preferred  Stock,  the purchasers
also received  warrants to purchase 90,000 shares of the Company's  Common Stock
at $8.10 per share are any time prior to September  30, 2002.  These  securities
were acquired by institutional purchasers.

                                       50
<PAGE>


Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

                  (a)  Exhibits


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

Exhibit
 List                 Exhibit Description                Page Number or Incorporated by reference to:

                                                         Exhibit 3.1 to Form SB-2 Registration
 3.1     Amended and Restated Articles of                Statement, filed on September 1, 1995, File No.
         Incorporation of the Company                    33-96520-A.

3.2      Amended and Restated By-Laws of the Company     Exhibit   3.2  to  Form SB-2 Registration
                                                         Statement, filed on September 1, 1995, File
                                                         No. 33-96520-A.

3.2.1    Amendment No. 1 to Amended and Restated         Exhibit 3.2.1 to Amendment No. 2 to Form SB-2
         Bylaws                                          Registration Statement, filed on November 6,
                                                         1995, File No. 33-96520-A.

3.2.2    Second Articles of Amendment to Articles of     Exhibit 3.1 to Form 8-K filed on October 9,
         Incorporation                                   1997, File No. 1-14082.

 4.1     Specimen Common Stock Certificate               Exhibit 4.1 to Form 8-A Registration Statement,
                                                         filed on April 16, 1997, File No. 1-14082.
 4.2     Specimen of Warrant Certificate
                                                         Exhibit 4.2 to Form 8-A Registration Statement,
                                                         filed on April 16, 1997, File No. 1-14082.


 4.3     Warrant Agreement between the Company and       Exhibit 4.5 to Amendment No. 2 to Form SB-2
         American Stock Transfer & Trust Company, as     Registration Statement, filed on November 6,
         Warrant Agent, dated November 9, 1995           1995, File No. 33-96520-A.

                                                         Exhibit 4.4 to Form 8-A Registration Statement,
4.3.1    Form of Amendment to Warrant Agreement          filed on April 16, 1997, File No. 1-14082.

10.1     Trademark License Agreement dated effective
         October 14, 1992 between the Company and        Exhibit 10.17 to Amendment No. 1 to Form SB-2
         Chevrolet Motor Division, General Motors        Registration Statement, filed on October 13,
         Corporation                                     1995, File No. 33-96520-A.


10.2     Trademark License Agreement dated effective     Exhibit 10.2 to Amendment No. 1 to Form SB-2
         October 3, 1992 between the Company and         Registration Statement, filed on October 13,
         General Motors Corporation                      1995, File No. 33-96520-A.



10.3     Reproduction and Service Parts Tooling
         License Agreement dated December 22, 1993
         between the Company and Service Parts           Exhibit 10.3.1 to Amendment No. 1 of Form SB-2
         Operation, General Motors Corporation           Registration Statement, filed on October 13,
         ("GM License Agreement")*                       1995, File No. 33-96520-A.




 10.4    Eckler  Industries,  Inc.  Retirement and       Exhibit  10.4.1 to Form SB-2 Registration
         Savings Plan and Trust Agreement, as Amended    Statement, Filed on September 1, 1995 File No. 33-96520-A.
         and Restated on September 14, 1992            



10.4.1   Amendment No. 1 to Eckler Industries,Inc.       Exhibit 10.4.2 to Form SB-2 Registration 
         Retirement and Savings Plan Trust Agreement     Statement,filed on September 1, 1995, File No.
         dated March 28, 1994                            33-96520-A.

 10.5    Eckler Industries, Inc. Non-Qualified Stock     Exhibit 10.6 to Form SB-2 Registration
         Option Plan                                     Statement, filed on September 1, 1995, File No.
                                                         33-96520-A.

 10.6    Eckler Industries, Inc. 1995 Combined           Exhibit 10.7 to Form SB-2 Registration
         Qualified and Non-Qualified Employee Stock      Statement, filed on September 1, 1995, File No.
         Option Plan                                     33-96520-A.

                                       51
<PAGE>


10.7     Registration Rights Agreement by and among
         the Company and each of the Purchasers          Exhibit 10.15 to Amendment No. 1 to Form SB-2
         referred to in Schedule 1 thereto, dated        Registration Statement, filed on October 13,
         September 20, 1995.                             1995, File No. 33-96520-A.
 
10.8     Unit Purchase Option Agreement between the      Exhibit 1.2 to Amendment No. 2 to Form SB-2
         Company and Argent Securities, Inc. and         Registration Statement, filed on November 6,
         Certificate dated November 15, 1995             1995, File No. 33-96520-A.

10.9     Stock  Purchase  Warrant in favor of Ralph H.   Exhibit  10.20 to Annual Report on Form 10KSB,
         Eckler dated November 15, 1995                  filed on January 16, 1997, File No. 1-14082.


10.10    Stock  Purchase  Warrant in favor of Ronald V.  Exhibit  10.21 to Annual Report on Form 10KSB, 
         Mohr dated  November 15,1995.                   filed on January 16, 1997, File No. 1-14082.

10.11    Stock  Purchase  Warrant in favor of G. Edward  Exhibit 10.22 to Annual Report on Form 10KSB,
         Mills dated  November 15, 1995.                 filed on January 16, 1997, File No. 1-14082.

10.12    Stock  Purchase  Warrant in favor of Robert M.  Exhibit  10.23 to Annual Report on Form 10KSB,  
         Eckler dated November 15, 1995.                 filed on January 16, 1997, File No. 1-14082.


10.13    Stock  Purchase  Warrant  in favor of Michael   Exhibit  10.24 to Annual Report on Form 10KSB,
         G. Wilson dated  November 15, 1995.             filed on January 16, 1997, File No. 1-14082.

10.14    Lease Agreement between the Company and         Exhibit 10.21 to Post Effective Amendment No. 1
         Titusville Chevrolet-Geo, Inc. dated March      to Form SB-2 Registration Statement, filed on
         4, 1996                                         April 10, 1996, File No. 33-96520-A.


10.15    Lease Agreement between the Company and         Exhibit 10.22 to Post-Effective Amendment No. 1
         Titusville Chevrolet-GEO, Inc. Dated March      to Form SB-2 Registration Statement, filed on
         4, 1996                                         April 10, 1996, File No. 33-96520-A.

10.16     Loan Agreement between the Company and         Exhibit 10.19 to Post-Effective Amendment No. 2
          Barnett Bank, N.A. dated September 30, 1996    to Form SB-2 Registration Statement, filed on
                                                         November 14, 1996, File No. 33-96520-A.


10.16.1  Loan  Modification  Agreement  between the      Exhibit 10.16.1 to Quarterly Report on Form 
         Company and Barnett Bank dated April 15,        10-Q, filed on August 19, 1997, File No.
         1997.                                           1-14082.

10.17    Mortgage and Security Agreement between the     Exhibit 10.20 to Post-Effective Amendment No. 2
         Company and Barnett Bank, N.A. dated            to Form SB-2 Registration Statement, filed on
         September 30, 1996.                             November 14, 1996, File No. 33-96520-A.

10.18    Promissory Note in the amount of $2,400,000     Exhibit 10.21 to Post-Effective Amendment No. 2 to
         from the Company in favor of Barnett Bank,      Form SB-2 Registration Statement, filed on
         N.A. dated September 30, 1996.                  November 14, 1996, File No. 33-96520-A.

10.19    Line of Credit Loan Agreement between the       Exhibit 10.22 to Post-Effective Amendment No. 2 to
         Company and Barnett Bank, N.A. dated            Form SB-2 Registration Statement, filed on
         September 30, 1996.                             November 14, 1996, File No. 33-96520-A.

                                                         Exhibit 10.23 to Post-Effective Amendment No. 2 to
10.20    Security Agreement between the Company and      Form SB-2 Registration Statement, filed on
         Barnett Bank, N.A. dated September 30, 1996.    November 14, 1996, File No. 33-96520-A.

10.21    Promissory Note in the amount of $1,000,000     Exhibit 10.24 to Post-Effective Amendment No. 2 to
         in favor of Barnett Bank, N.A. dated            Form SB-2 Registration Statement, filed on
         September 30, 1996                              November 14, 1996, File No. 33-96520-A.


10.22    Merger Agreement between Smart Choice
         Holdings, Inc., the Company, Thomas E. Conlan   Exhibit 10.1 to Form 8-K, filed on February 12,
         and Gerald C. Parker dated December 30, 1997.   1997, File No. 1-14082.

10.23    Non-Qualified Stock Option Agreement in favor   Exhibit 4.1 to Form 8-K, filed on February 12,
         of Ralph H. Eckler, dated January 28, 1997.     1997, File No. 1-14082.

10.24    Registration Rights Agreement with Ralph H.     Exhibit 4.2 to Form 8-K, filed on February 12,
         Eckler, dated January 28, 1997.                 1997, File No. 1-14082.

10.25    Executive Employment Agreement with Ralph H.    Exhibit 10.2 to Form 8-K, filed on February 12,
         Eckler, dated January 28, 1997.                 1997, File No. 1-14082.

10.26    First Amended and Restated Loan and Security    Exhibit 4.1 to Form 10-Q, filed on May 20, 1997, 
         Agreement between Florida Finance Group,        File No. 1-14082.                                
         Inc. ("FFG") and Finova Capital Corporation     
         ("Finova"), dated February 4, 1997.            

                                       52
<PAGE>
10.27    Warrant to Purchase Common Stock of the         Exhibit 4.2 to Form 10-Q, filed on May 20, 1997,
         Company between the Company and Finova,         File No. 1-14082.                               
         dated January 13, 1997.                         

10.28    Sixth Amended and Restated Promissory Note      Exhibit 4.3 to Form 10-Q, filed on May 20, 1997
         dated May 7, 1997, $35,000,000 principal        File No. 1-14082.                              
         amount, FFG and Liberty Finance Company,       
         makers, Finova, payee.                         

10.29    First Amended and Restated Schedule to          Exhibit 4.4 to Form 10-Q, filed on May 20, 1997,
         Amended and Restated Loan and Security          File No. 1-14082.                               
         Agreement, FFG, borrower, Finova, lender,       
         dated April 22, 1997.                          

10.30    Guaranty to Finova from the Company dated       Exhibit 4.5 to Form 10-Q, filed on May 20, 1997,
         January 13, 1997.                               File No. 1-14082.
  
10.31    Stock Purchase Agreement dated January 28,      Exhibit 10.1 to Form 10-Q, filed on May 20,
         1997 between SCHI and Gary Smith.               1997, File No. 1-14082.


10.32    Promissory Note dated January 28, 1997,         Exhibit 10.2 to Form 10-Q filed on May 20, 1997,  
         First Choice Auto Finance, Inc. ("FCAF"),       File No. 1-14082.                                 
         maker, Gary Smith, payee, in the principal      
         amount of $1,031,008.                          

10.33    Asset Purchase Agreement dated January 28,      Exhibit 10.3 to Form 10-Q, filed on May 20,
         1997 between FCAF and Gary Smith.               1997, File No. 1-14082.

10.34    Asset Purchase Agreement dated December 19,     Exhibit 10.4 to Form 10-Q, filed on May 20,  
         1996 among FCAF, Jack Winters Enterprises,      1997, File No. 1-14082.                      
         Inc., Jack Winters, and F. Craig Clements.      

10.35    Addendum to Asset Purchase Agreement dated      Exhibit 10.5 to Form 10-Q, filed on May 20, 
         March 24, 1997 among FCAF, Jack Winters         1997, File No. 1-14082.                     
         Enterprises, Inc., Jack Winters, and F.         
         Craig Clements.                                 

10.36    Merger Agreement dated February 12, 1997        Exhibit 10.1 to Form 8-K, filed on February 26, 
         among the Company, R.C. Hill Acquisition,       1997, File No. 1-14082.                         
         Inc., and R.C. Hill, II.                        

10.37    Stock Purchase Agreement dated February 12,     Exhibit 10.10 to Form 8-K, filed on February 26,1997, 
         1997 among the Company, FCAF, and R.C. Hill,    File No. 1-14082.                  
         II.                                                

10.38    Corporate Guaranty of the Company in favor      Exhibit 10.12 to Form 8-K, filed on February 26,
         of R.C. Hill, II, dated February 12, 1997.      1997, File No. 1-14082.

10.39    Registration Rights Agreement between the       Exhibit 4.1 to Form 8-K, filed on February 26,  
         Company and R.C. Hill, II, dated February       1997, File No. 1-14082.                         
         12, 1997.                                       

10.40    Asset Purchase Agreement among FCAF, Palm       Exhibit 10.17 to Form 8-K, filed on February 26, 
         Beach Finance and Mortgage Company ("PBF"),     1997, File No. 1-14082.                          
         Two Two Five North Military Corp. ("225"),      
         and David Bumgardner, and Amendment thereto.   

10.41   Loan and Security Agreement between 225 and      Exhibit 10.18 to Form 8-K, filed on February 26,
        FCAF dated February 14, 1997.                    1997, File No. 1-14082.

10.42   9% Secured Convertible Note of FCAF to 225       Exhibit 10.20 to Form 8-K, filed on February 26,
        and PBF.                                         1997, File No. 1-14082.

10.43   9% Convertible Debenture of SCHI to PBF.         Exhibit 10.21 to Form 8-K, filed on February 26,
        1997, File No. 1-14082.

10.44   Lease between David Bumgardner as Lessor and     Exhibit 10.22 to Form 8-K, filed on February 26,
        FCAF, Lessee, dated 2/13/97.                     1997, File No. 1-14082.

10.45   Promissory Note for $205,574 by FCAF in          Exhibit 10.19 to Form 8-K, filed on February 26,
        favor of David Bumgardner.                       1997, File No. 1-14082.

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<PAGE>

10.46   Indemnification Agreement in favor of Palm       Exhibit 10.23 to Form 8-K, filed on February 26,
        Beach Finance and Two Two Five North             1997, File No. 1-14082.                         
        Military Trail by FCAF, dated February 14,       
        1997.                                          

10.47   Executive Employment Agreement between the       Exhibit 10.14 to Form 10-Q, filed on May 20,
        Company and Fred E. Whaley.                      1997, File No. 1-14082.

10.48   Executive Employment Agreement between the       Exhibit 10.15 to Form 10-Q, filed on May 20,
        Company and Gary Smith.                          1997, File No. 1-14082.

10.49   Executive Employment Agreement between the       Exhibit 10.16 to Form 10-Q, filed May 20, 1997,
        Company and Robert Abrahams.                     File No. 1-14082.

10.50   Convertible Senior Promissory Note dated         Exhibit 10.18 to Form 10-Q, filed May 20, 1997,
        March 31, 1997, the Company, maker, Sirrom,      File No. 1-14082.                              
        payee.                                           

10.51   Convertible Senior Promissory Note dated May     Exhibit 10.19 to Form 10-Q, filed May 20, 1997,
        13, 1997, the Company, maker, Sirrom, payee.     File No. 1-14082.

10.52   Amended and restated Registration Rights         Exhibit 10.20 to Form 10-Q, filed May 20, 1997,
        Agreement between the Company and Sirrom,        File No. 1-14082.                              
        dated May 13, 1997.                              

10.53   Asset Purchase Agreement dated as of June
        30, 1997 among the Company and Roman Fedo,       Exhibit 10.1 to Form 8-K, filed on July 15,
        Fedo Finance, Inc. and Roman Fedo.               1997, File No. 1-14082.

10.54   Asset Purchase Agreement dated as of June
        27, 1997 among the Company, Strata Holding,
        Inc., Ready Finance, Inc., Donald Cook,          Exhibit 10.1 to Form 8-K filed on July 14, 1997,
        Marilyn Cook and Madie A. Stratemeyer.           File No. 1-14082.

10.55   $900,000 Promissory Note dated August 20,
        1997 by First Choice Auto Finance, Inc.          Exhibit 10.1 for Form 8-K filed on September 5,
        ("First Choice").                                1997, File No. 1-14082.

10.56   $300,000 Promissory Note dated August 20,
        1997 by First Choice Auto Finance, Inc.          Exhibit 10.2 to Form 8-K filed on  September 5,
        ("First Choice").                                1997, File No. 1-14082.

10.57   Form of Convertible Note issued by
        Registrant to High Capital Funding, LLC,         Exhibit 10.1 to Form 8-K filed on October 9,
        among other purchases.                           1997, File No. 1-14082.

10.58   Form of Warrant issued by Registrant to High     Exhibit 10.2 to Form 8-K filed on October 9,
        Capital Funding, LLC, among other purchasers.    1997, File No. 1-14082.

10.59   Promissory Note by Eckler Industries, Inc.       Exhibit 10.3 to Form 8-K filed on October 9,
        in favor of Stephens, Inc.                       1997, File No. 1-14082.

                                                         Exhibit 10.4 to Form 8-K filed on October 9,
10.60   Guaranty by Registrant to Stephens, Inc.         1997, File No. 1-14082.

10.61   Pledge and Security Agreement between            Exhibit 10.5 to Form 8-K filed on October 9,
        Registrant and Stephens, Inc.                    1997, File No. 1-14082.

10.62   Securities Purchase Agreement between the        Exhibit 10.6 to Form 8-K filed on October 9,
        Registrant and certain buyers represented by     1997, File No. 1-14082.                     
        Promethean Investment Group, L.L.C., among       
        others.                                        

10.63   Form of Warrant from Registrant to certain
        buyers represented by Promethean Investment      Exhibit 10.7 to Form 8-K filed on October 9,
        Group, L.L.C., among others.                     1997, File No. 1-14082.

10.64   Registration Rights Agreement between
        Registrant and certain buyers represented by
        Promethean Investment Group, L.L.C., among       Exhibit 10.8 to Form 8-K filed on October 9,
        others.                                          1997, File No. 1-14082.

27      Financial Data Schedules.
</TABLE>
                                       54
<PAGE>



         (b)      Reports on Form 8-K

                  A  current  report  on Form 8-K  Item 2 was  filed by
                  Smart  Choice  Automotive  Group,  Inc. on August 21,
                  1997.

                  A current  report on Form  8-K/A  Item 2 was filed by
                  Smart  Choice  Automotive  Group,  Inc. on August 21,
                  1997.

                  A  current  report  on Form 8-K  Item 2 was  filed by
                  Smart  Choice  Automotive  Group,  Inc. on August 29,
                  1997.

                  A current  report on Form  8-K/A  Item 2 was filed by
                  Smart  Choice  Automotive  Group,  Inc. on August 29,
                  1997.

                  A  current  report  on Form 8-K  Item 5 was  filed by
                  Smart Choice  Automotive Group, Inc. on September 24,
                  1997.



                                       55
<PAGE>



                                   SIGNATURES



         In  accordance  with  Section  13 or 15(d)  of the  Exchange  Act,  the
Registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized on November 19, 1997.

                               SMART CHOICE AUTOMOTIVE GROUP, INC.


                               By:      /s/ Gary R. Smith
                                  --------------------------------
                                  Gary R. Smith
                                  President and Chief Executive Officer


         In accordance  with the Exchange Act, this report has been signed below
by the following  persons on behalf of the  registrant and in the capacities and
on the dates indicated.

         Signatures             Title                                Date

/s/ Gary R. Smith           President, Chief Executive      November 19, 1997
------------------------    Officer and Director 
Gary R. Smith               

/s/ Joseph E. Mohr          Chief Financial Officer,        November 19, 1997
------------------------    (Principal Financial and  
Joseph E. Mohr              Accounting Officer)