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                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-K/A

       FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)

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

     FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

                                       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 0-20841

                            UGLY DUCKLING CORPORATION
             (Exact name of registrant as specified in its charter)

                Delaware                                86-0721358
    (State or other jurisdiction of         (I.R.S. Employer Identification No.)
     incorporation or organization)

   2525 E. Camelback Road, Suite 500,
            Phoenix, Arizona                              85016
(Address of principal executive offices)                (Zip Code)

       (Registrant's telephone number, including area code) (602) 852-6600

           Securities registered pursuant to Section 12(b) of the act:

           Title of Class              Name of Each Exchange On Which Registered
           --------------              -----------------------------------------
12% Subordinated Debentures Due 2003            American Stock Exchange
11% Subordinated Debentures Due 2007            American Stock Exchange

           Securities registered pursuant to Section 12(g) of the act:

            Title of Class             Name of Each Exchange On Which Registered
            --------------             -----------------------------------------
    Common Stock, $.001 Par Value               The Nasdaq Stock Market

     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 reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

     As of May 1,  2000,  the  aggregate  market  value of common  stock held by
non-affiliates of the registrant was approximately $73,202,715.

              APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

     Indicate by check mark whether the  registrant  has filed all documents and
reports  required  to be  filed by  Section  12,  13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court. Yes [ ] No [ ]

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

     As of May 1, 2000,  there were  approximately  13,895,965  shares of common
stock of the Registrant outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      NONE

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<PAGE>
                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

                                    DIRECTORS

     The following table gives the name, age, principal  occupation and business
experience  of our  directors.  Also,  included for each director is the year in
which he became a director for us, his  positions  and offices  with us,  family
relationships, other directorships and certain other biographical information.

<TABLE>
<CAPTION>
NAME                     AGE   BUSINESS EXPERIENCE                                    SINCE
----                     ---   -------------------                                    -----
<S>                       <C>  <C>                                                    <C>
ERNEST C. GARCIA II (1)   42   CHAIRMAN OF THE BOARD OF UGLY DUCKLING since its       1996
                               founding in 1992. Mr. Garcia also served as Chief
                               Executive Officer until July 1999 and as President
                               from 1992 to 1996. Since 1991, Mr. Garcia has
                               served as President of Verde Investments, Inc.
                               (Verde), a real estate investment corporation that
                               is an affiliate of Ugly Duckling. See "Certain
                               Relationships and Related Transactions."

CHRISTOPHER D. JENNINGS   46   CO-CHIEF EXECUTIVE OFFICER OF GLOBAL EURONET GROUP,    1996
                               a venture capital/investment banking internet
                               company, beginning in May 2000. Prior to that time,
                               he was a Managing Director of Friedman, Billings,
                               Ramsey & Co., Inc., an investment banking firm,
                               since April 1998. Mr. Jennings served as a managing
                               director of Cruttenden Roth Incorporated (Cruttenden
                               Roth), also an investment banking firm, from 1995
                               to April 1998. From 1992 to 1994, Mr. Jennings
                               served as a Managing Director at the investment
                               banking firm, Sutro & Co. From 1989 to 1992, Mr.
                               Jennings served as a Senior Managing Director at
                               Maiden Lane Associates, Ltd., a private equity fund.
                               Prior to 1989, Mr. Jennings served in various
                               positions with, among others, Dean Witter Reynolds,
                               Inc. and Warburg Paribas Becker, Inc., both of
                               which are investment banking firms. Mr. Jennings
                               is also a director of Global Netfinancial.com. Mr.
                               Jennings is a member of the Compensation Committee
                               of the board and effective March 1999 is also a
                               member of the Audit Committee. See "Certain
                               Relationships and Related Transactions" and
                               "Security Ownership of Certain Beneficial Owners
                               and Management."

JOHN N. MACDONOUGH        56   FORMER CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF         1996
                               MILLER BREWING COMPANY, a brewer and marketer of
                               beer, from 1993 until April of 1999. Mr. MacDonough
                               previously served from 1992 to 1993 as Miller
                               Brewing's President and Chief Operating Officer.
                               Prior to 1992, he was employed in various positions
                               at Anheuser Busch, Inc., also a brewer and marketer
                               of beer. Mr. MacDonough is also a director of
                               Marshall & Ilsley Bank and Wisconsin Energy
                               Corporation, a utility engaged in the generation,
                               transmission, distribution and sale of electric
                               energy.  He is married to the sister of Mr. Sullivan.
</TABLE>

                                        1
<PAGE>
<TABLE>
<CAPTION>
NAME                     AGE   BUSINESS EXPERIENCE                                    SINCE
----                     ---   -------------------                                    -----
<S>                       <C>  <C>                                                    <C>
GREGORY B. SULLIVAN       41   UGLY DUCKLING CORPORATION'S PRESIDENT SINCE MARCH      1998
                               1996 AND CHIEF EXECUTIVE OFFICER SINCE JULY 1999.
                               Mr. Sullivan has also served as President of Ugly
                               Duckling Car Sales, Inc. since December 1996. From
                               1995 through February 1996, Mr. Sullivan was a
                               consultant for us. He formerly served as President
                               and principal stockholder of National Sports Games,
                               Inc., an amusement game manufacturing company that
                               he co-founded in 1989 and sold in 1994. Prior to
                               1989, Mr. Sullivan was involved in the securities
                               industry and practiced law with a large Arizona
                               firm. He is an inactive member of the State Bar
                               of Arizona. Mr. Sullivan's sister is married to
                               Mr. MacDonough.

FRANK P. WILLEY           46   PRESIDENT OF FIDELITY NATIONAL FINANCIAL, INC., a      1996
                               title insurance underwriter, since 1995. From 1984
                               to 1995, Mr. Willey served as the Executive Vice
                               President and General Counsel of Fidelity National
                               Title. Mr. Willey is also a director of Fidelity
                               National Financial, Inc. and CKE Restaurants, Inc.,
                               an operator of various quick-service restaurant
                               chains. He is a member of the Compensation and
                               Audit Committees of the board
</TABLE>

(1)  Prior to 1992,  when he  founded  Ugly  Duckling,  Ernest C.  Garcia II was
     involved in various real estate,  securities, and banking ventures. Arising
     out  of  two   transactions  in  1987  between  Lincoln  Savings  and  Loan
     Association (Lincoln) and entities controlled by Mr. Garcia, the Resolution
     Trust  Corporation,  which  ultimately  took over  Lincoln,  asserted  that
     Lincoln  improperly  accounted for the  transactions  and that Mr. Garcia's
     participation  in the  transactions  facilitated  the improper  accounting.
     Facing severe financial pressures, Mr. Garcia agreed to plead guilty to one
     count of bank fraud,  but in light of his cooperation with authorities both
     before  and  after  he was  charged,  was  sentenced  to only  three  years
     probation,  which has  expired,  was fined $50 (the  minimum fine the court
     could assess), and during the period of his probation, which ended in 1996,
     was  banned  from  becoming  an  officer,   director  or  employee  of  any
     federally-insured  financial  institution  or  a  securities  firm  without
     governmental  approval.  In separate actions arising out of this matter Mr.
     Garcia agreed not to violate the securities  laws, and filed for bankruptcy
     both  personally and with respect to certain  entities he  controlled.  The
     bankruptcies were discharged by 1993.

                                        2
<PAGE>
             SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Section  16(a)  of  the  Securities  Exchange  Act  of  1934  requires  our
directors,  executive officers,  and persons who own more than 10% of our common
stock to file reports of ownership and changes in ownership  with the Securities
and  Exchange  Commission.  We are not aware of any  failure  of our  directors,
officers  and 10%  stockholders  to  comply  with all  Section  16(a)  reporting
requirements  during 1999,  except as set forth below. In making this statement,
we have relied upon the written  representation  of our directors,  officers and
10%  stockholders  who are our affiliates.  We disclaim any  responsibility  for
determining whether any person,  other than Ernest C. Garcia II, who has filed a
Schedule 13G or Schedule 13D reporting  more than 10%  beneficial  ownership for
purposes of Section  13(d) or Section  13(g) of the  Securities  Exchange Act of
1934 is also a more  than  10%  owner  for  purposes  of  Section  16(a)  of the
Securities Exchange Act of 1934 and we make no representations as to whether any
such person has made all required filings under Section 16(a).

     *    Mr.  Willey  is  the  President  and  Director  of  Fidelity  National
          Financial, Inc. (Fidelity). A subsidiary of Fidelity purchased 147,400
          shares of stock of Ugly  Duckling on various  dates  between April and
          July of 1999,  at  prices  ranging  from  $5.30 to $7.71  without  Mr.
          Willey's knowledge.  After becoming aware of the transaction, a Form 4
          filing was done on  December 8, 1999.  Fidelity  now has a process for
          the timely  reporting of  transactions  in Ugly  Duckling  stock.  Mr.
          Willey disclaims any beneficial ownership in these or any other shares
          of Ugly Duckling owned by Fidelity.

     *    We prepared Form 5's and  inadvertently  filed them two days after the
          required  filing date for the following  individuals:  Greg  Sullivan,
          Steve Darak,  Don Addink,  Jon  Ehlinger,  Ernie  Garcia,  Christopher
          Jennings, John MacDonough,  and Frank Willey. Steps have been taken to
          ensure this does not happen again.

                                        3
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION.

                COMPENSATION OF EXECUTIVE OFFICERS, BENEFITS AND
                                 RELATED MATTERS

                           SUMMARY COMPENSATION TABLE

     The table below sets forth information  concerning the annual and long-term
compensation  for services  rendered in all  capacities  for us during the three
fiscal years ended  December 31, 1999 of our Named  Executive  Officers.  "Named
Executive  Officers"  consist of (1) each person serving as our Chief  Executive
Officer during 1999, (2) our 4 next most highly  compensated  executive officers
serving as  executive  officers  at  December  31,  1999,  and (3) 2  additional
individuals  who would have been reported  under (2) above but for the fact that
the  individuals  were not serving as executive  officers  for Ugly  Duckling at
December 31, 1999.

<TABLE>
<CAPTION>
                                               ANNUAL COMPENSATION           LONG-TERM COMPENSATION
                                          -----------------------------      ---------------------
                                                                                    AWARDS
                                                                             ---------------------
                                                                 OTHER                    SECURITIES
                                                                ANNUAL      RESTRICTED      UNDER-     ALL OTHER
                                                                COMPEN-       STOCK         LYING       COMPEN-
     NAME AND PRINCIPAL                    SALARY               SATION       AWARD(S)      OPTIONS      SATION
         POSITION                  YEAR      ($)      BONUS       ($)          ($)         (#)(1)       ($)(2)
         --------                  ----   --------   -------    -------      --------       ------       ------
<S>                                <C>    <C>        <C>        <C>          <C>            <C>          <C>
Ernest C. Garcia II                1999   $ 93,416        --    $ 3,258(3)                  100,000          --
  Chairman of the Board  and       1998   $150,462        --    $ 3,228(3)         --            --      $1,000
  former Chief Executive Officer   1997   $131,677        --    $ 2,985(3)         --            --      $  950

Gregory B. Sullivan                1999   $200,000   $60,000    $ 4,850(4)         --       125,000      $  688
  President and Chief              1998   $208,308        --    $ 1,156(4)         --       500,000      $  833
  Executive Officer                1997   $197,846        --         --            --            --      $  554

Steven T. Darak                    1999   $175,000   $49,950    $   870(5)         --        35,000          --
  Senior Vice President, and       1998   $180,961        --    $ 1,750(5)         --        65,001(6)       --
  Chief Financial Officer          1997   $148,654   $25,000    $ 1,750(5)         --            --          --

Donald L. Addink                   1999   $169,230   $18,000         --            --        45,000          --
  Senior Vice President --         1998   $171,346   $40,000         --            --        33,500(7)   $1,000
  Treasurer                        1997   $139,671   $10,000         --            --            --      $  950

Steven A. Tesdahl(8)               1999   $198,941   $11,658                                             $  220
  Senior Vice President            1998   $187,115        --         --            --        75,000(9)   $1,000
  and Chief Information Officer    1997   $ 53,846        --         --      $100,000(10)   100,000          --

Jon Ehlinger                       1999   $135,076   $17,081         --            --        10,000      $  172
  Vice President,                  1998   $ 56,307        --         --            --        10,000          --
  General Counsel and Secretary    1997         --        --         --            --            --          --

Ray Fidel                          1999   $174,999   $ 4,354    $ 6,000(11)        --            --          --
  Former President,                1998   $147,115   $   761    $ 1,500(11)
  Cygnet Dealer Finance            1997   $132,692        --    $11,000(11)        --            --          --
</TABLE>

(1)  The amounts shown in this column  represent  stock options  granted  either
     pursuant to the  Incentive  Plan or the Executive  Plan.  For the Incentive
     Plan,  options  generally  vest  over a 5-year  period,  with  20.0% of the
     options becoming exercisable on each successive  anniversary of the date of
     grant.  For the Executive  Plan,  options vest over a 5-year  period,  with
     20.0% becoming  exercisable on each  successive  anniversary of the date of
     grant, but subject to additional  vesting hurdles based on the market price
     of our  common  stock  as  traded  on  Nasdaq  and /or  internal  financial
     performance targets. Regardless of the preceding vesting schedule being met
     for the Executive Plan options,  such options also fully vest at a set date
     in the  future.  (i.e.,  "cliff  vest").  See  "Compensation  of  Executive
     Officers,  Benefits and Related  Matters - Long Term Incentive  Plan" and "
     --- 1998 Executive  Incentive  Plan" for a discussion of the Incentive Plan
     and Executive Plan, respectively.

                                        4
<PAGE>
(2)  The amounts  shown in this column  include the dollar  value of 401(k) plan
     contributions  in Ugly Duckling  common stock made by Ugly Duckling for the
     benefit of our Named  Executive Officers. The stock related portion of this
     amount only includes  vested stock as of December 31, 1999 and the value is
     calculated  with a share price of $6.88,  the closing price of the stock as
     of December 31, 1999 (as reported by Nasdaq).
(3)  These amounts include car allowances as follows: (a) Mr. Garcia -- a $3,258
     car allowance during 1999, a $3,228 car allowance during 1998, and a $2,985
     car allowance during 1997.
(4)  These amounts include $4,850 for Mr.  Sullivan's  personal use of a company
     car for 1999 and $1,156 for a portion of 1998.
(5)  These  amounts  include  an $850 car  allowance  in 1999  and a $1,750  car
     allowance during each of 1998 and 1997.
(6)  Includes  15,001  options that were  cancelled and reissued on November 17,
     1998.
(7)  Includes  8,500  options that were  cancelled  and reissued on November 17,
     1998.
(8)  Employment changes occurred for this officer as follows: Mr. Tesdahl became
     Senior Vice  President  and Chief  Information  Officer of Ugly Duckling on
     February 15, 2000. Prior to that time,  effective November 1998, we revised
     our officer  structure and as part of that  process,  Mr.  Tesdahl  stopped
     being an  executive  officer  for Ugly  Duckling.  Mr.  Tesdahl  began  his
     employment as an executive officer of Ugly Duckling in September 1997.
(9)  Includes  50,000  options that were  cancelled and reissued on November 17,
     1998.
(10) The dollar amount shown represents the market value as of the grant date of
     restricted  stock  awarded  to Mr.  Tesdahl  upon  his  initial  hiring  in
     September 1997. The grant was pursuant to his employment  agreement with us
     and was made outside of the  Incentive  Plan and the  Executive  Plan.  The
     award was for approximately  7,692 shares at $13.00 per share (based on the
     closing price of our stock on the grant date as reported by Nasdaq).  Under
     Mr.  Tesdahl's  employment  agreement,  these shares vested 100% in January
     1998.  At December 31, 1999,  Mr.  Tesdahl  retained  4,565 shares from the
     restricted  stock award,  valued at $31,407 (based on the December 31, 1999
     closing price of our stock of $6.88 per share as reported by Nasdaq).
(11) This amount is for car allowances in 1999, 1998 and 1997.

                        OPTION GRANTS IN LAST FISCAL YEAR

         The  following  table  provides  information  on option  grants for the
fiscal year ended December 31, 1999 to each of our Named Executive Officers.

<TABLE>
<CAPTION>
                                                                                POTENTIAL REALIZABLE
                                        INDIVIDUAL GRANTS                             VALUE AT
                       ----------------------------------------------------        ASSUMED ANNUAL
                       NUMBER OF      PERCENT OF                                   RATES OF STOCK
                       SECURITIES       TOTAL                                    PRICE APPRECIATION
                       UNDERLYING   OPTIONS GRANTED   EXERCISE                   FOR OPTION TERM(1)
                        OPTIONS       TO EMPLOYEES      PRICE    EXPIRATION     --------------------
       NAME            GRANTED (#)   IN FISCAL YEAR    ($/SH)       DATE         5% ($)     10% ($)
       ----            -----------   --------------    ------       ----         ------     -------
<S>                    <C>               <C>            <C>       <C>           <C>        <C>
Ernest C. Garcia II    100,000(2)         3.3%          $5.56      3/2/2009     349,665      886,121
Gregory B. Sullivan    125,000(2)        20.4%          $5.56      3/2/2009     437,082    1,107,651
Steven T. Darak         35,000(2)         5.7%          $5.56      3/2/2009     122,383      310,142
Jon Ehlinger             7,500(3)         1.2%          $5.56      3/2/2009      26,225       66,454
                         2,500(3)         0.4%           8.19     7/28/2009      12,876       32,632
Donald L. Addink        35,000(2)         5.7%          $5.56      3/2/2009     122,383      310,142
                        10,000(3)         1.6%           8.19     7/28/2009      51,506      130,528
Ray Fidel                   --             --              --            --          --           --
Steven A. Tesdahl           --             --              --            --          --           --
</TABLE>

(1)  Potential  Realized Values are net of the exercise price,  but before taxes
     associated with the exercise.  Amounts  represent  hypothetical  gains that
     could be achieved for the respective options if exercised at the end of the
     option term. The assumed 5% and 10% rates of stock price  appreciation  are


                                        5
<PAGE>
     provided  in  accordance  with the  rules of the  Securities  and  Exchange
     Commission  and do not  represent  our estimate or projection of the future
     price of our common stock.  Actual gains, if any, on stock option exercises
     will depend upon the future  market  prices of our common stock on the date
     of exercise.  Accordingly,  there can be no assurance that the values shown
     in the last 2 columns  will be  realized.  The closing  price of our common
     stock on May 1, 2000 was $7.50 per share (as reported by Nasdaq).
(2)  On March 2, 1999 Mr.  Garcia was granted  these options under the Executive
     Plan at an exercise price equal to the fair value of the shares on the date
     of the grant.  The options  have a 10-year  term.  The options  vest over a
     5-year  period,   with  20.0%  becoming   exercisable  on  each  successive
     anniversary of the date of grant. On March 2, 1999, Mr. Sullivan, Mr. Darak
     and Mr.  Addink were granted  these  performance-based  stock option awards
     under  the  Executive  Plan.  They vest over a 5-year  period,  subject  to
     vesting  hurdles based on the market price of our common stock as traded on
     Nasdaq and certain internal target financial performance measures. However,
     even if the hurdles are not met,  these options fully vest on March 2, 2006
     (i.e., "cliff vesting").  The options have 10-year terms. See "Compensation
     of  Executive  Officers,  Benefits  and  Related  Matters - 1998  Executive
     Incentive Plan" for additional information on our Executive Plan.
(3)  These  options  were  granted  to the Named  Executive  Officers  under the
     Incentive  Plan at an exercise  price equal to the fair value of the shares
     on the date of grant.  The options  have a 10-year  term.  The options vest
     over a 5-year period,  with 20.0% becoming  exercisable on each  successive
     anniversary of the date of grant. See "Compensation of Executive  Officers,
     Benefits and Related  Matters - Long Term  Incentive  Plan" for  additional
     information on our Incentive Plan.

                                        6
<PAGE>
                          RECENT OPTION GRANTS IN 2000

     On February 15, 2000, the Compensation  Committee reviewed and approved, in
advance,  grants of stock  options  to Ugly  Duckling  employees.  These  grants
include the right to acquire an aggregate of approximately  15,000 shares of our
common  stock at an  exercise  price of $8.438 per share.  The  options  did not
include awards to any Named Executive Officers.

     On April 17, 2000, the Compensation Committee reviewed and approved a grant
of stock  options  to an  employee.  The grant  included  the  right to  acquire
approximately  5,000 shares of our common  stock at an exercise  price of $7.406
per share. The Board and  Compensation  Committee also approved a grant of 5,000
options under the Executive Plan to each independent director on April 17, 2000.

               AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
                          FISCAL YEAR-END OPTION VALUES

     The table below sets forth information with respect to option exercises and
the number and value of options  outstanding  at  December  31, 1999 held by our
Named Executive Officers. Generally, we have not issued any other forms of stock
based awards.

<TABLE>
<CAPTION>
                                                        NUMBER OF SECURITIES          VALUE OF UNEXERCISED
                                                       UNDERLYING OPTIONS AT        IN-THE-MONEY OPTIONS AT
                         SHARES                        FISCAL YEAR END (#)(1)        FISCAL YEAR END ($)(2)
                       ACQUIRED ON       VALUE       ---------------------------   ---------------------------
       NAME            EXERCISE (#)   REALIZED ($)   EXERCISABLE   UNEXERCISABLE   EXERCISABLE   UNEXERCISABLE
       ----            ------------   ------------   -----------   -------------   -----------   -------------
<S>                    <C>            <C>            <C>           <C>             <C>            <C>
Ernest C. Garcia II         --            --                --        100,000               --    $132,000.00
Gregory B. Sullivan         --            --           207,800        558,200      $400,062.00    $265,828.00
Steven T. Darak             --            --            18,999         91,002      $  6,028.25    $ 67,723.50
Jon D. Ehlinger             --            --             2,000         18,000      $      0.00    $  9,900.00
Donald L. Addink            --            --             6,700         71,800      $  2,975.00    $ 58,100.00
Ray Fidel (3)               --            --                --             --      $      0.00    $      0.00
Steven A. Tesdahl           --            --            15,000         60,000      $ 17,500.00    $ 70,000.00
</TABLE>

(1)  For the Incentive Plan,  generally options vest over a 5-year period,  with
     20% of the options becoming  exercisable on each successive  anniversary of
     the date of grant.  Under the  Executive  Plan,  options vest over a 5-year
     period,  with 20% of the options  becoming  exercisable on each  successive
     anniversary of the date of grant, but subject to additional vesting hurdles
     based on the market  price of our common  stock as traded on Nasdaq  and/or
     certain internal target financial  performance measures. In any event, such
     options  fully  vest on January  15,  2005 or March 2, 2006  (i.e.,  "cliff
     vesting"),  depending  upon  their  issuance  date.  See  "Compensation  of
     Executive Officers, Benefits and Related Matters- Long Term Incentive Plan"
     and " --- 1998 Executive Incentive Plan" for additional  information on the
     Incentive Plan and Executive Plan, respectively.
(2)  In-the-money  options are options for which the option  exercise price (the
     fair market  value on the date of grant) was lower than the market price of
     our common stock on December 31, 1999. The market price of our common stock
     on December 31, 1999 was $6.88 per share based on the closing  price of our
     stock on that  date as  reported  by  Nasdaq.  The  values  in the last two
     columns have not been,  and may never be,  received by the Named  Executive
     Officers.  Actual  gains,  if any, on option  exercises  will depend on the
     value of the common stock on the exercise dates. Accordingly,  there can be
     no assurance  that the values shown in the last 2 columns will be realized.
     The closing price of our common stock on May 1, 2000 was $7.50 per share.
(3)  Prior to December 30, 1999, Mr. Fidel was the President of Ugly  Duckling's
     Cygnet  Dealer  Finance  division.  As of December  30, 1999 Cygnet  Dealer
     Finance was sold to an affiliate of Mr. Garcia and Mr. Fidel's options were
     forfeited as part of the transaction by Mr. Fidel.

                                        7
<PAGE>
                            LONG TERM INCENTIVE PLAN

     In June  1995,  our  stockholders  approved  the Long Term  Incentive  Plan
(Incentive  Plan).  We believe that our Incentive  Plan promotes the success and
enhances  the value of Ugly  Duckling by (1) linking the  personal  interests of
participants to those of our stockholders,  and (2) providing  participants with
an incentive for outstanding performance. Under the Incentive Plan, we may grant
various types of awards to our employees, consultants and advisors, including:

     *    incentive stock options (ISOs),

     *    nonqualified stock options (NQSOs),

     *    performance shares,

     *    restricted stock, and

     *    performance-based awards.

     The Incentive Plan is administered by our board or a board committee (i.e.,
Compensation  Committee),  whose membership qualifies as non-employee  directors
and  outside  directors.   The  Compensation  Committee  has  the  authority  to
administer the plan, including the power to determine -

     *    eligibility,

     *    type and number of awards to be granted, and

     *    terms and  conditions  of any award  granted,  including the price and
          timing of awards,  vesting and acceleration of such awards (other than
          performance-based awards).

     Thus far, we have only granted  ISOs and NQSOs under this plan.  Generally,
these stock  options  have been subject to vesting  over a 5-year  period,  with
20.0% of the  options  becoming  exercisable  by the  holder on each  successive
anniversary date of the grant.  The options  generally expire 10 years after the
grant date. The total number of shares of our common stock  initially  available
for awards under the Incentive  Plan was  1,800,000.  The exercise  price of all
options  granted  under the plan in the past has  equaled or  exceeded  the fair
market value of our common stock on the date of grant. The plan has a "change of
control"  provision  that is  summarized  below  in this  proxy  statement.  See
"Compensation of Executive  Officers,  Benefits and Related Matters -- Change of
Control Arrangements."

     In 1999, the Compensation Committee granted, subject to certain conditions,
approximately  312,250 options under the Incentive Plan. On February 15, 2000 we
granted  15,000 options and on April 17, 2000 we granted 5,000 options under the
Incentive Plan.

     At May  1,  2000  we  had  granted  options  under  the  plan  to  purchase
approximately  1,391,485  shares of our common stock (net of canceled and lapsed
grants) to various  of our  employees,  of which  approximately  1,005,365  were
outstanding. Also at May 1, 2000, there were approximately 408,515 of our shares
that remained available for grant under the plan.

                          1998 EXECUTIVE INCENTIVE PLAN

     The 1998  Executive  Incentive  Plan  (Executive  Plan) was approved by our
stockholders at our 1998 annual meeting. The plan became effective as of January
1998.  Under the  Executive  Plan,  Ugly Duckling may grant ISOs,  NQSOs,  SARs,
performance  shares,  restricted  stock,  and  performance-based  awards  to its
employees,  consultants  and advisors.  Although the Executive Plan allows broad
based  awards to be  granted  and thus is  similar  to the  Incentive  Plan,  we
currently  intend to utilize the Executive Plan primarily for  performance-based
awards to our executives and key employees as noted previously. The total number

                                        8
<PAGE>
of shares of our common stock initially available for awards under the Executive
Plan was 800,000.  The exercise price of all options granted under the Executive
Plan in the past has been equal to the fair market  value of our common stock on
the date of grant.  The plan is administered by the  Compensation  Committee and
has a "change  of  control"  provision  that is  summarized  below in this proxy
statement. See "-- Change of Control Arrangements."

     At May 1, 2000, we had granted  options under the plan to purchase  635,000
shares of our  common  stock  (net of  canceled  and  lapsed  grants)  under the
Executive Plan to various officers of Ugly Duckling,  of which 635,000 are still
outstanding. There were 165,000 shares that remain available for grant under the
plan as of May 1, 2000.

     Other than as summarized and noted above,  the Executive Plan is similar to
the Incentive Plan as described in this proxy statement.

                                  401(K) PLANS

     Under both of our  401(k)  plans,  eligible  employees  may direct  that we
withhold a portion of their compensation,  up to a legally established  maximum,
and  contribute  this  amount  to their  accounts.  We  place  all  401(k)  plan
contributions  in trust funds within our 401(k) plans.  Participants  may direct
the  investment  of their  account  balances  among mutual or  investment  funds
available  under the  plans.  Until June 1, 1999,  the 401(k)  plans  provided a
matching  contribution  ranging  from 10.0% to 25.0% of a  participant's  pretax
contributions  and  discretionary  additional  matchings  by us, if we authorize
them.  Beginning June 1, 1999, the 401(k) plans provide a matching  contribution
of  Ugly  Duckling  stock  of up to 50% for up to the  first  six  percent  of a
participant's  pre-tax  contributions.  The  matching  contribution  vesting and
percentage  match are based  upon  years of  service  with one  hundred  percent
vesting  and fifty  percent  matching  at five  years.  Amounts  contributed  to
participant accounts under the 401(k) plans and any earnings or interest accrued
on the  participant  accounts are  generally  not subject to federal  income tax
until  distributed  to  the  participant  and,  except  in  limited  cases,  the
participant may not withdraw such amounts until death, retirement or termination
of employment.

   CONTRACTS WITH DIRECTORS AND EXECUTIVE OFFICERS AND SEVERANCE ARRANGEMENTS

Ernest C. Garcia II

     On January 1, 1996, we entered into a 3-year employment  agreement with Mr.
Garcia,  our Chairman and Chief Executive  Officer.  This agreement was extended
for another 3-year term effective  December 31, 1998. The agreement  established
Mr.  Garcia's  base salary for 1996 at $120,000  per year and provided a minimum
10.0%  increase  in the  base  salary  each  year  throughout  the  term  of the
agreement.  In addition,  the  agreement  provided for the  continuation  of Mr.
Garcia's  base salary and certain  benefits  for a period of 1 year in the event
Mr. Garcia was  terminated  by us without  cause prior to the  expiration of the
agreement.  It also contained  confidentiality  and non-compete  covenants.  Mr.
Garcia  stepped  down  from his  position  as Chief  Executive  Officer  of Ugly
Duckling in July of 1999 and this agreement terminated at that time.

Donald L. Addink

     On June 1, 1995,  we entered into a 5-year  employment  agreement  with Mr.
Addink,  our Senior  Vice  President  -- Senior  Analyst,  that was  amended and
restated effective August 1, 1997. This restated agreement expires May 31, 2000.
The restated agreement establishes Mr. Addink's base salary at $165,000 per year
beginning on or around the effective date of the restated  agreement,  a $10,000
bonus payment upon execution of the restated  agreement,  certain benefits,  and
the  continuation of Mr. Addink's base salary and certain  benefits for a period
of 1 year (but not to exceed the expiration  date of the agreement) in the event
Mr. Addink is terminated by us without cause prior to expiration of the restated
agreement. It also contains confidentiality and non-compete covenants.  Further,
it  accelerated  the vesting of Mr.  Addink's  100,000 stock options  previously
granted under the Incentive Plan, as set forth in the table below. These options
were originally  granted pursuant to the Incentive Plan's general 5-year vesting
schedule with 20% vesting each year.

                                        9
<PAGE>
                                NUMBER        EXERCISE PRICE      ACCELERATED
     ORIGINAL GRANT DATE      OF SHARES(#)     PER SHARE($)      VESTING DATE
     -------------------      ------------     ------------      ------------
     June 1995                  58,000           $  1.72        August 1, 1997
     June 1996                  25,000              6.75        January 15, 1998
     December 1996              17,000             17.69        August 1, 1997

STEVEN A. TESDAHL

     On August  16,  1997,  we entered  into an  employment  agreement  with Mr.
Tesdahl  that was  amended  as of May 21,  1998.  Mr.  Tesdahl  is  Senior  Vice
President and Chief Information Officer of Ugly Duckling. The agreement provides
for no minimum or maximum term of  employment.  But it does provide for: (1) his
annual  base salary at  $175,000  per year with a minimum  10%  increase on each
anniversary  of the hire date;  (2) an  initial  stock  option  grant to acquire
100,000  shares of our common  stock under the  Incentive  Plan,  with terms and
conditions  consistent with the plan's general terms;  (3) a grant of restricted
stock  valued at $100,000 on the  approximate  effective  date of Mr.  Tesdahl's
employment  with us, which fully vested as of January 15, 1998;  and (4) certain
other benefits.  The agreement  provides for the  continuation of Mr.  Tesdahl's
base  salary for a limited  period in the event he is  terminated  by us without
cause.  The potential  severance  benefit  decreases over time, and goes to zero
after September 1, 2000. The agreement has a "change of control"  provision that
provides  for  certain  rights and  benefits to Mr.  Tesdahl  upon such an event
occurring and either:

     *    he terminates his employment with us within 12 months after the change
          of control; or

     *    we terminate  him without  cause within 90 days prior to the change of
          control or within 12 months after the event.

     If these events occur,  Mr. Tesdahl will receive a termination fee equal to
200% of his then current salary,  and at the time of the change of control,  his
initial  option will fully  vest.  The  agreement  adopts the  Incentive  Plan's
definition  of a "change of control"  and adds an  additional  change of control
event if neither Ernest C. Garcia II nor Gregory B. Sullivan is Chief  Executive
Officer of Ugly Duckling. See " -- Change of Control Arrangements."

GENERALLY

     For additional information on option grants to our executive officers under
the Incentive Plan and Executive Plan, see " - Long Term Incentive Plan" and " -
1998 Executive Incentive Plan."

                         CHANGE OF CONTROL ARRANGEMENTS

LONG TERM INCENTIVE PLAN

     The term  "change  of  control"  is defined  in the  Incentive  Plan and is
summarized  in the next  paragraph  of this  proxy  statement.  Upon a change of
control of Ugly Duckling the  Compensation  Committee,  in its discretion,  will
either -

     *    cause  all  outstanding  options  and  awards to be fully  vested  and
          exercisable and all restrictions to lapse,  allowing  participants the
          right to  exercise  options  and  awards  before the change of control
          occurs (which event would otherwise  terminate  participants'  options
          and awards); or

     *    cause  all  outstanding  options  and  awards  to  terminate,  if  the
          surviving  or resulting  corporation  agrees to assume the options and
          awards on terms that substantially preserve the rights and benefits of
          outstanding options and awards.

                                       10
<PAGE>
     Under the  Incentive  Plan,  a "change of  control"  occurs upon any of the
following events:

     *    a merger or  consolidation  of Ugly Duckling with another  corporation
          where we are not the  surviving  entity or where  our  stock  would be
          converted into cash, securities or other property, other than a merger
          in  which  our   stockholders   before  the   merger   have  the  same
          proportionate ownership after the merger;

     *    with certain  exceptions,  any sale,  lease, or other transfer of more
          than 40% of our assets or our earning power;

     *    our   stockholders   approve  a  plan  of  complete   liquidation   or
          dissolution;

     *    any person (other than a current  stockholder or any employee  benefit
          plan)  becoming  the  beneficial  owner  of 20% or more of our  common
          stock; or

     *    during  any 2-year  period,  the  persons  who are on our board at the
          beginning  of such  period  and  any  new  person  whose  election  or
          nomination  was  approved by  two-thirds  of such  directors  cease to
          constitute a majority of the persons serving on our board.

1998 EXECUTIVE INCENTIVE PLAN

     The  Executive  Plan provides that in the event of a "change of control" of
Ugly  Duckling,  all  outstanding  options and awards  will be fully  vested and
exercisable  and all  restrictions  will lapse unless the surviving or resulting
corporation  agrees to assume the options and awards on terms that substantially
preserve  the rights  and  benefits  of  outstanding  options  and  awards.  The
Executive  Plan and the  Incentive  Plan have the same  definition  for the term
"change of control."

GENERALLY

     For additional information on change of control and severance arrangements,
see  "  --  Contracts  with  Directors  and  Executive  Officers  and  Severance
Arrangements."

           COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     There are no  compensation  committee  interlocks  and no officer or former
officer of ours has ever been a member of our  board's  Compensation  Committee.
See "Certain Relationships and Related Transactions."

                          COMPENSATION OF OUR DIRECTORS

     We pay our independent directors:

     *    an annual retainer of $7,500 per year;

     *    $2,000 for physical attendance at meetings of the board and $1,000 for
          physical  attendance  at meetings of  committees of the board on which
          they serve; and

     *    $1,000 for their  attendance by telephone at meetings of the board and
          $500 for telephonic attendance at committee meetings.

     We also reimburse these directors for reasonable  travel expenses for their
attendance  at these  meetings.  In  addition,  under Ugly  Duckling's  Director
Incentive Plan (Director Plan), upon initial  appointment or initial election to
the board, each of our independent directors receives Ugly Duckling common stock
valued at $30,000 (Director Stock). Director Stock generally vests in increments
of 1/3 over a three-year  period.  When Mr. Abrahams  resigned from the board in
April  of 1999,  we  accelerated  the  vesting  of the  final  one-third  of Mr.
Abrahams' Director Stock in recognition of his services to us as a director.

                                       11
<PAGE>
     On April  20,  1999,  our  board and the  Compensation  Committee  approved
additional  compensation for each of our independent directors.  On that date it
was determined  that each  independent  director would receive a stock option to
purchase  5,000 shares of Ugly Duckling  common stock under the Incentive  Plan.
The options were granted  effective  June 21, 1999 at an exercise price of $6.28
per share (the  closing  price per Nasdaq and the fair market value of our stock
on April 20, 1999),  and fully vested as of June 21, 1999. In 2000,  each of our
independent  directors were also granted 5,000 options under the Executive Plan.
These options are non-qualified  stock options,  and it is our current intention
to have annual option awards to our independent directors.

     We do not  compensate  directors who are also officers of Ugly Duckling for
their service as directors and such directors are not eligible to participate in
our Director Plan.

                                       12
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     The following  table gives  information  as of May 1, 2000,  unless another
date is indicated, concerning:

     *    each beneficial owner of more than 5% of our common stock;

     *    beneficial  ownership by all our directors and all our other executive
          officers  named in the  Summary  Compensation  Table on page 4 of this
          report (Named Executive Officers); and

     *    beneficial  ownership by all our directors and executive officers as a
          group.

     The number of shares beneficially owned by each entity, person, director or
executive  officer is  determined  under rules of the  Securities  and  Exchange
Commission,  and  the  information  does  not  necessarily  indicate  beneficial
ownership  for any  other  purpose.  Under  these  rules,  beneficial  ownership
includes  any shares as to which the  individual  has the sole or shared  voting
power or investment power and also any shares which the individual has the right
to acquire as of July 1, 2000 (60 days after May 1, 1999)  through the  exercise
of any stock option,  warrant or other right. Unless otherwise  indicated,  each
person has sole  investment  and voting  power (or shares  these powers with his
spouse) with respect to the shares set forth in the following table.  Other than
as set forth  below,  we know of no other 5% owner of our common stock as of May
1, 2000.

                                       13
<PAGE>
                           BENEFICIAL OWNERSHIP TABLE

<TABLE>
<CAPTION>
                                                                                    AMOUNT AND NATURE OF          PERCENT OF
TITLE OF CLASS   NAME OF BENEFICIAL OWNER, ADDRESS AND OTHER INFORMATION(1)    BENEFICIAL OWNERSHIP(#)(2)(3)(4)  CLASS(2)(3)(4)
--------------   ----------------------------------------------------------    --------------------------------  --------------
<S>              <C>                                                              <C>          <C>                  <C>
Common Stock     ERNEST C. GARCIA II, Chairman of the Board and 5% Owner.          4,500,000   Direct                 32.48%
                                                                                           0   Indirect
                                                                                      20,000   Vested Options
                                                                                  ----------
                                                                                   4,520,000   Total
                                                                                  ==========

Common Stock     HARRIS ASSOCIATES L.P. (Harris) and an affiliate Harris           1,962,000   Direct                14.12%
                 Associates Investment Trust (Harris Trust), series designated             0   Indirect
                 The Oakmark Small Cap Fund (4), 5% Owner, based on Schedule               0   Vested Options
                 13G filing filed February 7, 2000 and effective as of            ----------
                 December 31, 1999. According to this Schedule 13G, Harris         1,962,000   Total
                 Trust has shared voting and dispositive power over 1,750,000     ==========
                 shares of our common stock and Harris has
                 beneficial ownership of 1,962,000, including the shares
                 beneficially owned by Harris Trust.
                     Two North LaSalle Street, Suite 500
                     Chicago, Illinois 60602-3790

Common Stock     WELLINGTON MANAGEMENT COMPANY, LLP, (4) 5% Owner, based on a        860,000   Direct                 6.19%
                 Schedule 13G filing as of December 31, 1999, by Wellington                0   Indirect
                 Management Company, LLP. According to the filing, Wellington              0   Vested Options
                 Management Company, LLP has shared voting power                  ----------
                 over 264,600 shares of our common stock and shared                  860,000   Total
                 dispositive power over 860,000 shares of our common stock.       ==========
                      75 State Street
                      Boston, Massachusetts 02109

Common Stock     GREGORY B. SULLIVAN, Director, President and Chief Executive         59,800   Direct                 2.58%
                 Officer                                                                   0   Indirect
                                                                                     307,800   Vested Options
                                                                                  ----------
                                                                                     367,600   Total
                                                                                  ==========

Common Stock     STEVEN T. DARAK, Senior Vice President and Chief Financial          140,000   Direct                 1.21%
                 Officer                                                                   0   Indirect
                                                                                      28,999   Vested Options
                                                                                  ----------
                                                                                     168,999   Total
                                                                                  ==========

Common Stock     DONALD L. ADDINK, Senior Vice President and Treasurer                98,000   Direct                   *
                                                                                           0   Indirect
                                                                                      18,700   Vested Options
                                                                                  ----------
                                                                                     116,700   Total
                                                                                  ==========

Common Stock     STEVEN A. TESDAHL, Senior Vice President and Chief                   14,565   Direct                   *
                 Information Officer                                                       0   Indirect
                                                                                      20,000   Vested Options
                                                                                  ----------
                                                                                      34,565   Total
                                                                                  ==========

Common Stock     CHRISTOPHER D. JENNINGS, (5) Director, indirect ownership of          6,444   Direct                   *
                 a warrant to purchase 19,833 shares of our common stock held         19,833   Indirect
                 on behalf of Mr. Jennings by Cruttenden Roth, an investment           5,000   Vested Options
                 banking firm and previous employer of Mr. Jennings. The          ----------
                 warrants are convertible into our common stock at any time           31,277   Total
                 through June 21, 2001 at an exercise price of $9.45 per          ==========
                 share and are fully vested

Common Stock     JOHN N. MACDONOUGH, (5) Director, indirect ownership                  4,444   Direct                   *
                 consists of shares of our common stock acquired by Mr.                  100   Indirect
                 MacDonough's son.                                                     5,000   Vested Options
                                                                                  ----------
                                                                                       9,544   Total
                                                                                  ==========

Common Stock     FRANK P. WILLEY, (5)(6) Director                                     27,144   Direct                 1.29%
                                                                                     147,400   Indirect
                                                                                       5,000   Vested Options
                                                                                  ----------
                                                                                     179,544   Total
                                                                                  ==========
</TABLE>

                                       14
<PAGE>
<TABLE>
<CAPTION>
                                                                                    AMOUNT AND NATURE OF          PERCENT OF
TITLE OF CLASS   NAME OF BENEFICIAL OWNER, ADDRESS AND OTHER INFORMATION(1)    BENEFICIAL OWNERSHIP(#)(2)(3)(4)  CLASS(2)(3)(4)
--------------   ----------------------------------------------------------    --------------------------------  --------------
<S>              <C>                                                              <C>          <C>                  <C>
Common Stock     JON D. EHLINGER, Vice President, Secretary and General                2,000   Direct                   *
                 Counsel                                                                   0   Indirect
                                                                                       3,500   Vested Options
                                                                                  ----------
                                                                                       5,500   Total
                                                                                  ==========

Common Stock     RAY FIDEL, Former President, Cygnet Dealer Finance                   10,000   Direct                   *
                                                                                           0   Indirect
                                                                                           0   Vested Options
                                                                                  ----------
                                                                                      10,000   Total
                                                                                  ==========
                 All directors and executive officers as a group
                    (10 persons)                                                   5,443,729                         38.04%
</TABLE>

*    Represents less than one percent of the outstanding common stock.
(1)  Unless otherwise noted, the address of each of the listed beneficial owners
     of our  common  stock is 2525 East  Camelback  Road,  Suite  500,  Phoenix,
     Arizona 85016.
(2)  "Vested  Options"  are options  that the holder can  exercise as of July 1,
     2000.  These  options were issued under  either the  Incentive  Plan or the
     Executive Plan and their related terms and  conditions,  including  vesting
     schedules.  See "Compensation of Executive  Officers,  Benefits and Related
     Matters - Long Term Incentive Plan" and " - 1998 Executive Incentive Plan."
(3)  Shares of our common  stock that are subject to options,  warrants or other
     rights which are currently exercisable or exercisable within 60 days (i.e.,
     as of July 1, 2000) are treated as  outstanding  for  purposes of computing
     the  percentage of the person  holding the option,  warrant or other right,
     but are not treated as  outstanding  for  computing  the  percentage of any
     other  person.  Except as indicated in footnote (4) below,  the amounts and
     percentages  are  based  upon   13,895,965   shares  of  our  common  stock
     outstanding as of May 1, 2000, net of shares we hold in our treasury.
(4)  Information  in the table that is described as based on Schedule 13G and/or
     amendment  filings was provided to us by the beneficial  owner effective as
     of December 31, 1999, including the amount of securities beneficially owned
     and the percentage of class. We make no  representation  as to the accuracy
     or completeness  of the information  provided in these Schedule 13Gs and/or
     amendments or the  information in the beneficial  ownership  table which is
     based solely on the filings.
(5)  The total and direct ownership for each  independent  board member includes
     4,444 shares of our common stock that we granted  under the Director  Plan.
     We granted and issued shares having a value of $30,000 on or about the date
     of grant (i.e., 4,444 shares of our common stock) to each independent board
     member upon his  appointment  or election to our board in June 1996.  Under
     the Director Plan,  these shares  generally vest over a 3-year period at an
     annual rate of 33%, beginning on the first anniversary date after the grant
     date (June 1996).
(6)  Possible indirect ownership of shares of Ugly Duckling acquired by Fidelity
     National Financial,  Inc. Mr. Willey disclaims beneficial ownership of such
     shares.

                                       15
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     In the most recent fiscal year, we have maintained  business  relationships
and engaged in certain  transactions  with the affiliated  companies and parties
described below. Our plan is that any significant future transactions between us
and our  affiliated  entities,  executive  officers,  directors,  or significant
stockholders  will receive approval of a majority of our independent  directors,
will be fair and  generally  will be on terms  no less  favorable  to us than we
could obtain from non-affiliated parties.

     On December 30, 1999 Ugly Duckling sold its Cygnet Dealer Finance  division
(CDF) to an entity  controlled  by Mr.  Garcia  for an amount  equal to the book
value of CDF,  approximately  $37.5  million.  This  transaction  occurred after
several  attempts  by Ugly  Duckling  to  sell or  finance  CDF,  including  the
retention  and  effort of an  investment  banking  firm to sell CDF in the first
quarter of 1999.  The purchase  price of CDF was paid through the  assumption by
the buyer of approximately $8 million of outstanding debt owed by the Company to
Verde  Investments,  Inc., an affiliate of Mr. Garcia;  a $12 million,  ten-year
promissory  note from the buyer to the Company that is guaranteed by Verde;  and
the remainder in cash.  The Company also received  warrants to acquire up to 50%
of the buyer for $1,  exercisable  beginning  two years from close  though  five
years after the note is paid in full.  The  warrants  would be  forfeited in the
event  that  the $12  million  note is  repaid  in full  within  one  year.  The
percentage of the buyer  purchasable  under the warrants would be reduced to 25%
if the note  were  reduced  to $4  million  within  two  years and to 10% if the
warrant were paid in full within two years.

     As part of the  transaction,  the board  requested  and received a fairness
opinion from an investment  banking firm and the transaction was reviewed by the
Special Transaction Committee of the Board.

     In December,  1999, Verde Investments Inc., an affiliated  company owned by
Ernest C. Garcia, II, the Company's Chairman,  acquired at a 10% discount all of
the sale-leaseback  properties sold to an unrelated  investment company in March
of 1998. We acquired the option to purchase these properties at Verde's purchase
price at any time until December 31, 2000. Under the terms of the sale of Cygnet
Dealer,  the  term  of the  option  was  extended  and now  the  option  expires
simultaneously  with  our  receiving  payment  in full of the $12  million  note
receivable  arising  from  the sale of  Cygnet  Dealer  or  December  31,  2000,
whichever comes later.

     Verde has been one of our lenders for several years.  As noted above,  Ugly
Duckling was released of all liability  under its loan with Verde as part of the
Cygnet  Dealer  Finance  sale.  Mr.  Garcia,  our Chairman  and Chief  Executive
Officer, is also the President and sole stockholder of Verde.

     We believe  that it is  important  for our  directors  and  officers  to be
stakeholders  in Ugly Duckling.  With this in mind, in September 1997, our board
approved a directors' and officers' stock repurchase program (D&O Stock Purchase
Program).  The  program  provided  loans of up to $1.0  million  in total to our
directors and senior  officers to assist them in purchasing  our common stock on
the open market from  time-to-time.  The D&O Stock Purchase Program provides for
unsecured  loans,  with  interest at 10% per year,  and interest  and  principal
payments due at the end of each loan term. These loans were amended to make them
due on demand by Ugly Duckling  effective in 1999.  During 1997, senior officers
purchased  50,000  shares of common  stock  under the  program  and we  advanced
$500,000  for  these  purchases.  During  1998,  senior  officers  purchased  an
additional  40,000  shares of common  stock  under the  program  and we advanced
approximately $400,000 for these purchases. Through March 15, 2000 there were no
additional purchases of common stock under the program. In addition,  there have
been no principal  payments and minimal interest  payments made to Ugly Duckling
since the program began. The table that follows provides additional  information
on the D&O Stock  Purchase  Program  for each of our  executive  officers  as of
year-end 1999.

     During  August  of  1999,  we made  loans to Mr.  Darak,  our  Senior  Vice
President  and Chief  Financial  Officer,  and to Mr.  Addink,  our Senior  Vice
President and Treasurer.  The loans were employee advances.  The indebtedness is
unsecured,  with  interest at 10% per year,  and principal and interest due upon
demand.  There have been no interest or principal  payments made by Mr. Darak or
Mr.  Addink  to Ugly  Duckling  since  the  inception  of the  loans,  or on the
September  1998 or October  1998  loans to Mr.  Darak.  The table  that  follows
provides additional information on outstanding loans to our executive officers.

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<PAGE>
<TABLE>
<CAPTION>
                                                                                          PRINCIPAL        NUMBER OF
                                                                        DATE DEBT       BALANCE OF DEBT     SHARES
NAME & TITLE OF EXECUTIVE OFFICER             NATURE OF DEBT            INCURRED           AT 12/31/      PURCHASED (#)
---------------------------------             --------------            --------           ---------      -------------
<S>                                     <C>                           <C>                  <C>               <C>
Gregory B. Sullivan, CEO,               D&O Stock Purchase Program    11/97 & 5/98         $198,126          20,000
President, & Director

Steven T. Darak, Sr. VP & CFO           D&O Stock Purchase Program    11/97                $100,000          10,000

Steven P. Johnson, former Sr. VP,       D&O Stock Purchase Program    11/97                $100,000          10,000
General Counsel & Secretary(1)

Donald L. Addink, Sr. VP - Treasurer    D&O Stock Purchase Program    11/97                $100,000          10,000

Steven A. Tesdahl, Sr. VP & CIO         D&O Stock Purchase Program    5/98                 $ 98,126          10,000
of Ugly Duckling Car Sales

Other Senior Officers(1)                D&O Stock Purchase Program    11/97                $100,000          10,000

TOTAL for D&O Stock Purchase Program    D&O Stock Purchase Program    11/97 & 5/98         $696,252          70,000


Steven T. Darak, Sr. VP & CFO           Employee Advance              9/98, 10/98 & 8/99   $368,684            --

Don Addink, Sr. VP-Treasurer            Employee Advance              8/99                 $218,942            --
</TABLE>

(1)  As of December 31, 1999, Mr. Johnson and Ugly Duckling  mutually  agreed to
     terminate their  employment  relationship.  In addition,  Mr. Ray Fidel and
     Ugly Duckling also terminated their employment relationship on December 30,
     1999. In connection with these  terminations,  the principal balance of the
     debt was reduced to zero in exchange  for the  company  receiving  the Ugly
     Duckling  stock  initially  purchased by them under the D&O Stock  Purchase
     Program.  Mr. Fidel's exchange  occurred in March of 2000 and Mr. Johnson's
     exchange occurred in May of 2000.

     From April 1998 to May 2000,  Mr.  Jennings,  one of our  directors,  was a
managing  director of  Friedman,  Billings,  Ramsey & Co.,  Inc.,  which makes a
market in our common stock and from time to time may provide  investment banking
and other services to us.

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<PAGE>
                                   SIGNATURES

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


                                        UGLY DUCKLING CORPORATION,
                                        a Delaware corporation


                                        By: /s/ GREGORY B. SULLIVAN
                                            ------------------------------------
                                            Gregory B. Sullivan
                                            Its: Chief Executive Officer

Date: May 10, 2000

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