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

                       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

                                       or

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

               For the quarterly period ended: September 30, 2002

                        Commission File Number 000-20841

                        DriveTime Automotive Group, Inc.
                        (f/k/a Ugly Duckling Corporation)
              (Exact name of registrant as specified in its charter)

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

              4020 E. Indian School Road
                   Phoenix, Arizona                   85018
       (Address of principal executive offices)     (Zip Code)


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

     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.

                                 [X] Yes [ ] No
                                 ---------------



     This  document  serves both as a resource for analysts,  bond holders,  and
other interested persons,  and as the quarterly report on Form 10-Q of DriveTime
Automotive  Group, Inc.  (DriveTime) to the Securities and Exchange  Commission,
which has taken no action to approve or  disapprove  the report or pass upon its
accuracy or adequacy.  Additionally,  this document is to be read in conjunction
with the consolidated financial statements and notes included in Ugly Duckling's
Annual Report on Form 10-K, for the year ended December 31, 2001.


================================================================================
<PAGE>



                        DRIVETIME AUTOMOTIVE GROUP, INC.

                                    FORM 10-Q

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

  <S>                <C>                                                                                               <C>
                                                                                                                      Page
                     Part I - FINANCIAL STATEMENTS
  Item 1.            FINANCIAL STATEMENTS
                     Condensed Consolidated Balance Sheets-- September 30, 2002 and December 31, 2001                   1
                     Condensed Consolidated Statements of Operations-- Three and Nine Months Ended
                           September 30, 2002 and 2001                                                                  2
                     Condensed Consolidated Statements of Cash Flows-- Nine Months Ended
                           September 30, 2002 and 2001                                                                  3
                     Notes to Condensed Consolidated Financial Statements                                               4

  Item 2.            MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS             12
  Item 3.            MARKET RISK                                                                                       32
  Item 4.            CONTROLS AND PROCEDURES
                     Evaluation of Disclosure Controls and Procedures                                                  32
                     Changes in Internal Controls                                                                      32

                     Part II -- OTHER INFORMATION
  Item 1.            LEGAL PROCEEDINGS                                                                                 32
  Item 2.            CHANGES IN SECURITIES                                                                             34
  Item 3.            DEFAULTS UPON SENIOR SECURITIES                                                                   34
  Item 4.            SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                               34
  Item 5.            OTHER INFORMATION                                                                                 34
  Item 6.            EXHIBITS AND REPORTS ON FORM 8-K                                                                  35
                     SIGNATURES                                                                                        35
                     CERTIFICATIONS                                                                                    36


</TABLE>


<PAGE>


                                     ITEM 1.

                        DRIVETIME AUTOMOTIVE GROUP, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                      (In thousands, except share amounts)
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                                 September 30,        December 31,
                                                                                      2002                2001
                                                                                -----------------    ----------------
      <S>                                                                       <C>                  <C>
      ASSETS
      Cash and Cash Equivalents                                                 $          11,420    $          8,572
      Finance Receivables, Net                                                            567,930             495,254
      Note Receivable from Related Party                                                   12,000              12,000
      Inventory                                                                            47,593              58,618
      Property and Equipment, Net                                                          33,447              37,739
      Goodwill                                                                             11,569              11,569
      Other Assets                                                                         11,355              20,006
      Net Assets of Discontinued Operations                                                    -                3,899
                                                                                -----------------    ----------------
                     Total Assets                                               $         695,314    $        647,657
                                                                                =================    ================

      LIABILITIES AND STOCKHOLDERS' EQUITY
      Liabilities:
         Accounts Payable                                                       $           4,182    $          2,850
         Accrued Expenses and Other Liabilities                                            45,999              38,250
         Notes Payable - Portfolio                                                        420,895             377,305
         Other Notes Payable                                                               48,210              52,510
         Subordinated Notes Payable                                                        24,709              31,259
                                                                                -----------------    ----------------
                     Total Liabilities                                                    543,995             502,174
                                                                                -----------------    ----------------
      Stockholders' Equity:
           Preferred Stock $.001 par value, zero and 10,000,000 shares
              authorized, respectively; none issued and outstanding                            -                   -
           Common Stock $.001 par value, 1,000 and 100,000,000 shares
              authorized, respectively; 100 and 18,774,000 issued, respectively;
              and 100 and 12,275,000 outstanding, respectively                                 -                   19
         Additional Paid-in Capital                                                       133,418             173,741
         Retained Earnings                                                                 17,901              12,074
         Treasury Stock, at cost                                                               -             (40,351)
                                                                                -----------------    ----------------
                     Total Stockholders' Equity                                           151,319             145,483
                                                                                -----------------    ----------------
                                                                                $         695,314    $        647,657
                                                                                =================    ================
</TABLE>


     See accompanying notes to Condensed Consolidated Financial Statements.


<PAGE>


                        DRIVETIME AUTOMOTIVE GROUP, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
             Three and Nine Months Ended September 30, 2002 and 2001
                    (In thousands, except cars sold amounts)
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                    Three Months Ended              Nine Months Ended
                                                                      September 30,                   September 30,
                                                               -----------------------------   ----------------------------
                                                                    2002          2001             2002           2001
                                                               -----------------------------   ----------------------------

<S>                                                            <C>              <C>            <C>            <C>
Cars Sold                                                             11,434          11,907        38,802           38,365
                                                               =============================   ============================

Total Revenues                                                 $     157,611    $    145,237   $   488,661    $     450,086
                                                               =============================   ============================

Sales of Used Cars                                             $     121,133    $    110,237   $   383,614    $     346,342
Less:
   Cost of Used Cars Sold                                             72,370          62,622       226,724          196,102
   Provision for Credit Losses                                        37,712          48,755       121,474          119,985
                                                               -----------------------------   ----------------------------
                                                                      11,051         (1,140)        35,416           30,255
                                                               -----------------------------   ----------------------------
Other Income (Expense):
   Interest Income                                                    36,478          35,000       105,047          103,744
   Portfolio Interest Expense                                        (5,551)         (7,489)      (17,945)         (23,500)
                                                               -----------------------------   ----------------------------
      Net Interest Income                                             30,927          27,511        87,102           80,244
                                                               -----------------------------   ----------------------------

Income before Operating Expenses                                      41,978          26,371       122,518          110,499
Operating Expenses:
     Selling and Marketing                                             5,982           6,084        19,732           19,945
     General and Administrative                                       27,104          26,807        78,447           80,879
     Depreciation and Amortization                                     2,120           2,339         6,286            7,181
                                                               -----------------------------   ----------------------------
       Operating Expenses                                             35,206          35,230       104,465          108,005
                                                               -----------------------------   ----------------------------

Income (Loss) before Other Interest Expense                            6,772         (8,859)        18,053            2,494
Other Interest Expense                                                 2,439           2,695         7,073            8,648
                                                               -----------------------------   ----------------------------

Earnings (Loss) before Income Taxes                                    4,333        (11,554)        10,980          (6,154)
Income Taxes                                                           2,004         (4,737)         5,153          (2,523)
                                                               -----------------------------   ----------------------------
Net Earnings (Loss)                                            $       2,329    $    (6,817)   $     5,827    $     (3,631)
                                                               =============================   ============================
</TABLE>


     See accompanying notes to Condensed Consolidated Financial Statements.

<PAGE>



                        DRIVETIME AUTOMOTIVE GROUP, INC.


                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                  Nine Months Ended September 30, 2002 and 2001
                                 (In thousands)
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                                          Nine Months Ended
                                                                                            September 30,
                                                                                     -----------------------------
                                                                                          2002          2001
                                                                                     -----------------------------
<S>                                                                                  <C>              <C>
Cash Flows from Operating Activities:
     Net Earnings (Loss)                                                                   $  5,827    $  (3,631)
Adjusents to Reconcile Net Earnings (Loss) to Net Cash Provided
     by Operating Activities:
     Provision for Credit Losses                                                            121,474       119,985
     Depreciation and Amortization                                                            9,991        10,632
     Loss from Disposal of Property and Equipment                                               916           755
     Deferred Income Taxes                                                                      291             -
     Collections from Residuals in Finance Receivables Sold                                       -         1,136
     Decrease in Inventory                                                                   12,303        16,343
     (Decrease) of Inventory Allowance                                                      (1,278)          (15)
     (Increase) Decrease in Other Assets                                                      7,017      (16,068)
     Increase (Decrease) in Accounts Payable, Accrued Expenses and Other Liabilities          5,049         (499)
     Increase in Income Taxes Payable                                                         5,375         6,802
                                                                                     -----------------------------
         Net Cash Provided by Operating Activities                                          166,965       135,440
                                                                                     -----------------------------
Cash Flows from Investing Activities:
     Increase in Finance Receivables                                                      (360,767)     (313,376)
     Collections on Finance Receivables                                                     187,040       184,926
     Decrease in Investments Held in Trust on Finance Receivables Sold                            -         1,398
     Proceeds from Disposal of Property and Equipment                                         3,140         2,542
     Purchase of Property and Equipment                                                    (10,001)      (10,569)
                                                                                     -----------------------------
         Net Cash Used in Investing Activities                                            (180,588)     (135,079)
                                                                                     -----------------------------
Cash Flows from Financing Activities:
     Initial Deposits at Securitization into Investments Held in Trust                     (22,999)       (6,407)
     Additional Deposits into Investments Held in Trust                                    (66,882)      (69,358)
     Collections from Investments Held in Trust                                              69,458        81,118
     Additions to Notes Payable Portfolio                                                   590,858       447,328
     Repayment of Notes Payable Portfolio                                                 (549,417)     (469,638)
     Additions to Other Notes Payable                                                       137,089        44,232
     Repayment of Other Notes Payable                                                     (138,144)      (19,873)
     Repayment of Subordinated Notes Payable                                                (7,400)       (9,333)
     Proceeds from Additional Paid in Capital                                                     3             -
     Proceeds from Issuance of Common Stock                                                       6            18
                                                                                     -----------------------------
         Net Cash Provided by (Used in) Financing Activities                                 12,572       (1,913)
                                                                                     -----------------------------
Net Cash Provided by Discontinued Operations                                                  3,899           131
                                                                                     -----------------------------
Net Increase (Decrease) in Cash and Cash Equivalents                                          2,848       (1,421)
Cash and Cash Equivalents at Beginning of Period                                              8,572         8,805
                                                                                     -----------------------------
Cash and Cash Equivalents at End of Period                                                $  11,420      $  7,384
                                                                                     =============================
Supplemental Statement of Cash Flows Information:
     Interest Paid                                                                        $  21,319     $  28,437
                                                                                     =============================
     Income Taxes Paid (Received)                                                         $   (583)      $  4,258
                                                                                     =============================
Supplemental Statement of Non-Cash Investing and Financing Activities:
     Other Notes Payable Assumed by Leasor in Sale Leaseback Transaction                   $  4,070       $     -
                                                                                     =============================
     Acquisition of Treasury Stock in conjunction with Severance Agreement                 $     -       $   237
                                                                                     =============================
</TABLE>
     See accompanying notes to Condensed Consolidated Financial Statements.
<PAGE>

                        DRIVETIME AUTOMOTIVE GROUP, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

Note 1.  Basis of Presentation

     Our accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with accounting principles generally accepted in the
United States of America for interim financial information and pursuant to rules
and regulations of the Securities and Exchange Commission.  Accordingly, they do
not include all of the  information  and footnotes  required by such  accounting
principles  generally  accepted  in the United  States of America for a complete
financial  statement  presentation.  In  our  opinion,  such  unaudited  interim
financial  information  reflects  all  adjustments,  consisting  only of  normal
recurring  adjustments,  necessary to present our financial position and results
of operations for the periods  presented.  Our results of operations for interim
periods are not necessarily  indicative of the results to be expected for a full
fiscal year.  Our condensed  consolidated  balance sheet as of December 31, 2001
was derived from our audited consolidated  financial statements as of that date,
but does not include all the  information  and footnotes  required by accounting
principles  generally  accepted in the United States of America.  For a complete
financial statement  presentation,  we suggest that these condensed consolidated
financial  statements  be read in  conjunction  with  the  audited  consolidated
financial  statements  included in our Annual Report on Form 10-K,  for the year
ended  December 31, 2001. All amounts are in thousands with the exception of per
unit and per car data, unless otherwise noted.

Note 2.  Summary of Finance Receivables

     A summary of Finance Receivables, net, follows:
<TABLE>
<CAPTION>

                                       September 30,      December 31,
                                            2002             2001
                                      ----------------------------------
<S>                                   <C>               <C>
Contractually Scheduled Payments      $       799,392   $        694,572
Unearned Finance Charges                    (218,011)          (179,873)
                                      ----------------------------------
Principal Balances, net                       581,381            514,699
Accrued Interest                                6,355              5,824
Loan Origination Costs                          7,275              6,635
                                      ----------------------------------
Loan Receivables                              595,011            527,158
Investments Held in Trust                      90,419             69,996
                                      ----------------------------------
Finance Receivables                           685,430            597,154
Allowance for Credit Losses                 (117,500)          (101,900)
                                      ----------------------------------
Finance Receivables, net              $       567,930   $        495,254
                                      ==================================
</TABLE>

     Investments Held in Trust represent funds held by trustees on behalf of our
securitization   bondholders  and  consist  of  reserve  accounts,   as  further
described,  plus collections in transit.  In connection with its  securitization
transactions,  the Company  provides a credit  enhancement to the investor.  The
Company makes an initial cash deposit, historically ranging from 2.3% to 7.3% of
the initial underlying finance  receivables  principal balance,  into an account
held by the trustee  (reserve  account)  and  pledges  this cash to the trust to
which the finance  receivables were  transferred.  Additional  deposits from the
residual  cash flow  (through the  trustee)  are made to the reserve  account as
necessary to attain and maintain the reserve account at a specified  percentage,
currently  ranging from 8.0% to 11.5%,  of the  underlying  finance  receivables
principal balances.

     On August 15,  2002,  the Company  closed its 23rd  securitization,  2002B.
2002B consists of  approximately  $172.5  million in principal  balances and the
issuance of $150.0  million in Class A bonds,  including a pre-funded  amount of
approximately $27.5 million.  The coupon rate on the Class A bonds is 2.99%, the
initial  deposit  into the  reserve  account is 7.25%,  or  approximately  $12.5
million, and the reserve account target is 11.5%, subject to adjustment upon the
occurrence of specified  Termination Events or Portfolio Performance Events. The
Class A bonds are insured by XL Capital  Assurance,  resulting in the  following
ratings: AAA by Standard and Poor's and Aaa by Moody's.
<PAGE>


Note 3.  Related Party Transactions

     In January 2001, the Company entered into a $35 million senior secured loan
facility as a renewal for a $38 million  senior loan facility  originated in May
1999. As a condition to the $35 million  senior  secured loan  agreement,  Verde
Investments,  Inc. ("Verde"),  an affiliate of Ernest C. Garcia II, Chairman and
the then principal shareholder of the Company, was required to invest $7 million
in the Company  through a subordinated  loan. The funds were placed in escrow as
additional collateral for the $35 million senior secured loan. The funds were to
be released in July 2001 if, among other conditions, the Company had at least $7
million in pre-tax  income  through June of 2001 and, at that time,  Mr.  Garcia
would have guaranteed 33% of the $35 million facility.  The Company did not meet
this pre-tax income  requirement  for the first six months of 2001. Per the loan
agreement,  Mr. Garcia was entitled to receive warrants from the Company for 1.5
million shares of stock, vesting over a one-year period, at an exercise price of
$4.50 subject to certain  conditions.  Also as  consideration  for the loan, the
Company  released  all options to  purchase  real estate that were then owned by
Verde and leased to the Company.  The Company  also granted  Verde the option to
purchase,  at book value, any or all properties  currently owned by the Company,
or acquired by the Company  prior to the earlier of December  31,  2001,  or the
date the loan is  repaid.  Verde  agreed  to lease  the  properties  back to the
Company,  on terms similar to our current leases,  if it exercised its option to
purchase any of the properties.  The loan is secured by a portion of the finance
receivables in the Company's  securitization  transactions but is subordinate to
the senior secured loan facility.  The loan requires quarterly interest payments
at one month LIBOR plus 600 basis  points and is subject to pro rata  reductions
if certain  conditions are met. An independent  committee of the Company's board
reviewed and negotiated the terms of this subordinated loan and the Company also
received an opinion from an investment banker, which deemed the loan fair from a
financial point of view both to the Company and its shareholders. As a result of
the going private  transaction,  the warrants have been terminated.  On April 1,
2002, Verde Investments  transferred to Cygnet Capital  Corporation  ("CCC"), an
affiliate of Verde and Mr. Ernest C. Garcia,  the remaining $2.0 million balance
of the $7.0 million note payable.  All future principal  reductions and interest
payments will be made to CCC. In July 2002,  this remaining  balance was paid in
full.

     Pursuant to the option  discussed  above,  in December 2001 Verde exercised
its right to purchase from, and leaseback to the Company,  six properties having
a net  book  value of  approximately  $6.7  million.  This  sale  and  leaseback
transaction  closed in January 2002. Verde assumed all of the obligations of the
notes  payable  secured by the six  properties.  The  Company has  notified  the
lenders on these six properties that Verde assumed all of the obligations of the
notes  payable  on these  six  properties;  however,  the  Company  has not been
released as the borrower under the notes payable. The six properties were leased
back to the Company on terms  consistent  with other  sale-leasebacks,  12 to 15
year triple net leases,  with  termination  dates  ranging from December 2013 to
December 2016.

     The Note Receivable - Related Party originated from the Company's  December
1999 sale of its Cygnet Dealer Finance subsidiary to Cygnet Capital Corporation,
an  entity  controlled  by Mr.  Garcia.  The $12.0  million  note from CCC has a
10-year term, with interest payable quarterly at 9%, due December 2009. The note
is secured by the capital stock of CCC and  guaranteed by Verde.  The balance of
this loan at September 30, 2002 was $12.0 million.

     On November 26, 2001,  Mr. Garcia  initiated a Tender Offer to purchase all
of the outstanding  shares of the Company's  common stock, not owned by him, for
$2.51 per share. On December 10, 2001, the Company entered into an Agreement and
Plan of Merger with Mr.  Garcia,  Greg Sullivan,  President and Chief  Executive
Officer, and UDC Acquisition Corp. ("Acquisition"), a wholly owned subsidiary of
UDC Holdings Corp. The Merger  Agreement  provided for  Acquisition to amend the
pending Tender Offer to purchase all of the outstanding shares of the Company by
increasing  the offer  from  $2.51 per  share to $3.53 per share  (the  "Amended
Tender Offer"). The Merger Agreement also provided for a second step merger (the
"Merger") at the same price of $3.53 per share (the Amended Tender Offer and the
Merger together are the  "Transaction").  The Merger Agreement  further provided
that the  Transaction  could be  consummated  only if a majority of the minority
shareholders  of the Company,  in the aggregate,  tendered in the Amended Tender
Offer or (if Acquisition did not own 90% or more of the shares after the Amended
Tender Offer) voted in favor of the Merger.  At that time,  there were 4,771,749
shares of the Company's stock not held by the buyout group.  The Transaction was
entered  into  after  review by a special  transaction  committee  comprised  of
independent  members  of the board of  directors.  The  committee  and the board
consulted with and obtained a fairness opinion from an investment  banking firm,
U.S. Bancorp Piper Jaffray. The special committee recommended the Transaction to
the full board and the board  recommended the Transaction to the shareholders of
the Company.  On December 14, 2001,  Acquisition  commenced  the Amended  Tender
Offer. The Company's  shareholders  overwhelmingly  supported the Amended Tender
Offer, which closed on January 16, 2002.  Shareholders tendered 3,806,800 shares
of the Company's  common stock  representing  approximately  79% of the minority
shares.  Upon completion of the Amended Tender Offer and Acquisition  paying the
tendering  shareholders,  Acquisition  owned  approximately  92% of the Company.
Acquisition  received its funding for these  payments from UDC Holdings Corp. On
March 4,  2002,  Acquisition  completed  a short form  merger  with and into the
Company. The Company was the surviving  corporation in the short form merger. As
of September 30, 2002,  the Company has a receivable  from UDC Holdings Corp. of
approximately  $1.7 million  which is  classified  in Other  Assets.  Ray Fidel,

<PAGE>

DriveTime Car Sales and Finance Corporation's executive vice president and chief
operating  officer,  now holds a minority interest in UDC Holdings Corp.,  along
with Mr. Sullivan. Mr. Garcia holds a majority interest in UDC Holdings Corp.

     In  March  and  April  of  2002,  Cygnet  Capital  Corporation,  a  company
affiliated with the Company's Chairman, Mr. Garcia, purchased on the open market
$0.3 million face value of the Company's  2003  debentures and $1.7 million face
value of the Company's 2007 debentures. As of September 30, 2002, Mr. Garcia, or
entities  affiliated with Mr. Garcia,  own approximately $2.6 million face value
of the  Company's  2003  debentures  total  face  value  of  $13.8  million  and
approximately  $4.9 million face value of the Company's  2007  debentures  total
face value of $11.9 million.

     On June 30, 2002, Cygnet Capital Corporation, a company affiliated with the
Company's  Chairman and principal  shareholder,  Mr.  Garcia,  purchased from an
unrelated  party the entire $3.0 million  outstanding  balance of the  Company's
senior  subordinated  notes payable  bearing  interest at 15% per annum and with
principal due February 2003. The senior subordinated notes have been modified to
extend the  principal  maturity  date to  February  12,  2005 and to provide for
earlier payment of principal out of the retained earnings of the Company,  up to
a maximum of $1.0  million  per  quarter,  to the extent  that the Company is in
compliance  with  the  covenant  requirements  of  its  various  lenders.  As of
September 30, 2002, the outstanding balance was $3.0 million.

On April 1, 2002,  the Company  entered into an Aircraft  Lease  Agreement  with
Verde Investments,  Inc. to lease a Raytheon Hawker 125-700A aircraft. The lease
expires on March 31, 2003 and provides for monthly lease payments of $100,000 to
Verde,  plus an initial  security  deposit of  $100,000.  The  Company  was also
responsible  to pay all  costs  and  expenses  relating  to the  Hawker  and its
operations.  During the first nine months of 2002, the Company paid $0.9 million
to Verde for the aircraft  lease and  reimbursement  of various travel costs and
other  expenses  incurred  by Verde on behalf  of the  Company.  This  lease was
terminated on September 24, 2002 and a new Aircraft  Lease  Agreement with Verde
to lease a Challenger  601-3A  aircraft was entered into on September  25, 2002.
The Challenger lease expires on November 1, 2007, and provides for monthly lease
payments of $150,000 to Verde, plus an initial security deposit of $1.0 million.

Note 4.  Notes Payable

     Notes Payable, Portfolio

     A summary of Notes  Payable,  Portfolio at September  30, 2002 and December
31, 2001 follows ($ in thousands):
<TABLE>
<CAPTION>

                                                                                   September 30,         December 31,
                                                                                       2002                  2001
                                                                                --------------------  --------------------
<S>                                                                             <C>                   <C>
Revolving Facility for $100.0 million with Greenwich Capital Financial
     Products, Inc, secured by loan receivables that are not included in
     securitized trusts                                                         $             29,216  $             38,249
Class A obligations issued pursuant to the Company's securitization program,
     secured by underlying pools of finance receivables and investments held in
     trust totaling $607.5 million and $515.2 million September 30, 2002 and
     December 31, 2001, respectively                                                         394,658               341,812
                                                                                --------------------  --------------------
     Subtotal                                                                                423,874               380,061
     Less:  Unamortized Loan Fees                                                              2,979                 2,756
                                                                                --------------------  --------------------
     Total                                                                      $            420,895  $            377,305
                                                                                ====================  ====================
</TABLE>

     Class A  obligations  have interest  payable  monthly at rates ranging from
2.99%  to  8.26%.  Monthly  principal  reductions  on the  Class  A  obligations
approximate  71% of the principal  reductions on the underlying  pool of finance
receivable  loans.  As of September 30, 2002,  the Company was not in compliance
with the monthly and  quarterly  calculation  of the Debt to Tangible  Net Worth
covenant  in its  2002B  Trust,  resulting  in an event  of  default  under  the
agreement.  The breach in covenant was due to an error in the  determination  of
the covenant test at the time the trust documentation was prepared. The insurer,
XL Capital,  has waived the covenant for the month and quarter ending  September
30,  2002,  and its rights  under the event of  default  and agreed to amend the
documentation  with a more appropriate  test going forward.  In the 2001A Trust,
the portfolio breached a portfolio delinquency test, resulting in an increase in
the target reserve account level to 16% from 8%. The reserve level as of October
15, 2002, was 10.4%.

     In March 2002, the Company  renewed its revolving  warehouse  facility with
Greenwich  Capital  Financial  Products,  Inc.  for an  additional  364-day term
through March 2003. The facility  allows for maximum  borrowings of $100 million
during the entire renewed term, as compared to $75 million during the period May
1, 2001, through November 30, 2001, increasing to $100 million during the period
December 1, 2001 through  April 30, 2002,  under the initial  term. In addition,
the 65% cap on the advance rate was removed and the calculation of the warehouse

<PAGE>

advance  relative  to the net  securitization  advance  was  improved by 2%. The
lender  maintains  an option to adjust the  advance  rate to reflect  changes in
market conditions or portfolio performance. The interest rate on the facility is
one-month  LIBOR plus 2.80%  (4.62% as of September  30,  2002,  and 4.72% as of
December 31,  2001).  The facility is secured by loan  receivables  that are not
included in securitized trusts. As a result of the event of default in the 2002B
trust,  although  waived,  an event of default was  triggered  in the  warehouse
agreement.  The  warehouse  lender  has  agreed  to  waive  this  breach  in the
agreement.  At September 30, 2002, the Company was in compliance  with all other
required covenants.

     Other Notes Payable
     A summary of Other Notes  Payable at  September  30, 2002 and  December 31,
2001 follows ($ in thousands):
<TABLE>
<CAPTION>

                                                                                    September 30,        December 31,
                                                                                        2002                 2001
                                                                                 -------------------- --------------------
<S>                                                                              <C>                  <C>
Senior note payable with certain lenders, secured by the capital stock of
    UDRC II, UDRC III, UDRC IV, UDRC V and certain other receivables             $             45,000 $             26,000
Revolving Facility for $36.0 million with Automotive Finance Corporation,
     secured by the Company's automobile inventory                                              3,613               20,963
Other notes payable bearing interest at rates ranging from 7.5% to 11%
     due through October 2015, secured by certain real
     property, and certain property and equipment                                               1,689                6,133
                                                                                 -------------------- --------------------
     Subtotal                                                                                  50,302               53,096
     Less:  Unamortized Loan Fees                                                               2,092                  586
                                                                                 -------------------- --------------------
     Total                                                                       $             48,210 $             52,510
                                                                                 ==================== ====================
</TABLE>

     On July 19, 2002, the Company renewed its senior secured loan facility with
certain  lenders.  The loan  facility  was  increased  from a $35  million  loan
facility to $45 million.  Interest is payable at the greater of one-month  LIBOR
or 2.125%,  plus 500 basis points, a decrease of 100 basis points from the prior
agreement  (7.13% as of September 30, 2002,  and 7.90% as of December 31, 2001),
and has a term of approximately  30 months.  The loan discount at funding was 5%
or $2.25 million and there are no prepayment penalties.  The facility is secured
by the Company's  retained  interests in the residuals  from its  securitization
transactions.  Pursuant to the credit agreement, the Company must make principal
payments of $1.5 million per month commencing  January 2003.  Beginning  January
2004 through the term of the agreement,  the minimum monthly principal  payments
increase  to $2.25  million.  As a result of the event of  default  in the 2002B
trust,  although waived, an event of default was triggered in the senior secured
loan agreement. The senior secured lender has agreed to waive this breach in the
agreement.  At September 30, 2002, the Company was in compliance  with all other
required covenants.

     On August 31,  2001,  the  Company  entered  into a $36  million  revolving
inventory facility with Automotive Finance  Corporation  ("AFC") that expires in
June of 2003.  The  borrowing  base is  calculated on advance rates on inventory
purchased,  ranging from 80% to 100% of the purchase price. The interest rate on
the facility is Prime plus 6.0% (10.75% as of September 30, 2002,  and 10.75% as
of December 31,  2001).  The facility is secured with the  Company's  automobile
inventory.  As a result of the event of  default  in the 2002B  trust,  although
waived,  an event of default was triggered in the revolving  inventory  facility
agreement.  AFC has agreed to waive this breach in the  agreement.  At September
30, 2002, the Company was in compliance with all other required covenants.
<PAGE>

     Subordinated Notes Payable
     A summary of Subordinated  Notes Payable at September 30, 2002 and December
31, 2001 follows ($ in thousands):
<TABLE>
<CAPTION>

                                                                                      September 30,        December 31,
                                                                                           2002                2001
                                                                                     -----------------  -------------------
<S>                                                                                  <C>                <C>
$13.5 million senior subordinated notes payable to a related party, bearing
     interest at 15% per annum payable quarterly, principal balance due
     February 12, 2005 and is senior to subordinated debentures                      $           3,000  $             5,000
$17.5 million subordinated debentures, interest at 12% per annum
     (approximately 18.8% effective rate) payable semi-annually, principal
     balance due October 23, 2003                                                               13,839               13,839
$11.9 million subordinated debentures, interest at 11% per annum
     (approximately 19.7% effective rate) payable semi-annually, principal
     balance due April 15, 2007                                                                 11,940               11,940
$7.0 million senior subordinated note payable to a related party, bearing
      interest at LIBOR plus 6% per annum payable quarterly,
      principal due December 2003                                                                   -                 5,400
                                                                                     -----------------  -------------------
     Subtotal                                                                                   28,779               36,179
     Less:          Unamortized Discount - subordinated debentures                               4,070                4,920
                                                                                     -----------------  -------------------
     Total                                                                           $          24,709  $            31,259
                                                                                     =================  ===================
</TABLE>


Note 5.  Stockholders' Equity

     On December 14,  2001,  Acquisition  commenced  an amended  tender offer to
purchase all of the  Company's  outstanding  shares of common stock not owned by
Mr.  Garcia,  Mr.  Sullivan or  affiliated  entities.  As of March 4, 2002,  the
Company and  Acquisition  effected a statutory  merger under  Section 253 of the
Delaware General  Corporation Law. The Company was the surviving  corporation in
the  merger,  and  following  the  merger  UDC  Holding  Corp.  held  all of the
outstanding shares of the common stock of the Company.  As a result, the Company
became a  privately  held  company and its shares  were  deregistered  under the
Exchange Act.  Therefore,  no public trading  market exists for its shares.  The
Company  continues  to file  certain  reports  under the Exchange Act due to the
listing of certain debt securities listed on the American Stock Exchange. On May
31,  2002,  UDC  Holding  Corp.  conveyed  all of the stock of the Company to DT
Holdings Corp., a 100% owned subsidiary of UDC Holdings Corp.

     Shortly  after the  expiration  of the Amended  Tender  Offer,  the Company
mailed to the  shareholders  who did not tender their shares a notice  outlining
procedures  they were  required  to follow if they  wished to  dissent  from the
Merger  and  seek   appraisal  of  their  shares.   Under  Delaware  law,  these
shareholders  had 20 days from the date of the  mailing  of the notice to notify
the Company of their intention to assert  appraisal  rights.  If such notice was
made  timely,  dissenting  shareholders  were  required  to file a petition  for
appraisal in the  Delaware  Court of Chancery  within 120 days of the  effective
date of the Merger,  in order to preserve their appraisal right.  Dissenters who
failed to file a petition  for  appraisal  within  this time period will only be
entitled to the merger  consideration  of $3.53 per share.  Two appraisal rights
actions have been filed in Delaware  requesting a valuation of the shareholders'
UDC  shares.  The  court now  determines  which  shareholders  are  entitled  to
appraisal rights and appraises the shares of such shareholders. UDC Holdings has
agreed  to  fund  the  payment  of the  final  appraisal  amount  to  dissenting
shareholders.  The only  remaining  outstanding  shares of  common  stock of the
Company are the 100 shares of common stock issued upon  conversion of the shares
of UDC  Acquisition  Corp.  common  stock.  All of these  shares  are held by DT
Holdings Corp., a 100% owned subsidiary of UDC Holdings Corp.


Note 6.  Business Segments

     The Company has three distinct business  segments.  These consist of retail
car sales operations (Retail Operations),  the income resulting from the finance
receivables  generated at the Company dealerships  (Portfolio  Operations),  and
corporate and other operations  (Corporate  Operations).  In computing operating
profit by business segment, the following items were considered in the Corporate
Operations category:  portions of administrative expenses,  interest expense and
other items not considered  direct operating  expenses.  Identifiable  assets by
business segment are those assets used in each segment of Company operations.
<PAGE>

     A summary of operating  activity by business segment for the three and nine
months ended September 30, 2002 and 2001 follows:
<TABLE>
<CAPTION>

                                                     Retail        Portfolio       Corporate         Total
                                                  -------------- --------------- -------------- ----------------
<S>                    <C> <C>
Three months September 30, 2002:
Sales of Used Cars                                $     121,133                                 $       121,133
Less: Cost of Cars Sold                                  72,370                                          72,370
    Provision for Credit Losses                          28,890           8,822                          37,712
                                                  -------------- --------------- -------------- ----------------
                                                         19,873         (8,822)                          11,051
Net Interest Income                                                      30,927                          30,927
                                                  -------------- --------------- -------------- ----------------
Income before Operating Expenses                         19,873          22,105                          41,978
                                                  -------------- --------------- -------------- ----------------
Operating Expenses:
    Selling and Marketing                                 5,982                                           5,982
    General and Administrative                           12,851           7,364          6,889           27,104
    Depreciation and Amortization                         1,107             237            776            2,120
                                                  -------------- --------------- -------------- ----------------
                                                         19,940           7,601          7,665           35,206
                                                  -------------- --------------- -------------- ----------------
Operating Income (Loss) before Other Interest
Expense                                           $        (67)  $       14,504  $     (7,665)  $         6,772
                                                  ============== =============== ============== ================

Capital Expenditures                              $       5,555             226            452  $         6,233
                                                  ============== =============== ============== ================
Identifiable Assets, Excluding Net Assets
      of Discontinued Operations                  $      79,655         593,065         22,594  $       695,314
                                                  ============== =============== ============== ================

                                                     Retail        Portfolio       Corporate         Total
                                                  -------------- --------------- -------------- ----------------
Three months ended September 30, 2001:
Sales of Used Cars                                $     110,237                                 $       110,237
Less: Cost of Cars Sold                                  62,622                                          62,622
    Provision for Credit Losses                          23,223          25,532                          48,755
                                                  -------------- --------------- -------------- ----------------
                                                         24,392        (25,532)                         (1,140)
Net Interest Income                                                      27,511                          27,511
                                                  -------------- --------------- -------------- ----------------
Income before Operating Expenses                         24,392           1,979                          26,371
                                                  -------------- --------------- -------------- ----------------
Operating Expenses:
    Selling and Marketing                                 6,084                                           6,084
    General and Administrative                           13,867           7,286          5,654           26,807
    Depreciation and Amortization                         1,419             236            684            2,339
                                                  -------------- --------------- -------------- ----------------
                                                         21,370           7,522          6,338           35,230
                                                  -------------- --------------- -------------- ----------------
Income (loss) before Other Interest Expense       $       3,022  $      (5,543)  $     (6,338)  $       (8,859)
                                                  ============== =============== ============== ================

Capital Expenditures                              $        273              131          2,043  $         2,447
                                                  ============== =============== ============== ================
Identifiable Assets, Excluding Net Assets

      of Discontinued Operations                  $      84,344         496,775         72,577  $       653,696
                                                  ============== =============== ============== ================

<PAGE>

                                                     Retail         Portfolio      Corporate         Total
                                                  -------------- --------------- -------------- ---------------
Nine Months Ended September 30, 2002:
Sales of Used Cars                                $     383,614                                 $       383,614
Less: Cost of Cars Sold                                 226,724                                         226,724
    Provision for Credit Losses                          84,838          36,636                         121,474
                                                  -------------- --------------- -------------- ----------------
                                                         72,052        (36,636)                          35,416
Net Interest Income                                                      87,102                          87,102
                                                  -------------- --------------- -------------- ----------------
Income before Operating Expenses                         72,052          50,466                         122,518
                                                  -------------- ------------------------------ ----------------
Operating Expenses:
    Selling and Marketing                                19,732                                          19,732
    General and Administrative                           39,296          21,193         17,958           78,447
    Depreciation and Amortization                         3,308             736          2,242            6,286
                                                  -------------- --------------- -------------- ----------------
                                                         62,336          21,929         20,200          104,465
                                                  -------------- --------------- -------------- ----------------
Income (loss) before Other Interest Expense       $       9,716       $  28,537  $    (20,200)  $        18,053
                                                  ============== =============== ============== ================

Capital Expenditures                              $       6,759             520          2,722  $        10,001
                                                  ============== =============== ============== ================
Identifiable Assets, Excluding Net Assets
      of Discontinued Operations                  $      79,655         593,065         22,594  $       695,314
                                                  ============== =============== ============== ================

                                                     Retail        Portfolio       Corporate         Total
                                                  -------------- --------------- -------------- ----------------
Nine Months Ended September 30, 2001:
Sales of Used Cars                                $     346,342                                 $       346,342
Less: Cost of Cars Sold                                 196,102                                         196,102
    Provision for Credit Losses                          71,773          48,212                         119,985
                                                  -------------- --------------- -------------- ----------------
                                                         78,467        (48,212)                          30,255
Net Interest Income                                                      80,114            130           80,244
                                                  -------------- --------------- -------------- ----------------
Income before Operating Expenses                         78,467          31,902            130          110,499
                                                  -------------- --------------- -------------- ----------------
Operating Expenses:
    Selling and Marketing                                19,945                                          19,945
    General and Administrative                           43,380          22,653         14,846           80,879
    Depreciation and Amortization                         4,108             732          2,341            7,181
                                                  -------------- --------------- -------------- ----------------
                                                         67,433          23,385         17,187          108,005
                                                  -------------- --------------- -------------- ----------------
Income (loss) before Other Interest Expense       $      11,304  $        8,517  $    (17,057)  $         2,494
                                                  ============== =============== ============== ================

Capital Expenditures                              $       3,517             718          6,334  $        10,569
                                                  ============== =============== ============== ================
Identifiable Assets, Excluding Net Assets
        of Discontinued Operations                $      84,344         496,775         72,577  $       653,696
                                                  ============== =============== ============== ================
</TABLE>

Note 7.  Use of Estimates

     The preparation of our condensed consolidated financial statements requires
us to make estimates and  assumptions  that affect the reported amount of assets
and liabilities and disclosure of contingent  assets and liabilities at the date
of the financial  statements  and the reported  amounts of revenues and expenses
during the reporting period. Actual results could differ from our estimates.

Note 8.  Reclassifications

     We have made certain  reclassifications  to previously reported information
to conform to the current presentation.
<PAGE>

Note 9.  Recent Accounting Pronouncements

     The Company adopted the provisions of Statement No. 141 as of July 1, 2001,
and Statement 142 effective  January 1, 2002.  Statement No. 141 required,  upon
adoption of Statement No. 142, that the Company evaluate its existing intangible
assets and goodwill that were acquired in a prior purchase business combination,
and make any  necessary  reclassifications  in  order  to  conform  with the new
criteria  in  Statement  No.  141  for  recognition  apart  from  goodwill.   In
conjunction  with the adoption of Statement  No. 142, the Company has  allocated
the entire goodwill balance to the Retail Operations Segment.  During the second
quarter of 2002, the Company finalized the required impairment tests of goodwill
as of January 1, 2002.  The Company does not have an impairment of goodwill.  As
of September 30, 2002,  the Company has  unamortized  goodwill of  approximately
$11.6 million within the retail segment. In addition, upon adoption, the Company
discontinued  amortizing goodwill as of the date of adoption.  For the three and
nine months ended September 30, 2001, the Company had approximately $0.2 million
and $0.7 million,  respectively,  in amortization  expense.  The following table
presents the impact of Statement No. 142 on net earnings (loss) had the standard
been in effect for the three and nine months ended September 30, 2001:

<TABLE>
<CAPTION>
                                           Three Months Ended                Nine Months Ended
                                              September 30,                    September 30,
                                     -------------------------------- --------------------------------
                                          2002             2001            2002             2001
                                     -------------------------------- --------------------------------
<S>                                  <C>              <C>             <C>             <C>
Reported net earnings (loss)         $       2,329    $       (6,817) $       5,827   $        (3,631)
Adjustments:
   Amortization of Goodwill                     -                 240            -                 719
   Income tax effect                            -                (98)            -               (295)
                                     -------------------------------- --------------------------------
Net Adjustments                                 -                 142            -                 424
                                     -------------------------------- --------------------------------
Adjusted net earnings                $       2,329    $       (6,675) $       5,827   $        (3,207)
                                     ================================ ================================
</TABLE>






<PAGE>


                                     ITEM 2.

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                                       AND
                              RESULTS OF OPERATIONS

Introduction

     We operate the largest chain of buy-here  pay-here used car  dealerships in
the United States. At September 30, 2002, we operated 76 dealerships  located in
eleven metropolitan areas in eight states. We have one primary line of business:
to sell and finance  quality used vehicles to customers  within what is referred
to as the  sub-prime  segment of the used car market.  The  sub-prime  market is
comprised of customers who typically have limited credit histories,  low incomes
or past credit problems. References to DriveTime Automotive Group, Inc. ("DTAG")
as the largest  chain of buy-here  pay-here used car  dealerships  in the United
States is  management's  belief based upon the knowledge of the industry and not
on any current independent third party study.

     On  September  1, 2002,  we changed the name of the  Company  for  business
purposes  from Ugly  Duckling  to  DriveTime.  We changed  the legal name of the
corporation from Ugly Duckling  Corporation to DriveTime  Automotive Group, Inc.
in September  2002. The goal of the name change is to attract a higher volume of
our better  customers,  reduce  loan  losses and  improve  profitability.  After
extensive name and brand development  research,  the name DriveTime was selected
because it  represented  the new image and direction of the Company.  Our vision
for the Company is to be the auto  dealership and finance  company of choice for
people with credit issues,  large and small.  DriveTime means Innovative  Credit
Solutions, Quality Vehicles, and Outstanding Customer Service.

     Consistent  with our new name and the vision for the Company,  we have made
improvements  to the  way we do  business  and the  product  we  provide  to our
customers. Some of the changes include:

     o    Inventory - a wider variety of higher quality, late model vehicles,
     o    DriveCare - a standard 90-day,  3,000 mile limited  warranty  covering
          major mechanical items and air conditioning,
     o    RateAdvantage  - a new  interest  rate  program  offering  lower rates
          depending  on the  customer's  credit  history  and  size of the  down
          payment,
     o    VIP  Program - existing  customers  with good  payment  histories  are
          eligible to finance their next vehicle with lower  interest  rates and
          down payments,
     o    Customer  Service - we are  committed  to provide a  straight-forward,
          professional and friendly experience for our customers,
     o    Advertising - a new aspirational  advertising  campaign  launched that
          targets  customers  with small and large credit  problems,  and target
          regional,  retail advertising  designed to increase application volume
          and dealership traffic, and
     o    Facilities - all of our 76 dealerships received a facelift,  including
          new  signage,  flooring,  furniture,  paint,  wallpaper  and  awnings,
          totaling approximately $6.3 million.

     Our overall  target  customer  population  and our business  model have not
significantly  changed.  However,  through risk  management and analysis we have
been able to credit grade our customer base, and as part of DriveTime, we intend
to shift the mix of our loans within our  sub-prime  target  market toward those
grades  with lower loss rates.  In  addition,  we have  improved  our  inventory
because we determined that  historically  our credit losses are lower for better
vehicles across all our credit grades. The goals for DriveCare and RateAdvantage
are to increase volume while at the same time reducing loan losses through lower
vehicle repair costs and lower loan payment amounts for our customers.

     We believe the changes we have  implemented in conjunction  with the change
to DriveTime will have long-term  benefits to the Company,  including  enhancing
volume, lowering credit losses and improving profitability.  However,  launching
DriveTime  negatively  impacted  earnings  during  the  3rd  quarter  due to the
write-off of certain  property and equipment of  approximately  $0.8 million and
other launch related expenses of approximately $0.6 million. The new branding of
the DriveTime  name may have a short term negative  impact on sales volume until
the better  inventory,  customer  service and the new DriveTime  products become
recognized  within  our  individual  markets  through  marketing,   advertising,
referrals,  word of  mouth  and  other  promotional  activities.  The  month  of
September  saw a dip in sales  volume due to the  anticipated  initial  customer
uncertainty related to the name change.  However, sales volumes have returned to
pre-name change levels in October.  Ongoing  depreciation  expense will increase
related to the $6.3 million of dealership improvements. In addition, we estimate
the overall  impact on interest  income  related to lower  rates  offered  under
RateAdvantage  and the VIP  Program  will be to lower the  portfolio's  weighted
average contract APR by approximately 100 basis points or more.
<PAGE>

     As a buy-here  pay-here dealer,  we offer the customer  certain  advantages
over more traditional financing sources including:

     o    expanded credit solutions,
     o    standard limited warranty on virtually every vehicle,
     o    flexible payment terms,  including  structuring loan payment due dates
          as weekly or bi-weekly,  often coinciding with the customer's  payday,
          and
     o    the ability to make payments in person at the dealerships.  This is an
          important  feature  to many  sub-prime  borrowers  who  may  not  have
          checking  accounts or are otherwise unable to make payments by the due
          date through use of the mail due to the timing of paydays.

     We  distinguish  our  retail  operations  from  those of  typical  buy-here
pay-here dealers through our:
<TABLE>
<CAPTION>
<S>  <C>  <C>                                               <C>  <C>
     o    dedication to customer service,                   o    advertising and marketing programs,
     o    larger and newer  inventories of used cars,       o    upgraded facilities, and
     o    network of multiple locations,                    o    centralized purchasing.
</TABLE>

     We  finance  substantially  all  of the  used  cars  that  we  sell  at our
dealerships  through  retail  installment  loan  contracts.  Subject  to certain
underwriting  standards and the discretion of our dealership or sales  managers,
potential customers must meet our formal underwriting  guidelines before we will
agree to finance the purchase of a vehicle. Our employees analyze and verify the
customer credit application  information,  and subsequently make a determination
whether to provide financing to the customer.

     Our business is divided into three operating  segments:  Retail,  Portfolio
and Corporate  Operations.  Information  regarding our operating segments can be
found in Note (6) of the Notes to Condensed  Consolidated  Financial  Statements
contained   herein.   Operating   segment   information   is  also  included  in
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations - Business Segment Information" found below.

     In the  following  discussion  and  analysis,  we  explain  the  results of
operations and general  financial  condition of DTAG. In particular,  we analyze
and explain the changes in the results of  operations  of our business  segments
for the three and nine months ended September 30, 2002 and 2001. All amounts are
presented in thousands except per unit and per car data, unless otherwise noted.

During the third quarter of 2002 we:

     o    Increased revenues to $157.6 million,  an 8.5% increase over the third
          quarter of 2001,
     o    Closed our 23rd Securitization,  insured by XL Capital Assurance, with
          loan principal  balances of  approximately  $211.3 million and Class A
          bonds issued of $150.0 million,
     o    Expanded  the  RateAdvantage  interest  rate  program  to  all  of our
          markets,  offering  lower rates  depending  on the  customer's  credit
          history and size of the down payment,
     o    Expanded the DriveCare  limited  warranty  program to all our markets,
          providing a 90-day,  3,000 mile,  limited warranty on major mechanical
          items and air conditioning,
     o    Continued to make  improvements to our business  model,  repositioning
          the Company to focus on providing our customers with innovative credit
          solutions, quality vehicles, and outstanding customer service,
     o    Refurbished all 76 existing  dealerships  prior to the official launch
          of DriveTime  in  September  2002,  resulting  in  approximately  $6.3
          million of capital expenditures,
     o    Entered  into an  agreement  to  purchase  1,941 new  Daewoo  vehicles
          (consisting of Leganza and Nubira  models) from the Daewoo  bankruptcy
          estate- we believe these  vehicles,  which include the  manufacturer's
          basic limited warranty of 3 years/36,000  miles and powertrain limited
          warranty of 5  years/60,000  miles,  will  enhance the products we are
          offering with the rollout of DriveTime, and
     o    Renewed our senior  secured loan  facility and  increased the facility
          from a $35 million to a $45 million loan facility.




<PAGE>
<TABLE>
<CAPTION>

                                                                         At or For the Three Months Ended
                                              --------------------------------------------------------------------------------------
Selected Consolidated Financial Data            Sept 30,     June 30,    March 31,    Dec 31,     Sept 30,    June 30,    March 31,
(in thousands, except per car sold data)          2002         2002        2002        2001         2001       2001         2001
                                              --------------------------------------------------------------------------------------
<S>                                           <C>           <C>         <C>          <C>         <C>        <C>          <C>
Operating Data:
Total Revenues                                $    157,611  $  155,986  $   175,064  $  121,292  $  145,237 $    140,819 $   164,030
Sales of Used Cars                            $    121,133  $  120,247  $   142,234  $   88,018  $  110,237 $    105,919 $   130,186
Earnings before Interest, Taxes, Depr.
      & Amort.                                $     14,443  $   14,556  $    13,285  $    5,423  $      969 $     14,518 $    17,105
E-Commerce Revenue as Percent of Sales of
      Used Cars                                      13.2%       14.1%        13.8%       13.8%       14.2%        14.4%       11.6%
Number Dealerships in Operation                         76          76           76          76          76           77          77
Average Sales per Dealership per Month                  50          53           67          41          52           50          64
Number of Used Cars Sold                            11,434      12,068       15,300       9,353      11,907       11,607      14,851
Sales Price - Per Car Sold                    $     10,594  $    9,964  $     9,296  $    9,411  $    9,258 $      9,125 $     8,766
Cost of Sales - Per Car Sold                  $      6,329  $    5,911  $     5,426  $    5,549  $    5,259 $      5,224 $     4,905
Gross Margin - Per Car Sold                   $      4,265  $    4,053  $     3,870  $    3,862  $    3,999 $      3,901 $     3,861
Provision - Per Car Sold                      $      3,298  $    3,182  $     2,965  $    3,324  $    4,095 $      2,775 $     2,627
Total Operating Expense - Per Car Sold        $      3,079  $    2,797  $     2,320  $    3,765  $    2,959 $      3,042 $     2,523
Total Operating Income (Loss) - Per Car Sold  $        592  $      518  $       329  $    (413)  $    (744) $        446 $       416
Total Operating Income (Loss)                 $      6,772  $    6,247  $     5,034  $  (3,865)  $  (8,859) $      5,174 $     6,179
Earnings before Income Taxes                  $      4,333  $    3,919  $     2,728  $  (6,392)  $ (11,554) $      2,312 $     3,088
Cost of Used Cars as Percent of Sales                59.7%       59.3%        58.4%       59.0%       56.8%        57.3%       56.0%
Gross Margin as Percent of Sales                     40.3%       40.7%        41.6%       41.0%       43.2%        42.7%       44.0%
Provision as Percent of Originations                 30.9%       32.2%        32.3%       35.5%       44.7%        31.1%       31.0%
Total Operating Expense - % of Total
      Revenues                                       22.3%       21.6%        20.3%       29.0%       24.3%        25.1%       22.8%
Segment Operating Expense Data:
Retail Operating Expense - Per Car Sold       $      1,744  $    1,676  $     1,449  $    1,932  $    1,795 $      1,934 $     1,590
Retail Operating Expense-% of Used Car Sales         16.5%       16.8%        15.6%       20.5%       19.4%        21.2%       18.1%
Corporate/Other Expense - Per Car Sold        $        670  $      514  $       427  $      828  $      532 $        503 $       376
Corporate/Other Expense - % of Total Revenue          4.9%        4.0%         3.7%        6.4%        4.4%         4.1%        3.4%
Portfolio Exp. Annualized -
      % of End of Period Principal
Balance                                               5.2%        5.2%         5.0%        7.3%        5.6%         5.8%        6.2%
Balance Sheet Data:
Finance Receivables, net                      $    567,930  $  531,928  $   514,329  $  495,254  $  501,048 $    544,585 $   522,893
Inventory                                     $     47,593  $   38,148  $    39,471  $   58,618  $   47,414 $     40,772 $    43,434
Total Assets                                  $    695,314  $  644,951  $   637,396  $  647,657  $  657,740 $    678,950 $   659,470
Portfolio Notes Payable                       $    420,895  $  398,640  $   381,208  $  377,305  $  386,572 $    415,877 $   390,615
Subordinated Notes Payable                    $     24,709  $   25,813  $    28,130  $   31,259  $   32,600 $     34,951 $    40,807
Other Notes Payable                           $     48,210  $   25,690  $    29,753  $   52,510  $   41,646 $     42,495 $    39,444
Total Debt                                    $    493,814  $  450,143  $   439,091  $  461,074  $  460,818 $    493,323 $   470,866
Total Stockholders' Equity                    $    151,319  $  148,990  $   146,859  $  145,483  $  151,550 $    158,604 $   157,222
Total Debt to Equity                                   3.3         3.0          3.0         3.2         3.0          3.1         3.0
Loan Portfolio Data:
Interest Income                               $     36,478  $   35,739  $    32,830  $   33,274  $   35,000 $     34,900 $    33,844
Average Yield on Portfolio                           25.9%       26.6%        25.9%       25.8%       26.5%        26.7%       26.3%
Portfolio Interest Expense                    $      5,551  $    6,251  $     6,143  $    6,957  $    7,489 $      7,492 $     8,519
Average Borrowing Cost                                5.8%        7.1%         7.0%        7.5%        8.0%         8.3%        8.9%
Principal Balances Originated                 $    122,020  $  119,389  $   140,455  $   87,452  $  109,139 $    103,615 $   126,015
Principal Balances Originated as % of Sales         100.7%       99.3%        98.7%       99.4%       99.0%        97.8%       96.8%
Number of Loans Originated                          11,404      12,016       15,225       9,283      11,844       11,558      14,776
Average Original Amount Financed              $     10,700  $    9,936  $     9,225  $    9,421  $    9,215 $      8,965 $     8,528
Number of Loans Originated as % of Units
      Sold                                           99.7%       99.6%        99.5%       99.3%       99.5%        99.6%       99.5%
Portfolio Delinquencies:
      Current                                        65.5%       70.3%        72.4%       64.5%       67.4%        70.2%       73.0%
      1 to 30 days                                   26.2%       23.1%        21.9%       26.2%       24.0%        23.0%       21.2%
      31 to 60 days                                   5.0%        3.9%         3.3%        5.6%        5.3%         4.1%        3.3%
      Over 60 days                                    3.3%        2.7%         2.4%        3.7%        3.3%         2.7%        2.5%
Principal Outstanding                         $    581,381  $  565,382  $   543,842  $  514,699  $  537,946 $    534,766 $   535,039
Number of Loans Outstanding                         85,252      86,037       84,821      82,254      85,961       86,446      87,033
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

Sales of Used  Cars and Cost of Used Cars Sold

                                      Three Months Ended                              Nine Months Ended
                                         September 30,                                   September 30,
                                ------------------------------    Percentage    ------------------------------   Percentage
                                     2002           2001            Change           2002           2001           Change
                                ------------------------------  --------------- ------------------------------ ---------------

<S>                             <C>             <C>             <C>             <C>              <C>             <C>
Number of Used Cars Sold               11,434           11,907         (4.0%)          38,802           38,365          1.1%
                                ==============================                  ==============================

Sales of Used Cars              $     121,133   $      110,237           9.9%   $     383,614    $     346,342         10.8%
Cost of Used Cars Sold                 72,370           62,622          15.6%         226,724          196,102         15.6%
                                ------------------------------                  ------------------------------
Gross Margin                    $      48,763           47,615           2.4%   $     156,890    $     150,240          4.4%
                                ==============================                  ==============================
Gross Margin %                          40.3%            43.2%                          40.9%            43.4%

Per Car Sold:
Sales                           $      10,594   $        9,258          14.4%   $       9,886    $       9,028          9.5%
Cost of Used Cars Sold                  6,329            5,259          20.4%           5,843            5,111         14.3%
                                ------------------------------                  ------------------------------
Gross Margin                    $       4,265   $        3,999           6.6%           4,043            3,916          3.3%
                                ==============================                  ==============================
</TABLE>

     For the three months  ended  September  30,  2002,  the number of cars sold
decreased  4.0% from the prior year,  and remained  relatively  constant for the
nine months ended September 30, 2002,  compared to the same periods of the prior
year.  Revenues from Sales of Used Cars  increased  9.9% and 10.8% for the three
and nine months ended  September  30, 2002,  respectively,  compared to the same
periods  of 2001.  The  decline  in the  number of used  cars sold is  primarily
related to the initial  customer  uncertainty in September  associated  with the
launch of  DriveTime.  We  anticipated  a  short-term  decline in sales  volumes
related to the DriveTime launch, and October sales volumes increased as planned,
and are in excess of 2001 levels.  Through our  analysis of the primary  factors
that influence  loan  performance,  we determined  that a higher cost and better
quality  vehicle  positively  affects the gross loan loss rate across all credit
grades.  We made a decision  to upgrade  the  quality of our  vehicle  inventory
throughout  2001 and have  continued  to increase the quality of our vehicles in
the nine months ended  September 30, 2002. As a result,  the total Sales of Used
Cars,  total Cost of Used Cars Sold,  the average  sales price,  and the average
cost of used cars sold  increased.  The average sales price  increased 14.4% and
the cost of a vehicle increased 20.4% compared to the third quarter of 2001. The
average dollar gross margin per car had a 6.6% increase between periods. When we
increased the quality and related cost of vehicles,  the margin  decreased  from
43.2% to 40.3%,  because we do not calculate sales price as a direct  percentage
of cost.

     Our Internet site continues to be a valuable tool  generating a steady flow
of credit  applications,  which lead to the closing of sales at our dealerships.
We accept credit applications from potential customers via our website,  located
at www.drivetime.com. Our employees review the credit applications received over
the web,  and then  contact  the  customers  and  schedule  appointments  at our
dealerships.  During the third  quarter of 2002,  applications  received via our
internet site generated  1,500 cars sold,  down from 1,730 for the third quarter
2001. We believe the decrease is temporary and is related to the switch from the
prior Ugly Duckling  website to the new DriveTime  website on September 1, 2002.
However, due to the increase in sales price per car sold, the internet generated
sales  resulted in $16.0  million in revenue,  up from $15.7  million in revenue
during the same period of the prior year.  For the nine months  ended  September
30, 2002, Internet  applications  generated 5,316 cars sold and $52.6 million in
revenue,  up from  5,189 cars sold and $45.9  million  in  revenue  for the same
period 2001.

     We finance  substantially all of our used car sales. The percentage of used
cars sold  financed  has  remained  constant for the three and nine months ended
September 30, 2002 versus the comparable periods of 2001. We have experienced an
increase  in the  percentage  of  sales  revenue  financed  because  of a slight
decrease in the average  down payment as a  percentage  of the sales  price.  We
determine down payment based upon credit grade of customer, and not based on the
sales  price of the car sold;  therefore,  as the  average  sales  price of cars
increased  due to our focus on better  quality  cars,  the amount  financed as a
percentage of revenue has  correspondingly  increased.  In addition,  for repeat
customers  that have paid us well on their  previous  loan,  we do not require a
down payment on their next purchase.  The loan loss rate for repeat customers is
significantly better than new customers, as a result we have emphasized the sale
of cars to repeat  customers in 2002,  thus  lowering  the overall  average down
payment  amount.  The average down payment  amount for new customers was $888 in
the third  quarter of 2002  compared to $871 in the third  quarter of 2001.  The
amount financed consists of the sales price, plus tax, title,  license and other
fees,  less the down payment.  The amount of the sales tax,  title,  license and
other fees exceeded the down payment amount in the third  quarter,  resulting in
an amount financed slightly greater than the sales revenues. The following table
indicates the percentage of sales units and revenue financed:
<PAGE>
<TABLE>
<CAPTION>

                                                  Three Months Ended               Nine Months Ended
                                                    September 30,                    September 30,
                                             ----------------------------- -------------------------------
                                                  2002           2001           2002           2001
                                             ----------------------------- -------------------------------
<S>                                          <C>           <C>             <C>            <C>
Percentage of used cars sold financed               99.7%          99.5%          99.6%          99.5%
                                             ============================= ===============================

Percentage of sales revenue financed               100.7%          99.0%          99.5%          97.8%
                                             ============================= ===============================
</TABLE>

Provision for Credit Losses

     The following is a summary of the Provision for Credit Losses:
<TABLE>
<CAPTION>
                                      Three Months Ended                              Nine Months Ended
                                         September 30,                                  September 30,
                                 ------------------------------   Percentage    -----------------------------    Percentage
                                      2002           2001           Change           2002           2001           Change
                                 ------------------------------ --------------  ----------------------------- ---------------
<S>                              <C>            <C>              <C>            <C>            <C>              <C>
Provision for Credit Losses      $      37,712  $        48,755       (22.6%)   $     121,474  $      119,985           1.2%
                                 ==============================                 =============================
Provision per loan originated    $       3,307  $         4,116       (19.7%)   $       3,143  $        3,143           0.0%
                                 ==============================                 =============================
Provision as a percentage of
  principal balances originated          30.9%            44.7%                         31.8%           35.4%
                                 ==============================                 =============================
</TABLE>

     The Provision  for Credit  Losses,  as a percentage  of principal  balances
originated,  decreased  to 30.9% and 31.8% for the three and nine  months  ended
September  30,  2002,  compared to 44.7% and 35.4% for the three and nine months
ended September 30, 2001.  Company policy is to maintain an Allowance for Credit
Losses  ("Allowance")  for all loans in its  portfolio  to cover  estimated  net
charge-offs  for the next 12 months.  The decrease in provision  rate in the 3rd
quarter of 2002 reflects  lower loss rates emerging for loans  originated  since
March  2001  resulting  from  the  improved  underlying  credit  quality  mix of
originations  due to improved  credit  standards  and the  introduction  of loan
grading in June 2001. As a result,  2001 and 2002  originations  are  performing
better to date than loans  originated  in prior  periods.  In the 3rd quarter of
2001,  the  Provision  for Loan  Losses  was  significantly  higher  at 44.7% of
originations due to the effects of the recession and the related  performance of
loans  originated  prior to 2001 that did not have the benefit of the new higher
credit  standards  and  that  emerged  at loss  levels  higher  than  previously
estimated;  plus,  the higher  provision  rate also  reflected  the  decrease in
origination  volume in 2001  compared  to 2000.  The  amount  financed  per loan
originated  increased from $8,874 to $9,881 for the nine months ended  September
30, 2001 and 2002, respectively.  The net result is an increase in the Provision
for Credit  Losses in total  dollars and no change in the  Provision  Amount per
Loan  Originated,  even  though  the  Provision  as a  percentage  of the amount
financed for the nine months ended  September 30 decreased from 35.4% in 2001 to
31.8% in 2002.

     See "Static  Pool  Analysis"  below for further  Provision  for Credit Loss
discussion.

Net Interest Income
<TABLE>
<CAPTION>
                                 Three Months Ended                            Nine Months Ended
                                   September 30,                                 September 30,
                            -----------------------------   Percentage   ----------------------------  Percentage
                                 2002          2001           Change          2002          2001         Change
                            -----------------------------  ------------- ---------------------------- -------------
<S>                         <C>            <C>              <C>          <C>            <C>            <C>
Interest Income             $     36,478   $       35,000         4.2%   $     105,047  $     103,744        1.3%
Portfolio Interest Expense       (5,551)          (7,489)      (25.9%)        (17,945)       (23,500)     (23.6%)
                            ------------   --------------                -------------  -------------
Net Interest Income         $     30,927   $       27,511        12.4%   $      87,102  $      80,244        8.5%
                            =============================                ============================

Average Effective Yield            25.9%            26.5%                        26.1%          26.5%
                            =============================                ============================
Average Borrowing Cost              5.8%             8.0%                         6.6%           8.1%
                            =============================                ============================
</TABLE>

     Interest  Income  consists  primarily  of  interest  on finance  receivable
principal  balances,  plus interest income from  investments  held in trust. The
increase in Net  Interest  Income is mostly  attributable  to an increase in the

<PAGE>

average  principal  balances to $575.1  million and $552.0 million for the three
and nine months ended  September 30, 2002,  respectively,  versus $536.9 million
and $533.0 million for the same periods of 2001. The average  effective yield on
finance  receivables  decreased  to 25.9% from 26.5% for the three  months ended
September 30, 2002 and 2001, respectively,  and to 26.1% from 26.5% for the nine
months ended September 30, 2002 and 2001,  respectively.  The decline in average
yield in 2002 related  primarily to (i) the lower  interest  rates offered under
our new  RateAdvantage  Program and (ii) in certain states the maximum  interest
rates  allowed is lower for newer model year cars and, as we have  improved  our
inventory,  the interest  rates allowed on these newer vehicles has been capped.
We experienced a decrease in interest  earned on investments  held in trust from
$0.6 million and $2.4 million for the three and nine months ended  September 30,
2001,  respectively,  to $0.3  million  and $1.0  million for the three and nine
months ended  September  30, 2002,  respectively.  This  decrease was  primarily
related to lower money market rates during the first nine months of 2002.

     Portfolio  interest expense consists primarily of interest on our revolving
warehouse  facility  and the Class A  obligations  issued in our  securitization
transactions  from the  collateralized  borrowings on the  portfolio.  Portfolio
interest  expense  was $5.6  million  and $17.9  million  for the three and nine
months ended September 30, 2002, respectively,  a decrease from $7.5 million and
$23.5 million for the same periods of the previous  year. The decrease is due to
lower borrowing costs as a result of a decline in our benchmark  interest rates,
and due to  borrowing  less  under the  combination  of the  warehouse  line and
securitizations  as a result of securing the  inventory  line in August of 2001,
which are included in other interest expense.

Income before Operating Expenses

     Income before Operating  Expenses  increased 59.2% to $42.0 million for the
three months ended September 30, 2002, up from $26.4 million for the same period
in 2001.  Income before Operating  Expenses  increased to $122.5 million for the
nine months ended September 30, 2002, up from $110.5 million for the same period
in 2001, a 10.9%  increase.  The increase in Income  before  Operating  Expenses
resulted  from an  increase  in the gross  margin  from  sales of used  cars,  a
decrease in the loan loss  provision  rate as a percentage of  originations,  an
increase  in net  interest  income  primarily  due to an increase in the average
principal  balances,  and a decrease in portfolio  interest  expense  related to
lower borrowing rates.

Operating Expenses
<TABLE>
<CAPTION>
                               Three Months Ended                             Nine Months Ended
                                 September 30,                                   September 30,
                          -----------------------------   Percentage   -----------------------------    Percentage
                               2002          2001          Change           2002          2001            Change
                          ----------------------------- -------------- -----------------------------  --------------

<S>                       <C>           <C>              <C>           <C>              <C>             <C>
Operating Expenses        $    35,206   $        35,230       (0.1%)   $      104,465   $    108,005         (3.3%)
                          =============================                =============================

Per Car Sold              $     3,079   $         2,959         4.1%   $        2,692   $      2,815         (4.4%)
                          =============================                =============================

As % of Total Revenue           22.3%             24.3%                         21.4%          24.0%
                          =============================                =============================
</TABLE>

     Operating  expenses,  which  consist of  selling,  marketing,  general  and
administrative and depreciation/amortization expenses, remained constant quarter
over  quarter;  whereas  Operating  Expenses  for the nine month  periods  ended
September 30,  decreased to $104.5  million in 2002 from $108.0 million in 2001.
The  decrease in Operating  Expenses for the nine months ended  September 30 was
primarily  due to numerous  cost  savings  initiatives  initiated  during  2001,
including consolidating  collection and loan servicing centers by closing two of
our four  centralized  facilities  and  completing  a reduction in work force of
primarily  corporate staff in the fourth quarter of 2001. In January of 2002, we
incurred a $0.8 million  charge  related to a second  reduction in work force to
save an  additional  $1.7  million  per annum in  salary,  wages  and  benefits.
Offsetting  these cost  reductions  were  additional  costs  incurred in the 3rd
quarter  of 2002  related  to the  rollout of  DriveTime,  consisting  of a $0.8
million charge for the write-off of disposed assets related to the refurbishment
of our dealerships and $0.6 million in other launch related expenses.

Other Interest Expense

     Other Interest  Expense,  which consists of interest on Other Notes Payable
and  Subordinated  Notes Payable,  totaled $2.4 million and $7.1 million for the
three and nine  months  ended  September  30,  2002,  respectively,  versus $2.7
million and $8.6  million  for the  comparable  periods of the prior  year.  The
average  outstanding balance for Other Notes Payable was $46.8 million and $42.2

<PAGE>

million for the three and nine months ended  September  30, 2002,  respectively,
and $41.8  million and $38.9  million for the  comparable  periods of 2001.  The
changes to Other  Notes  Payable  is  primarily  attributable  to changes to the
amount borrowed under the revolving  inventory facility and the Company renewing
and  increasing  the balance  outstanding on its senior secured loan facility in
July 2002,  partially offset by a reduction in mortgage  interest related to the
sale of certain  dealerships  to Verde  Investments in January 2002. The monthly
average  outstanding balance of Subordinated Notes Payable was $24.9 million and
$27.0  million  for  the  three  and  nine  months  ended  September  30,  2002,
respectively,  and $34.0 million and 38.0 million for the comparable  periods of
2001. The decrease related  primarily to scheduled  principal  reductions on the
$13.5 million senior  subordinated  note payable to a related  party,  principal
reductions on the $7.0 million  subordinated  note to a related  party,  and the
repurchase  in June  2001 of  $3.6  million  in  principal  of the  subordinated
debentures due in 2003. See Note (4) of the Notes to the Condensed  Consolidated
Financial Statements for further discussion.

Income Taxes

     Income  taxes  totaled $2.0 million and $5.2 million for the three and nine
months  ended  September  30,  2002,  versus a benefit of $4.7  million and $2.5
million for the same  periods in 2001.  Our  effective  tax rate was 41% for the
three and nine months ended September 30, 2002 and 2001. In addition, the income
taxes  for  the  three  and  nine  months  ended  September  30,  2002,  include
approximately  $0.3 and $0.6  million  charge for a change in  estimate  for tax
deficiencies.

Net Earnings

     Net  Earnings  totaled  $2.3 million and $5.8 million or the three and nine
months ended September 30, 2002,  respectively,  as compared with a $6.8 million
loss million and $3.6 million loss for the three and nine months ended September
30, 2001,  respectively.  The  increases in Net Earnings are primarily due to an
increase  in the gross  margin  from sales of used cars,  a decrease in the loan
loss provision rate as a percentage of originations, an increase in net interest
income  primarily due to an increase in the average  principal  balances,  and a
decrease in portfolio interest expense related to lower borrowing rates.

Business Segment Information

     We report our operations based on three operating segments.  These segments
are reported as Retail, Portfolio and Corporate Operations.  See Note (6) to the
Condensed Consolidated Financial Statements.

     Operating Expenses for our business  segments,  along with a description of
the included activities,  for the three and nine months ended September 30, 2002
and 2001 are as follows:

     Retail  Operations.  Operating  expenses for our Retail segment  consist of
Company  marketing  efforts,  maintenance  and  development  of  dealership  and
inspection   center  sites,  and  direct   management  of  used  car  purchases,
reconditioning  and sales  activities.  A summary of retail  operating  expenses
follows ($ in thousands, except per car sold amounts):
<PAGE>
<TABLE>
<CAPTION>
                                          Three Months Ended                         Nine Months Ended
                                            September 30,                              September 30,
                                     ---------------------------      %        -----------------------------      %
                                         2002         2001          Change         2002           2001          Change
                                     --------------------------- ------------- -------------- -------------- --------------
<S>                                  <C>           <C>            <C>          <C>            <C>              <C>
  Retail Operations:
    Selling and Marketing            $      5,982  $       6,084       (1.7%)  $      19,732  $       19,945       (1.1%)
    General and Administrative             12,851         13,867       (7.3%)         39,296          43,380       (9.4%)
    Depreciation and Amortization           1,107          1,419      (22.0%)          3,308           4,108      (19.5%)
                                     ---------------------------               -------------- --------------
         Retail Expense              $     19,940  $      21,370       (6.7%)  $      62,336  $       67,433       (7.6%)
                                     ===========================               ============== ==============
Per Car Sold:
    Selling and Marketing            $        523  $         511         2.4%  $         509  $          520       (2.1%)
    General and Administrative              1,124          1,165       (3.5%)          1,013           1,131      (10.4%)
    Depreciation and Amortization              97            119      (18.5%)             85             107      (20.6%)
                                     ---------------------------               -------------- --------------
       Total                         $      1,744  $       1,795       (2.8%)  $       1,607  $        1,758       (8.6%)
                                     ===========================               ============== ==============

As % of Used Cars Sold Revenue:
    Selling and Marketing                    4.9%           5.5%                        5.1%            5.8%
    General and Administrative              10.6%          12.6%                       10.2%           12.5%
    Depreciation and Amortization            0.9%           1.3%                        0.9%            1.2%
                                     ---------------------------               -------------- --------------
       Total                                16.4%          19.4%                       16.2%           19.5%
                                     ===========================               ============== ==============
</TABLE>

     Total  Selling and Marketing  expenses  remained  fairly  constant in total
amount  and on a per car  sold  basis  for 2002 and  2001;  however,  due to the
increase in the average  sales price of vehicles in 2002,  Selling and Marketing
expenses decreased as a percentage of used cars sold revenue.

     General and Administrative  expenses  decreased in total dollars,  on a per
car sold basis and as a percentage  of sales of used cars for the three and nine
months  ended June 30,  2002,  principally  due to a reduction in work force and
other general cost saving initiatives.

     Depreciation and Amortization expenses decreased in total dollars, on a per
car sold basis and as a percentage of cars revenue for the three and nine months
ended September 30, 2002,  primarily due to the  discontinuation of depreciation
on $3.8  million  original  cost of buildings as a result of the sale of the six
properties to Verde investments and the discontinuation of goodwill amortization
in 2002 upon the adoption of SFAS No. 142. See Notes (3) and (9) of the Notes to
Condensed Consolidated Financial Statements for further discussion.

     Portfolio Operations.  Operating expenses for our Portfolio segment consist
of loan servicing and collection efforts,  securitization  activities, and other
operations  pertaining directly to the administration and collection of the loan
portfolio.  A summary of portfolio  operating  expenses follows ($ in thousands,
except expense per month per loan serviced):
<TABLE>
<CAPTION>

                                         Three Months Ended                          Nine Months Ended
                                           September 30,              %                September 30,               %
                                     ---------------------------                ----------------------------
                                         2002         2001          Change          2002           2001          Change
                                     --------------------------- -------------  --------------  -------------  -------------
  <S>                                <C>           <C>             <C>         <C>            <C>              <C>
  Portfolio Expense:
    General and Administrative       $      7,364  $       7,286         1.1%  $      21,193  $       22,653       (6.4%)
    Depreciation and Amortization             237           236          0.4%            736             732         0.5%
                                     ---------------------------                -------------  -------------
       Portfolio Expense             $      7,601  $       7,522         1.1%  $      21,929  $       23,385       (6.2%)
                                     ===========================                =============  =============

Average Expense per Month per
   Loan Serviced                     $      29.51  $       28.99               $       28.63  $        29.60
                                     ===========================                =============  =============

Annualized Expense as % of  End
   of Period Principal Balances              5.2%           5.6%                        5.0%            5.8%
                                     ===========================                =============  =============
</TABLE>
<PAGE>

     Portfolio  Expenses  in total  and per  month  per loan  serviced  remained
relatively unchanged for the three months ended September 30, 2002 and 2001. The
decrease in Portfolio Expenses both in total and per month per loan serviced for
the nine months ended September 30, 2002,  compared to the same periods in 2001,
is primarily a result of efficiencies  gained with the closing of the collection
and loan administration facilities in Florida and Texas during the first quarter
of 2001 and  other  general  cost  saving  initiatives.  The nine  months  ended
September 30, 2001, include a $0.6 million  restructuring  charge related to the
closure of those facilities.

     Corporate Operations.  Operating expenses for our Corporate segment consist
of costs to provide managerial oversight and reporting for the Company,  develop
and implement  policies and procedures,  and provide expertise to the Company in
areas such as finance,  legal,  human  resources and information  technology.  A
summary  of  corporate  expenses  follows ($ in  thousands,  except per car sold
amounts):
<TABLE>
<CAPTION>
                                          Three Months Ended                                  Nine Months Ended
                                             September 30,                                     September 30,
                                    --------------------------------      %         ---------------------------------       %
                                         2002            2001           Change           2002              2001           Change
                                    --------------- ---------------- -------------  ----------------- ---------------  -------------
  <S>                               <C>             <C>                <C>          <C>               <C>                <C>
  Corporate Expense:
    General and Administrative      $         6,889 $          5,654       21.8%    $          17,958 $        14,846         21.0%
    Depreciation and Amortization               776              684       13.5%                2,242           2,341        (4.2%)
                                    --------------- ----------------                ----------------  ---------------
       Corporate Expense            $         7,665 $          6,338       20.9%    $          20,200 $        17,187         17.5%
                                    --------------- ----------------                ----------------  ---------------

Per Car Sold                        $           670 $            532                $             521             448
                                    =============== ================                ================  ===============
As % of Total Revenues                         4.9%             4.4%                             4.1%            3.8%
                                    =============== ================                ================  ===============
</TABLE>

          Corporate  operating  expenses as a percent of total revenue increased
     slightly for the three and nine months ended September 30, 2002, versus the
     same periods of 2001.  Corporate  expenses  increased in total and on a per
     car sold  basis,  as  compared to the same  periods of the  previous  year,
     primarily due to the $0.8 million  restructuring  charge in January 2002 as
     result of the second reduction in work force, a $0.8 million charge for the
     write-off  of  disposed  assets  related  to  the   refurbishment   of  our
     dealerships and approximately $0.6 million in other expenses related to the
     DriveTime  launch,  plus during the first nine months of 2002,  the Company
     paid $0.9  million to Verde for the  aircraft  lease and  reimbursement  of
     various travel costs and other expenses  incurred by Verde on behalf of the
     Company. See Note (3) to the Condensed Consolidated Financial Statements.

Financial Position

     The following table represents key components of our financial  position ($
in thousands):
<TABLE>
<CAPTION>
                                               September 30,      December 31,      Percentage
                                                   2002               2001            Change
                                            ------------------- ---------------- ---------------
<S>                                          <C>                 <C>              <C>
Total Assets                                 $         695,314   $      647,657            7.4%

Finance Receivables, Net                               567,930          495,254           14.7%
Inventory                                               47,593           58,618         (18.8%)
Property and Equipment, Net                             33,447           37,739         (11.4%)
Net Assets of Discontinued Operations                       -             3,899         (100.0%)

Total Debt                                             493,814          461,074            7.1%
Notes Payable - Portfolio                              420,895          377,305           11.6%
Other Notes Payable                                     48,210           52,510          (8.2%)
Subordinated Notes Payable                              24,709           31,259         (21.0%)
Stockholders' Equity                         $         151,319   $      145,483            4.0%
</TABLE>

     Total Assets.  Total assets have increased primarily due to the increase in
Finance  Receivables,  net, partially offset by the decrease in Inventory and in
Net Property and Equipment.

     Inventory. Inventory represents the acquisition and reconditioning costs of
used and new cars located at our  dealerships  and our inspection  centers.  The
change in inventory  from  December 31, 2001,  to September  30, 2002, is due to

<PAGE>

management's  decision  to increase  inventory  levels at the end of the year in
preparation  for the strong  seasonal  sale periods  during the first and second
quarters of the year. We have implemented  changes to our inventory  acquisition
strategy  to focus on  auctions  and to limit  purchases  from  wholesalers.  We
believe  this  will help  enable us to  achieve  our goal of  purchasing  higher
quality  inventory at better  prices.  For the three months ended  September 30,
2002, we acquired our used car inventory from three sources:  80% from auctions,
10% from fleet sales, 6% from wholesalers and 4% from new car dealerships.

     Property and  Equipment,  net. Net Property and  Equipment  decreased  from
December 31, 2001,  to September  30, 2002,  by $4.3  million.  The decrease was
primarily  related to ongoing  depreciation  of assets and the January 2002 sale
and  leaseback of six  dealerships,  with a net book value of $6.7  million,  to
Verde  Investments,  Inc.  pursuant to the option agreement  granted in 2001, as
partial  consideration  for the $7.0  million  subordinated  loan  made by Verde
Investments,  Inc.,  partially offset by capital  expenditures made to refurbish
all 76  dealerships  for the  DriveTime  launch.  See Note (3) to the  Condensed
Consolidated Financial Statements.

     Finance Receivables,  net. Net Finance Receivables grew by $72.7 million or
14.7% during the nine months ended September 30, 2002. New originations for this
period exceeded the portfolio runoff,  consisting of regular principal payments,
payoffs and charge-offs,  by $66.7 million.  Investments held in trust increased
by $20.4 million primarily  related to the increase in obligations  issued under
the Company's  securitization  program.  Partially offsetting the growth in loan
principal balances and investments held in trust was a $15.6 million increase in
the Allowance  for Credit  Losses.  See Note (2) to the  Condensed  Consolidated
Financial Statements for the detail components of Finance Receivables, net.

     The following  table reflects  activity in the Allowance for Credit Losses,
as well as information  regarding  charge-off  activity,  for the three and nine
months ended September 30, 2002 and 2001 ($ in thousands):
<TABLE>
<CAPTION>
                                      Three Months Ended                Nine Months Ended
                                         September 30,                    September 30,
                                -------------------------------- --------------------------------
<S>                             <C>             <C>              <C>             <C>
Allowance Activity:                  2002            2001             2002            2001
                                -------------------------------- --------------------------------
Balance, Beginning of Period    $     116,200   $        101,589 $     101,900   $         99,700
Provision for Credit Losses            37,712             48,755       121,474            119,985
Other Allowance Activity                   -               (127)            -               (133)
Net Charge Offs                      (36,412)           (35,717)     (105,874)          (105,052)
                                -------------------------------- --------------------------------
Balance, End of Period          $     117,500   $        114,500 $     117,500   $        114,500
                                ================================ ================================

Charge off Activity:
Principal Balances              $    (45,361)   $       (45,655) $   (128,421)   $      (134,416)
Recoveries, Net                         8,949              9,938        22,547             29,364
                                -------------------------------- --------------------------------
Net Charge Offs                 $    (36,412)   $       (35,717) $   (105,874)   $      (105,052)
                                ================================ ================================
</TABLE>

     The Allowance for Credit Losses is $117.5 million as of September 30, 2002,
compared  to $114.5  million as of  September  30,  2001.  The  increase  in the
allowance  for credit losses is due to the increase in loan  principal  balances
from $537.9  million as of September 30, 2001 to $581.4  million as of September
30, 2002,  partially  offset by a decrease in the  Allowance as a percentage  of
loan  principal  balance to 20.2% from 21.3% as of September  30, 2002 and 2001,
respectively.  The decrease in the Allowance as a percentage  of loan  principal
balances as of September 30, 2002 is due to lower loss rates  emerging for loans
originated  since  March 2001  resulting  from the  improved  underlying  credit
quality  mix  of  originations   due  to  improved  credit   standards  and  the
introduction  of loan  grading.  As a  result,  2001 and 2002  originations  are
performing  better to date than loans  originated  in prior  periods.  Partially
offsetting  the  positive  effects of  improvements  in credit  quality  mix and
improved credit  standards are the ongoing effects of the recession and the slow
recovery.  The  Allowance  as a  percentage  of loan  principal  is  20.2% as of
September 30, 2002, 19.8% as of December 31, 2001, and 21.3% as of September 30,
2001.

     The  Allowance  for  Credit  Losses  is  maintained  at  a  level  that  in
management's  judgment  is adequate to provide  for  estimated  probable  credit
losses  inherent  in our  loan  portfolio  over the next  twelve  months  and is
reviewed on an ongoing  basis.  See  "Management's  Discussion  and  Analysis of
Financial Condition and Results of Operations - Static Pool Analysis" below.

     Net Assets of Discontinued Operations. In December 1999, we sold the Cygnet
Dealer  Finance  ("CDF")  subsidiary  and also decided to abandon any efforts to
acquire  third  party  loans or  servicing  rights  to  additional  third  party
portfolios.  As a  result,  CDF,  Cygnet  Servicing  and the  associated  Cygnet
Corporate  segment  assets and  liabilities  were  classified as net assets from
discontinued operations.
<PAGE>

     Total Debt.  Total Debt is  comprised of Notes  Payable - Portfolio,  Other
Notes Payable and  Subordinated  Notes Payable.  We finance the increases in our
loan portfolio and other assets primarily through  additional  borrowings on our
warehouse line, additional securitizations and our inventory line of credit. See
"Management's  Discussion  and Analysis of Financial  Condition  and Operation -
Financing Resources" below.

     Notes  Payable -  Portfolio.  Notes  Payable -  Portfolio  consists  of our
warehouse line and securitizations. Notes Payable - Portfolio increased by $43.6
million  during  the nine  months  ended  September  30,  2002.  The  amount  of
obligations  outstanding  pursuant  to  the  Company's   securitization  program
increased $52.8 million due to the increased loan portfolio  principal  balances
and  the  timing  of the  securitizations.  The  amount  outstanding  under  the
warehouse line decreased by $9.0 million during the nine months ended  September
30,  2002,  primarily  due to the increase in  borrowings  under our $45 million
senior  secured note  payable  related to the renewal and increase in the amount
borrowed under the facility in July 2002.

     Other Notes Payable - The decrease in Other Notes Payable was primarily due
to a decrease in the inventory line of $17.4 million,  offset by a $19.0 million
increase in borrowings  under the $45 million  senior  secured note payable.  In
addition, on January 4, 2002, Verde Investments, Inc. ("Verde"), an affiliate of
Mr. Ernest Garcia II, the Company's  chairman,  purchased six properties located
in Texas, Virginia, and California,  and simultaneously leased the properties to
the Company on terms  similar to the  Company's  current  leases,  12 to 15 year
triple net leases, with termination dates ranging from December 2013 to December
2016. In conjunction with this sale, Verde assumed  responsibility  for payments
on  approximately  $4.1 million of principal  mortgage  balances.  However,  the
Company  guarantees these loans with the lenders.  For further  discussion,  see
Notes (3) and (4) of Notes to the Condensed Consolidated Financial Statements.

     Subordinated Notes Payable - The decrease in Subordinated Notes Payable was
primarily due to the scheduled $2.0 million pay down of the senior  subordinated
notes  payable to a related  party during 2002 and a $5.4 million  payoff of the
remaining  balance of the $7.0  million  subordinated  note payable to a related
party.  On April 1,  2002,  Verde  Investments  transferred  to  Cygnet  Capital
Corporation  ("CCC"),  an  affiliate  of Verde  and Mr.  Ernest C.  Garcia,  the
remaining  balance of the $7.0  million  note  payable.  In July  2002,  a final
principal  payment of $1.4 million was made,  representing  the entire remaining
balance of the $7.0 million  subordinated  note. On May 31, 2002,  CCC purchased
from an unrelated party the entire  outstanding  balance of the Company's senior
subordinated notes payable.  See Notes (3) and (4) of the Notes to the Condensed
Consolidated Financial Statements.


Static Pool Analysis

     We use a "static pool"  analysis to monitor  performance  for loans we have
originated at our dealerships. In a static pool analysis, we assign each month's
originations  to  a  unique  pool  and  track  the  charge-offs  for  each  pool
separately.  We calculate  the  cumulative  net  charge-offs  for each pool as a
percentage of that pool's original  principal  balances,  based on the number of
complete  payments  made by the  customer  before  charge-off.  The table  below
displays the cumulative net charge-offs of each pool as a percentage of original
loan cumulative  balances,  based on the quarter the loans were originated.  The
table is further  stratified  by the number of  payments  made by our  customers
prior to  charge-off.  For periods  denoted by "x",  the pools have not seasoned
sufficiently to allow us to compute  cumulative  losses.  For periods denoted by
"-",  the pools have not yet  reached the  indicated  cumulative  age.  While we
monitor  static  pools on a monthly  basis,  for  presentation  purposes  we are
presenting the information in the table below on a quarterly basis.

     Currently  reported  cumulative  losses  may  vary  from  those  previously
reported due to ongoing  collection  efforts on  charged-off  accounts,  and the
difference  between final proceeds on the sale of repossessed  collateral versus
our  estimates of the sale  proceeds.  Management,  however,  believes that such
variations will not be material.

     The following  table sets forth as of October 31, 2002,  the cumulative net
charge-offs as a percentage of original loan cumulative  (pool) balances,  based
on the quarter of  origination  and segmented by the number of monthly  payments
completed by customers  before  charge-off.  The table also shows the percent of
principal  reduction  for each pool since  inception  and  cumulative  total net
losses incurred (TLI).


<PAGE>
<TABLE>
<CAPTION>



                           Pool's Cumulative Net Losses as Percentage of Pool's Original
                                           Aggregate Principal Balance
                                                    ($ in thousands)

                              Monthly Payments Completed by Customer Before Charge-Off
                              --------------------------------------------------------
                     Orig.        0           3          6          12          18          24         TLI        Reduced
                     -----        -           -          -          --          --          --         ---        -------
   <S>               <C>         <C>        <C>        <C>         <C>         <C>         <C>        <C>          <C>
   1993              $ 12,984    8.8%       21.4%      27.6%       32.8%       34.8%       35.3%      36.8%        100.0%
   1994              $ 23,589    5.3%       14.6%      19.6%       25.2%       27.5%       28.2%      28.8%        100.0%
   1995              $ 36,569    1.9%        8.1%      13.1%       19.0%       22.1%       23.4%      24.1%        100.0%
   1996              $ 48,996    1.5%        8.1%      13.9%       22.1%       26.2%       27.9%      28.9%        100.0%
   1997
   1st Quarter       $ 16,279    2.1%       10.7%      18.2%       24.8%       29.8%       32.0%      33.5%        100.0%
   2nd Quarter       $ 25,875    1.5%        9.9%      15.8%       22.7%       27.3%       29.4%      30.6%        100.0%
   3rd Quarter       $ 32,147    1.4%        8.3%      13.2%       22.4%       26.9%       29.1%      30.6%        100.0%
   4th Quarter       $ 42,529    1.4%        6.8%      12.6%       21.8%       26.0%       28.7%      29.9%        100.0%
   1998
   1st Quarter       $ 69,708    0.9%        6.9%      13.4%       20.8%       26.3%       28.7%      29.9%        100.0%
   2nd Quarter       $ 66,908    1.1%        8.0%      14.2%       21.7%       27.2%       29.1%      30.1%        100.0%
   3rd Quarter       $ 71,027    1.0%        7.9%      13.2%       22.9%       27.6%       30.1%      30.9%        100.0%
   4th Quarter       $ 69,583    0.9%        6.5%      13.0%       24.1%       28.8%       31.2%      32.0%        100.0%
   1999
   1st Quarter       $103,068    0.8%        7.4%      15.0%       23.4%       29.2%       31.3%      32.5%        100.0%
   2nd Quarter       $ 95,768    1.1%        9.8%      16.6%       25.1%       31.1%       33.4%      34.6%         99.9%
   3rd Quarter       $102,585    1.0%        8.2%      14.1%       25.1%       30.6%       33.4%      34.6%         99.6%
   4th Quarter       $ 80,641    0.7%        5.8%      12.5%       23.4%       28.8%       31.8%      33.0%         98.8%
   2000
   1st Quarter       $128,123    0.3%        6.5%      14.5%       24.0%       30.1%       33.0%      33.9%         96.8%
   2nd Quarter       $118,778    0.6%        8.5%      15.8%       25.8%       32.5%       34.9%      35.4%         93.1%
   3rd Quarter       $124,367    0.7%        7.7%      14.3%       25.7%       32.1%          x       34.9%         88.2%
   4th Quarter       $100,823    0.6%        6.6%      13.5%       25.7%       31.7%          -       33.0%         82.1%
   2001
   1st Quarter       $126,013    0.4%        6.3%      14.0%       24.3%          x           -       29.8%         75.2%
   2nd Quarter       $103,521    0.5%        6.2%      12.9%       21.7%          -           -       24.3%         64.3%
   3rd Quarter       $109,037    0.7%        5.3%      10.6%          x           -           -       19.1%         51.2%
   4th Quarter       $ 87,355    0.7%        5.1%      11.0%          -           -           -       15.0%         37.3%
   2002
   1st Quarter       $140,178    0.4%        5.6%         x           -           -           -        9.6%         29.2%
   2nd Quarter       $119,196    0.6%          x          -           -           -           -        4.3%         14.8%
   3rd Quarter       $122,092      x           -          -           -           -           -        0.3%          4.4%
</TABLE>


<PAGE>



     The following table sets forth the principal  balances'  delinquency status
as a percentage of total outstanding contract principal balances from dealership
operations:
<TABLE>
<CAPTION>

                                 September 30,      September 30,      December 31,
Days Delinquent:                     2002               2001              2001
                               ------------------  ----------------  ----------------
<S>                            <C>                 <C>               <C>
Current                                    65.5%             67.4%             64.5%
1-30 Days                                  26.2%             24.0%             26.2%
31-60 Days                                  5.0%              5.3%              5.6%
61-90 Days                                  3.3%              3.3%              3.7%
                               ------------------  ----------------  ----------------
Total Portfolio                           100.0%            100.0%            100.0%
                               ==================  ================  ================
</TABLE>

     In accordance with our charge-off  policy,  there are no accounts more than
90 days delinquent as of September 30, 2002.

     Accounts  greater than 31 days delinquent  decreased from 8.6% at September
30, 2001 to 8.3% at September 30, 2002.  The  improvement  in  delinquencies  is
primarily a combination  of the positive  effect of higher credit  standards and
the improved credit quality mix of originations since the first quarter of 2001,
and the overall impact of the recession.

     The Provision  for Credit  Losses,  as a percentage  of principal  balances
originated,  decreased  to 30.9% and 31.8% for the three and nine  months  ended
September  30,  2002,  compared to 44.7% and 35.4% for the three and nine months
ended September 30, 2001.  Company policy is to maintain an Allowance for Credit
Losses  ("Allowance")  for all loans in its  portfolio  to cover  estimated  net
charge-offs  for the next 12 months.  The decrease in provision  rate in the 3rd
quarter of 2002 reflects  lower loss rates emerging for loans  originated  since
March 2001  resulting  from the improved  underlying  credit  quality mix of its
originations  due to improved  credit  standards  and the  introduction  of loan
grading.  As a result,  2001 and 2002 originations are performing better to date
than  loans  originated  in prior  periods.  In the 3rd  quarter  of  2001,  the
Provision for Loan Losses was significantly  higher at 44.7% of originations due
to the effects of the recession and the related  performance of loans originated
prior to 2001 that did not have the benefit of the new higher  credit  standards
and that emerged at loss levels  higher than  previously  estimated;  plus,  the
higher provision rate also reflected the decrease in origination  volume in 2001
compared to 2000. The Allowance as a percentage of loan principal is 20.2% as of
September  30,  2002,  up from 19.8% as of December  31,  2001,  and 21.3% as of
September 30, 2001.

Securitizations

     Under the current legal structure of our  securitization  program,  we sell
loans to our subsidiaries that then securitize the loans by transferring them to
separate   trusts  that  issue  several   classes  of  notes  and   certificates
collateralized by the loans. The  securitization  subsidiaries then sell Class A
notes or certificates  (Class A obligations or Notes Payable) to investors.  The
subordinate  classes  are  retained  by our  subsidiaries  or us. We continue to
service the securitized loans.

     The  Class  A  obligations  have  historically  received  investment  grade
ratings.  To secure the payment of the Class A obligations,  the  securitization
subsidiaries  have  obtained an insurance  policy from a AAA rated  insurer that
guarantees payment of amounts to the holders of the Class A obligations.  In the
second quarter of 2002, we entered into a commitment  with XL Capital  Assurance
to insure, at a minimum,  the 2002B  securitization that was completed in August
and the next two  securitizations.  The 2002A  securitization  and all  previous
securitizations  with  outstanding  balances  were  insured  by  MBIA  Insurance
Corporation.  Both of our  insurers,  XL Capital  Assurance  and MBIA  Insurance
Corporation,  are  rated  AAA  by  Standard  and  Poor's  and  Aaa  by  Moody's.
Additionally, we establish a cash "reserve" account for the benefit of the Class
A obligation  holders.  The reserve  accounts are classified in our consolidated
financial statements as Investments Held in Trust and are a component of Finance
Receivables, Net.

     Reserve Account Requirements.  Under our current securitization  structure,
we make an initial  cash deposit into a reserve  account,  historically  ranging
from  2.3% to 7.3% of the  initial  underlying  Finance  Receivables'  principal
balance,  and pledge this cash to the reserve  account  agent.  The trustee then
makes  additional  deposits to the reserve  account  out of  collections  on the
securitized  receivables as necessary to fund the reserve account to a specified
percentage,  currently  ranging from 8.0% to 11.5%,  of the  underlying  Finance
Receivables' principal balance. The trustee makes distributions to us when:

o    reserve account balance exceeds the specified percentage,
o    required periodic payments to the Class A certificate holders are current,
o    portfolio charge-off and delinquency triggers are not exceeded, and
o    trustee, servicer and other administrative costs are current.
<PAGE>

     On August 15,  2002,  the Company  closed its 23rd  securitization,  2002B.
2002B consists of  approximately  $172.5  million in principal  balances and the
issuance of $150.0  million in Class A bonds,  including a pre-funded  amount of
approximately $27.5 million.  The coupon rate on the Class A bonds is 2.99%, the
initial  deposit  into the  reserve  account is 7.25%,  or  approximately  $12.5
million,  and the reserve account  maximum is 11.5%,  subject to adjustment upon
the occurrence of specified  Termination Events or Portfolio Performance Events.
The  Class A  bonds  are  insured  by XL  Capital  Assurance,  resulting  in the
following ratings: AAA by Standard and Poor's and Aaa by Moody's.

     While  completing  the 2002A  securitization,  insured by MBIA, we mutually
agreed with MBIA to further  diversify  our lending  sources,  a process that we
initiated in 2001 with our  inventory  and warehouse  lending  facilities.  As a
result, we engaged a different  insurer,  XL Capital  Assurance ("XL"),  for our
second  securitization  of this year,  2002B, and for a minimum of the following
two subsequent securitizations.  As a condition for MBIA providing insurance for
the 2002A securitization, the Company deposited an additional $2.3 million in an
escrow  account to protect MBIA from any  potential  losses on any active trusts
they  insure.  MBIA has agreed that if an  amendment  to the Sale and  Servicing
Agreements  and  Appendices A thereto,  in form and substance  acceptable to the
Insurer,  is approved by the bondholders,  and no termination Event has occurred
under   any  of  the  Sales  and   Servicing   Agreements   that  has  not  been
unconditionally waived in writing by MBIA, that MBIA will consent to the release
of the $2.3 deposit in escrow.

     For discussion of certain risks related to our securitization transactions,
see "Securitization Transactions" set forth in Exhibit 99 to this Form 10-Q.

Liquidity and Capital Resources

     In recent periods,  our needs for additional capital resources have leveled
as we slowed the growth of our  business.  In addition  to our normal  recurring
capital  requirements,  we  refurbished  all of our  dealerships  related to the
change of our  corporate  name from Ugly  Duckling to  DriveTime.  Total capital
expenditures  incurred  in the 3rd  quarter of 2002  related  to the  rollout of
DriveTime  were  approximately  $5.7  million,  and  we  anticipate   additional
expenditures  of  $0.6  million  in  the  fourth  quarter  as  we  complete  the
refurbishment  project. We funded the DriveTime capital improvements through our
existing liquidity; however we have received preliminary approval from a leasing
company and are in the process of finalizing a lease agreement for approximately
$3.2 million of these capital improvements. In general, we require capital for:
<TABLE>
<CAPTION>

<S>   <C>                                                       <C>   <C>
o     investment in our loan portfolio,                         o     the purchase of inventories, and
o     working capital and general corporate purposes,           o     the purchase of property and equipment.

    We fund our capital requirements primarily through:

o     operating cash flow,                                      o     our inventory line, and
o     securitization transactions,                              o     supplemental borrowings.
o     our revolving warehouse facility,
</TABLE>

     For the  remainder  of 2002 and 2003,  we  believe  we will  have  adequate
liquidity for our operations. We closed our second securitization transaction of
2002 in August,  and believe we will continue to be able to securitize  our loan
pools in future  periods.  We have  engaged XL Capital  Assurance  to insure our
third  securitization in 2002,  expected to close in December 2002 and our first
securitization  of 2003. In March of 2002, we renewed our $100 million warehouse
credit facility for an additional  364-day period. On July 19, 2002, the Company
renewed its senior  secured loan facility with certain  lenders and the facility
was  increased  from $35 million to $45 million.  In  addition,  our $36 million
revolving inventory facility does not expire until June of 2003.

     We are  considering the acquisition of new car francises and increasing the
number of used car dealerships,  to compliment our existing 76 dealerships.  Our
current plans are to acquire or open one to three new car  franchises and one to
five used car dealerships over the next 15 months.  We have not entered into any
definitive  acquisition  agreements  at  this  time.  We  plan  on  funding  any
acquisitions or increases in dealerships  with a combination of existing Company
liquidity  plus new debt secured by assets of the  dealerships  and/or  entering
into lease agreements.


<PAGE>

     The IRS has completed its audits of the Company for 1997, 1998 and 1999 and
the IRS has also notified the Company that it intends to perform an  examination
of the  Company's  tax year 2000.  There can be no  assurance as to the ultimate
outcome of the year 2000  examination  and the Company  could become  liable for
current  tax  payments  related  to the timing of  certain  deductions  that may
materially impact the Company's liquidity.  The IRS has not informed the Company
of the timing or exact scope of this audit.

     We are in the process of delisting  the Company's  subordinated  debentures
from AMEX and  discontinuing  being a reporting  company under the Exchange Act.
The Company has less than 300 bondholders per debenture. The Company's chairman,
and his affiliates, own approximately 30% of the outstanding bonds and there has
been  little to no trading in the bonds,  even  though  they are listed on AMEX.
Upon delisting of the debentures, the Company will no longer be required to be a
reporting Company.

     For a  discussion  of certain  risks that could  affect our  liquidity  and
capital resources, see Exhibit 99.1 to this form 10-Q.

Cash Flow

     Net cash provided by operating activities increased $31.6 million to $167.0
million in the nine months ended  September 30, 2002, up from $135.4 million net
cash  provided by operating  activities  in the nine months ended  September 30,
2001.  This  increase is  primarily  due to an increase in net  earnings of $9.5
million  and a decrease  in other  assets in 2002  related to the release of the
cash collateral held for the $35 million senior secured note payable compared to
an increase  in other  assets in 2001  primarily  related to an increase in repo
inventory.

     Net cash used in investing  activities  increased  $45.5  million to $180.6
million  during the nine months ended  September  30, 2002 as compared to $135.1
million  used  during  the same  period of 2001.  The  increase  in cash used in
investing  activities is primarily related to an increase in finance receivables
originated due to increased sales price and volume.

     Net cash provided by financing  activities increased $14.5 million to $12.6
million  provided in the nine months ended  September  30, 2002,  as compared to
$1.9 million net cash used during the same period of 2001.  The increase in cash
provided is primarily due to an increase in additions to notes payable portfolio
because  of larger  pools of loans  securitized  during the nine  months  ending
September  30, 2002  versus the same  period in 2001,  and due to an increase in
additions to other notes  payable  relating to renewing our senior  secured loan
facility for $45 million.  Primarily offsetting these increases in cash provided
were  repayments  of the inventory  line,  warehouse  facility,  and other notes
payable utilizing proceeds from the renewed senior secured loan facility and the
new securitizations.

Financing Resources

     Securitizations.  Our  securitization  program  is a primary  source of our
working  capital.  Securitizations  generate  cash  flow for us from the sale of
Class A obligations,  ongoing servicing fees, and excess cash flow distributions
from  collections  on the  loans  securitized  after  payments  on the  Class  A
obligations,  payment of fees,  expenses,  and insurance premiums,  and required
deposits to the reserve accounts.  Securitizations also allow us to fix our cost
of funds for a given loan  portfolio.  As of September 30, 2002, the Company was
not in  compliance  with the monthly and  quarterly  calculation  of the Debt to
Tangible Net Worth covenant in its 2002B Trust, resulting in an event of default
under  the  agreement.  The  breach  in  covenant  was  due to an  error  in the
determination  of the  covenant  test at the time the  trust  documentation  was
prepared.  The  insurer,  XL Capital,  has waived the covenant for the month and
quarter ending September 30, 2002, and its rights under the event of default and
agreed to amend the documentation with a more appropriate test going forward. In
the 2001A Trust, the portfolio breached a portfolio  delinquency test, resulting
in an increase in the target  reserve  account level to 16% from 8%. The reserve
levels as of October 15,  2002,  was 10.4%.  See  "Management's  Discussion  and
Analysis of Financial Condition and Results of Operations--Securitizations"  for
a more complete description of our securitization program.

     Revolving  Warehouse  Facility.  In March  2002,  the  Company  renewed its
revolving warehouse facility with Greenwich Capital Financial Products, Inc. for
an additional  364-day term through March 2003. The facility  allows for maximum
borrowings  of $100 million  during the entire  renewed term, as compared to $75
million  during the period May 1 through  November 30 increasing to $100 million
during  the  period  December  1 through  April 30 under the  initial  term.  In
addition, the 65% cap on the advance rate was removed and the calculation of the
warehouse advance relative to the net securitization advance was improved by 2%.
The lender  maintains an option to adjust the advance rate to reflect changes in

<PAGE>

market conditions or portfolio performance. The interest rate on the facility is
one-month  LIBOR plus 2.80% (4.62% and 4.72% at September 30, 2002, and December
31, 2001, respectively).  The facility is secured with substantially all Company
assets.  As a result of the event of default in the trust,  although waived,  an
event of default was triggered in the warehouse agreement.  The warehouse lender
has agreed to waive this breach in the  agreement.  At September  30, 2002,  the
Company was in compliance with all other required covenants.

     Revolving Inventory Facility.  On August 31, 2001, the Company entered into
a $36 million revolving  inventory facility with Automotive Finance  Corporation
("AFC")  that  expires in June of 2003.  The  borrowing  base is  calculated  on
advance rates on inventory  purchased,  ranging from 80% to 100% of the purchase
price. The interest rate on the facility is Prime plus 6.0% (10.75% at September
30, 2002, and at December 31, 2001).  The facility is secured with the Company's
automobile inventory. As a result of the event of default in the trust, although
waived,  an event of default was triggered in the revolving  inventory  facility
agreement.  AFC has agreed to waive this breach in the  agreement.  At September
30, 2002, the Company was in compliance with all other required covenants.

Supplemental Borrowings

     Senior  Secured Note  Payable.  On July 19, 2002,  the Company  renewed its
senior  secured  loan  facility  with  certain  lenders.  The loan  facility was
increased  from a $35 million loan facility to $45 million.  Interest is payable
at one-month  LIBOR plus 500 basis  points,  a decrease of 100 basis points from
the prior  agreement  (7.3% as September 30, 2002,  and 7.90% as of December 31,
2001),  with a  minimum  LIBOR of  2.125%,  and has a term of  approximately  30
months.  The loan  discount at funding was 5% or $2.25  million and there are no
prepayment  penalties.  The  facility  is  secured  by  the  Company's  retained
interests in the residuals from its securitization transactions. Pursuant to the
credit agreement,  the Company must make principal  payments of $1.5 million per
month commencing  January 2003.  Beginning January 2004, through the term of the
agreement,  the minimum monthly principal payments increase to $2.25 million. As
a result of the event of  default  in the trust,  although  waived,  an event of
default was triggered in the senior secured loan  agreement.  The senior secured
lender has agreed to waive this breach in the agreement.  At September 30, 2002,
the Company was in compliance with all other required covenants.

     Senior Subordinated Secured Note. In January 2001, we borrowed $7.0 million
in a subordinated loan from Verde Investments,  Inc. ("Verde"),  an affiliate of
Mr.  Garcia,  secured by  residual  interests  in the  Company's  securitization
transactions  but  subordinate  to the senior  secured  note  payable.  The loan
requires  quarterly  interest  payments at one-month LIBOR plus 600 basis points
and is  subject  to pro rata  reductions  if certain  conditions  are met.  As a
condition to the $35 million senior secured note payable,  Verde was required to
invest the $7.0 million in us through a subordinated loan. The funds were placed
in escrow as additional  collateral for the $35 million senior secured loan. The
funds were to be released in July 2001, if, among other conditions,  the Company
had at least $7 million  in pre-tax  income  through  June of 2001 and,  at that
time,  Mr. Garcia would have  guaranteed  33% of the $35 million  facility.  The
Company did not meet this pre-tax income requirement for the first six months of
2001.  As  consideration  for the loan,  the  Company  released  all  options to
purchase real estate that were then owned by Verde and leased to the Company. We
also granted Verde the option to purchase,  at book value, any or all properties
currently owned by the Company,  or acquired by the Company prior to the earlier
of December 31, 2001, or the date the loan is repaid.  Verde agreed to lease the
properties back to the Company,  on terms similar to our current  leases,  if it
exercised its option to purchase any of the properties.  In December 2001, Verde
exercised  its right to  purchase  from,  and  lease  back to the  Company,  six
properties having a net book value of approximately $6.7 million.  This sale and
leaseback  transaction  closed in January 2002,  for six  properties  located in
Texas,  Virginia and California.  As a result of the going private  transaction,
the  warrants  have  been  terminated.  On  April  1,  2002,  Verde  Investments
transferred to Cygnet Capital Corporation ("CCC"), an affiliate of Verde and Mr.
Ernest C. Garcia,  the remaining  $2.0 million  balance of the $7.0 million note
payable. The remaining balance was paid in full in July 2002.

     Senior  Subordinated  Notes. In February 1998, we borrowed a total of $15.0
million of subordinated debt from unrelated third parties for a three-year term.
We issued  warrants to the lenders of this debt to purchase up to 500,000 shares
of our common stock at an exercise price of $10.00 per share, exercisable at any
time until the later of  February  2001,  or when the debt was paid in full.  On
September 30, 2000, the Loan Agreement,  Warrants and Warrant Agreements between
us and certain  Lenders under this Loan  Agreement,  were amended to: reduce the
outstanding principal balance under the Loan Agreement from $15 million to $13.5
million; require us to take out one of the lenders in the facility by paying off
that lender's $1.5 million  share of the loan (which  occurred),  and cancel the
number  of  outstanding  warrants  attributable  to that  portion  of the  loan;
increase the interest rate under the Loan  Agreement to 15%;  extend the term of
the Loan  Agreement  to February  12,  2003;  and provide for the  repayment  of
principal and the  corresponding  reduction of warrants  under certain terms and
conditions.  This debt is senior to the  subordinated  debentures  issued in our
exchange offers (described  below),  and subordinate to our other  indebtedness.
With the closing of the going private transaction, the warrants were terminated.
On May 31,  2002,  Cygnet  Capital  Corporation,  an  affiliate of Verde and Mr.
Garcia,  purchased from an unrelated party the entire outstanding balance of the
Company's senior subordinated notes payable.  The senior subordinated notes have

<PAGE>

been modified to extend the principal  maturity date to February 12, 2005 and to
provide for earlier  payment of principal  out of the  retained  earnings of the
Company,  up to a maximum of $1.0  million per  quarter,  to the extent that the
Company is in compliance with the covenant  requirements of its various lenders.
As of September 30, 2002, the outstanding balance was $3.0 million.

     1998  Exchange   Offer.   In  the  fourth  quarter  of  1998,  we  acquired
approximately   2.7  million   shares  of  our  common  stock  in  exchange  for
approximately $17.5 million of subordinated debentures. We issued the debentures
at a premium of  approximately  $3.9 million over the market value of the shares
of our common stock that were  exchanged for the  debentures.  Accordingly,  the
debt was  recorded at $13.6  million on our balance  sheet.  The premium will be
amortized  over the life of the  debentures  and results in an effective  annual
interest  rate of  approximately  18.8%.  The  debentures  are unsecured and are
subordinate to all of our existing and future indebtedness. We must pay interest
on the  debentures  semi-annually  at 12% per year.  We are  required to pay the
principal  amount of the  debentures  on October 23, 2003.  We can redeem all or
part of the debentures at any time. In June 2001, we repurchased $3.6 million of
principal of the  debentures.  Mr. Garcia and affiliates own $2.6 million of the
debentures.

     2000 Exchange Offer. In April 2000, we completed an exchange offer in which
we acquired approximately 1.1 million shares of our common stock in exchange for
$11.9 million of subordinated debentures.  We issued the debentures at a premium
of  approximately  $3.9 million over the market value of the exchanged shares of
our common  stock.  Accordingly,  the debt was  recorded  at $8.0  million.  The
premium  will be  amortized  over the life of the  debentures  and results in an
effective  annual  interest rate of  approximately  19.9%.  The  debentures  are
unsecured and are subordinate to all of our existing and future indebtedness. We
must pay  interest  on the  debentures  semi-annually  at 11% per  year.  We are
required to pay the principal amount of the debentures on April 15, 2007. We can
redeem all or part of the  debentures at any time. Mr. Garcia and affiliates own
$4.9 million of the debentures.

     Debt Shelf  Registration.  In 1997, we registered up to $200 million of our
debt securities under the Securities Act of 1933. Upon the Company  delisting of
the  debentures  and  discontinuing  as a  reporting  company,  the  debt  shelf
registration will be terminated.

Capital Expenditures and Commitments

     On March 4, 2002, UDC Acquisition Corp.  ("Acquisition"),  an entity wholly
owned by UDC  Holdings  Corp.,  completed  a short form merger with and into the
Company. The Company was the surviving  corporation under the short form merger.
UDC Holdings capitalized Acquisition with a combination of cash, common stock of
the Company and a receivable from UDC Holdings representing a commitment to fund
the final  payment to dissenting  shareholders.  Since the  consummation  of the
Merger,  Ray Fidel,  DriveTime  Car Sales and  Finance  Corp.'s  executive  vice
president and chief operating  officer,  has acquired a minority interest in UDC
Holdings Corp., along with Greg Sullivan,  President.  Mr. Garcia has a majority
interest in UDC  Holdings  Corp.  See  Management's  Discussion  and Analysis of
Financial Condition - Part II Other Information - Item 1. Legal Proceedings.

     In addition to our normal recurring  capital  requirements,  we refurbished
all of our  dealerships  related to the change of our  corporate  name from Ugly
Duckling to DriveTime. Total capital expenditures incurred in the 3rd quarter of
2002 related to the rollout of DriveTime were approximately $5.7 million, and we
anticipate additional  expenditures of $0.6 in the fourth quarter as we complete
the refurbishment  project. We funded the DriveTime capital improvements through
our existing liquidity;  however, we have received  preliminary  approval from a
leasing  company  are in  the  process  of  finalizing  a  lease  agreement  for
approximately $3.2 million of these capital improvements.

     Beginning  in June 2002,  the  Company  launched a pilot  limited  warranty
program in the Phoenix market offering a 90 day/3,000 mile major  mechanical and
air  conditioning  coverage.  In July 2002, we rolled out this program to all of
our dealerships.  We also offered,  for a limited time, a 4 year/40,000  limited
warranty for the new Daewoo vehicles  purchased.  We disclaim any obligation for
vehicle related problems outside the scope of the warranty.  However,  there can
be no assurance that these  disclaimers will be upheld in every instance.  Also,
under certain state laws, implied or other warranties may now apply.

     In August 2002,  we entered into an  agreement  with the Daewoo  bankruptcy
trustee to purchase 1,941 new Daewoo vehicles and paid a $0.7 million deposit to
the trustee.  In September  2002, we paid $6.7 million of the purchase  price to
the  trustee and took  delivery  862  vehicles.  We  anticipate  paying the $7.6
million  remaining  purchase price and taking  delivery of the additional  1,079
vehicles in the 4th  quarter of 2002.  We plan to fund this  purchase  primarily
though draws on our inventory credit facility.
<PAGE>
Accounting Matters

Critical Accounting Policies

     The  discussion  and  analysis of our  financial  condition  and results of
operations are based upon our condensed consolidated financial statements, which
have been prepared in accordance with accounting  principles  generally accepted
in the United States of America.  The preparation of these financial  statements
require  management to make  estimates  and  judgments  that affect the reported
amounts  of  assets  and  liabilities,   revenues  and  expenses,   and  related
disclosures  of contingent  assets and  liabilities at the date of our financial
statements.  Actual  results may differ from these  estimates  under  difference
assumptions or conditions.

     Certain accounting policies involve  significant  judgments and assumptions
by management,  which have a material impact on the carrying value of assets and
liabilities  and the  recognition of income and expenses;  management  considers
these accounting policies to be critical accounting policies.  The judgments and
assumptions  used by  management  are based on historical  experience  and other
factors,  which are  believed  to be  reasonable  under the  circumstances.  The
following are the Company's critical accounting policies.

     Revenue  Recognition  - Revenue  from the sales of used cars is  recognized
     upon delivery,  when the sales contract is signed and the agreed-upon  down
     payment has been received. Interest income is recognized using the interest
     method.  Direct  loan  origination  costs  related to loans  originated  at
     Company  dealerships  are deferred and charged  against finance income over
     the life of the related  installment  sales loan using the interest method.
     The accrual of interest for accounting  purposes is suspended if collection
     becomes doubtful,  generally 90 days past due, and is resumed when the loan
     becomes current.

     Allowance for Loan Losses - An allowance  for credit losses is  established
     by charging the provision for credit losses and the  allocation of acquired
     allowances.  The evaluation of the adequacy of the allowance considers such
     factors  as the  performance  of  each  dealership's  loan  portfolio,  the
     portfolio  credit grade mix, the Company's  historical  credit losses,  the
     overall portfolio quality and delinquency  status,  the value of underlying
     collateral,  and current economic conditions that may affect the borrowers'
     ability  to pay.  Based  on  these  factors,  management  provides  for the
     estimated  net credit  losses  anticipated  to be  charged-off  on existing
     receivables  over the twelve months  following the balance sheet date. This
     estimate of existing probable and estimatable  losses is primarily based on
     static  pool  analyses  prepared  for  various  segments  of the  portfolio
     utilizing historical loss experience,  adjusted for the estimated impact of
     the current environmental factors outlined above.

     Valuation of Inventory - Inventory consists of used vehicles held for sale,
     which is valued at the lower of cost or market,  and repossessed  vehicles,
     which  are  valued  at  market  value.  Vehicle  reconditioning  costs  are
     capitalized  as a component of inventory  cost.  The cost of used  vehicles
     sold is determined on a specific identification basis.

     Accounting for  Securitizations  - Under the current legal structure of the
     securitization  program,  the Company  sells loans to Company  subsidiaries
     that then securitize the loans by transferring them to separate trusts that
     issue  several  classes  of notes and  certificates  collateralized  by the
     loans.  The  securitization   subsidiaries  then  sell  Class  A  notes  or
     certificates  (Class A obligations) to investors,  and subordinate  classes
     are  retained  by  the  Company.  The  Company  continues  to  service  the
     securitized  loans.  The Class A  obligations  have  historically  received
     investment  grade  ratings and are recorded as Notes Payable - Portfolio by
     the Company.  Additionally, a cash "reserve" account is established for the
     benefit  of the Class A  obligations  holders.  The  reserve  accounts  are
     classified in the financial statements as Investments Held in Trust and are
     a component of Finance Receivables, Net.

     Accounting  for Income Taxes - The  provision  for income taxes is based on
     income  reported  for  financial  statement  purposes  and differs from the
     amount of taxes currently  payable,  since certain income and expense items
     are reported for  financial  statement  purposes in different  periods than
     those for tax  reporting  purposes.  The Company  accounts for income taxes
     using  the asset  and  liability  approach,  the  objective  of which is to
     establish deferred tax assets and liabilities for the temporary differences
     between the  financial  reporting  basis and the tax basis of the Company's
     assets and  liabilities  at enacted tax rates expected to be in effect when
     such amounts are realized or settled. A valuation  allowance is established
     for deferred tax assets if, based on the weight of available  evidence,  it
     is more likely than not that some portion or all of the deferred tax assets
     will not be realized. A valuation allowance is established, when necessary,
     to reduce the  deferred  tax assets to the amount  that is more likely than
     not to be realized.

Recent Accounting Pronouncements

     In October  2002,  the  Financial  Accounting  Standards  Board issued FASB
Statement  No.  147,  Acquisitions  of  Certain  Financial  Institutions,  which
requires that the excess of the fair value of liabilities  assumed over the fair
value of tangible  and  identifiable  intangible  assets  acquired in a business

<PAGE>

combination  represents goodwill and should be accounted for under SFAS No. 142,
Goodwill  and  Other  Intangible   Assets.   This  statement   applied  for  all
acquisitions of financial institutions,  except those between two or more mutual
enterprises.  Management  does not expect the adoption of Statement No. 147 will
have an effect on the Company's financial statements.

     In  July  2002,  the  Financial  Accounting  Standards  Board  issued  FASB
Statement  No.  146,  Accounting  for Costs  Associated  with  Exit or  Disposal
Activities,  which  revises  accounting  for  specified  employee  and  contract
terminations  that are  part of  restructuring  activities.  Statement  No.  146
applies to costs associated with an exit activity  (including  restructuring) or
with a disposal of long-lived assets.  Those activities can include  eliminating
or reducing profit lines,  terminating  employees and contracts,  and relocating
plant facilities or personnel.  Under Statement No. 146, a company will record a
liability  for a cost  associated  with an exit or disposal  activity  when that
liability is incurred and can be measured at fair value. The new requirement can
shift  expense  recognition  from one  quarter or fiscal  year to  another.  The
provisions of Statement No. 146 are effective prospectively for exit or disposal
activities  initiated  after December 31, 2002.  Management  does not expect the
adoption of  Statement  No. 146 will have an effect on the  Company's  financial
statements.

     In April  2002,  the  Financial  Accounting  Standards  Board  issued  FASB
Statement  No. 145,  Rescission  of  Statement  No. 4, 44 and 64,  Amendment  of
Statement No. 13, and Technical  Corrections  (SFAS No. 145).  SFAS No. 145 will
rescind SFAS No. 4 which  required all gains and losses from  extinguishment  of
debt to be aggregated and, if material, classified as an extraordinary item, net
of related  income tax effect.  As a result of SFAS No. 145, the criteria in APB
Opinion No. 30,  Reporting the Results of  Operations,  Reporting the Effects of
Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently
Occurring Events and  Transactions  will now be used to classify those gains and
losses.  SFAS No. 64 amended SFAS No. 4, and is no longer necessary because SFAS
No. 4 has been rescinded.  The provisions of Statement No. 145 are effective for
fiscal years  beginning  after May 15, 2002. The Company has elected to do early
adoption  of  SFAS  No.  145,  which  resulted  in  the  reclassification  of an
extraordinary item resulting from the gain from the early extinguishment of debt
that occurred in the three months ended June 30, 2001.

     In August  2001,  the  Financial  Accounting  Standards  Board  issued FASB
Statement  No. 144,  Accounting  for the  Impairment  or Disposal of  Long-Lived
Assets (Statement 144), which supersedes both FASB Statement No. 121, Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of (Statement  121) and the accounting  and reporting  provisions of APB Opinion
No. 30, Reporting the Results of  Operations--Reporting  the Effects of Disposal
of  a  Segment  of a  Business,  and  Extraordinary,  Unusual  and  Infrequently
Occurring Events and Transactions (Opinion 30), for the disposal of a segment of
a business (as previously  defined in that  Opinion).  Statement No. 144 retains
the  fundamental  provisions in Statement No. 121 for  recognizing and measuring
impairment  losses on long-lived assets held for use and long-lived assets to be
disposed of by sale,  while also  resolving  significant  implementation  issues
associated  with  Statement  No. 121.  For example,  Statement  No. 144 provides
guidance  on how a  long-lived  asset that is used as part of a group  should be
evaluated for impairment,  establishes  criteria for when a long-lived  asset is
held for sale, and prescribes the accounting for a long-lived asset that will be
disposed of other than by sale.  Statement No. 144 retains the basic  provisions
of Opinion 30 on how to present discontinued  operations in the income statement
but broadens that  presentation to include a component of an entity (rather than
a segment of a business).  Unlike  Statement No. 121, an  impairment  assessment
under  Statement No. 144 will never result in a write-down of goodwill.  Rather,
goodwill is evaluated for impairment under Statement No. 142, Goodwill and Other
Intangible Assets.

     The Company  adopted the  provisions  of Statement  No. 144 for the quarter
ended March 31, 2002.  The adoption of Statement No. 144 for  long-lived  assets
held  for  use  did  not  have a  material  impact  on the  Company's  financial
statements because the impairment  assessment under Statement No. 144 is largely
unchanged from Statement No. 121.

     In June 2001,  the FASB  issued  Statement  No. 143,  Accounting  for Asset
Retirement Obligations, which requires that the fair value of a liability for an
asset retirement  obligation be recognized in the period in which it is incurred
if a  reasonable  estimate  of fair  value  can be made.  The  associated  asset
retirement  costs would be  capitalized  as part of the  carrying  amount of the
long-lived  asset and depreciated  over the life of the asset.  The liability is
accreted at the end of each period through charges to operating expense.  If the
obligation is settled for other than the carrying  amount of the liability,  the
Company will recognize a gain or loss on settlement. The provisions of Statement
No. 143 are  effective  for fiscal  years  beginning  after June 15,  2002.  The
Company has not yet determined the impact,  if any, of adoption of Statement No.
143.

     In June 2001, the FASB issued Statement No. 141, Business Combinations, and
Statement No. 142, Goodwill and Other Intangible Assets.  Statement 141 requires
that the purchase  method of  accounting  be used for all business  combinations
initiated  after  June  30,  2001,  as  well  as all  purchase  method  business
combinations  completed  after  June 30,  2001.  Statement  141  also  specifies

<PAGE>

criteria  intangible  assets acquired in a purchase method business  combination
must meet to be recognized and reported  apart from goodwill.  Statement No. 142
requires that goodwill and  intangible  assets with  indefinite  useful lives no
longer be amortized,  but instead  tested for  impairment  at least  annually in
accordance  with the  provisions  of Statement  No. 142.  Statement No. 142 also
requires that  intangible  assets with definite  useful lives be amortized  over
their respective  estimated useful lives to their estimated residual values, and
reviewed for impairment. The Company adopted the provisions of Statement No. 141
as of July 1, 2001, and Statement No. 142 effective January 1, 2002.

     Statement  No. 141 required  upon  adoption of Statement  No. 142, that the
Company evaluate its existing  intangible assets and goodwill that were acquired
in  a  prior   purchase   business   combination,   and   make   any   necessary
reclassifications in order to conform with the new criteria in Statement No. 141
for  recognition  apart from  goodwill.  Upon adoption of Statement No. 142, the
Company was required to reassess  the useful  lives and  residual  values of all
intangible  assets  acquired in  purchase  business  combinations,  and make any
necessary amortization period adjustments by the end of the first interim period
after adoption.  In addition, to the extent an intangible asset is identified as
having an indefinite useful life, the Company is required to test the intangible
asset for impairment in accordance with the provisions of Statement No. 142. Any
impairment  loss must be measured as of the date of adoption and  recognized  as
the cumulative  effect of a change in accounting  principle in the first interim
period.

     The Company adopted the provisions of Statement No. 141 as of July 1, 2001,
and Statement No. 142 effective January 1, 2002. Statement No. 141 required upon
adoption of Statement No. 142, that the Company evaluate its existing intangible
assets and goodwill that were acquired in a prior purchase business combination,
and make any  necessary  reclassifications  in  order  to  conform  with the new
criteria  in  Statement  No.  141  for  recognition  apart  from  goodwill.   In
conjunction  with the adoption of Statement  No. 142, the Company has  allocated
the entire goodwill balance to the Retail Operations Segment.  During the second
quarter of 2002, the Company finalized the required impairment tests of goodwill
as of January 1, 2002. The Company does not have an impairment of goodwill as of
the date of adoption.  In addition,  upon  adoption we  discontinued  amortizing
goodwill.  For the three  months  ended  September  30,  2001,  the  Company had
approximately  $0.2 million in amortization  expense.  As of September 30, 2002,
the Company has unamortized  goodwill of approximately  $11.6 million within the
retail  segment.   (For  further  discussion  on  SFAS  No.  141  and  142,  see
Management's  Discussion and Analysis of Financial  Condition- Recent Accounting
Pronouncements.)

We Make Forward Looking Statements

     This Report includes statements that constitute  forward-looking statements
within the meaning of the safe harbor  provisions of the Private and  Securities
Litigation  Reform Act of 1995. We claim the protection of the  safe-harbor  for
our   forward-looking   statements.   Forward-looking   statements   are   often
characterized  by  the  words  "may,"  "anticipates,"  "believes,"  "estimates,"
"projects,"  "expects"  or similar  expressions  and do not  reflect  historical
facts.  Forward-looking  statements in this report relate,  among other matters,
to:  opening  additional  new and  used car  dealerships;  our  name  change  to
DriveTime and strategic operating changes, including the impacts of new programs
such as  DriveCare  and  RateAdvantage  (including  the impact on our  portfolio
average  APR),  funding  for  DriveTime   improvements;   economic   conditions;
anticipated financial results, such as sales, profitability,  other revenues and
loan portfolios, improvements in underwriting including credit scoring, adequacy
of the allowance for credit  losses,  and  improvements  in recoveries  and loan
performance,  including  delinquencies  and charge offs;  selling and  marketing
expenses  remaining  constant  through year end;  retaining  the  warehouse  and
inventory  lines  of  credit;  the  success  of  cost  savings  initiatives  and
restructurings;  improvements in inventory, inventory acquisition, and inventory
mix,  including  higher priced  inventory and improved loan  performance on such
inventory;   release  of  deposits  held  in  escrow;   continuing  to  complete
securitization  transactions;  and  internet  generated  sales  growth  and loan
performance.  Forward looking statements include risks,  uncertainties and other
factors which may cause our actual  results,  performance or  achievements to be
materially  different  from those  expressed or implied by such forward  looking
statements,  some of which we cannot  predict or  quantify.  Factors  that could
affect  our  results  and  cause  or  contribute  to   differences   from  these
forward-looking  statements  include,  but are not  limited  to: any  decline in
consumer  acceptance  of our car sales  strategies or marketing  campaigns;  any
inability to finance our  operations  in light of a tight credit  market for the
sub-prime industry and our current financial circumstances; any deterioration in
the used car finance industry or increased competition in the used car sales and
finance  industry;  any  inability to monitor and improve our  underwriting  and
collection  processes;  any changes in  estimates  and  assumptions  in, and the
ongoing adequacy of, our allowance for credit losses;  any inability to continue
to reduce  operating  expenses as a percentage  of sales;  increases in interest
rates; the failure to efficiently and profitably manage  acquisitions and/or new
car dealerships; adverse economic conditions; any material litigation against us
or material,  unexpected  developments  in existing  litigation;  and any new or
revised  accounting,  tax or legal guidance that adversely affect used car sales
or financing and  developments  with respect to the going  private  transaction.
Forward-looking  statements  speak only as of the date the  statement  was made.
Future   events  and  actual   results   could   differ   materially   from  the
forward-looking statements. When considering each forward-looking statement, you
should keep in mind the risk factors and cautionary  statements found throughout
this Form 10-Q and specifically those set forth in Exhibit 99.1 hereto. We are
not  obligated  to  publicly  update or revise any forward  looking  statements,
whether as a result of new information,  future events, or for any other reason.
References to DriveTime  Automotive Group, Inc. as the largest chain of buy-here
pay-here used car dealerships in the United States is management's  belief based
upon the  knowledge  of the industry  and not on any current  independent  third
party study.

                                     ITEM 3.

                                   Market Risk

     We are exposed to market risk on our financial  instruments from changes in
interest rates. We do not use financial  instruments for trading  purposes or to
manage  interest rate risk. Our earnings are  substantially  affected by our net
interest  income,   which  is  the  difference  between  the  income  earned  on
interest-bearing assets and the interest paid on interest bearing notes payable.
Increases   in  market   interest   rates  could  have  an  adverse   effect  on
profitability.

     Our  financial   instruments   consist  primarily  of  fixed  rate  finance
receivables,  residual  interests  in pools of fixed rate  finance  receivables,
fixed rate notes  receivable,  and  variable and fixed rate notes  payable.  Our
finance  receivables  are  classified  as  sub-prime  loans and  generally  bear
interest at the lower of 29.9% or the maximum  interest  rate  allowed in states
that  impose  interest  rate  limits.  At  September  30,  2002,  the  scheduled
maturities on our finance receivables ranged from one to 45 months for used cars
and the  scheduled  maturities  on our  finance  receivables  for new cars is 48
months,  with a weighted  average  maturity of 30.0  months.  In March 2002,  we
launched  a  pilot   interest   rate  program  in  the  Phoenix   market  called
RateAdvantage  that offers  interest rates ranging from 9.9% to 29.9%  depending
upon the customer's credit grade and the size of the down payment. By July 2002,
we  began  offering  the  RateAdvantage  interest  rate  program  at  all of our
dealerships.  This will impact the overall average  interest rate of our finance
receivable  portfolio.  The  interest  rates we charge our  customers on finance
receivables  has not  changed  as a result of  fluctuations  in market  interest
rates,  although we may increase  the interest  rates we charge in the future if
market interest rates  increase.  A large component of our debt at September 30,
2002, is the Collateralized Notes Payable (Class A obligations) issued under our
securitization  program.  Issuing debt through our securitization program allows
us to mitigate  our  interest  rate risk by reducing the balance of the variable
revolving  line of credit and replacing it with a lower fixed rate note payable.
We are subject to interest  rate risk on fixed rate Notes  Payable to the extent
that future  interest  rates are lower than the  interest  rates on our existing
Notes Payable.

     We believe that our market risk information has not changed materially from
December 31, 2001. See Exhibit 99.1 for further  information on Forward  Looking
Statements and Risk Factors.


                                     ITEM 4.

                             CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures
Under SEC rules,  the Company is required to maintain  disclosure  controls  and
procedures  designed to ensure that information  required to be disclosed by the
Company in the reports that it files or submits  under the  Securities  Exchange
Act of 1934 is recorded,  processed,  summarized  and  reported  within the time
periods  specified in the SEC's rules and forms.  Within the 90-day period prior
to the filing date of this report,  the Company carried out an evaluation of the
effectiveness  of the  design  and  operation  of its  disclosure  controls  and
procedures.  The Company's  management,  including the Company's chief executive
officer  and  chief  financial  officer,  supervised  and  participated  in  the
evaluation.  Based on this evaluation, the chief executive officer and the chief
financial  officer  concluded  that  the  Company's   disclosure   controls  and
procedures were effective as of the evaluation date.

Changes in Internal Controls
There were no significant changes in the Company's internal controls or in other
factors that could significantly affect these controls subsequent to the date of
the Company's evaluation.

PART II.  OTHER INFORMATION
Item 1.  Legal Proceedings.

     The Company has historically sold our cars on an "as is" basis. It requires
all customers to acknowledge in writing on the date of sale that we disclaim any
obligation  for  vehicle-related  problems  that  subsequently  occur.  Although
management  believes that these  disclaimers  are enforceable  under  applicable
laws,  there can be no  assurance  that  they will be upheld in every  instance.
Despite  obtaining these  disclaimers,  in the ordinary course of business,  the
Company  receives  complaints  from  customers  relating  to  vehicle  condition
problems as well as alleged  violations of federal and state consumer lending or
other similar laws and  regulations.  Most of these complaints are made directly
to  the  Company  or  to  various  consumer  protection  organizations  and  are

<PAGE>

subsequently resolved. However, customers occasionally name us as a defendant in
civil suits filed in state, local, or small claims courts.

     Additionally,  in  the  ordinary  course  of  business,  the  Company  is a
defendant  in various  other types of legal  proceedings.  Although  the Company
cannot  determine  at this time the amount of the ultimate  exposure  from these
lawsuits,  if any, based on the advice of counsel management does not expect the
final outcome to have a material adverse effect on the Company.

    In April of 2002, the Company was served in Texas as a defendant in a
purported class action lawsuit captioned Felix Rather III, et. al vs. Dallas
Automotive Sale and Service, et. al (including Ugly Duckling Car Sales, now dba
DriveTime, and Ugly Duckling Credit Corporation, now known as DriveTime Credit
Corporation), 192nd Judicial District, Dallas County, Texas (state court case).
A group of law firms in Texas have sued a large number of Dallas county auto
dealers (including the Company) alleging the auto dealers have charged customers
interest on deferred sales taxes and overcharged in the sale and financing of
customers. It is our understanding more lawsuits have been filed in other Texas
counties. We believe the claims against us are without merit and intend to
vigorously defend against them.

Going Private  Transaction and Related Actions. On March 20, 2001, a shareholder
derivative  complaint was filed,  purportedly  on behalf of the Company,  in the
court of  Chancery  for the State of Delaware  in New Castle  County,  captioned
Berger v. Garcia, et al., No. 18746NC.  The complaint alleges that the Company's
then current directors  breached  fiduciary duties owed to it in connection with
certain  transactions between the Company and Mr. Ernest Garcia II, its Chairman
and majority  stockholder,  and various entities  controlled by Mr. Garcia.  The
complaint  was amended on April 17, 2001,  to add a second  cause of action,  on
behalf of all persons who own Company  common  stock,  and their  successors  in
interest,  which  alleged that the  Company's  then current  directors  breached
fiduciary  duties in connection  with the proposed  acquisition by Mr. Garcia of
all of the outstanding  shares of common stock not owned by him. The Company was
named as a nominal defendant in the action.  The original cause of action sought
to void all  transactions  deemed to have been  approved in breach of directors'
fiduciary  duties and  recovery by the Company of alleged  compensatory  damages
sustained as a result of the transactions.  The second cause of action sought to
enjoin the Company from proceeding with the proposed  acquisition by Mr. Garcia,
or, in the alternative, awarding compensatory damages to the class.

     Following Mr.  Garcia's  offer in April 2001,  to purchase all  outstanding
shares of the  Company's  common  stock (for $2.00  cash,  $5.00  debenture  per
share),  five  additional  and  separate  purported   shareholder  class  action
complaints  were filed  between  April 17, and April 25,  2001,  in the Court of
Chancery for the State of Delaware in New Castle County. All of these cases were
consolidated June 5, 2001.

     In  September  of 2001,  Mr.  Garcia  withdrew  his April 2001  proposal to
purchase the outstanding common stock due to the economic uncertainty  resulting
from the events following the September 11th terrorist  attack.  On November 16,
2001,  Mr.  Garcia  announced  his  intention  of  initiating  a tender offer to
purchase all of the outstanding  shares of common stock of the Company not owned
by him.  That  same day,  the  plaintiffs'  amended  the  consolidated  cases to
re-allege  the  derivative  claims and replaced the class claims  related to the
April 2001  proposal  with class  claims  challenging  and seeking to enjoin Mr.
Garcia's  tender  offer.  The  amended  complaint  alleged  that the  defendants
breached  or aided and  abetted in the  breach of their  fiduciary  duties,  and
sought to void the transactions  challenged in the derivative claims and recover
compensatory damages on behalf of the purported class and the Company.

     On December 4, 2001,  UDC  Acquisition,  a wholly owned  subsidiary  of UDC
Holdings  Corp.,  an entity then wholly  owned by Mr.  Garcia and Mr.  Sullivan,
commenced a tender offer to purchase all of UDC's  outstanding  shares of common
stock not owned by Mr. Garcia,  Mr.  Sullivan,  and affiliated  entities.  As of
March 4, 2002, UDC Acquisition and the Company effected a statutory merger under
Section 253 of the Delaware General Corporation Law.

     On February 4, 2002, the parties  entered into a Stipulation  and Agreement
of Compromise, Settlement and Release documenting the settlement of the Delaware
litigation  and  providing  for a final hearing for court review and approval of
the settlement.  A mailing was sent to the shareholders in mid-February and this
hearing was held on April 17, 2002.  On April 18th,  the court entered its final
decision  approving the  settlement  and finding it fair,  reasonable and in the
best  interests  of  the  class,  certifying  the  class  for  purposes  of  the
settlement,  compromising  and releasing all claims with prejudice on the merits
and  awarding  attorneys'  fees and costs to the  plaintiffs'  in the  amount of
$1,050,000. A notice of appeal was filed by two dissenting shareholders prior to
the expiration date; their appeal has been denied.  The court order was final as
of November  12,  2002.  Plaintiffs'  counsel is not  entitled to their fees and
costs until five days after the court order is final. An additional objection to
the settlement has been informally raised by objecting  shareholders.  We expect
this  objection  to be  rejected by the court.  We do not believe the  objection
affects  the  finality  of  the  court  order  although  we  are  seeking  court
affirmation  of such.  The Company also reached an agreement with its directors'
and  officers'  liability  insurance  carrier to  reimburse  the Company for the
payment of the plaintiffs'  fees and costs (assuming final court approval of the
settlement).
<PAGE>

     Shortly  after the  expiration  of the Amended  Tender  Offer,  the Company
mailed to the  shareholders  who did not tender their shares a notice  outlining
the  procedures  they were required to follow if they wished to dissent from the
merger  and  seek   appraisal  of  their  shares.   Under  Delaware  law,  these
shareholders  had 20 days from the date of the  mailing  of the notice to notify
the Company of their intention to assert  appraisal  rights.  If such notice was
made  timely,  dissenting  shareholders  were  required  to file a petition  for
appraisal in the  Delaware  Court of Chancery  within 120 days of the  effective
date of the merger in order to preserve their appraisal  rights.  Dissenters who
failed to file a petition  for  appraisal  within  this time period will only be
entitled to the merger  consideration  of $3.53 per share.  Two appraisal rights
actions  were filed in Delaware  during this 120 day period.  The court will now
determine which  shareholders  are entitled to appraisal rights and appraise the
shares of such shareholders.  UDC Holdings has agreed to fund the payment of the
final appraisal amount to dissenting shareholders.

Item 2.  Changes in Securities and Use of Proceeds.

     (a)  None
     (b)  None
     (c)  None
     (d)  Not Applicable

Item 3.  Defaults Upon Senior Securities.

     As of  September  30,  2002,  the  Company was not in  compliance  with the
monthly and quarterly  calculation of the Debt to Tangible Net Worth covenant in
its 2002B  Trust,  resulting  in an event of default  under the  agreement.  The
breach in covenant was due to an error in the determination of the covenant test
at the time the trust documentation was prepared.  The insurer, XL Capital,  has
waived the covenant for the month and quarter ending September 30, 2002, and its
rights under the event of default and agreed to amend the  documentation  with a
more appropriate test going forward.  In the 2001A Trust, the portfolio breached
a portfolio  delinquency  test,  resulting in an increase in the target  reserve
account level to 16% from 8%.

     As a result of the event of default in the 2002B trust, although waived, an
event of default was triggered in the warehouse agreement.  The warehouse lender
has agreed to waive this breach in the  agreement.  At September  30, 2002,  the
Company was in compliance with all other required covenants.

     As a result of the event of default in the 2002B trust, although waived, an
event of default was triggered in the senior secured loan agreement.  The senior
secured  lender has agreed to waive this breach in the  agreement.  At September
30, 2002, the Company was in compliance with all other required covenants.

     As a result of the event of default in the 2002B trust, although waived, an
event of default was triggered in the revolving  inventory  facility  agreement.
AFC has agreed to waive this breach in the agreement. At September 30, 2002, the
Company was in compliance with all other required covenants.


Item 4.  Submission of Matters to a Vote of Security Holders.

   None

Item 5.  Other Information.

   None

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

(a)      Exhibits
<TABLE>
<CAPTION>
<S>             <C>
Exhibit 10.1    -Amended and Restated  Senior  Secured Loan  Agreement  between the  Registrant  and Certain  Lenders,
                 dated July 19, 2002
Exhibit 10.2    -Aircraft  Lease  Agreement  between the Registrant and Verde  Investments,  Inc.,  dated November 1, 2002
Exhibit 10.3    -Covenant Waiver dated November 6, 2002, between the Registrant and Greenwich Capital Financial Products, Inc.
Exhibit 10.4    -Covenant Waiver dated November 6, 2002, between the Registrant and Automotive Finance Corporation
Exhibit 10.5    -Covenant Waiver dated November 13, 2002, between the Registrant and XL Capital Assurance
Exhibit 10.6    -Covenant Waiver dated November 6, 2002, between the Registrant and various lenders
Exhibit 99.1    -Statement Regarding Forward Looking Statements and Risk Factors
Exhibit 99.2    -Certifications by Greg Sullivan, CEO, and Mark Sauder, CFO
</TABLE>

(b) Reports on Form 8-K.

     During the third  quarter of 2002,  the  Company  filed two reports on Form
8-K. The first report on Form 8-K, dated July 19, 2002, and filed July 24, 2002,
reported  Ugly  Duckling's  closing the renewal of a $45  million  secured  loan
facility  with  certain  lenders  and  revised  calculations  found  in  fact no
termination  events had been  triggered,  as  previously  announced.  The second
report on Form 8-K,  dated and filed August 30,  2002,  reported the name change
and new  financing  program.  A press release dated August 28, 2002 and entitled
"Ugly Duckling  Announces  Change to DriveTime and Introduction of 0% Financing"
was filed as an exhibit to this 8-K.

SIGNATURE

     Pursuant to the  requirements  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.

         DRIVETIME AUTOMOTIVE GROUP, INC.

         /s/     MARK G. SAUDER
       -----------------------------------------------------------------------
         Mark G. Sauder
         Vice President and
         Chief Financial Officer
         (Principal Financial and Accounting Officer)

Date:  November 13, 2002
<PAGE>

CERTIFICATIONS

I, Gregory B. Sullivan, CEO, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of DriveTime  Automotive
     Group, Inc.;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officer and I have  indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


      Date: November 13, 2002           DRIVETIME AUTOMOTIVE GROUP, INC.

                                        /s/     GREGORY B. SULLIVAN
                                      ----------------------------------------
                                        Gregory B. Sullivan
                                        President and Chief Executive Officer
                                        (Principal Executive Officer)


<PAGE>



I, Mark G. Sauder, CFO, certify that:


1.   I have reviewed this quarterly report on Form 10-Q of DriveTime  Automotive
     Group, Inc.;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officer and I have  indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


     Date: November 13, 2002            DRIVETIME AUTOMOTIVE GROUP, INC.

                                        /s/     MARK G. SAUDER
                                      ----------------------------------------
                                        Mark G. Sauder
                                        Vice President and
                                        Chief Financial Officer
                                        (Principal Financial and Accounting
                                        Officer)