<PAGE>

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

                                    FORM 10-Q


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

               For the quarterly period ended          October 31, 2002
                                              --------------------------------

                                       OR

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

         For the transition period from               to
                                        -------------   -------------

Commission file number 1-11601
                       -------

                           NATIONAL AUTO CREDIT, INC.
        ----------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


         Delaware                                                 34-1816760
------------------------------------------------             -------------------
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)



555 Madison Avenue, 29th Floor, New York, New York                  10022
---------------------------------------------------          -------------------
(Address of principal executive offices)                          (Zip Code)



                   (212) 644-1400
---------------------------------------------------
(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.

                        Yes (X)              No ( )

Indicate by check mark whether the registrant has filed all documents and
reports required by Sections 12, 13 or 15(d) of the Securities and Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court.

                        Yes ( )              No ( )

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

          Class                                 Outstanding at December 12, 2002
-----------------------------                   --------------------------------
Common Stock, $0.05 par value                              7,830,614

<PAGE>

                        NATIONAL AUTO CREDIT, INC. AND SUBSIDIARIES

                                     TABLE OF CONTENTS


<TABLE>
<CAPTION>

                                                                                                     PAGE

<S>                 <C>                                                                               <C>
PART I.            FINANCIAL INFORMATION


Item 1.            Financial Statements

                   Report of Independent Certified Public Accountants                                 1

                   Condensed Consolidated Balance Sheets as of
                   October 31, 2002 and January 31, 2002                                              2

                   Condensed Consolidated Statements of Operations for the
                   Three Months and Nine Months Ended October 31, 2002 and 2001                       3

                   Condensed Consolidated Statements of Stockholders' Equity and
                   Comprehensive Income for the Nine Months Ended October 31, 2002                    4

                   Condensed Consolidated Statements of Cash Flows for
                   the Nine Months Ended October 31, 2002 and 2001                                    5

                   Notes to Condensed Consolidated Financial Statements                               6


Item 2.            Management's Discussion and Analysis of
                   Financial Condition and Results of Operations                                     15


Item 3.            Quantitative and Qualitative Disclosures about
                   Market Risk                                                                       22

Item 4.            Controls and Procedures                                                           22


PART II.           OTHER INFORMATION

Item 1.            Legal Proceedings                                                                 23

Item 6.            Exhibits and Reports on Form 8-K                                                  26


Signatures                                                                                           26

Certifications                                                                                       27

</TABLE>

<PAGE>
                          PART I. FINANCIAL INFORMATION
                          ITEM 1. FINANCIAL STATEMENTS


REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS


To the Board of Directors and Stockholders of
National Auto Credit, Inc. and Subsidiaries
New York, New York


         We have reviewed the accompanying condensed consolidated balance sheet
of National Auto Credit, Inc. and its subsidiaries as of October 31, 2002, the
related statements of operations for each of the three-month and nine-month
periods ended October 31, 2002 and 2001; the related statements of stockholders'
equity and comprehensive income for the nine-month period ended October 31, 2002
and the statement of cash flows for the nine-month periods ended October 31,
2002 and 2001. The financial statements are the responsibility of the Company's
management.

         We conducted our reviews in accordance with standards established by
the American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with auditing standards generally accepted in the United States of
America, the objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an
opinion.

         Based on our review, we are not aware of any material modifications
that should be made to such condensed consolidated financial statements for them
to be in conformity with accounting principles generally accepted in the United
States of America.

         We have previously audited, in accordance with auditing standards
generally accepted in the United States of America, the consolidated balance
sheet as of January 31, 2002, and the related consolidated statements of
operations, stockholders' equity and comprehensive income, and cash flows for
the year then ended (not presented herein) and in our report dated April 9,
2002, we expressed an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet as of January 31, 2002, is fairly stated,
in all material respects, in relation to the consolidated balance sheet from
which it has been derived.



/s/ Grant Thornton LLP
Cleveland, Ohio
December 11, 2002



                                       1
<PAGE>

                   NATIONAL AUTO CREDIT, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT SHARE DATA)


<TABLE>
<CAPTION>
                                                          October 31,      January 31,
                                                             2002              2002
                                                          -----------      -----------
                                                           (unaudited)
                               ASSETS

<S>                                                         <C>            <C>
Cash and cash equivalents                                   $   2,644      $   6,122
Marketable securities (Note 2)                                    947            994
Investment in AFC (Note 3)                                      9,440          9,220
Property and equipment, net of accumulated depreciation
  of $79, and $57, respectively                                    84             71
Income taxes refundable                                         3,507          3,507
Other assets                                                      458            620
                                                            ---------      ---------
                                                            $  17,080      $  20,534
                                                            =========      =========


                LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES:
Self-insurance claims                                       $     718      $     769
Accrued income taxes                                              697            697
Other liabilities                                               1,730          2,743
                                                            ---------      ---------
  Total liabilities                                             3,145          4,209

Commitments and contingencies (Note 4)                             --             --

STOCKHOLDERS' EQUITY:
Preferred stock                                                    --             --
Common stock,  $.05 par value;
  authorized 40,000,000 shares; issued 39,377,589
  shares each period                                            1,969          1,969
Additional paid-in capital                                    174,337        174,337
Retained deficit                                             (138,649)      (136,346)
Accumulated other comprehensive loss                             (180)          (133)
Treasury stock, at cost, 31,144,975 shares and
  30,735,835 shares, respectively (Note 6)                    (23,542)       (23,502)
                                                            ---------      ---------
  Total stockholders' equity                                   13,935         16,325
                                                            ---------      ---------
                                                            $  17,080      $  20,534
                                                            =========      =========
</TABLE>

     See accompanying notes to condensed consolidated financial statements.

                                       2
<PAGE>



                   NATIONAL AUTO CREDIT, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                         Three Months Ended        Nine Months Ended
                                                            October 31,                October 31,
                                                        -------------------      ---------------------
                                                           2002       2001         2002         2001
                                                        ------      -------      -------      --------
Revenues
<S>                                                     <C>         <C>          <C>          <C>
  Interest income from investments                      $   32      $    74      $   117      $    300
  Income from AFC investment                               118           13          220            61
                                                        ------      -------      -------      --------
    Total revenues                                         150           87          337           361
                                                        ------      -------      -------      --------
Costs and Expenses
  General and administrative                               930        1,247        2,613         4,096
                                                        ------      -------      -------      --------
    Total costs and expenses                               930        1,247        2,613         4,096
                                                        ------      -------      -------      --------
Loss from continuing operations
  before income taxes                                     (780)      (1,160)      (2,276)       (3,735)
Provision for income taxes                                   -            -            -             -
                                                        ------      -------      -------      --------
Loss from continuing operations                           (780)      (1,160)      (2,276)       (3,735)
Loss from discontinued operations, net of tax             (173)      (6,787)         (27)       (9,254)
                                                        ------      -------      -------      --------
Net loss                                                  (953)      (7,947)      (2,303)      (12,989)
Accretion of discount on redeemable preferred stock         --          (26)          --           (74)
                                                        ------      -------      -------      --------
Net loss applicable to common stock                     $ (953)     $(7,973)     $(2,303)     $(13,063)
                                                        ======      =======      =======      ========

Basic and diluted earnings (loss) per share
  Continuing operations                                 $ (.09)     $  (.10)     $  (.27)     $   (.33)
  Discontinued operations                                 (.02)        (.58)          --          (.79)
                                                        ------      -------      -------      --------
    Net earnings (loss) per share                       $ (.11)     $  (.68)     $  (.27)     $  (1.12)
                                                        ======      =======      =======      ========
Weighted average number of shares outstanding
  Basic and diluted                                      8,357       11,721        8,546        11,684
                                                        ======      =======      =======      ========
</TABLE>




     See accompanying notes to condensed consolidated financial statements.



                                       3
<PAGE>



                   NATIONAL AUTO CREDIT, INC. AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                            AND COMPREHENSIVE INCOME
                       NINE MONTHS ENDED OCTOBER 31, 2002
                        (IN THOUSANDS, EXCEPT SHARE DATA)
                                   (UNAUDITED)





<TABLE>
<CAPTION>

                                  Preferred Stock       Common Stock
                                 ----------------- -------------------------   Additional
                                            Par                     Par         Paid-In
                                 Shares    Value      Shares       Value        Capital
                                 -------- -------- ------------- ----------- ---------------


<S>                              <C>       <C>      <C>          <C>          <C>
Balance at
January 31, 2002                     -    $   -    39,377,589     $ 1,969       $ 174,337

Net loss
Surrender of common shares
   as payment on note receivable
Other comprehensive
   income-unrealized loss
   on marketable securities
                                 -------- -------- ------------- ----------- ---------------

Comprehensive income (loss)


Balance at
October 31, 2002                     -    $   -    39,377,589     $ 1,969       $ 174,337
                                 ======== ======== ============= =========== ===============

<CAPTION>

                                                             Accumulated
                                                                Other                    Comprehensive
                                   Retained     Treasury    Comprehensive                   Income
                                   Deficit        Stock     Income (Loss)     Total         (Loss)
                                 ------------- ------------ --------------- -----------   ------------


<S>                               <C>          <C>          <C>             <C>           <C>
Balance at
January 31, 2002                   $ (136,346)   $ (23,502)         $ (133)   $ 16,325

Net loss                               (2,303)                                  (2,303)      $ (2,303)
Surrender of common shares
   as payment on note receivable                       (40)                        (40)
Other comprehensive
   income-unrealized loss
   on marketable securities                                            (47)        (47)           (47)
                                 ------------- ------------ --------------- -----------   ------------

Comprehensive income (loss)                                                                  $ (2,350)
                                                                                          ============

Balance at
October 31, 2002                   $ (138,649)   $ (23,542)         $ (180)   $ 13,935
                                 ============= ============ =============== ===========

</TABLE>



See accompanying notes to condensed consolidated financial statements.


                                       4
<PAGE>



                   NATIONAL AUTO CREDIT, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                      Nine Months Ended
                                                                         October 31,
                                                                    --------      --------
                                                                      2002          2001
                                                                    --------      --------
<S>                                                                 <C>           <C>
Cash flows from operating activities
Net loss                                                            $ (2,303)     $(12,989)
Adjustments to reconcile net loss to net cash used in
  operating activities:
  Loss from discontinued operations                                       27         9,254
  Depreciation and amortization                                           22           490
  Stock compensation                                                      --          (116)

Changes in operating assets and liabilities:
 Accrued income tax                                                       --           (56)
 Other liabilities                                                      (805)       (1,979)
 Other operating assets and liabilities, net                            (204)          283
                                                                    --------      --------
   Net cash used in operating activities                              (3,263)       (5,113)
                                                                    --------      --------

Cash flows from investing activities
 Principal collected on loans                                             --           149
 Proceeds from sale of loans                                              --           313
 Change in contracts in progress                                         106           559
 Proceeds from AFC distributions                                          --           551
 Proceeds from sale of assets held for sale                               --            78
 Purchase of property and equipment                                      (35)         (317)
                                                                    --------      --------
      Net cash provided by investing activities                           71         1,333
                                                                    --------      --------

    Decrease in cash and cash equivalents from
       continuing operations                                          (3,192)       (3,780)
    Decrease in cash and cash equivalents from
       discontinued operations                                          (286)       (2,623)
    Cash and cash equivalents at beginning of period                   6,122        12,444
                                                                    --------      --------
    Cash and cash equivalents at end of period                      $  2,644      $  6,041
                                                                    ========      ========

 Supplemental disclosures of cash flow information
    Interest paid                                                   $      3      $     --
                                                                    ========      ========
    Income taxes paid                                               $     --      $     56
                                                                    ========      ========
</TABLE>



     See accompanying notes to condensed consolidated financial statements.



                                       5
<PAGE>



                   NATIONAL AUTO CREDIT, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1 - BASIS OF PRESENTATION

General

         The accompanying unaudited condensed consolidated financial statements
include the accounts of National Auto Credit, Inc. and Subsidiaries ("NAC"). The
financial statements are unaudited, but in the opinion of management, reflect
all adjustments (consisting only of normal recurring accruals) necessary for a
fair presentation of NAC's consolidated financial position, results of
operations, stockholders' equity and comprehensive income, and cash flows for
the periods presented.

         The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial statements and with the rules of the Securities and
Exchange Commission applicable to interim financial statements, and therefore do
not include all disclosures that might normally be required for interim
financial statements prepared in accordance with generally accepted accounting
principles. The accompanying unaudited condensed consolidated financial
statements should be read in conjunction with NAC's consolidated financial
statements, including the notes thereto, appearing in NAC's Annual Report on
Form 10-K for the year ended January 31, 2002. The results of operations for the
three months and nine months ended October 31, 2002 are not necessarily
indicative of the operating results for the full year.

         The preparation of financial statements and the accompanying notes
thereto, in conformity with generally accepted accounting principles, requires
management to make estimates and assumptions that affect reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and reported amounts of revenues and
expenses during the respective reporting periods. Actual results could differ
from those estimates.

Discontinued Operations

         In the fourth quarter of Fiscal 2002, NAC completed a strategic review
of its investment in ZoomLot, acquired December 15, 2000, and the development of
its e-commerce services. NAC's strategic review included evaluating the evolving
market conditions of the used car dealer and financing industries, the start-up
nature of the ZoomLot operations, the current market demand for and penetration
of ZoomLot's e-commerce solution to electronically link eligible used car
dealers and their qualified customers with available used car lenders and
financing terms, current operating losses and forecasts of future operating
results and strategic opportunities available to ZoomLot. As a result of this
review, management of NAC determined that it was unable to predict, with the
requisite degree of certainty, when or whether ZoomLot would achieve positive
cash flows.

         As a consequence of NAC's strategic review and determination, effective
December 31, 2001, NAC suspended its ZoomLot operations and initiated steps to
discontinue e-commerce operations. Additionally, as a consequence of NAC's
decision to discontinue its ZoomLot e-commerce operations, NAC also formally
exited the sub-prime used automobile consumer finance business effective
December 31, 2001. As a result of these decisions, both the e-commerce and
automobile finance segments have been classified as discontinued operations as
of January 31, 2002. Subsequent to December 31, 2001, NAC is engaged principally
in the movie exhibition segment.

     NAC is evaluating various additional strategic business alternatives,
including, but not limited to, the purchase of one or more existing businesses
or the entry into one or more businesses.

     Certain fiscal 2002 amounts have been reclassified to conform with fiscal
2003 presentations.



                                       6
<PAGE>


                   NATIONAL AUTO CREDIT, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)



NOTE 1 - BASIS OF PRESENTATION (CONTINUED)

New Accounting Pronouncements

     On July 20, 2001, the Financial Accounting Standards Board (FASB) issued
SFAS 141, Business Combinations, and SFAS 142, Goodwill and Intangible Assets.
SFAS 141 is effective for all business combinations completed after June 30,
2001. SFAS 142 is effective for fiscal years beginning after December 15, 2001;
however, certain provisions of this Statement apply to goodwill and other
intangible assets acquired between July 1, 2001 and the effective date of SFAS
142. Major provisions of these Statements and their effective dates for NAC are
as follows:

         o    All business combinations initiated after June 30, 2001 must use
              the purchase method of accounting. The pooling of interest method
              of accounting is prohibited except for transactions initiated
              before July 1, 2001;

         o    Intangible assets acquired in a business combination must be
              recorded separately from goodwill if they arise from contractual
              or other legal rights or are separable from the acquired entity
              and can be sold, transferred, licensed, rented or exchanged,
              either individually or as part of a related contract, asset or
              liability;

         o    Goodwill, as well as intangible assets with indefinite lives,
              acquired after June 30, 2001, will not be amortized. Effective
              February 1, 2002, all previously recognized goodwill and
              intangible assets with indefinite lives is no longer subject to
              amortization;

         o    Effective February 1, 2002, goodwill and intangible assets with
              indefinite lives are tested for impairment annually and whenever
              there is an impairment indicator; and

         o    All acquired goodwill must be assigned to reporting units for
              purposes of impairment testing and segment reporting.

         NAC adopted SFAS 141 and 142 effective February 1, 2002. NAC previously
recorded a monthly charge (as a reduction of its earnings from its investment in
AFC) of $23,000 for the amortization, in a manner similar to goodwill, of the
excess of NAC's investment in AFC over its share of the net assets of AFC. As a
result of NAC's adoption of SFAS 141 and SFAS 142, for the three months and nine
months ended October 31, 2002, NAC discontinued this monthly charge to earnings.

         In June 2001, the FASB issued SFAS 143, Accounting for Asset Retirement
Obligations. SFAS 143 requires entities to record to the fair value of the
liability for an asset retirement obligation in the period in which it is
incurred. The amount initially recorded as the asset retirement obligation is
based upon the estimated present value of the retirement costs to be incurred,
and is capitalized as a part of the asset. The obligation is subsequently
accreted for the passage of time by charges to interest expense, and the
capitalized costs are amortized as part of depreciation expense related to the
asset. The asset retirement obligation is also continually re-estimated, with
changes in its present value caused by changes in the estimated retirement cost
recorded as adjustments to the carrying amount and subsequent depreciation of
the asset. SFAS 143 is effective for fiscal years beginning after June 15, 2002
and was adopted by NAC effective February 1, 2002. At the time of adoption,
there was no material impact to NAC's financial statements.



                                       7
<PAGE>
                   NATIONAL AUTO CREDIT, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 1 - BASIS OF PRESENTATION (CONTINUED)

         In August 2001, the FASB issued SFAS 144, Accounting for the Impairment
or Disposal of Long-Lived Assets. SFAS 144 supercedes SFAS 121, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,
with the exception of impairment and disposal issues related to goodwill and
other intangible assets that are not amortized. SFAS 144 also supersedes the
accounting and reporting provisions of Accounting Principles Board Opinion No.
(APB) 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. SFAS 144 retains many of the fundamental
recognition and measurement provisions of SFAS 121, and also retains the
requirement in APB 30 to separately identify and report discontinued operations.
However, SFAS 144 extends the APB 30 reporting requirements for discontinued
operations to components of an entity that have either been disposed of or
classified as assets held for sale that may not have qualified as segments under
APB 30, as a result of which operating results that previously were not
classified as discontinued operations may be treated as such upon the adoption
of SFAS 144. SFAS 144 is effective for fiscal years beginning after December 15,
2001, and was adopted by NAC effective February 1, 2002. At the time of
adoption, there was no material impact to NAC's financial statements.

         In July, 2002 the FASB issued SFAS 146, Accounting for Costs Associated
with Exit or Disposal Activities. SFAS 146 requires companies to recognize costs
associated with exit or disposal activities when they are incurred, rather than
at the date of a commitment to an exit or disposal plan. Examples of costs
covered by the standard included lease termination costs and certain employee
severance costs that are associated with a restructuring, discontinued
operation, plant closing, or other exit or disposal activity. Previous
accounting guidance was provided by EITF Issue No. 94-3, Liability Recognition
for Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring. SFAS 146 replaces Issue
94-3 and is required to be applied prospectively to exit or disposal activities
initiated after December 2002. NAC is currently evaluating the impacts, if any,
of SFAS 146.




NOTE 2 - MARKETABLE SECURITIES

         Marketable securities at October 31, 2002 are summarized as follows (in
thousands):

                                                 Gross Unrealized
                                                -----------------
                                         Cost    Gains     Losses    Fair Value
                                        ------- -------    ------    ----------
Equity securities - mutual funds        $ 1,127 $     -    $ (180)      $ 947


All marketable securities were classified as available for sale.


                                       8
<PAGE>
                   NATIONAL AUTO CREDIT, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)




NOTE 3 - INVESTMENT IN AFC

         On April 5, 2000, NAC, through its wholly owned subsidiary National
Cinemas, Inc., acquired a 50% membership interest in Angelika Film Center, LLC
("AFC"). AFC is the owner and operator of the Angelika Film Center, which is a
multiplex cinema and cafe complex in the Soho District of Manhattan in New York
City.

         AFC is currently owned 50% by NAC and 50% by Reading International,
Inc. ("Reading"). The articles and bylaws of AFC provide that for all matters
subject to a vote of the members, a majority is required, except that in the
event of a tie vote, the Chairman of Reading shall cast the deciding vote.

            NAC uses the equity method to account for its investment in AFC.
NAC's initial investment exceeded its share of AFC's net assets and that portion
of the investment balance is accounted for in a manner similar to goodwill. AFC
uses a December 31 year-end for financial reporting purposes. NAC reports on a
January 31 year-end, and for its fiscal quarters ending April 30, July 31,
October 31 and January 31 records its pro-rata share of AFC's earnings on the
basis of AFC's fiscal quarters ending March 31, June 30, September 30, and
December 31, respectively. For the three months ended October 31, 2002 and 2001,
NAC recorded income of $118,000 and $82,000, respectively, representing its
share of AFC's net income. For the nine months ended October 31, 2002 and 2001,
NAC recorded income of $220,000 and $266,000, respectively, representing its
share of AFC's net income. Additionally, for the three and nine months ended
October 31, 2001, prior to the adoption of SFAS 141 and SFAS 142, NAC recorded
amortization expense of $69,000 and $205,000, respectively, as a reduction of
its income from its investment in AFC. As a result of NAC's adoption of SFAS 141
and 142, this amortization charge was discontinued in Fiscal 2003.

          Summarized income statement data for AFC for the three months and nine
months ended September 30, 2002, and 2001, respectively, is as follows (in
thousands):

<TABLE>
<CAPTION>

                                            Three Months Ended        Nine Months Ended
                                                September 30,            September 30,
                                            ------------------        -----------------
                                             2002         2001         2002        2001
                                            -------     -------      -------     -------
<S>                                         <C>         <C>          <C>         <C>
Revenues                                    $ 1,529     $ 1,657      $ 4,338     $ 5,044

Film rental                                     420         551        1,155       1,664
Operating costs                                 656         707        2,092       2,158
Depreciation and amortization                   175         149          524         484
General and administrative expenses              42          85          127         206
                                            -------     -------      -------     -------
                                              1,293       1,492        3,898       4,512
                                            -------     -------      -------     -------
Net income                                  $   236     $   165      $   440     $   532
                                            =======     =======      =======     =======

NAC's proportionate share of net income     $   118     $    82      $   220     $   266
Amortization expense                             --         (69)          --        (205)
                                            -------     -------      -------     -------
Income from investment in AFC               $   118     $    13      $   220     $    61
                                            =======     =======      =======     =======

</TABLE>



                                       9
<PAGE>

                   NATIONAL AUTO CREDIT, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 4 - COMMITMENTS AND CONTINGENCIES

Shareholder Complaints

         On July 31, 2001, NAC received a derivative complaint (the "Academy
Complaint") filed by Academy Capital Management, Inc. ("Academy"), a shareholder
of NAC, with the Court of Chancery of Delaware, on or about July 31, 2001,
against James J. McNamara, John A. Gleason, William S. Marshall, Henry Y.L. Toh,
Donald Jasensky, Peter T. Zackaroff, Mallory Factor, and Thomas F. Carney, Jr.
(the "Director Defendants") and names NAC as a nominal defendant. The Academy
Complaint principally seeks: (i) a declaration that the Director Defendants
breached their fiduciary duties to NAC, (ii) a judgment voiding an employment
agreement with James J. McNamara and rescinding a stock exchange agreement in
which NAC acquired ZoomLot Corporation, (iii) a judgment voiding the grant of
stock options and the award of director fees allegedly related thereto, (iv) an
order directing the Director Defendants to account for alleged damages sustained
and profits obtained by the Director Defendants as a result of the alleged
various acts complained of, (v) the imposition of a constructive trust over
monies or other benefits received by the Director Defendants and (vi) an award
of costs and expenses.

         On August 16, 2001, NAC received a complaint (the "Markovich
Complaint") filed by Levy Markovich ("Markovich"), a shareholder of NAC, with
the Court of Chancery of Delaware on or about August 16, 2001, against James J.
McNamara, John A. Gleason, William S. Marshall, Henry Y. L. Toh, Donald
Jasensky, Peter T. Zackaroff, Mallory Factor, and Thomas F. Carney, Jr. and NAC
as a nominal defendant. The Markovich Complaint principally seeks: (i) a
declaration that the Director Defendants have breached their fiduciary duties to
NAC, (ii) a judgment voiding an employment agreement with James J. McNamara and
rescinding a stock exchange agreement in which NAC acquired ZoomLot Corporation,
(iii) a judgment voiding the grant of options and the award of directors fees
allegedly related thereto, (iv) an order directing the Director Defendants to
account for alleged damages sustained and alleged profits obtained by the
Director Defendants as a result of the alleged various acts complained of, (v)
the imposition of a constructive trust over monies or other benefits received by
the directors, and (vi) an award of costs and expenses.

         On August 31, 2001, NAC received a complaint (the "Harbor Complaint")
filed by Harbor Finance Partners ("Harbor"), a shareholder of NAC, with the
Court of Chancery of Delaware on or about August 31, 2001, against Thomas F.
Carney, Jr., Mallory Factor, John A. Gleason, Donald Jasensky, William S.
Marshall, James J. McNamara, Henry Y. L. Toh, Peter T. Zackaroff, Ernest C.
Garcia, and ZoomLot Corporation as Defendants and NAC as a nominal defendant.
The Harbor Complaint principally seeks: (i) a judgment requiring the Director
Defendants to promptly schedule an annual meeting of shareholders within thirty
(30) days of the date of the Harbor Complaint; (ii) a judgment declaring that
the Director Defendants breached their fiduciary duties to NAC and wasted its
assets; (iii) an injunction preventing payment of monies and benefits to James
J. McNamara under his employment agreement with NAC and requiring Mr. McNamara
to repay the amounts already paid to him thereunder; (iv) a judgment rescinding
the agreement by NAC to purchase ZoomLot and refunding the amounts it paid; (v)
a judgment rescinding the award of monies and options to the directors on
December 15, 2000 and requiring the directors to repay the amounts they received
allegedly related thereto; (vi) a judgment requiring the defendants to indemnify
NAC for alleged losses attributable to their alleged actions; and (vii) a
judgment awarding interest, attorney's fees, and other costs, in an amount to be
determined.



                                       10
<PAGE>

                   NATIONAL AUTO CREDIT, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)



NOTE 4 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

         On October 12, 2001, NAC received a complaint (the "Zadra Complaint")
filed by Robert Zadra, a shareholder of NAC, with the Supreme Court of the State
of New York on or about October 12, 2001 against James J. McNamara, John A.
Gleason, William S. Marshall, Henry Y. L. Toh, Donald Jasensky, Peter T.
Zackaroff, Mallory Factor, Thomas F. Carney, Jr., and NAC as Defendants. The
Zadra Complaint seeks (i) a declaration that the Director Defendants have
breached their fiduciary duties to NAC, (ii) a judgment voiding the grant of
options and the award of directors fees, (iii) a judgment voiding an employment
agreement with James J. McNamara, (iv) an order directing the Director
Defendants to account for alleged damages sustained and alleged profits obtained
by the Director Defendants as a result of the alleged various acts complained
of, and (v) an award of costs and expenses.

         NAC intends to vigorously defend each of the respective claims made in
the Academy Complaint, Markovich Complaint, Harbor Complaint and Zadra
Complaint, as it believes that the claims have no merit. By order of the
Delaware Chancery Court on November 12, 2001, the Academy, Markovich and Harbor
Complaints were consolidated and the Academy Complaint was deemed the operative
complaint. A motion to dismiss the Academy Complaint has been filed but has not
yet been decided. A motion to dismiss the Zadra Complaint was filed but was
withdrawn after plaintiff filed an amended compliant. NAC has until January 24,
2003 to answer or otherwise move to dismiss the amended complaint. As each of
these litigation matters are in a very early stage, no prediction is made with
respect to their respective ultimate outcomes.

Self-Insurance Reserves for Property Damage and Personal Injury Claims.

         NAC, under the names Agency Rent-A-Car, Inc. ("ARAC"), Altra Auto
Rental and Automate Auto Rental, previously engaged in the rental of automobiles
on a short-term basis, principally to the insurance replacement market. In
Fiscal 1996, NAC disposed of its rental fleet business through the sale of
certain assets and through certain leases to a national car rental company. All
liabilities related to the discontinued rental business, principally
self-insurance claims, were retained by NAC.

         NAC maintained and continues to maintain self-insurance for claims
relating to bodily injury or property damage from accidents involving the
vehicles rented to customers by its discontinued automobile rental operations.
NAC was, when required by either governing state law or the terms of its rental
agreement, self-insured for the first $1.0 million per occurrence, and for
losses in excess of $5.0 million per occurrence, for bodily injury and property
damage resulting from accidents involving its rental vehicles. NAC was also
self-insured, up to certain retained limits, for bodily injury and property
damage resulting from accidents involving NAC vehicles operated by employees
within the scope of their employment. In connection therewith, NAC established
certain reserves in its financial statements for the estimated cost of
satisfying those claims.



                                       11
<PAGE>

                   NATIONAL AUTO CREDIT, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)



NOTE 4 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

NAC is named as defendant in a self-insurance action Darrell Smith and Aaron
Simpson ("Plaintiffs") v. John J. Bennett, ARAC, Country Mutual Insurance
Company and Atlanta Casualty Insurance Company in Cook County (State) Court of
Illinois. This matter arises out of an incident in which an ARAC car renters'
son, while driving the rental vehicle, was involved in a fatal accident and with
serious injuries to passengers in the vehicle. Initially, the Plaintiffs
appeared to be recovering well from the injuries sustained. However,
subsequently plaintiff Simpson underwent an accident-related surgery on his back
for removal of a shunt, during which nerves in the spine were severed causing
paraplegia. The Plaintiffs are suing for damages resulting from their injuries
and the subsequent paraplegia suffered by plaintiff Simpson. The doctor and
hospital that performed the surgery were also named as defendants by Plaintiffs
and have been impleaded by NAC under a theory of medical malpractice. Damages
alleged in the complaint are not specified, although in discovery Plaintiffs
have indicated they are seeking millions of dollars in compensatory and other
damages. The matter is scheduled for trial during 2003. NAC maintains a number
of defenses relating to this matter. NAC has almost exhausted its self-insured
retention of $500,000 on this case and NAC attempted to get its excess carrier,
the Transamerica Insurance Company ("TIC"), to take over the defense of this
action and indemnify NAC up to the policy limits. However, as a result TIC has
filed a suit (TIC Co. v. Darrell Smith, Aaron Simpson and NAC in the United
States Court for the Northern District of Illinois) for a declaratory judgment
seeking a ruling that it has no liability as an "excess insurer" of NAC in
connection with the Smith and Simpson action and that under Illinois law, NAC's
(and thereafter TIC's) financial responsibility is capped at an amount for less
than what the Plaintiffs are seeking in the state court action. The federal
court initially dismissed this complaint prior to NAC answering on the grounds
that the matter to be decided was premature as the original action had not been
resolved. TIC made a motion to have the court reconsider its decision and NAC
has filed a response arguing that the court should take action on this matter at
this time. The Court granted TIC's motion and has permitted the action to
proceed. NAC's answer was filed in May 2002. Thereafter, in August 2002, TIC
filed a motion for summary judgment, asserting that NAC has no liability to
Smith and Simpson; that if NAC is liable, such liability is capped in an amount
far less that what Plaintiff is seeking in the state court action; and that it
also has no liability to NAC under its excess insurance policy. NAC filed its
own cross-motion for summary judgment, asserting that it has no liability to
Smith and Simpson; and that if there is any liability it is capped under
Illinois state law, or, if not capped, then TIC's excess insurance coverage
applies. Smith and Simpson has filed their own cross-motion for summary
judgment, asserting that NAC is liable for Smith and Simpson's injuries and that
NAC's liability is not capped under Illinois law. These motions and
cross-motions have been filed but have not yet been decided by the court.

         Because of the uncertainties related to these two matters, as well as
several smaller legal proceedings involving NAC's former rental operations and
self-insurance claims, it is difficult to project with precision the ultimate
effect the adjudication or settlement of these matters will have on NAC. At
October 31, 2002 NAC had accrued $718,000 to cover all outstanding
self-insurance liabilities. As additional information regarding NAC's potential
liabilities becomes available, NAC will revise the estimates as appropriate.

Other Litigation

         In the normal course of its business, NAC is named as defendant in
legal proceedings. It is the policy of NAC to vigorously defend litigation
and/or enter into settlements of claims where management deems appropriate.



                                       12
<PAGE>

                   NATIONAL AUTO CREDIT, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 5 - DISCONTINUED OPERATIONS

         As discussed in Note 1, as a consequence of NAC's strategic review and
determination, effective December 31, 2001, NAC suspended its ZoomLot operations
and initiated the steps to discontinue e-commerce operations. Additionally, as a
consequence of NAC's decision to discontinue its ZoomLot e-commerce operations
NAC also formally exited the sub-prime used automobile consumer finance business
effective December 31, 2001. As a result of these decisions, both the e-commerce
and automobile financing segments have been classified as discontinued
operations.

         Summarized results of discontinued operations are as follows (in
thousands):
<TABLE>
<CAPTION>
                                                                     Discontinued Operations
                                                        ---------------------------------------------------
                                                                        Auto          Auto
                                                        E-Commerce    Financing      Rental         Total
                                                        ---------     ---------     --------       --------
<S>                                                     <C>          <C>            <C>          <C>
NINE MONTHS ENDED OCTOBER 31, 2002
  Revenue                                               $      -      $     23      $      -      $     23
  Operating expense                                            -             -             -             -
  General and administrative expenses (income)                (1)          157          (106)           50
                                                        --------      --------      --------      --------
                                                              (1)          157          (106)           50
                                                        --------      --------      --------      --------
  Income (loss) before income taxes                            1          (134)          106           (27)
  Provision for income taxes                                   -             -             -             -
                                                        --------      --------      --------      --------
  Income (loss) from discontinued operations                   1          (134)          106           (27)
  Gain (loss) on disposal of operations, net of tax            -             -             -             -
                                                        --------      --------      --------      --------
  Income (loss) from discontinued operations            $      1      $   (134)     $    106      $    (27)
                                                        ========      ========      ========      ========

NINE MONTHS ENDED OCTOBER 31, 2001
  Revenue                                               $    769      $    463      $      -      $  1,232
  Operating expense                                       10,190             -             -        10,190
  General and administrative expenses                          -           144           152           296
                                                       --------      --------      --------      --------
                                                          10,190           144           152        10,486
                                                        --------      --------      --------      ---------
  Income (loss) before income taxes                       (9,421)          319          (152)       (9,254)
  Provision for income taxes                                   -             -             -             -
                                                        --------      --------      --------      --------
  Income (loss) from discontinued operations              (9,421)          319          (152)       (9,254)
  Gain (loss) on disposal of operations, net of tax            -             -             -             -
                                                        --------      --------      --------      --------
  Income (loss) from discontinued operations            $ (9,421)     $    319      $   (152)     $ (9,254)
                                                        ========      ========      ========      ========
</TABLE>


                                       13
<PAGE>

                   NATIONAL AUTO CREDIT, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 6 - TREASURY STOCK

         In connection with the discontinued operations of ZoomLot, on January
31, 2002 NAC entered into an Exchange and Repayment Agreement ("Exchange
Agreement") with the former ZoomLot shareholders to resolve certain financial
obligations of NAC and the former ZoomLot shareholders. Pursuant to the terms of
the Exchange Agreement, the former ZoomLot shareholders issued to NAC a
promissory note in the amount of $986,048 payable, together with interest 4% per
annum, in cash or NAC Common Stock (at a mutually agreed-upon value of $1.25 per
share) on or before January 31, 2003. For financial reporting purposes, at
January 31, 2002, NAC recorded the note receivable, a component of other assets,
at a net value of $110,000 reflecting the market value at January 31, 2002 of
the 788,838 shares of NAC Common Stock the maker of the note has the option to
tender in payment of the principal.

         On August 29, 2002, the former ZoomLot shareholders transferred to NAC
409,140 shares of NAC Common Stock as an installment payment against the
promissory note. The market value of the 409,140 shares at the date of their
transfer was $16,000 less than the $56,000 carrying amount of the note
extinguished by the transfer, and, accordingly, NAC recorded the surrendered
shares at their market value of $40,000 and a note receivable collectability
charge (included in general and administrative expenses) for the $16,000
deficiency. At October 31, 2002, the net value of the promissory note was
$56,000.

         On November 13, 2002, subsequent to the fiscal quarter ended October
31, 2002, the former ZoomLot shareholders transferred to NAC 402,000 shares of
NAC common stock with a net value of $56,000 as the second and final payment
against the promissory note.





                                       14
<PAGE>

                                     ITEM 2.
                   NATIONAL AUTO CREDIT, INC. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


GENERAL

         National Auto Credit, Inc. (the "Company" or "NAC") began operations in
1969 and was incorporated in Delaware in 1971. Through and including December
31, 2001, NAC's operations were conducted principally through three operating
segments, (i) the e-commerce segment, which was comprised of ZoomLot
Corporation's ("ZoomLot") development of e-commerce services to facilitate the
process by which used car dealerships, lenders and insurance companies
communicate and complete the transactions between them that are needed to
provide used car dealers' customers with financing, insurance and other
services, (ii) the movie exhibition segment, which is comprised of the
activities of Angelika Film Center LLC ("AFC") and (iii) the automobile
financing segment.

         In the fourth quarter of Fiscal 2002, NAC completed a strategic review
of its investment in ZoomLot, acquired December 15, 2000, and the development of
its e-commerce services. NAC's strategic review included evaluating the evolving
market conditions of the used car dealer and financing industries, the start-up
nature of the ZoomLot operations, the current market demand for and penetration
of ZoomLot's e-commerce solution to electronically link eligible used car
dealers and their qualified customers with available used car lenders and
financing terms, current operating losses and forecasts of future operating
results and strategic opportunities available to ZoomLot. As a result of this
review, management of NAC determined that it was unable to predict, with the
requisite degree of certainty, when or whether ZoomLot would achieve positive
cash flows.

         As a consequence of NAC's strategic review and determination, effective
December 31, 2001, NAC suspended its ZoomLot operations and initiated the steps
to discontinue its e-commerce operations. As a further consequence of NAC's
decision to discontinue its ZoomLot e-commerce operations, NAC also formally
exited the sub-prime used automobile consumer finance business effective
December 31, 2001. From October 1995 through March 2000, NAC's principal
business activity was to invest in sub-prime used automobile consumer loans,
which took the form of installment loans collateralized by the related vehicle.
NAC purchased such loans, or interests in pools of such loans, from member
dealerships, and performed the underwriting and collection functions for such
loans. As a result of these decisions both the e-commerce and the automobile
financing operations were classified as a discontinued operations as of January
31, 2002.

         Throughout the nine months ended October 31, 2002 and as of December
12, 2002, NAC had no external source of financing, and has operated on its
existing cash balances. NAC continues to pursue its plan of examining new
business opportunities, which may be pursued through the investment in, or
acquisition of existing operating businesses or other means. At October 31, 2002
NAC has cash and marketable securities of $3.6 million, which together with any
cash flow derived from its investment in AFC and proceeds from the collection of
its $3.5 million federal income tax refund, will be used to pursue such
opportunities. Additionally, NAC will continue to pursue reduction in operating
expenses and explore new debt or equity financing (for which there can be no
assurance NAC will obtain such financing) as means of supplementing the
resources available to pursue new opportunities.



                                       15
<PAGE>



                   NATIONAL AUTO CREDIT, INC. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED


RESULTS FROM OPERATIONS FOR THE THREE MONTHS ENDED OCTOBER 31, 2002 AS COMPARED
TO THE THREE MONTHS ENDED OCTOBER 31, 2001

         Interest Income from Investments: Interest income from investments is
principally the interest earned on NAC's investments in marketable securities,
commercial paper and money market accounts. Interest income from these
investments was $32,000 for the three months ended October 31, 2002 as compared
to $74,000 for the three months ended October 31, 2001. The decrease was
primarily due to the decrease in the weighted average investment balances for
the three months ended October 31, 2002.

         Income from AFC Investment: NAC accounts for its investment in AFC
using the equity method. For the three months ended October 31, 2002 and 2001,
NAC recorded income of $118,000 and $82,000, respectively, representing NAC's
share of AFC's net income for the three months ended September 30, 2002 and
2001, respectively. Additionally, for the three months ended October 31, 2001,
prior to the adoption of SFAS 141 and SFAS 142, NAC recorded amortization
expense of $69,000 as a reduction of its income from its investment in AFC. As a
result of NAC's adoption of SFAS 141 and 142, this amortization charge was
discontinued in Fiscal 2003.

         The following sets forth summarized operating results for AFC (in
thousands):

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

Revenues                                    $ 1,529     $ 1,657

Film rental                                     420         551
Operating costs                                 656         707
Depreciation and amortization                   175         149
General and administrative expenses              42          85
                                            -------     -------
                                              1,293       1,492
                                            -------     -------
Net income                                  $   236     $   165
                                            =======     =======

NAC's proportionate share of net income     $   118     $    82
Amortization expense                              -         (69)
                                            -------     -------
Income from investment in AFC               $   118     $    13



                                       16
<PAGE>



                   NATIONAL AUTO CREDIT, INC. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED


AFC's revenues decreased $128,000 for the three months ended September 30, 2002
as compared to the three months ended September 30, 2001, principally as a
result of the net effects of a 9.7% decrease in attendance which was partially
offset by a 0.5% increase in average ticket prices. The attendance, and at times
the ticket prices, at AFC will vary depending on audience interest in, and the
popularity of the films it exhibits and other factors. Film rental, as a
percentage of revenue, decreased 5.8% to 27.5% from 33.3% for the three months
ended September 30, 2002 and 2001, respectively. Film rental expense generally
is a factor of a fixed percentage rental rate per film multiplied by the number
of tickets sold. AFC experiences fluctuations in film rental expense, as a
percentage of revenue, depending upon the rental rate per film and the
popularity of the film. Operating costs, as a percent of revenue, remained
stable at 42.9% for the three months ended September 30, 2002 as compared to
42.7% for the three months ended September 30, 2001 due principally to a
decrease in revenues offset by a decrease in advertising expenses. The nature of
AFC's operating costs tend to generally be more fixed overhead-related costs and
advertising expenses. In August 2002, AFC initiated a $1.3 million capital
program to renovate the interior of the theatre and upgrade certain equipment,
services and facilities. As a result, AFC is financing the capital program
through its current cash flow from operations and has deferred cash
distributions to NAC until such time that the capital program is completed which
is currently scheduled for December 2002. For the nine months ended October 31,
2001, proceeds from AFC distributions to NAC was $551,000.

         General and Administrative: General and administrative expenses include
costs of executive, accounting and legal personnel, occupancy, legal,
professional, insurance and other general corporate overhead costs. General and
administrative expenses decreased $317,000 to $930,000 for the three months
ended October 31, 2002 from $1.2 million for the three months ended October 31,
2001. The decrease in general and administrative costs for the three months
ended October 31, 2002 was primarily due to a decrease in professional services,
which declined as a result in the contraction of NAC's operations. Included in
general and administrative expenses for the three months ended October 31, 2002
is a charge of $16,000 related to the excess of the carrying amount of the
portion of the note receivable from the former ZoomLot shareholders repaid by
their surrender of 409,000 shares of NAC Common Stock over the market value of
those shares when surrendered (see Note 6 of Notes to Condensed Consolidated
Financial Statements).

         Income Taxes: Due to net operating losses and the availability of net
operating loss carryforwards, NAC's effective income tax rate was zero for the
three-month period ended October 31, 2002 and October 31, 2001. NAC has provided
a full valuation allowance against its net operating loss carryforward and other
net deferred tax asset items due to the uncertainty of their future realization.

RESULTS FROM OPERATIONS FOR THE NINE MONTHS ENDED OCTOBER 31, 2002
  AS COMPARED TO THE NINE MONTHS ENDED OCTOBER 31, 2001

         Interest Income from Investments: Interest income from investments is
principally the interest earned on NAC's investments in marketable securities,
commercial paper and money market accounts. Interest income from these
investments was $117,000 for the nine months ended October 31, 2002 as compared
to $300,000 for the nine months ended October 31, 2001. The decrease was
primarily due to the decrease in the weighted average investment balances for
the nine months ended October 31, 2002.


                                       17
<PAGE>

                   NATIONAL AUTO CREDIT, INC. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED

         Income from AFC Investment: NAC accounts for its investment in AFC
using the equity method. For the nine months ended October 31, 2002 and 2001,
NAC recorded income of $220,000 and $266,000, respectively, representing NAC's
share of AFC's net income for the nine months ended September 30, 2002 and 2001,
respectively. Additionally, for the nine months ended September 30, 2001, prior
to the adoption of SFAS 141 and SFAS 142, NAC recorded amortization expense of
$205,000 as a reduction of its income from its investment in AFC. As a result of
NAC's adoption of SFAS 141 and 142, this amortization charge was discontinued in
Fiscal 2003.

         The following sets forth summarized operating results for AFC (in
thousands):

                                            Nine Months Ended
                                               September 30,
                                            -------------------
                                              2002        2001
                                            -------     -------
Revenues                                    $ 4,338     $ 5,044

Film rental                                   1,155       1,664
Operating costs                               2,092       2,158
Depreciation and amortization                   524         484
General and administrative expenses             127         206
                                            -------     -------
                                              3,898       4,512
                                            -------     -------
Net income                                  $   440     $   532
                                            =======     =======

NAC's proportionate share of net income     $   220     $   266
Amortization expense                              -        (205)
                                            -------     -------
Income from investment in AFC               $   220     $    61
                                            =======     =======

         AFC's revenues decreased $706,000 for the nine months ended September
30, 2002 as compared to the nine months ended September 30, 2001, principally as
a result of the net effects of a 18.3% decrease in attendance which was
partially offset by a 5.7% increase in average ticket prices. The attendance,
and at times the ticket prices, at AFC will vary depending on audience interest
in, and the popularity of the films it exhibits and other factors. Film rental,
as a percentage of revenue, decreased 6.4% to 26.6% from 33.0% for the nine
months ended September 30, 2002 and 2001, respectively. Film rental expense
generally is a factor of a fixed percentage rental rate per film multiplied by
the number of tickets sold. AFC experiences fluctuations in film rental expense,
as a percentage of revenue, depending upon the rental rate per film and the
popularity of the film. Operating costs, as a percent of revenue, were 48.2% for
the nine months ended September 30, 2002 as compared to 42.7% for the nine
months ended September 30, 2001 due principally to a decrease in revenues. The
nature of AFC's operating costs tend to generally be more fixed overhead-related
costs and advertising expenses. In August 2002, AFC initiated a $1.3 million
capital program to renovate the interior of the theatre and upgrade certain
equipment, services and facilities. As a result, AFC is financing the capital
program through its current cash flow from operations and has deferred cash
distributions to NAC until such time that the capital program is completed which
is currently scheduled for December 2002. For the nine months ended October 31,
2001, proceeds from AFC distribution to NAC was $551,000.


                                       18
<PAGE>


                   NATIONAL AUTO CREDIT, INC. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED


         General and Administrative: General and administrative expenses include
costs of executive, accounting and legal personnel, occupancy, legal,
professional, insurance and other general corporate overhead costs. General and
administrative expenses decreased $1.5 million to $2.6 million for the nine
months ended October 31, 2002 from $4.1 million for the nine months ended
October 31, 2001. The decrease in general and administrative costs for the nine
months ended October 31, 2002 was primarily due to a decrease in personnel costs
and professional services, which declined as a result in the contraction of
NAC's operations.

  Income Taxes: Due to net operating losses and the availability of net
operating loss carryforwards, NAC's effective income tax rate was zero for the
nine-month period ended October 31, 2002 and October 31, 2001. NAC has provided
a full valuation allowance against its net operating loss carryforward and other
net deferred tax asset items due to the uncertainty of their future realization.

DISCONTINUED OPERATIONS

         E-commerce Operations: For the nine months ended October 31, 2002,
NAC's e-commerce operations generated operating income of $1,000 from the
wind-down of the e-commerce operations. For the nine months ended October 31,
2001, NAC's e-commerce operations incurred an operating loss of $9.4 million,
reflecting revenues of $769,000 and expenses of $10.2 million. Included in the
expenses of $10.2 million were non-cash charges of $1.7 million for the
amortization of the goodwill arising in the December 2000 acquisition of ZoomLot
and $5.5 million charge to write-off the impairment of unamortized goodwill and
certain long-lived assets. The remaining expenses of $3.0 million represent the
expenses incurred in ZoomLot's attempts to develop its e-commerce method of
facilitating the process by which used car dealerships, lenders and insurance
companies communicate and complete the transactions between them that are needed
to provide the used auto dealers' customers with financing, insurance and other
services.

         Automobile Financing and Auto Rental: For the nine months ended October
31, 2002, NAC's automobile financing and rental operations incurred a combined
operating loss of $28,000, comprised of net proceeds from an insurance
settlement of $186,000 less $214,000 in net general and administrative expenses.
For the nine months ended October 31, 2001, NAC's automobile financing and
rental operations generated combined operating income of $167,000, comprised of
net proceeds of $463,000 from the sale and collection of previously charged-off
loans less other net general and administrative expenses of $296,000.

LIQUIDITY AND CAPITAL RESOURCES

         For the nine months ended October 31, 2002 and 2001, NAC used $3.2
million and $5.1 million, respectively, for operating activities as NAC's
payments for operating and general and administrative expenses exceeded income
from investments and NAC's proportionate share of income from AFC. NAC funded
the negative operating cash flows and negative cash flows from discontinued
operations from its existing cash balances.

                                       19
<PAGE>


                   NATIONAL AUTO CREDIT, INC. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED

         NAC believes that the available cash and cash equivalents and
marketable securities totaling $3.6 million at October 31, 2002, and the
investment income therefrom, the collection of the federal income tax refund of
$3.5 million and any cash distributions from its investment in AFC will be
sufficient to pay operating expenses, existing liabilities, and fund its
activities through the next twelve months as NAC explores new strategic business
alternatives. As discussed in Note 4 of Notes to Condensed Consolidated
Financial Statements, NAC is presently a defendant or nominal defendant in
various derivative shareholder complaints and various litigation matters
relating to NAC's discontinued auto finance and auto rental businesses. Although
NAC intends to vigorously defend each of the claims, each of these litigations
are in a very early stage, and no prediction can be made with respect to their
ultimate outcomes. An adverse outcome could have a material adverse effect on
NAC's liquidity, financial condition or results of operations. Additionally, as
previously discussed, NAC's lack of external financing sources may limit its
ability to pursue strategic business alternatives being considered by NAC's
Board of Directors. Such limitations may have an adverse impact on NAC's
financial position, results of operations and liquidity.

NEW ACCOUNTING PRONOUNCEMENTS

     On July 20, 2001, the Financial Accounting Standards Board (FASB) issued
SFAS 141, Business Combinations, and SFAS 142, Goodwill and Intangible Assets.
SFAS 141 is effective for all business combinations completed after June 30,
2001. SFAS 142 is effective for fiscal years beginning after December 15, 2001;
however, certain provisions of this Statement apply to goodwill and other
intangible assets acquired between July 1, 2001 and the effective date of SFAS
142. Major provisions of these Statements and their effective dates for NAC are
as follows:

         o    All business combinations initiated after June 30, 2001 must use
              the purchase method of accounting. The pooling of interest method
              of accounting is prohibited except for transactions initiated
              before July 1, 2001;

         o    Intangible assets acquired in a business combination must be
              recorded separately from goodwill if they arise from contractual
              or other legal rights or are separable from the acquired entity
              and can be sold, transferred, licensed, rented or exchanged,
              either individually or as part of a related contract, asset or
              liability;

         o    Goodwill, as well as intangible assets with indefinite lives,
              acquired after June 30, 2001, will not be amortized. Effective
              February 1, 2002, all previously recognized goodwill and
              intangible assets with indefinite lives is no longer subject to
              amortization;

         o    Effective February 1, 2002, goodwill and intangible assets with
              indefinite lives are tested for impairment annually and whenever
              there is an impairment indicator; and

         o    All acquired goodwill must be assigned to reporting units for
              purposes of impairment testing and segment reporting.


         NAC adopted SFAS 141 and 142 effective February 1, 2002. NAC previously
recorded a monthly charge (as a reduction of its earnings from its investment in
AFC) of $23,000 for the amortization, in a manner similar to goodwill, of the
excess of NAC's investment in AFC over its share of the net assets of AFC. As a
result of NAC's adoption of SFAS 141 and SFAS 142, for the three months and nine
months ended October 31, 2002, NAC discontinued this monthly charge to earnings.




                                       20
<PAGE>



                   NATIONAL AUTO CREDIT, INC. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED


          In June 2001, the FASB issued SFAS 143, Accounting for Asset
Retirement Obligations. SFAS 143 requires entities to record to the fair value
of the liability for an asset retirement obligation in the period in which it is
incurred. The amount initially recorded as the asset retirement obligation is
based upon the estimated present value of the retirement costs to be incurred,
and is capitalized as a part of the asset. The obligation is subsequently
accreted for the passage of time by charges to interest expense, and the
capitalized costs are amortized as part of depreciation expense related to the
asset. The asset retirement obligation is also continually re-estimated, with
changes in its present value caused by changes in the estimated retirement cost
recorded as adjustments to the carrying amount and subsequent depreciation of
the asset. SFAS 143 is effective for fiscal years beginning after June 15, 2002
and was adopted by NAC effective February 1, 2002. At the time of adoption,
there was no material impact to NAC's financial statements.

         In August 2001, the FASB issued SFAS 144, Accounting for the Impairment
or Disposal of Long-Lived Assets. SFAS 144 supercedes SFAS 121, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,
with the exception of impairment and disposal issues related to goodwill and
other intangible assets that are not amortized. SFAS 144 also supersedes the
accounting and reporting provisions of Accounting Principles Board Opinion No.
(APB) 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. SFAS 144 retains many of the fundamental
recognition and measurement provisions of SFAS 121, and also retains the
requirement in APB 30 to separately identify and report discontinued operations.
However, SFAS extends the APB 30 reporting requirements for discontinued
operations to components of an entity that have either been disposed of or
classified as assets held for sale that may not have qualified as segments under
APB 30, as a result of which operating results that previously were not
classified as discontinued operations may be treated as such upon the adoption
of SFAS 144. SFAS 144 is effective for fiscal years beginning after December 15,
2001, and was adopted by NAC effective February 1, 2002. At the time of
adoption, there was no material impact to NAC's financial statements.

         In July, 2002 the FASB issued SFAS 146, Accounting for Costs Associated
with Exit or Disposal Activities. SFAS 146 requires companies to recognize costs
associated with exit or disposal activities when they are incurred, rather than
at the date of a commitment to an exit or disposal plan. Examples of costs
covered by the standard included lease termination costs and certain employee
severance costs that are associated with a restructuring, discontinued
operation, plant closing, or other exit or disposal activity. Previous
accounting guidance was provided by EITF Issue No. 94-3, Liability Recognition
for Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring. SFAS 146 replaces Issue
94-3 and is required to be applied prospectively to exit or disposal activities
initiated after December 2002. NAC is currently evaluating the impacts, if any,
of SFAS 146.


OTHER

         NAC's exposure to the risks of inflation is generally limited to the
potential impact of inflation on its operating and general and administrative
expenses. To date, inflation has not had a material adverse impact on NAC.

         NAC does not utilize futures, options or other derivative financial
instruments.



                                       21
<PAGE>


FORWARD-LOOKING STATEMENTS
         Various statements made in this Item 2 and elsewhere in this Quarterly
Report on Form 10-Q concerning the manner in which NAC intends to conduct its
future operations, and potential trends that may impact its future results of
operations, are forward looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. NAC may be unable to realize its plan
and objectives due to various important factors, including, but not limited to,
the failure of the Board of Directors to promptly determine what strategic
business plan NAC should pursue, the failure of NAC to implement any such plan
due to its inability to identify suitable acquisition candidates or its
inability to obtain the financing necessary to complete any desired
acquisitions, or any adverse outcome of the pending shareholder actions or other
litigation.

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Like virtually all commercial enterprises, NAC can be exposed to the
risk ("market risk") that the cash flows to be received or paid relating to
certain financial instruments could change as a result of changes in interest
rate, exchange rates, commodity prices, equity prices and other market changes.

         NAC does not engage in trading activities and does not utilize interest
rate swaps or other derivative financial instruments or buy or sell foreign
currency, commodity or stock indexed futures or options. Accordingly, NAC is not
exposed to market risk from these sources.

         NAC's automobile loan portfolio was comprised of fixed rate financing
agreements with high credit risk consumers. The rates on these financing
agreements cannot be increased for changes in market conditions, and accordingly
these loans were not subject to market risk.

         As of October 31, 2002, NAC has no interest-bearing debt, and
accordingly no market risk associated with increases in interest costs resulting
from changes in market rates.

ITEM 4.   CONTROLS AND PROCEDURES

         In accordance with Item 307 of regulation S-K promulgated under the
Securities Act 1933, as amended, and within 90 days of the date of this
Quarterly Report on Form 10-Q (the "Evaluation Date"), the Chief Executive
Officer and the Chief Financial Officer of NAC (the "Certifying Officers") have
conducted evaluations of NAC's disclosure controls and procedures. As defined
under Sections 13a-14(c) and 15d-14(c) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), the term "disclosure controls and procedures"
means controls and other procedures of an issuer that are designed to ensure
that information required to be disclosed by the issuer in the reports that it
files or submits under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Commission's rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed by an
issuer in the reports that it files or submits under the Exchange Act is
accumulated and communicated to the issuer's management, including its principal
executive officer or officers and principal financial officer or officers, or
persons performing similar functions, as appropriate to allow timely decisions
regarding required disclosure. The Certifying Officers have reviewed NAC's
disclosure controls and procedures and have concluded that (subject to the
qualifications and disclosures set forth herein below) those disclosure controls
and procedures are effective as of the date of this Quarterly Report on Form
10-Q. In compliance with Section 302 of the Sarbanes-Oxley Act of 2002, (18
U.S.C. 1350), each of the Certifying Officers executed an Officer's
Certification included in this Quarterly Report on Form 10-Q.

         As of this Quarterly Report on Form 10-Q, there have not been any
significant changes in NAC's internal controls or in other factors that could
significantly affect these controls subsequent to the date of their evaluation,
including corrective actions with regard to significant deficiencies and
material weaknesses.


                                       22
<PAGE>




                                    PART II.
                                OTHER INFORMATION

ITEM 1.        LEGAL PROCEEDINGS

Shareholder Complaints

         On July 31, 2001, NAC received a derivative complaint (the "Academy
Complaint") filed by Academy Capital Management, Inc. ("Academy"), a shareholder
of NAC, with the Court of Chancery of Delaware, on or about July 31, 2001,
against James J. McNamara, John A. Gleason, William S. Marshall, Henry Y.L. Toh,
Donald Jasensky, Peter T. Zackaroff, Mallory Factor, and Thomas F. Carney, Jr.
(the "Director Defendants") and names NAC as a nominal defendant. The Academy
Complaint principally seeks: (i) a declaration that the Director Defendants
breached their fiduciary duties to NAC, (ii) a judgment voiding an employment
agreement with James J. McNamara and rescinding a stock exchange agreement in
which NAC acquired ZoomLot Corporation, (iii) a judgment voiding the grant of
stock options and the award of director fees allegedly related thereto, (iv) an
order directing the Director Defendants to account for alleged damages sustained
and profits obtained by the Director Defendants as a result of the alleged
various acts complained of, (v) the imposition of a constructive trust over
monies or other benefits received by the Director Defendants and (vi) an award
of costs and expenses.

         On August 16, 2001, NAC received a complaint (the "Markovich
Complaint") filed by Levy Markovich ("Markovich"), a shareholder of NAC, with
the Court of Chancery of Delaware on or about August 16, 2001, against James J.
McNamara, John A. Gleason, William S. Marshall, Henry Y. L. Toh, Donald
Jasensky, Peter T. Zackaroff, Mallory Factor, and Thomas F. Carney, Jr. and NAC
as a nominal defendant. The Markovich Complaint principally seeks: (i) a
declaration that the Director Defendants have breached their fiduciary duties to
NAC, (ii) a judgment voiding an employment agreement with James J. McNamara and
rescinding a stock exchange agreement in which NAC acquired ZoomLot Corporation,
(iii) a judgment voiding the grant of options and the award of directors fees
allegedly related thereto, (iv) an order directing the Director Defendants to
account for alleged damages sustained and alleged profits obtained by the
Director Defendants as a result of the alleged various acts complained of, (v)
the imposition of a constructive trust over monies or other benefits received by
the directors, and (vi) an award of costs and expenses.

         On August 31, 2001, NAC received a complaint (the "Harbor Complaint")
filed by Harbor Finance Partners ("Harbor"), a shareholder of NAC, with the
Court of Chancery of Delaware on or about August 31, 2001, against Thomas F.
Carney, Jr., Mallory Factor, John A. Gleason, Donald Jasensky, William S.
Marshall, James J. McNamara, Henry Y. L. Toh, Peter T. Zackaroff, Ernest C.
Garcia, and ZoomLot Corporation as Defendants and NAC as a nominal defendant.
The Harbor Complaint principally seeks: (i) a judgment requiring the Director
Defendants to promptly schedule an annual meeting of shareholders within thirty
(30) days of the date of the Harbor Complaint; (ii) a judgment declaring that
the Director Defendants breached their fiduciary duties to NAC and wasted its
assets; (iii) an injunction preventing payment of monies and benefits to James
J. McNamara under his employment agreement with NAC and requiring Mr. McNamara
to repay the amounts already paid to him thereunder; (iv) a judgment rescinding
the agreement by NAC to purchase ZoomLot and refunding the amounts it paid; (v)
a judgment rescinding the award of monies and options to the directors on
December 15, 2000 and requiring the directors to repay the amounts they received
allegedly related thereto; (vi) a judgment requiring the defendants to indemnify
NAC for alleged losses attributable to their alleged actions; and (vii) a
judgment awarding interest, attorney's fees, and other costs, in an amount to be
determined.


                                       23
<PAGE>


         On October 12, 2001, NAC received a complaint (the "Zadra Complaint")
filed by Robert Zadra, a shareholder of NAC, with the Supreme Court of the State
of New York on or about October 12, 2001 against James J. McNamara, John A.
Gleason, William S. Marshall, Henry Y. L. Toh, Donald Jasensky, Peter T.
Zackaroff, Mallory Factor, Thomas F. Carney, Jr., and NAC as Defendants. The
Zadra Complaint seeks (i) a declaration that the Director Defendants have
breached their fiduciary duties to NAC, (ii) a judgment voiding the grant of
options and the award of directors fees, (iii) a judgment voiding an employment
agreement with James J. McNamara, (iv) an order directing the Director
Defendants to account for alleged damages sustained and alleged profits obtained
by the Director Defendants as a result of the alleged various acts complained
of, and (v) an award of costs and expenses.

         NAC intends to vigorously defend each of the respective claims made in
the Academy Complaint, Markovich Complaint, Harbor Complaint and Zadra
Complaint, as it believes that the claims have no merit. By order of the
Delaware Chancery Court on November 12, 2001, the Academy, Markovich and Harbor
Complaints were consolidated and the Academy Complaint was deemed the operative
complaint. A motion to dismiss the Academy Complaint has been filed but has not
yet been decided. A motion to dismiss the Zadra Complaint was filed but was
withdrawn after plaintiff filed an amended complaint. NAC has until January 24,
2003 to answer or otherwise move to dismiss the amended compliant. As each of
these litigation matters are in a very early stage, no prediction is made with
respect to their respective ultimate outcomes.

Self-Insurance Reserves for Property Damage and Personal Injury Claims.

         NAC, under the names Agency Rent-A-Car, Inc. ("ARAC"), Altra Auto
Rental and Automate Auto Rental, previously engaged in the rental of automobiles
on a short-term basis, principally to the insurance replacement market. In
Fiscal 1996, NAC disposed of its rental fleet business through the sale of
certain assets and through certain leases to a national car rental company. All
liabilities related to the discontinued rental business, principally
self-insurance claims, were retained by NAC.

         NAC maintained and continues to maintain self-insurance for claims
relating to bodily injury or property damage from accidents involving the
vehicles rented to customers by its discontinued automobile rental operations.
NAC was, when required by either governing state law or the terms of its rental
agreement, self-insured for the first $1.0 million per occurrence, and for
losses in excess of $5.0 million per occurrence, for bodily injury and property
damage resulting from accidents involving its rental vehicles. NAC was also
self-insured, up to certain retained limits, for bodily injury and property
damage resulting from accidents involving NAC vehicles operated by employees
within the scope of their employment. In connection therewith, NAC established
certain reserves in its financial statements for the estimated cost of
satisfying those claims.

         NAC is named as defendant in a self-insurance action Darrell Smith and
Aaron Simpson ("Plaintiffs") v. John J. Bennett, ARAC, Country Mutual Insurance
Company and Atlanta Casualty Insurance Company in Cook County (State) Court of
Illinois. This matter arises out of an incident in which an ARAC car renters'
son, while driving the rental vehicle, was involved in a fatal accident and with
serious injuries to passengers in the vehicle. Initially, the Plaintiffs
appeared to be recovering well from the injuries sustained. However,
subsequently plaintiff Simpson underwent an accident-related surgery on his back
for removal of a shunt, during which nerves in the spine were severed causing
paraplegia. The Plaintiffs are suing for damages resulting from their injuries
and the subsequent paraplegia suffered by plaintiff Simpson. The doctor and
hospital that performed the surgery were also named as defendants by Plaintiffs
and have been impleaded by NAC under a theory of medical malpractice. Damages
alleged in the complaint are not specified, although in discovery Plaintiffs
have indicated they are seeking millions of dollars in compensatory and other
damages. The matter is scheduled for trial during 2003. NAC maintains a number
of defenses relating to this matter. NAC has almost exhausted its self-insured
retention of $500,000 on this case and NAC attempted to get its excess carrier,
the Transamerica Insurance Company ("TIC"), to take over the defense of this
action and



                                       24
<PAGE>

indemnify NAC up to the policy limits. However, as a result TIC has filed a suit
(TIC Co. v. Darrell Smith, Aaron Simpson and NAC in the United States Court for
the Northern District of Illinois) for a declaratory judgment seeking a ruling
that it has no liability as an "excess insurer" of NAC in connection with the
Smith and Simpson action and that under Illinois law, NAC's (and thereafter
TIC's) financial responsibility is capped at an amount for less than what the
Plaintiffs are seeking in the state court action. The federal court initially
dismissed this complaint prior to NAC answering on the grounds that the matter
to be decided was premature as the original action had not been resolved. TIC
made a motion to have the court reconsider its decision and NAC has filed a
response arguing that the court should take action on this matter at this time.
The Court granted TIC's motion and has permitted the action to proceed. NAC's
answer was filed in May 2002. Thereafter, in August 2002, TIC filed a motion for
summary judgment, asserting that NAC has no liability to Smith and Simpson; that
if NAC is liable, such liability is capped in an amount far less that what
Plaintiff is seeking in the state court action; and that it also has no
liability to NAC under its excess insurance policy. NAC filed its own
cross-motion for summary judgment, asserting that it has no liability to Smith
and Simpson; and that if there is any liability it is capped under Illinois
state law, or, if not capped, then TIC's excess insurance coverage applies.
Smith and Simpson has filed their own cross-motion for summary judgment,
asserting that NAC is liable for Smith and Simpson's injuries and that NAC's
liability is not capped under Illinois law. These motions and cross-motions have
been filed but have not yet been decided by the court.

         Because of the uncertainties related to these two matters, as well as
several smaller legal proceedings involving NAC's former rental operations and
self-insurance claims, it is difficult to project with precision the ultimate
effect the adjudication or settlement of these matters will have on NAC. At
October 31, 2002 NAC had accrued $718,000 to cover all outstanding
self-insurance liabilities. As additional information regarding NAC's potential
liabilities becomes available, NAC will revise the estimates as appropriate.

Other Litigation

         In the normal course of its business, NAC is named as defendant in
legal proceedings. It is the policy of NAC to vigorously defend litigation
and/or enter into settlements of claims where management deems appropriate.



                                       25
<PAGE>



ITEM  6. EXHIBITS AND REPORTS ON FORM 8-K

         A) EXHIBITS

<TABLE>
<CAPTION>
            EXHIBIT                                                                         PAGE
            NUMBER             TITLE OF EXHIBIT                                            NUMBER
            -------------------------------------------------------------------------------------
            <S>      <C>                                                                   <C>
            99.1     Certification of Principal Executive Officer Pursuant to
                     Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)           29
            99.2     Certification of Principal Financial Officer Pursuant to
                     Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)           30
</TABLE>

         B) REPORTS ON FORM 8-K

            None.-

                                   SIGNATURES


         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.


                               NATIONAL AUTO CREDIT, INC.

Date: December 12, 2002        By: /s/ James J. McNamara
      ------------------           ---------------------
                               James J. McNamara
                               Chairman of the Board and Chief Executive Officer


                               By:   /s/ Robert V. Cuddihy, Jr.
                                     --------------------------
                                     Robert V. Cuddihy, Jr.
                                     Chief Financial Officer




                                       26
<PAGE>



                       OFFICER'S CERTIFICATION PURSUANT TO

         SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 (18 U.S.C. 1350)

I, James McNamara., certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of National Auto Credit,
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 officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15-d-14) for the registrant and we have:

         (a) designated such disclosure controls and procedures to ensure that
         material information related to the registrant, including its
         consolidating 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 ("Evaluation Date"); and

         (c) presented in the 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 officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
the 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 and material weakness in
         internal controls; and

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

6. The registrant's other certifying officers 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: December 12, 2002
                                           By: /s/ James J. McNamara
                                               ---------------------
                                           James J. McNamara
                                           Chief Executive Officer


                                       27
<PAGE>

                       OFFICER'S CERTIFICATION PURSUANT TO

         SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 (18 U.S.C. 1350)

I, Robert V. Cuddihy, Jr., certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of National Auto Credit,
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 officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15-d-14) for the registrant and we have:

         (a) designated such disclosure controls and procedures to ensure that
         material information related to the registrant, including its
         consolidating 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 ("Evaluation Date"); and

         (c) presented in the 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 officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
the 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 and material weakness in
         internal controls; and

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

6. The registrant's other certifying officers 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: December 12, 2002

                                              By: /s/ Robert V. Cuddihy, Jr.
                                                  --------------------------
                                              Robert V. Cuddihy, Jr.
                                              Chief Financial Officer



                                       28