TRUST AGREEMENT

                                     between

                      NATIONAL FINANCIAL AUTO FUNDING TRUST

                                       and

                            WILMINGTON TRUST COMPANY

                                  Owner Trustee

                            Dated as of July 21, 1997




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                                TABLE OF CONTENTS

                                                                           Page
ARTICLE I  Definitions........................................................1

   SECTION 1.1  Capitalized Terms.............................................1

   SECTION 1.2.  Other Definitional Provisions................................3

   SECTION 1.3.  Action by or Consent of Noteholders and Certificateholders...4

   SECTION 1.4  Material Adverse Effect.......................................4

ARTICLE II  Organization......................................................5

   SECTION 2.1.  Name.........................................................5

   SECTION 2.2.  Office.......................................................5

   SECTION 2.3.  Purposes and Powers..........................................5

   SECTION 2.4.  Appointment of Owner Trustee.................................5

   SECTION 2.5.  Initial Capital Contribution of Trust Estate.................5

   SECTION 2.6.  Declaration of Trust.........................................5

   SECTION 2.7.  Liability....................................................6

   SECTION 2.8.  Title to Trust Property......................................6

   SECTION 2.9.  Situs of Trust...............................................6

   SECTION 2.10.  Representations and Warranties of the Depositor.............7

   SECTION 2.11.  Federal Income Tax Allocations..............................8

   SECTION 2.12.  Covenants of the Depositor..................................8

   SECTION 2.13.  Covenants of the Certificateholders.........................9

ARTICLE III  Certificates and Transfer of Interests..........................10

   SECTION 3.1.  Initial Ownership...........................................10

   SECTION 3.2.  The Certificates............................................10

   SECTION 3.3.  Authentication of Certificates..............................10

   SECTION 3.4.  Registration of Transfer and Exchange of Certificates.......10

   SECTION 3.5.  Mutilated, Destroyed, Lost or Stolen Certificates...........13

   SECTION 3.6.  Persons Deemed Certificateholders...........................13

   SECTION 3.7.  Access to List of Certificateholders' Names and Addresses...13

   SECTION 3.8.  Maintenance of Office or Agency.............................14

   SECTION 3.9.  ERISA Restrictions..........................................14

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   SECTION 3.10.  Securities Matters.........................................14

ARTICLE IV  Voting Rights and Other Actions..................................14

   SECTION 4.1.  Prior Notice to Holders with Respect to Certain Matters.....14

   SECTION 4.2.  Action by Certificateholders with Respect to
                 Certain Matters.............................................15

   SECTION 4.3.  Action by Certificateholders with Respect to Bankruptcy.....15

   SECTION 4.4.  Restrictions on Certificateholders' Power...................15

   SECTION 4.5.  Majority Control............................................16

   SECTION 4.6.  Rights of Insurer...........................................16

ARTICLE V  Certain Duties....................................................17

   SECTION 5.1.  Accounting and Records to the Noteholders,
                 Certificateholders, the Internal Revenue Service and Others.17

   SECTION 5.2.  Signature on Returns; Tax Matters Partner...................17

   SECTION 5.3.  Underwriting Agreement......................................17

ARTICLE VI  Authority and Duties of Owner Trustee............................17

   SECTION 6.1.  General Authority...........................................17

   SECTION 6.2.  General Duties..............................................18

   SECTION 6.3.  Action upon Instruction.....................................18

   SECTION 6.4.  No Duties Except as Specified in this Agreement or in
                 Instructions................................................19

   SECTION 6.5.  No Action Except under Specified Documents or Instructions..19

   SECTION 6.6.  Restrictions................................................20

ARTICLE VII  Concerning the Owner Trustee....................................20

   SECTION 7.1.  Acceptance of Trusts and Duties.............................20

   SECTION 7.2.  Furnishing of Documents.....................................21

   SECTION 7.3.  Representations and Warranties..............................21

   SECTION 7.4.  Reliance; Advice of Counsel.................................22

   SECTION 7.5.  Not Acting in Individual Capacity...........................22

   SECTION 7.6.  Owner Trustee Not Liable for Certificates or Receivables....22

   SECTION 7.7.  Owner Trustee May Own Certificates and Notes................23

   SECTION 7.8.  Payments from Owner Trust Estate............................23

   SECTION 7.9.  Doing Business in Other Jurisdictions.......................23

ARTICLE VIII  Compensation of Owner Trustee..................................24

   SECTION 8.1.  Owner Trustee's Fees and Expenses...........................24

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   SECTION 8.2.  Indemnification.............................................24

   SECTION 8.3.  Payments to the Owner Trustee...............................24

ARTICLE IX  Termination of Trust Agreement...................................24

   SECTION 9.1.  Termination of Trust Agreement..............................25

ARTICLE X  Successor Owner Trustees and Additional Owner Trustees............26

   SECTION 10.1.  Eligibility Requirements for Owner Trustee.................26

   SECTION 10.2.  Resignation or Removal of Owner Trustee....................26

   SECTION 10.3.  Successor Owner Trustee....................................27

   SECTION 10.4.  Merger or Consolidation of Owner Trustee...................28

   SECTION 10.5.  Appointment of Co-Trustee or Separate Trustee..............28

ARTICLE XI  Miscellaneous....................................................29

   SECTION 11.1.  Supplements and Amendments.................................29

   SECTION 11.2.  No Legal Title to Owner Trust Estate in Certificateholders.30

   SECTION 11.3.  Limitations on Rights of Others............................30

   SECTION 11.4.  Notices....................................................30

   SECTION 11.5.  Severability...............................................31

   SECTION 11.6.  Separate Counterparts......................................31

   SECTION 11.7.  Assignments; Insurer.......................................31

   SECTION 11.8.  No Petition................................................31

   SECTION 11.9.  No Recourse................................................32

   SECTION 11.10.  Headings..................................................32

   SECTION 11.11.  GOVERNING LAW.............................................32

   SECTION 11.12.  Servicer..................................................32

Exhibit A         Form of Certificate

Exhibit B         Form of Certificate of Trust

Exhibit C         Form of Purchaser Representation Letter

Exhibit D         Form of Transferee Representation Letter


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         TRUST AGREEMENT dated as of July 21, 1997 between NATIONAL FINANCIAL
AUTO FUNDING TRUST, a Delaware business trust (the "Depositor"), and WILMINGTON
TRUST COMPANY, a Delaware banking corporation, as Owner Trustee.


                                    ARTICLE I

                                   Definitions

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         SECTION 1.1 Capitalized Terms.  For all purposes of this Agreement, the
following terms shall have the meanings set forth below:
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                  "Affiliate" shall mean with respect to any specified Person, a
Person that directly, or indirectly through one or more intermediaries, controls
or is controlled by, or is under common control with, or owns, directly or
indirectly, 50% or more of, the Person specified.

                  "Agreement" shall mean this Trust Agreement, as the same may
be amended and supplemented from time to time.

                  "Basic Documents" shall mean this Agreement, the Certificate
of Trust, the Sale and Servicing Agreement, the Spread Account Agreement, the
Insurance Agreement, the Indenture and the other documents and certificates
delivered in connection therewith.

                  "Benefit Plan" shall have the meaning assigned to such term in
Section 3.9.

                  "Business Trust Statute" shall mean Chapter 38 of Title 12 of
the Delaware Code, 12 Del. Code ss.. 3801 et. seq. as the same may be amended
from time to time.

                  "Certificate" means a trust certificate evidencing the
beneficial ownership interest of a Certificateholder in the Trust, substantially
in the form of Exhibit A attached hereto.

                  "Certificate of Trust" shall mean the Certificate of Trust in
the form of Exhibit B to be filed for the Trust pursuant to Section 3810(a) of
the Business Trust Statute.

                  "Certificate Register" and "Certificate Registrar" shall mean
the register mentioned and the registrar appointed pursuant to Section 3.4.

                  "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and Treasury Regulations promulgated thereunder.

                  "Corporate Trust Office" shall mean, with respect to the Owner
Trustee, the principal corporate trust office of the Owner Trustee located at
Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001,
Attention: Corporate Trust Administration, or at such other address as the Owner
Trustee may designate by notice to the Certificateholders and the Depositor, or
the principal corporate trust office of any successor Owner Trustee (the address


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of which the successor owner trustee will notify the Certificateholders and the
Depositor).

                  "Definitive Certificates" shall mean Certificates issued in
certificated, fully registered form.

                  "Depositor" shall mean National Financial Auto Funding Trust
in its capacity as Depositor hereunder.

                  "Depositor Trust Agreement" shall mean the First Amended and
Restated Trust Agreement, dated as of December 8, 1994, between National Auto
Finance Company, Inc. and The Chase Manhattan Bank (Delaware), as trustee, as
the same may be amended and supplemented from time to time.

                  "Distribution Account" shall mean the account designated as
such as established and maintained pursuant to the Sale and Servicing Agreement.

                  "ERISA" shall have the meaning assigned to such term in
Section 3.9.

                  "Expenses" shall have the meaning assigned to such term in
Section 8.2.

                  "Holder" or "Certificateholder" shall mean the Person in whose
name a Certificate is registered on the Certificate Register.

                  "Indemnified Parties" shall have the meaning assigned to such
term in Section 8.2.

                  "Indenture" shall mean the Indenture dated as of June 29,
1997, between the Issuer and Harris Trust and Savings Bank, as Trust Collateral
Agent and Indenture Trustee, as the same may be amended and supplemented from
time to time in accordance with the terms thereof.

                  "Indenture Trustee" shall mean, initially Harris Trust and
Savings Bank, in its capacity as indenture trustee, including its successors in
interest, until and unless a successor Person shall have become the Indenture
Trustee pursuant to the Sale and Servicing Agreement and thereafter "Indenture
Trustee" shall mean such successor Person.

                  "Insurer" shall mean Financial Security Assurance Inc., or its
successor in interest.

                  "Instructing Party" shall have the meaning assigned to such
term in Section 6.3.

                  "Owner Trust Estate" shall mean all right, title and interest
of the Trust in and to the property and rights assigned to the Trust pursuant to
Article II of the Sale and Servicing Agreement, all funds on deposit from time
to time in the Trust Accounts and all other property of the Trust from time to
time, including any rights of the Owner Trustee and the Trust pursuant to the
Sale and Servicing Agreement and the Spread Account Agreement.

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                  "Owner Trustee" shall mean Wilmington Trust Company, a
Delaware banking corporation, not in its individual capacity but solely as owner
trustee under this Agreement, and any successor Owner Trustee hereunder.

                  "Record Date" shall mean with respect to any Distribution
Date, the close of business on the last Business Day immediately preceding such
Distribution Date.

                  "Sale and Servicing Agreement" shall mean the Sale and
Servicing Agreement among the Trust, National Financial Auto Funding Trust, as
Seller, National Auto Finance Company, Inc., as Servicer and the Trust
Collateral Agent, dated as of June 29, 1997, as the same may be amended and
supplemented from time to time.

                  "Secretary of State" shall mean the Secretary of State of the
State of Delaware.

                  "Security Majority" means a majority by principal amount of
the Noteholders so long as the Notes are outstanding and a majority by principal
amount of the Certificateholders thereafter.

                  "Spread Account" shall mean the Series Spread Account
established and maintained pursuant to the Spread Account Agreement.

                  "Spread Account Agreement" shall mean the Spread Account
Agreement, dated as of July 23, 1997, among National Financial Auto Funding
Trust, the Insurer, and Harris Trust and Savings Bank, as Trust Collateral Agent
and as Collateral Agent, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof.

                  "Treasury Regulations" shall mean regulations, including
proposed or temporary regulations, promulgated under the Code. References herein
to specific provisions of proposed or temporary regulations shall include
analogous provisions of final Treasury Regulations or other successor Treasury
Regulations.

                  "Trust" shall mean the trust established by this Agreement.

                  "Trust Accounts" shall have the meaning ascribed thereto in
the Sale and Servicing Agreement.

                  "Trust Collateral Agent" shall mean, initially, Harris Trust
and Savings Bank, in its capacity as collateral agent, including its successors
in interest, until and unless a successor Person shall have become the Trust
Collateral Agent pursuant to the Sale and Servicing Agreement, and thereafter
"Trust Collateral Agent" shall mean such successor Person.

         SECTION 1.2. Other Definitional Provisions.

               (a) Capitalized terms used herein and not otherwise defined have
         the meanings assigned to them in the Sale and Servicing Agreement or,
         if not defined therein, in the Spread Account Agreement or in the
         Indenture.
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               (b) All terms defined in this Agreement shall have the defined
         meanings when used in any certificate or other document made or
         delivered pursuant hereto unless otherwise defined therein.

               (c) As used in this Agreement and in any certificate or other
         document made or delivered pursuant hereto or thereto, accounting terms
         not defined in this Agreement or in any such certificate or other
         document, and accounting terms partly defined in this Agreement or in
         any such certificate or other document to the extent not defined, shall
         have the respective meanings given to them under generally accepted
         accounting principles as in effect on the date of this Agreement or any
         such certificate or other document, as applicable. To the extent that
         the definitions of accounting terms in this Agreement or in any such
         certificate or other document are inconsistent with the meanings of
         such terms under generally accepted accounting principles, the
         definitions contained in this Agreement or in any such certificate or
         other document shall control.

               (d) The words "hereof," "herein," "hereunder" and words of
         similar import when used in this Agreement shall refer to this
         Agreement as a whole and not to any particular provision of this
         Agreement; Section and Exhibit references contained in this Agreement
         are references to Sections and Exhibits in or to this Agreement unless
         otherwise specified; and the term "including" shall mean "including
         without limitation." 

               (e) The definitions contained in this Agreement are applicable to
         the singular as well as the plural forms of such terms and to the
         masculine as well as to the feminine and neuter genders of such terms.
         

         SECTION 1.3. Action by or Consent of Noteholders and
Certificateholders. Whenever any provision of this Agreement refers to action to
be taken, or consented to, by Noteholders or Certificateholders, such provision
shall be deemed to refer to the Certificateholder or Noteholder, as the case may
be, of record as of the Record Date immediately preceding the date on which such
action is to be taken, or consent given, by Noteholders or Certificateholders.
Solely for the purposes of any action to be taken, or consented to, by
Noteholders, any Note registered in the name of the Seller or any Affiliate
thereof shall be deemed not to be outstanding; provided, however, that, solely
for the purpose of determining whether the Indenture Trustee or the Trust
Collateral Agent is entitled to rely upon any such action or consent, only Notes
which the Owner Trustee, the Indenture Trustee or the Trust Collateral Agent,
respectively, knows to be so owned shall be so disregarded.

         SECTION 1.4. Material Adverse Effect. Whenever a determination is to be
made under this Agreement as to whether a given event, action, course of conduct
or set of facts or circumstances could or would have a material adverse effect
on the Noteholders or Certificateholders (or any similar or analogous
determination), such determination shall be made without taking into account the
funds available from claims under the Policy.

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                                   ARTICLE II

                                  Organization
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         SECTION 2.1 Name. There is hereby formed a trust to be known as
"National Auto Finance 1997-1 Trust", in which name the Owner Trustee may
conduct the business of the Trust, make and execute contracts and other
instruments on behalf of the Trust and sue and be sued.
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         SECTION 2.2. Office. The office of the Trust shall be in care of the
Owner Trustee at the Corporate Trust Office or at such other address as the
Owner Trustee may designate by written notice to the Certificateholders and the
Depositor.

         SECTION 2.3. Purposes and Powers. (a) The purpose of the Trust is, and
the Trust shall have the power and authority, to engage in the following
activities: (i) to issue the Notes pursuant to the Indenture and the
Certificates pursuant to this Agreement, and to sell the Notes; (ii) with the
proceeds of the sale of the Notes, to fund the Pre-Funding Account, the
Pre-Funding Period Reserve Account and the Spread Account and to pay the
organizational, start-up and transactional expenses of the Trust and to pay the
balance to the Depositor pursuant to the Sale and Servicing Agreement; (iii) to
assign, grant, transfer, pledge, mortgage and convey the Owner Trust Estate
(other than the Distribution Account) to the Trust Collateral Agent pursuant to
the Indenture for the benefit of the Insurer and the Indenture Trustee on behalf
of the Noteholders and to hold, manage and distribute to the Certificateholders
and the Depositor pursuant to the terms of the Sale and Servicing Agreement any
portion of the Owner Trust Estate released from the Lien of, and remitted to the
Trust pursuant to, the Indenture; (iv) to enter into and perform its obligations
under the Basic Documents to which it is a party; (v) to engage in those
activities, including entering into agreements, that are necessary, suitable or
convenient to accomplish the foregoing or are incidental thereto or connected
therewith; and (vi) subject to compliance with the Basic Documents, to engage in
such other activities as may be required in connection with conservation of the
Owner Trust Estate and the making of distributions to the Certificateholders and
the Noteholders.

         The Trust is hereby authorized to engage in the foregoing activities.
The Trust shall not engage in any activity other than in connection with the
foregoing or other than as required or authorized by the terms of this Agreement
or the Basic Documents.

         SECTION 2.4. Appointment of Owner Trustee. The Depositor hereby
appoints the Owner Trustee as trustee of the Trust effective as of the date
hereof, to have all the rights, powers and duties set forth herein.

         SECTION 2.5. Initial Capital Contribution of Trust Estate. The
Depositor hereby sells, assigns, transfers, conveys and sets over to the Owner
Trustee, as of the date hereof, the sum of $1. The Owner Trustee hereby
acknowledges receipt in trust from the Depositor, as of the date hereof, of the
foregoing contribution, which shall constitute the initial Owner Trust Estate
and shall be deposited in the Distribution Account. The Depositor shall pay
organizational expenses of the Trust as they may arise.

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         SECTION 2.6. Declaration of Trust. The Owner Trustee hereby declares
that it will hold the Owner Trust Estate in trust upon and subject to the
conditions set forth herein for the use and benefit of the Certificateholders,
subject to the obligations of the Trust under the Basic Documents. It is the
intention of the parties hereto that the Trust constitute a business trust under
the Business Trust Statute and that this Agreement constitute the governing
instrument of such business trust. It is the intention of the parties hereto
that, solely for income tax purposes, the Trust shall be treated as a branch;
provided, however, that in the event Certificates are owned by more than one
Certificateholder, it is the intention of the parties hereto that, solely for
income and franchise tax purposes, the Trust shall then be treated as a
partnership and that, unless otherwise required by appropriate tax authorities,
only after such time the Trust will file or cause to be filed annual or other
necessary returns, reports and other forms consistent with the characterization
of the Trust as a partnership for such tax purposes. Effective as of the date
hereof, the Owner Trustee shall have all rights, powers and duties set forth
herein and to the extent not inconsistent herewith, in the Business Trust
Statute with respect to accomplishing the purposes of the Trust. The Owner
Trustee shall file the Certificate of Trust with the Secretary of State.

         SECTION 2.7. Liability. (a) The Depositor shall pay organizational
expenses of the Trust as they may arise or shall, upon the request of the Owner
Trustee, promptly reimburse the Owner Trustee for any such expenses paid by the
Owner Trustee.

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                   (b)   No Holder, other than to the extent set forth in
         clause (a), shall have any personal liability for any liability or
         obligation of the Trust.
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         SECTION 2.8. Title to Trust Property. (a) Legal title to all the Owner
Trust Estate shall be vested at all times in the Trust as a separate legal
entity except where applicable law in any jurisdiction requires title to any
part of the Owner Trust Estate to be vested in a trustee or trustees, in which
case title shall be deemed to be vested in the Owner Trustee, a co-trustee
and/or a separate trustee, as the case may be.

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                   (b)   The Holders shall not have legal title to any part of
         the Trust Property. The Holders shall be entitled to receive
         distributions with respect to their undivided ownership interest
         therein only in accordance with Articles V and IX. No transfer, by
         operation of law or otherwise, of any right, title or interest by any
         Certificateholder of its ownership interest in the Owner Trust Estate
         shall operate to terminate this Agreement or the trusts hereunder or
         entitle any transferee to an accounting or to the transfer to it of
         legal title to any part of the Trust Property.
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         SECTION 2.9. Situs of Trust. The Trust will be located and administered
in the State of Delaware. All bank accounts maintained by the Owner Trustee on
behalf of the Trust shall be located in the State of Delaware or the State of
New York. Payments will be received by the Trust only in Delaware or New York
and payments will be made by the Trust only from Delaware or New York. The Trust
shall not have any employees in any state other than Delaware; provided,

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<PAGE>
however, that nothing herein shall restrict or prohibit the Owner Trustee, the
Servicer or any agent of the Trust from having employees within or without the
State of Delaware. The only office of the Trust will be at the Corporate Trust
Office in Delaware.

         SECTION 2.10. Representations and Warranties of the Depositor. The
Depositor makes the following representations and warranties on which the Owner
Trustee relies in accepting the Owner Trust Estate in trust and issuing the
Certificates and upon which the Insurer relies in issuing the Note Policy.

               (a) Organization and Good Standing. The Depositor is duly
         organized and validly existing as a Delaware business trust with power
         and authority to own its properties and to conduct its business as such
         properties are currently owned and such business is presently conducted
         and is proposed to be conducted pursuant to this Agreement and the
         Basic Documents.

               (b) Due Qualification. It is duly qualified to do business and in
         good standing, and has obtained all necessary licenses and approvals,
         in all jurisdictions in which the ownership or lease of its property,
         the conduct of its business and the performance of its obligations
         under this Agreement and the Basic Documents requires such
         qualification. 

               (c) Power and Authority. The Depositor has the trust power and
         authority to execute and deliver this Agreement and to carry out its
         terms; the Depositor has full power and authority to sell and assign
         the property to be sold and assigned to and deposited with the Trust
         and the Depositor has duly authorized such sale and assignment and
         deposit to the Trust by all necessary corporate action; and the
         execution, delivery and performance of this Agreement has been duly
         authorized by the Depositor by all necessary trust action.

               (d) No Consent Required. To the best knowledge of the Depositor,
         no consent, license, approval or authorization or registration or
         declaration with, any Person or with any governmental authority, bureau
         or agency is required in connection with the execution, delivery or
         performance of this Agreement and the Basic Documents, except for such
         as have been obtained, effected or made. 

               (e) No Violation. The consummation of the transactions
         contemplated by this Agreement and the fulfillment of the terms hereof
         do not conflict with, result in any breach of any of the terms and
         provisions of, or constitute (with or without notice or lapse of time)
         a default under, the organizational documents of the Depositor, or any
         material indenture, agreement or other instrument to which the
         Depositor is a party or by which it is bound; nor result in the
         creation or imposition of any Lien upon any of its properties pursuant
         to the terms of any such indenture, agreement or other instrument
         (other than pursuant to the Basic Documents); nor violate any law or,
         to the best of the Depositor's knowledge, any order, rule or regulation
         applicable to the Depositor of any court or of any Federal or state
         regulatory body, administrative agency or other governmental
         instrumentality having jurisdiction over the Depositor or its
         properties. 

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<PAGE>

               (f) No Proceedings. There are no proceedings or investigations
         pending or, to its knowledge threatened against it before any court,
         regulatory body, administrative agency or other tribunal or
         governmental instrumentality having jurisdiction over it or its
         properties (A) asserting the invalidity of this Agreement or any of the
         Basic Documents, (B) seeking to prevent the issuance of the
         Certificates or the Notes or the consummation of any of the
         transactions contemplated by this Agreement or any of the Basic
         Documents, (C) seeking any determination or ruling that might
         materially and adversely affect its performance of its obligations
         under, or the validity or enforceability of, this Agreement or any of
         the Basic Documents, or (D) seeking to adversely affect the federal
         income tax or other federal, state or local tax attributes of the
         Certificates. 

         SECTION 2.11. Federal Income Tax Allocations. In the event that the
Trust is treated as a partnership for Federal income tax purposes, net income
(to the extent of available net income) and net losses of the Trust for any
month as determined for Federal income tax purposes (and each item of income,
gain, loss, credit and deduction entering into the computation thereof) shall be
allocated among the Certificateholders as of the first Record Date following the
end of such month, in proportion to their percentage ownership of the
Certificate on such date. The Depositor is authorized to modify the allocations
in this paragraph if necessary or appropriate, in its sole discretion, for the
allocations to fairly reflect the economic income, gain or loss to the
Certificateholders, or as otherwise required by the Code.

         SECTION 2.12. Covenants of the Depositor. The Depositor agrees and
covenants for the benefit of each Certificateholder, the Insurer and the Owner
Trustee, during the term of this Agreement, and to the fullest extent permitted
by applicable law, that:

               (a) it shall not create, incur or suffer to exist any
         indebtedness or engage in any business, except, in each case, as
         permitted by the Depositor Trust Agreement and the Basic Documents;

               (b) it shall not, for any reason, institute proceedings for the
         Trust to be adjudicated a bankrupt or insolvent, or consent to the
         institution of bankruptcy or insolvency proceedings against the Trust,
         or file a petition seeking or consenting to reorganization or relief
         under any applicable federal or state law relating to the bankruptcy of
         the Trust, or consent to the appointment of a receiver, liquidator,
         assignee, trustee, sequestrator (or other similar official) of the
         Trust or a substantial part of the property of the Trust or cause or
         permit the Trust to make any assignment for the benefit of creditors,
         or admit in writing the inability of the Trust to pay its debts
         generally as they become due, or declare or effect a moratorium on the
         debt of the Trust or take any action in furtherance of any such action;

               (c) it shall obtain from each counterparty to each Basic Document
         to which it or the Trust is a party and each other agreement entered
         into on or after the date hereof to which it or the Trust is a party,
         an agreement by each such counterparty that prior to the occurrence of
 
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<PAGE>
         the event specified in Section 9.1(e) such counterparty shall not
         institute against, or join any other Person in instituting against, it
         or the Trust, any bankruptcy, reorganization, arrangement, insolvency
         or liquidation proceedings or other similar proceedings under the laws
         of the United States or any state of the United States; and 

               (d) it shall not, for any reason, withdraw or attempt to withdraw
         from this Agreement, dissolve, institute proceedings for it to be
         adjudicated a bankrupt or insolvent, or consent to the institution of
         bankruptcy or insolvency proceedings against it, or file a petition
         seeking or consenting to reorganization or relief under any applicable
         federal or state law relating to bankruptcy, or consent to the
         appointment of a receiver, liquidator, assignee, trustee, sequestrator
         (or other similar official) of it or a substantial part of its
         property, or make any assignment for the benefit of creditors, or admit
         in writing its inability to pay its debts generally as they become due,
         or declare or effect a moratorium on its debt or take any action in
         furtherance of any such action. 

         SECTION 2.13. Covenants of the Certificateholders. Each 
Certificateholder agrees:

               (a) to be bound by the terms and conditions of the Certificates
         and of this Agreement, including any supplements or amendments hereto
         and to perform the obligations of a Certificateholder as set forth
         therein or herein, in all respects as if it were a signatory hereto.
         This undertaking is made for the benefit of the Trust, the Owner
         Trustee, the Insurer and all other Certificateholders present and
         future;

               (b) to hereby appoint the Depositor as such Certificateholder's
         agent and attorney-in-fact to sign any federal income tax information
         return filed on behalf of the Trust, if any, and agree that, if
         requested by the Trust, it will sign such federal income tax
         information return in its capacity as holder of an interest in the
         Trust. Each Certificateholder also hereby agrees that in its tax
         returns it will not take any position inconsistent with those taken in
         any tax returns that may be filed by the Trust; 

               (c) if such Certificateholder is other than an individual or
         other entity holding its Certificate through a broker who reports
         securities sales on Form 1099-B, to notify the Owner Trustee of any
         transfer by it of a Certificate in a taxable sale or exchange, within
         30 days of the date of the transfer;

               (d) until the completion of the events specified in Section
         9.1(e), not to, for any reason, institute proceedings for the Trust or
         the Depositor to be adjudicated a bankrupt or insolvent, or consent to
         the institution of bankruptcy or insolvency proceedings against the
         Trust, or file a petition seeking or consenting to reorganization or
         relief under any applicable federal or state law relating to
         bankruptcy, or consent to the appointment of a receiver, liquidator,
         assignee, trustee, sequestrator (or other similar official) of the
         Trust or a substantial part of its property, or cause or permit the
         Trust to make any assignment for the benefit of its creditors, or admit
         in writing its inability to pay its debts generally as they become due,
         or declare or effect a moratorium on its debt or take any action in
         furtherance of any such action; and

                                       9
<PAGE>
               (e) that there shall not be more than 98 other holders of
         Certificates.
                                  ARTICLE III

                     Certificates and Transfer of Interests

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         SECTION 3.1 Initial Ownership. Upon the formation of the Trust by the
contribution by the Depositor pursuant to Section 2.5 and until the sale of the
Certificates by the Depositor, the Depositor, as the sole Certificateholder,
shall be the sole beneficiary of the Trust.
--------------------------------------------------------------------------------

         SECTION 3.2. The Certificates shall be executed on behalf of the Trust
by manual or facsimile signature of an authorized officer of the Owner Trustee.
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures shall have been affixed, authorized to sign on
behalf of the Trust, shall be validly issued and entitled to the benefit of this
Agreement, notwithstanding that such individuals or any of them shall have
ceased to be so authorized prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of authentication and
delivery of such Certificates. A transferee of a Certificate shall become a
Certificateholder, and shall be entitled to the rights and subject to the
obligations of a Certificateholder hereunder, upon due registration of such
Certificate in such transferee's name pursuant to Section 3.4. 

         SECTION 3.3. Authentication of Certificates. Concurrently with the
initial sale of the Receivables to the Trust pursuant to the Sale and Servicing
Agreement, the Owner Trustee shall cause the Certificates to be executed on
behalf of the Trust, authenticated and delivered to or upon the written order of
the Depositor, signed by its chairman of the board, its president or any vice
president, its treasurer or any assistant treasurer without further corporate
action by the Depositor. No Certificate shall entitle its holder to any benefit
under this Agreement, or shall be valid for any purpose, unless there shall
appear on such Certificate a certificate of authentication substantially in the
form set forth in Exhibit A, executed by the Owner Trustee, by manual signature;
such authentication shall constitute conclusive evidence that such Certificate
shall have been duly authenticated and delivered hereunder. All Certificates
shall be dated the date of their authentication.

         SECTION 3.4. Registration of Transfer and Exchange of Certificates. The
Certificate Registrar shall keep or cause to be kept, at the office or agency
maintained pursuant to Section 3.8, a Certificate Register in which, subject to
such reasonable regulations as it may prescribe, the Owner Trustee shall provide
for the registration of Certificates and of transfers and exchanges of
Certificates as herein provided. The Owner Trustee shall be the initial
Certificate Registrar.

         The Certificates have not been registered under the Securities Act of
1933, as amended (the "Securities Act") or any state securities law. The
Certificate Registrar shall not register the transfer of any Certificate unless
such resale or transfer is pursuant to an effective registration statement under
the Securities Act or is to the Seller or unless it shall have received (i) a

                                       10
<PAGE>
representation letter substantially in the form of Exhibit C hereto or (ii) such
other representations (or an Opinion of Counsel) satisfactory to the Owner
Trustee to the effect that such resale or transfer is made (A) in a transaction
exempt from the registration requirements of the Securities Act and applicable
state securities laws, or (B) to a person who the transferor of the Certificate
reasonably believes is a qualified institutional buyer (within the meaning of
Rule 144A under the Securities Act) that is aware that such resale or other
transfer is being made in reliance upon Rule 144A. Until the earlier of (i) such
time as the Certificates shall be registered pursuant to a registration
statement filed under the Securities Act and (ii) the date two years from the
later of the date of the original authentication and delivery of the
Certificates and the date any Certificate was acquired from the Seller or any
affiliate of the Seller, the Certificates shall bear a legend as follows:

         THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE IN
RELIANCE UPON EXEMPTIONS PROVIDED BY THE SECURITIES ACT AND SUCH STATE
SECURITIES LAWS. NO RESALE OR OTHER TRANSFER OF THIS CERTIFICATE MAY BE MADE
UNLESS SUCH RESALE OR TRANSFER (A) IS MADE IN ACCORDANCE WITH SECTION 3.4 OF THE
OWNER TRUST AGREEMENT PERTAINING TO THE NATIONAL AUTO FINANCE 1997-1 TRUST (THE
"AGREEMENT") AND (B) IS MADE (i) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, (ii) IN A TRANSACTION EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, (iii)
TO THE SELLER OR (iv) TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT THAT IS AWARE THAT THE RESALE OR OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A AND (C) UPON THE SATISFACTION OF CERTAIN OTHER
REQUIREMENTS SPECIFIED IN THE AGREEMENT. NEITHER THE SELLER, THE SERVICER, THE
TRUST NOR THE OWNER TRUSTEE IS OBLIGATED TO REGISTER THE CERTIFICATES UNDER THE
SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS.

         The Certificate Registrar shall provide the Trust Collateral Agent with
a list of the names and addresses of the Certificateholders on the Closing Date
in the form which such information is provided to the Certificate Registrar by
the Depositor. Upon any transfers of Certificates, the Certificate Registrar
shall notify the Trust Collateral Agent of the name and address of the
transferee in writing, by facsimile, on the day of such transfer.

         Upon surrender for registration of transfer of any Certificate at the
office or agency maintained pursuant to Section 3.8, the Owner Trustee shall
execute, authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of a like class percentage ownership
interest in the Trust dated the date of authentication by the Owner Trustee or
any authenticating agent. At the option of a Holder, Certificates may be
exchanged for other Certificates of the same class of a like percentage
ownership interest in the Trust upon surrender of the Certificates to be
exchanged at the office or agency maintained pursuant to Section 3.8.

                                       11
<PAGE>
         Every Certificate presented or surrendered for registration of transfer
or exchange shall be accompanied by a written instrument of transfer in form
satisfactory to the Owner Trustee and the Certificate Registrar duly executed by
the Certificateholder or his attorney duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Certificate Registrar, which requirements include membership
or participation in the Securities Transfer Agent's Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Certificate Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Exchange Act. Each Certificate surrendered for registration
of transfer or exchange shall be canceled and subsequently disposed of by the
Owner Trustee in accordance with its customary practice.

         No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Owner Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.

         Notwithstanding the preceding provisions of this Section, the Owner
Trustee shall be required to make, and the Certificate Registrar shall not be
required to register, transfers and exchanges of Certificates for a period of 15
days preceding the due date for any payment with respect to the Certificate.

         The Seller shall not sell, transfer, assign, convey or pledge any
Certificate at any time subsequent to the Closing Date to any Person that is an
Affiliate of the Seller, unless, prior to such sale, transfer, assignment,
conveyance or pledge, the Seller delivers to Financial Security an Opinion of
Counsel substantially similar in form and substance to the Opinion of Counsel
delivered on the Closing Date as to non-consolidation of the assets and
liabilities of (x) the Seller and NAFI or (y) the Seller and any such Person
that is an Affiliate of the Seller (other than NAFI), of which a copy shall be
delivered to each Rating Agency.

         In furtherance of and not in limitation of the foregoing, each
Certificateholder, by acceptance of its Certificate, specifically acknowledges
that is has no right to or interest in any monies at any time held pursuant to
the Spread Account Agreement or prior to the release of such monies pursuant to
Section 5.7(b) of the Sale and Servicing Agreement or Section 3.03 of the Spread
Account Agreement, such monies being held in trust for the benefit of the
Noteholders and the Insurer. Notwithstanding the foregoing, in the event that it
is ever determined that the monies held in the Spread Account constitute a
pledge of collateral, then the provisions of the Sale and Servicing Agreement
and the Spread Account Agreement shall be considered to constitute a security
agreement and the Seller and the Certificateholders hereby grant to the
Collateral Agent for the benefit of the Indenture Trustee on behalf of the
Noteholders and the Insurer a first priority perfected security interest in such
amounts, to be applied as set forth in Section 3.03 of the Spread Account
Agreement. In addition, each Certificateholder, be acceptance of its
Certificate, hereby appoints the Depositor as its agent to pledge a first
priority perfected security interest in the Spread Account, and any amounts held
therein from time to time, to the Collateral Agent for the benefit of the
Indenture Trustee and the Insurer pursuant to the Spread Account Agreement and

                                       12
<PAGE>
agrees to execute and deliver such instruments of conveyance, assignment, grant,
confirmation, etc. as well as any financing statements, in each case the Insurer
shall consider reasonably necessary in order to perfect the Collateral Agent's
Security Interest in the Collateral (as such terms are defined in the Spread
Account Agreement).

         SECTION 3.5. Mutilated, Destroyed, Lost or Stolen Certificates. If (a)
any mutilated Certificate shall be surrendered to the Certificate Registrar, or
if the Certificate Registrar shall receive evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there shall be delivered
to the Certificate Registrar, the Owner Trustee and (unless an Insurer Default
shall have occurred and be continuing) the Insurer, such security or indemnity
as may be required by them to save each of them harmless, then in the absence of
notice that such Certificate shall have been acquired by a bona fide purchaser,
the Owner Trustee on behalf of the Trust shall execute and the Owner Trustee
shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
class, and percentage ownership interest in the Trust. In connection with the
issuance of any new Certificate under this Section, the Owner Trustee or the
Certificate Registrar may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Any duplicate Certificate issued pursuant to this Section shall constitute
conclusive evidence of an ownership interest in the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Certificate shall be found
at any time.

         SECTION 3.6. Persons Deemed Certificateholders. Every Person by virtue
of becoming a Certificateholder in accordance with this Agreement and the rules
and regulations of the Certificate Registrar shall be deemed to be bound by the
terms of this Agreement. Prior to due presentation of a Certificate for
registration of transfer, the Owner Trustee, the Certificate Registrar and the
Insurer and any agent of the Owner Trustee, the Certificate Registrar and the
Insurer, may treat the Person in whose name any Certificate shall be registered
in the Certificate Register as the owner of such Certificate for the purpose of
receiving distributions pursuant to the Sale and Servicing Agreement and for all
other purposes whatsoever, and none of the Owner Trustee, the Certificate
Registrar or the Insurer nor any agent of the Owner Trustee, the Certificate
Registrar or the Insurer shall be bound by any notice to the contrary.

         SECTION 3.7. Access to List of Certificateholders' Names and Addresses.
The Owner Trustee shall furnish or cause to be furnished to the Servicer, the
Depositor or (unless an Insurer Default shall have occurred and be continuing)
the Insurer, within 15 days after receipt by the Owner Trustee of a request
therefor from such Person in writing, a list, of the names and addresses of the
Certificateholders as of the most recent Record Date. If three or more Holders
of Certificates or one or more Holders of Certificates evidencing not less than
25% of the percentage ownership interest in the Trust apply in writing to the
Owner Trustee, and such application states that the applicants desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates and such application is accompanied by
a copy of the communication that such applicants propose to transmit, then the
Owner Trustee shall, within five Business Days after the receipt of such
application, afford such applicants access during normal business hours to the
current list of Certificateholders. Each Holder, by receiving and holding a
Certificate, shall be deemed to have agreed not to hold any of the Depositor,
the Servicer, the Owner Trustee or the Insurer or any agent thereof accountable

                                       13
<PAGE>
by reason of the disclosure of its name and address, regardless of the source
from which such information was derived.

         SECTION 3.8. Maintenance of Office or Agency. The Owner Trustee shall
maintain in Wilmington, Delaware, an office or offices or agency or agencies
where Certificates may be surrendered for registration of transfer or exchange
and where notices and demands to or upon the Owner Trustee in respect of the
Certificates and the Basic Documents may be served. The Owner Trustee initially
designates its Corporate Trust Office for such purposes. The Owner Trustee shall
give prompt written notice to the Depositor, the Certificateholders and the
Insurer of any change in the location of the Certificate Register or any such
office or agency.

         SECTION 3.9. ERISA Restrictions. The Certificates may not be acquired
by or for the account of (i) an employee benefit plan (as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) that is subject to the provisions of Title I of ERISA, (ii) a plan
described in Section 4975(e)(1) of the Internal Revenue Code of 1985, as
amended, or (iii) any entity whose underlying assets include plan assets by
reason of a plan's investment in the entity (each, a "Benefit Plan"). By
accepting and holding its beneficial ownership interest in its Certificate, the
Holder thereof shall be deemed to have represented and warranted that it is not
a Benefit Plan.

         SECTION 3.10. Securities Matters. Notwithstanding anything contained
herein to the contrary, the Owner Trustee shall not be responsible for
ascertaining whether any transfer complies with the registration provisions or
exemptions from the Securities Act of 1933, as amended, the Securities Act of
1934, as amended, applicable state securities law or the Investment Company Act;
provided, however, that if a certificate is specifically required to be
delivered to the Owner Trustee by a purchaser or transferee of a Certificate,
the Owner Trustee shall be under a duty to examine the same to determine whether
it conforms to the requirements of this Trust Agreement and shall promptly
notify the party delivering the same if such certificate does not so conform.

                                   ARTICLE IV

                         Voting Rights and Other Actions
         
--------------------------------------------------------------------------------

         SECTION 4.1.Prior Notice to Holders with Respect to Certain Matters.
With respect to the following matters, the Owner Trustee shall not take action
unless at least 10 days before the taking of such action, the Owner Trustee
shall have notified the Certificateholders in writing of the proposed action and
the Certificateholders shall not have notified the Owner Trustee in writing
prior to the 10th day after such notice is given that such Certificateholders
have withheld consent or provided alternative direction:
--------------------------------------------------------------------------------

               (a) the election by the Trust to file an amendment to the
         Certificate of Trust (unless such amendment is required to be filed
         under the Business Trust Statute or unless such amendment would not
         materially and adversely affect the interests of the Holders);

                                       14
<PAGE>
               (b) the amendment of the Indenture by a supplemental indenture in
         circumstances where the consent of any Noteholder is required; 

               (c) the amendment of the Indenture by a supplemental indenture in
         circumstances where the consent of any Noteholder is not required and
         such amendment materially adversely affects the interest of the
         Certificateholders; or

               (d) except pursuant to Section 13.1(b) of the Sale and Servicing
         Agreement, the amendment, change or modification of the Sale and
         Servicing Agreement, except to cure any ambiguity or defect or to amend
         or supplement any provision in a manner that would not materially
         adversely affect the interests of the Certificateholders. 

               The Owner Trustee shall notify the Certificateholders in writing
of any appointment of a successor Note Registrar, Trust Collateral Agent or
Certificate Registrar within five Business Days thereof.

         SECTION 4.2. Action by Certificateholders with Respect to Certain
Matters. The Owner Trustee shall not have the power, except upon the direction
of the Insurer or, in the event that an Insurer Default shall have occurred and
be continuing, the Security Majority in accordance with the Basic Documents, to
(a) remove the Servicer under the Sale and Servicing Agreement or (b) except as
expressly provided in the Basic Documents, sell the Receivables after the
termination of the Indenture. The Owner Trustee shall take the actions referred
to in the preceding sentence only upon written instructions signed by the
Insurer or the Securityholders, as the case may be, and the furnishing of
indemnification satisfactory to the Owner Trustee by the Certificateholders.

         SECTION 4.3. Action by Certificateholders with Respect to Bankruptcy.
Until the Notes have been paid in full, the Owner Trustee shall not have the
power to, and shall not, commence any proceeding or other actions contemplated
by Section 2.12(d) relating to the Trust without the prior written consent of
the Insurer (unless an Insurer Default shall have occurred and be continuing) or
the Security Majority upon an Insurer Default. After the Notes have been paid in
full, all amounts due to the Insurer under the Insurance Agreement have been
paid in full, the Term of the Policy has expired and the Trust Collateral Agent
has surrendered the Policy to the Insurer, the Owner Trustee shall not have the
power to, and shall not, commence any proceeding or other actions contemplated
by Section 212(d) relating to the Trust without the prior written consent of all
of the Certificateholders and the delivery to the Owner Trustee by each such
Certificateholder of written certification that such Certificateholder
reasonably believes that the Trust is insolvent.

         SECTION 4.4. Restrictions on Certificateholders' Power. (a) The
Certificateholders shall not direct the Owner Trustee to take or refrain from
taking any action if such action or inaction would be contrary to any obligation
of the Trust or the Owner Trustee under this Agreement or any of the Basic
Documents or would be contrary to Section 2.3 or otherwise contrary to law nor
shall the Owner Trustee be obligated to follow any such direction, if given.

                                       15
<PAGE>
--------------------------------------------------------------------------------
               No Certificateholder (other than the Depositor as sole
         Certificateholder) shall have any right by virtue or by availing itself
         of any provisions of this Agreement to institute any suit, action, or
         proceeding in equity or at law upon or under or with respect to this
         Agreement or any Basic Document, unless the Certificateholders are the
         Instructing Party pursuant to Section 6.3 and unless a
         Certificateholder previously shall have given to the Owner Trustee a
         written notice of default and of the continuance thereof, as provided
         in this Agreement, and also unless Certificateholders evidencing not
         less than 25% of the percentage ownership interest in the Trust shall
         have made written request upon the Owner Trustee to institute such
         action, suit or proceeding in its own name as Owner Trustee under this
         Agreement and shall have offered to the Owner Trustee such reasonable
         indemnity as it may require against the costs, expenses and liabilities
         to be incurred therein or thereby, and the Owner Trustee, for 30 days
         after its receipt of such notice, request, and offer of indemnity,
         shall have neglected or refused to institute any such action, suit, or
         proceeding, and during such 30-day period no request or waiver
         inconsistent with such written request has been given to the Owner
         Trustee pursuant to and in compliance with this Section or Section 6.3;
         it being understood and intended, and being expressly covenanted by
         each Certificateholder with every other Certificateholder and the Owner
         Trustee, that no one or more Holders of Certificates shall have any
         right in any manner whatever by virtue or by availing itself or
         themselves of any provisions of this Agreement to affect, disturb, or
         prejudice the rights of the Holders of any other of the Certificates,
         or to obtain or seek to obtain priority over or preference to any other
         such Holder, or to enforce any right under this Agreement, except in
         the manner provided in this Agreement and for the equal, ratable, and
         common benefit of all Certificateholders. For the protection and
         enforcement of the provisions of this Section 4.4, each and every
         Certificateholder and the Owner Trustee shall be entitled to such
         relief as can be given either at law or in equity.
         -----------------------------------------------------------------------

         SECTION 4.5. Majority Control. No Certificateholder shall have any
right to vote or in any manner otherwise control the operation and management of
the Trust except as expressly provided in this Agreement. Except as expressly
provided herein, any action that may be taken by the Certificateholders under
this Agreement may be taken by the Holders of Certificates evidencing not less
than a majority of the percentage ownership interest in the Trust. Except as
expressly provided herein, any written notice of the Certificateholders
delivered pursuant to this Agreement shall be effective if signed by
Certificateholders evidencing not less than a majority of the percentatge
ownership interest in the Trust at the time of the delivery of such notice.

         SECTION 4.6. Rights of Insurer. Notwithstanding anything to the
contrary in the Basic Documents, without the prior written consent of the
Insurer or if an Insurer Default shall have occurred and be continuing, the
Security Majority, the Owner Trustee shall not (i) remove the Servicer, the
Backup Servicer, or any Sub-Servicer, (ii) initiate any claim, suit or
proceeding by the Trust or compromise any claim, suit or proceeding brought by
or against the Trust, other than with respect to the enforcement of any
Receivable or any rights of the Trust thereunder, (iii) authorize the merger or
consolidation of the Trust with or into any other business trust or other entity
(other than in accordance with Section 3.10 of the Indenture), (iv) amend the
Certificate of Trust or (v) amend this Agreement in accordance with Section 11.1
of this Agreement.
                                       16
<PAGE>

                                    ARTICLE V

                                 Certain Duties

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

         SECTION 5.1 Accounting and Records to the Noteholders,
Certificateholders, the Internal Revenue Service and Others. Subject to Sections
12.1(b)(iii) and 12.1(c) of the Sale and Servicing Agreement, the Depositor
shall (a) maintain (or cause to be maintained) the books of the Trust on a
calendar year basis on the accrual method of accounting, including, without
limitation, the allocations of net income under Section 2.11, (b) deliver (or
cause to be delivered) to each Certificateholder, as may be required by the Code
and applicable Treasury Regulations, such information as may be required
(including Schedule K-1, if applicable) to enable each Certificateholder to
prepare its Federal and state income tax returns, (c) file or cause to be filed,
if necessary, such tax returns relating to the Trust (including a partnership
information return, Form 1065), and direct the Owner Trustee or the Servicer, as
the case may be, to make such elections as may from time to time be required or
appropriate under any applicable state or Federal statute or rule or regulation
thereunder so as to maintain the Trust's characterization as a branch, or if
applicable, as a partnership, for Federal income tax purposes and (d) collect or
cause to be collected any withholding tax as described in and in accordance with
Section 5.9(c) of the Sale and Serving Agreement with respect to income or
distributions to Certificateholders and the appropriate forms relating thereto.
The Owner Trustee or the Servicer, as the case may be, shall make all elections
pursuant to this Section as directed in writing by the Depositor. The Owner
Trustee shall sign all tax information returns, if any, filed pursuant to this
Section 5.1 and any other returns as may be required by law, and in doing so
shall rely entirely upon, and shall have no liability for information provided
by, or calculations provided by, the Depositor or the Servicer. The Owner
Trustee shall elect under Section 1278 of the Code to include in income
currently any market discount that accrues with respect to the Receivables. The
Owner Trustee shall not make the election provided under Section 754 of the
Code.
--------------------------------------------------------------------------------

         SECTION 5.2. Signature on Returns; Tax Matters Partner. (a)
Notwithstanding the provisions of Section 5.1 and in the event that the Trust is
characterized as a partnership, the Owner Trustee shall sign on behalf of the
Trust the tax returns of the Trust, unless applicable law requires a
Certificateholder to sign such documents, in which case such documents shall be
signed by the Depositor.

--------------------------------------------------------------------------------
                           In the event that the Trust is characterized as a
         partnership, the Depositor shall be the "tax matters partner" of the
         Trust pursuant to the Code.
--------------------------------------------------------------------------------

         SECTION 5.3. Underwriting Agreement. The Servicer is hereby authorized
to execute and deliver the Underwriting Agreement with respect to the Notes.

                                   ARTICLE VI

                      Authority and Duties of Owner Trustee
                                       17
<PAGE>

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

         SECTION 6.1 General Authority. The Owner Trustee is authorized and
directed to execute and deliver the Basic Documents to which the Trust is named
as a party and each certificate or other document attached as an exhibit to or
contemplated by the Basic Documents to which the Trust is named as a party and
any amendment thereto, in each case, in such form as the Depositor shall approve
as evidenced conclusively by the Owner Trustee's execution thereof, and on
behalf of the Trust, to direct the Indenture Trustee to authenticate and deliver
the Notes in the aggregate principal amount of $66,891,200. In addition to the
foregoing, the Owner Trustee is authorized, but shall not be obligated, to take
all actions required of the Trust pursuant to the Basic Documents. The Owner
Trustee is further authorized from time to time to take such action as the
Instructing Party recommends with respect to the Basic Documents so long as such
activities are consistent with the terms of the Basic Documents.
--------------------------------------------------------------------------------

         SECTION 6.2. General Duties. It shall be the duty of the Owner Trustee
to discharge (or cause to be discharged) all of its responsibilities pursuant to
the terms of this Agreement and to administer the Trust in the interest of the
Holders, subject to the Basic Documents and in accordance with the provisions of
this Agreement. Notwithstanding the foregoing, the Owner Trustee shall be deemed
to have discharged its duties and responsibilities hereunder and under the Basic
Documents to the extent the Servicer has agreed in the Sale and Servicing
Agreement to perform any act or to discharge any duty of the Trust or the Owner
Trustee hereunder or under any Basic Document, and the Owner Trustee shall not
be liable for the default or failure of the Servicer to carry out its
obligations under the Sale and Servicing Agreement.

         SECTION 6.3. Action upon Instruction. (a) Subject to Article IV and the
terms of the Spread Account Agreement, the Insurer (so long as an Insurer
Default shall not have occurred and be continuing) or the Certificateholders (if
an Insurer Default shall have occurred and be continuing) (the "Instructing
Party") shall have the exclusive right to direct the actions of the Owner
Trustee in the management of the Trust, so long as such instructions are not
inconsistent with the express terms set forth herein or in any Basic Document.
The Instructing Party shall not instruct the Owner Trustee in a manner
inconsistent with this Agreement or the Basic Documents.

--------------------------------------------------------------------------------
               (b) The Owner Trustee shall not be required to take any action
         hereunder or under any Basic Document if the Owner Trustee shall have
         reasonably determined, or shall have been advised by counsel, that such
         action is likely to result in liability on the part of the Owner
         Trustee or is contrary to the terms hereof or of any Basic Document or
         is otherwise contrary to law.
--------------------------------------------------------------------------------

               (c) Whenever the Owner Trustee is unable to decide between
         alternative courses of action permitted or required by the terms of
         this Agreement or any Basic Document, the Owner Trustee shall promptly
         give notice (in such form as shall be appropriate under the
         circumstances) to the Instructing Party requesting instruction as to
         the course of action to be adopted, and to the extent the Owner Trustee
         acts in good faith in accordance with any written instruction of the
         Instructing Party received, the Owner Trustee shall not be liable on
         account of such action to any Person. If the Owner Trustee shall not

                                       18
<PAGE>
         have received appropriate instruction within ten days of such notice
         (or within such shorter period of time as reasonably may be specified
         in such notice or may be necessary under the circumstances) it may, but
         shall be under no duty to, take or refrain from taking such action, not
         inconsistent with this Agreement or the Basic Documents, as it shall
         deem to be in the best interests of the Certificateholders, and shall
         have no liability to any Person for such action or inaction.

               (d) In the event that the Owner Trustee is unsure as to the
         application of any provision of this Agreement or any Basic Document or
         any such provision is ambiguous as to its application, or is, or
         appears to be, in conflict with any other applicable provision, or in
         the event that this Agreement permits any determination by the Owner
         Trustee or is silent or is incomplete as to the course of action that
         the Owner Trustee is required to take with respect to a particular set
         of facts, the Owner Trustee may give notice (in such form as shall be
         appropriate under the circumstances) to the Instructing Party
         requesting instruction and, to the extent that the Owner Trustee acts
         or refrains from acting in good faith in accordance with any such
         instruction received, the Owner Trustee shall not be liable, on account
         of such action or inaction, to any Person. If the Owner Trustee shall
         not have received appropriate instruction within 10 days of such notice
         (or within such shorter period of time as reasonably may be specified
         in such notice or may be necessary under the circumstances) it may, but
         shall be under no duty to, take or refrain from taking such action, not
         inconsistent with this Agreement or the Basic Documents, as it shall
         deem to be in the best interests of the Certificateholders, and shall
         have no liability to any Person for such action or inaction. 

         SECTION 6.4. No Duties Except as Specified in this Agreement or in
Instructions. The Owner Trustee shall not have any duty or obligation to manage,
make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee is a party, except as expressly provided by the terms
of this Agreement or in any document or written instruction received by the
Owner Trustee pursuant to Section 6.3; and no implied duties or obligations
shall be read into this Agreement or any Basic Document against the Owner
Trustee. The Owner Trustee shall have no responsibility for filing any financing
or continuation statement in any public office at any time or to otherwise
perfect or maintain the perfection of any security interest or lien granted to
it hereunder or to prepare or file any Commission filing for the Trust or to
record this Agreement or any Basic Document. The Owner Trustee nevertheless
agrees that it will, at its own cost and expense, promptly take all action as
may be necessary to discharge any Liens on any part of the Owner Trust Estate
that result from actions by, or claims against, the Owner Trustee (solely in its
individual capacity) and that are not related to the ownership or the
administration of the Owner Trust Estate.

         SECTION 6.5. No Action Except under Specified Documents or
Instructions. The Owner Trustee shall not manage, control, use, sell, dispose of
or otherwise deal with any part of the Owner Trust Estate except (i) in

                                       19
<PAGE>
accordance with the powers granted to and the authority conferred upon the Owner
Trustee pursuant to this Agreement, (ii) in accordance with the Basic Documents
and (iii) in accordance with any document or instruction delivered to the Owner
Trustee pursuant to Section 6.3.

         SECTION 6.6. Restrictions. The Owner Trustee shall not take any action
(a) that is inconsistent with the purposes of the Trust set forth in Section 2.3
or (b) that, to the actual knowledge of the Owner Trustee, would result in the
Trust's becoming taxable as a corporation or a publicly traded partnership for
Federal income tax purposes. The Certificateholders shall not direct the Owner
Trustee to take action that would violate the provisions of this Section.


                                   ARTICLE VII

                          Concerning the Owner Trustee

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         SECTION 7.1. Acceptance of Trusts and Duties. The Owner Trustee accepts
the trusts hereby created and agrees to perform its duties hereunder with
respect to such trusts but only upon the terms of this Agreement. The Owner
Trustee also agrees to disburse all monies actually received by it constituting
part of the Owner Trust Estate upon the terms of the Basic Documents and this
Agreement. The Owner Trustee shall not be answerable or accountable hereunder or
under any Basic Document under any circumstances, except (i) for its own willful
misconduct, bad faith or negligence, (ii) in the case of the inaccuracy of any
representation or warranty contained in Section 7.3 expressly made by the Owner
Trustee in its individual capacity, (iii) for liabilities arising from the
failure of the Owner Trustee to perform obligations expressly undertaken by it
in the last sentence of Section 6.4 hereof, (iv) for any investments issued by
the Owner Trustee or any branch or affiliate thereof in its commercial capacity
or (v) for taxes, fees or other charges on, based on or measured by, any fees,
commissions or compensation received by the Owner Trustee. In particular, but
not by way of limitation (and subject to the exceptions set forth in the
preceding sentence):
--------------------------------------------------------------------------------

               (a) the Owner Trustee shall not be liable for any error of
         judgment made by a Responsible Officer of the Owner Trustee;

               (b) the Owner Trustee shall not be liable with respect to any
         action taken or omitted to be taken by it in accordance with the
         instructions of the Instructing Party, the Depositor, the Servicer or
         any Certificateholder; 

               (c) no provision of this Agreement or any Basic Document shall
         require the Owner Trustee to expend or risk funds or otherwise incur
         any financial liability in the performance of any of its rights or
         powers hereunder or under any Basic Document if the Owner Trustee shall
         have reasonable grounds for believing that repayment of such funds or
         adequate indemnity against such risk or liability is not reasonably
         assured or provided to it; 
                                       20
<PAGE>
               (d) under no circumstances shall the Owner Trustee be liable for
         indebtedness evidenced by or arising under any of the Basic Documents,
         including the principal of and interest on the Notes; 

               (e) the Owner Trustee shall not be responsible for or in respect
         of the validity or sufficiency of this Agreement or for the due
         execution hereof by the Depositor or for the form, character,
         genuineness, sufficiency, value or validity of any of the Owner Trust
         Estate or for or in respect of the validity or sufficiency of the Basic
         Documents, other than the certificate of authentication on the
         Certificates, and the Owner Trustee shall in no event assume or incur
         any liability, duty or obligation to the Depositor, the Insurer,
         Trustee, Trust Collateral Agent, the Collateral Agent, any Noteholder
         or to any Certificateholder, other than as expressly provided for
         herein and in the Basic Documents; 

               (f) the Owner Trustee shall not be liable for the default or
         misconduct of the Depositor, the Insurer, the Trustee, the Trust
         Collateral Agent or the Servicer under any of the Basic Documents or
         otherwise and the Owner Trustee shall have no obligation or liability
         to perform the obligations under this Agreement or the Basic Documents
         that are required to be performed by the Depositor under this
         Agreement, by the Trustee under the Indenture or the Trust Collateral
         Agent or the Servicer under the Sale and Servicing Agreement; and

               (g) the Owner Trustee shall be under no obligation to exercise
         any of the rights or powers vested in it by this Agreement, or to
         institute, conduct or defend any litigation under this Agreement or
         otherwise or in relation to this Agreement or any Basic Document, at
         the request, order or direction of the Instructing Party or any of the
         Certificateholders, unless such Instructing Party or Certificateholders
         have offered to the Owner Trustee security or indemnity satisfactory to
         it against the costs, expenses and liabilities that may be incurred by
         the Owner Trustee therein or thereby. The right of the Owner Trustee to
         perform any discretionary act enumerated in this Agreement or in any
         Basic Document shall not be construed as a duty, and the Owner Trustee
         shall not be answerable for other than its negligence, bad faith or
         willful misconduct in the performance of any such act.

         SECTION 7.2. Furnishing of Documents. The Owner Trustee shall furnish
to the Certificateholders promptly upon receipt of a written request therefor,
duplicates or copies of all reports, notices, requests, demands, certificates,
financial statements and any other instruments furnished to the Owner Trustee
under the Basic Documents.

         SECTION 7.3. Representations and Warranties. The Owner Trustee hereby
represents and warrants, in its individual capacity, to the Depositor, the
Holders and the Insurer (which shall have relied on such representations and
warranties in issuing the Policies), that:

               (a) It is a Delaware banking corporation, duly organized and
         validly existing in good standing under the laws of the State of
         Delaware. It has all requisite corporate power and authority to
         execute, deliver and perform its obligations under this Agreement.

                                       21
<PAGE>
               (b) It has taken all corporate action necessary to authorize the
         execution and delivery by it of this Agreement, and this Agreement will
         be executed and delivered by one of its officers who is duly authorized
         to execute and deliver this Agreement on its behalf. 

               (c) Neither the execution nor the delivery by it of this
         Agreement, nor the consummation by it of the transactions contemplated
         hereby nor compliance by it with any of the terms or provisions hereof
         will contravene any federal or Delaware state law, governmental rule or
         regulation governing the banking or trust powers of the Owner Trustee
         or any judgment or order binding on it, or constitute any default under
         its charter documents or by-laws or any indenture, mortgage, contract,
         agreement or instrument to which it is a party or by which any of its
         properties may be bound. 

         SECTION 7.4. Reliance; Advice of Counsel. (a) The Owner Trustee shall
incur no liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or other
document or paper believed by it to be genuine and believed by it to be signed
by the proper party or parties. The Owner Trustee may accept a certified copy of
a resolution of the board of directors or other governing body of any corporate
party as conclusive evidence that such resolution has been duly adopted by such
body and that the same is in full force and effect. As to any fact or matter the
method of the determination of which is not specifically prescribed herein, the
Owner Trustee may for all purposes hereof rely on a certificate, signed by the
president or any vice president or by the treasurer, secretary or other
authorized officers of the relevant party, as to such fact or matter, and such
certificate shall constitute full protection to the Owner Trustee for any action
taken or omitted to be taken by it in good faith in reliance thereon.

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

               (b) In the exercise or administration of the trusts hereunder and
         in the performance of its duties and obligations under this Agreement
         or the Basic Documents, the Owner Trustee (i) may act directly or
         through its agents or attorneys pursuant to agreements entered into
         with any of them, and the Owner Trustee shall not be liable for the
         conduct or misconduct of such agents or attorneys if such agents or
         attorneys shall have been selected by the Owner Trustee with reasonable
         care, and (ii) may consult with counsel, accountants and other skilled
         persons to be selected with reasonable care and employed by it. The
         Owner Trustee shall not be liable for anything done, suffered or
         omitted in good faith by it in accordance with the written opinion or
         advice of any such counsel, accountants or other such persons and
         according to such opinion not contrary to this Agreement or any Basic
         Document.
         -----------------------------------------------------------------------

         SECTION 7.5. Not Acting in Individual Capacity. Except as provided in
this Article VII, in accepting the trusts hereby created Wilmington Trust
Company acts solely as Owner Trustee hereunder and not in its individual
capacity and

                                       22
<PAGE>
all Persons having any claim against the Owner Trustee by reason of the
transactions contemplated by this Agreement or any Basic Document shall look
only to the Owner Trust Estate for payment or satisfaction thereof.

         SECTION 7.6. Owner Trustee Not Liable for Certificates or Receivables.
The recitals contained herein and in the Certificates (other than the signature
and countersignature of the Owner Trustee on the Certificates) shall be taken as
the statements of the Depositor and the Owner Trustee assumes no responsibility
for the correctness thereof. The Owner Trustee makes no representations as to
the validity or sufficiency of this Agreement, of any Basic Document or of the
Certificates (other than the signature and countersignature of the Owner Trustee
on the Certificates) or the Notes, or of any Receivable or related documents.
The Owner Trustee shall at no time have any responsibility or liability for or
with respect to the legality, validity and enforceability of any Receivable, or
the perfection and priority of any security interest created by any Receivable
in any Financed Vehicle or the maintenance of any such perfection and priority,
or for or with respect to the sufficiency of the Owner Trust Estate or its
ability to generate the payments to be distributed to Certificateholders under
this Agreement or the Noteholders under the Indenture, including, without
limitation: the existence, condition and ownership of any Financed Vehicle; the
existence and enforceability of any insurance thereon; the existence and
contents of any Receivable on any computer or other record thereof; the validity
of the assignment of any Receivable to the Trust or of any intervening
assignment; the completeness of any Receivable; the performance or enforcement
of any Receivable; the compliance by the Depositor, the Servicer or any other
Person with any warranty or representation made under any Basic Document or in
any related document or the accuracy of any such warranty or representation or
any action of the Trustee or the Servicer or any subservicer taken in the name
of the Owner Trustee.

         SECTION 7.7. Owner Trustee May Own Certificates and Notes. The Owner
Trustee in its individual or any other capacity may become the owner or pledge
of Certificates or Notes and may deal with the Depositor, the Trustee and the
Servicer in banking transactions with the same rights as it would have if it
were not Owner Trustee.

         SECTION 7.8. Payments from Owner Trust Estate. All payments to be made
by the Owner Trustee under this Agreement or any of the Basic Documents to which
the Trust or the Owner Trustee is a party shall be made only from the income and
proceeds of the Owner Trust Estate and only to the extent that the Owner Trust
shall have received income or proceeds from the Owner Trust Estate to make such
payments in accordance with the terms hereof. Wilmington Trust Company, or any
successor thereto, in its individual capacity, shall not be liable for any
amounts payable under this Agreement or any of the Basic Documents to which the
Trust or the Owner Trustee is a party.

         SECTION 7.9. Doing Business in Other Jurisdictions. Notwithstanding
anything contained to the contrary, neither Wilmington Trust Company or any
successor thereto, nor the Owner Trustee shall be required to take any action in
any jurisdiction other than in the State of Delaware if the taking of such
action will, even after the appointment of a co-trustee or separate trustee in
accordance with Section 10.5 hereof, (i) require the consent or approval or

                                       23

<PAGE>
authorization or order of or the giving of notice to, or the registration with
or the taking of any other action in respect of, any state or other governmental
authority or agency of any jurisdiction other than the State of Delaware; (ii)
result in any fee, tax or other governmental charge under the laws of the State
of Delaware becoming payable by Wilmington Trust Company (or any successor
thereto); or (iii) subject Wilmington Trust Company (or any successor thereto)
to personal jurisdiction in any jurisdiction other than the State of Delaware
for causes of action arising from acts unrelated to the consummation of the
transactions by Wilmington Trust Company (or any successor thereto) or the Owner
Trustee, as the case may be, contemplated hereby.

                                  ARTICLE VIII

                          Compensation of Owner Trustee

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

         SECTION 8.1. Owner Trustee's Fees and Expenses. The Owner Trustee shall
receive as compensation for its services hereunder such fees as have been
separately agreed upon before the date hereof between the Depositor and the
Owner Trustee, and the Owner Trustee shall be entitled to be reimbursed by the
Depositor for its other reasonable expenses hereunder, including the reasonable
compensation, expenses and disbursements of such agents, representatives,
experts and counsel as the Owner Trustee may employ in connection with the
exercise and performance of its rights and its duties hereunder and under the
Basic Documents.
--------------------------------------------------------------------------------

         SECTION 8.2. Indemnification. The Depositor shall be liable as primary
obligor for, and shall indemnify the Owner Trustee (in its individual and trust
capacities) and its officers, directors, successors, assigns, agents and
servants (collectively, the "Indemnified Parties") from and against, any and all
liabilities, obligations, losses, damages, taxes, claims, actions and suits, and
any and all reasonable costs, expenses and disbursements (including reasonable
legal fees and expenses) of any kind and nature whatsoever (collectively,
"Expenses") which may (in its trust or individual capacities) at any time be
imposed on, incurred by, or asserted against the Owner Trustee or any
Indemnified Party in any way relating to or arising out of this Agreement, the
Basic Documents, the Owner Trust Estate, the administration of the Owner Trust
Estate or the action or inaction of the Owner Trustee hereunder, except only
that the Depositor shall not be liable for or required to indemnify the Owner
Trustee from and against Expenses arising or resulting from any of the matters
described in the third sentence of Section 7.1. The indemnities contained in
this Section and the rights under Section 8.1 shall survive the resignation or
termination of the Owner Trustee or the termination of this Agreement. In any
event of any claim, action or proceeding for which indemnity will be sought
pursuant to this Section, the Owner Trustee's choice of legal counsel shall be
subject to the approval of the Depositor which approval shall not be
unreasonably withheld.

         SECTION 8.3. Payments to the Owner Trustee. Any amounts paid to the
Owner Trustee pursuant to this Article VIII shall be deemed not to be a part of
the Owner Trust Estate immediately after such payment.

         SECTION 8.4. Non-recourse Obligations. Notwithstanding anything in this
Agreement or any Basic Document, the Owner Trustee agrees in its individual

                                       24
<PAGE>
capacity and in its capacity as Owner Trustee for the Trust that all obligations
of the Trust to the Owner Trustee individually or as Owner Trustee for the Trust
shall be recourse to the Owner Trust Estate only and specifically shall not be
recourse to the assets of any Certificateholder.

                                   ARTICLE IX

                         Termination of Trust Agreement

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

         SECTION 9.1. Termination of Trust Agreement. (a) This Agreement and the
Trust shall terminate and be of no further force or effect upon the latest of
(i) the maturity or other liquidation of the last Receivable (including the
purchase by the Servicer at its option of the corpus of the Trust as described
in Section 11.1 of the Sale and Servicing Agreement) and the subsequent
distribution of amounts in respect of such Receivables as provided in the Basic
Documents or (ii) the payment to Certificateholders of all amounts required to
be paid to them pursuant to this Agreement and the payment to the Insurer of all
amounts payable or reimbursable to it pursuant to the Sale and Servicing
Agreement; provided, however, that the rights to indemnification under Section
8.2 and the rights under Section 8.1 shall survive the termination of the Trust.
The Servicer shall promptly notify the Owner Trustee and the Insurer of any
prospective termination pursuant to this Section 9.1. The bankruptcy,
liquidation, dissolution, death or incapacity of any Certificateholder shall not
(x) operate to terminate this Agreement or the Trust, nor (y) entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of all
or any part of the Trust or Owner Trust Estate nor (z) otherwise affect the
rights, obligations and liabilities of the parties hereto.

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

               (b) Except as provided in clause (a), neither the Depositor nor
         any other Certificateholder shall be entitled to revoke or terminate
         the Trust.
--------------------------------------------------------------------------------

               (c) Notice of any termination of the Trust, specifying the
         Distribution Date upon which the Certificateholders shall surrender
         their Certificates to the Trust Collateral Agent for payment of the
         final distribution and cancellation, shall be given by the Owner
         Trustee by letter to Certificateholders mailed within five Business
         Days of receipt of notice of such termination from the Servicer given
         pursuant to Section 11.1(c) of the Sale and Servicing Agreement,
         stating (i) the Distribution Date upon or with respect to which final
         payment of the Certificates shall be made upon presentation and
         surrender of the Certificates at the office of the Trust Collateral
         Agent therein designated, (ii) the amount of any such final payment,
         (iii) that the Record Date otherwise applicable to such Distribution
         Date is not applicable, payments being made only upon presentation and
         surrender of the Certificates at the office of the Trust Collateral
         Agent therein specified and (iv) interest will cease to accrue on the
         Certificates. The Owner Trustee shall give such notice to the
         Certificate Registrar (if other than the Owner Trustee) and the Trust

                                       25
<PAGE>
         Collateral Agent at the time such notice is given to
         Certificateholders. Upon presentation and surrender of the
         Certificates, the Trust Collateral Agent shall cause to be distributed
         to Certificateholders amounts distributable on such Distribution Date
         pursuant to Section 5.7 of the Sale and Servicing Agreement. In the
         event that all of the Certificateholders shall not surrender their
         Certificates for cancellation within six months after the date
         specified in the above mentioned written notice, the Owner Trustee
         shall give a second written notice to the remaining Certificateholders
         to surrender their Certificates for cancellation and receive the final
         distribution with respect thereto. If within one year after the second
         notice all the Certificates shall not have been surrendered for
         cancellation, the Owner Trustee may take appropriate steps, or may
         appoint an agent to take appropriate steps, to contact the remaining
         Certificateholders concerning surrender of their Certificates, and the
         cost thereof shall be paid out of the funds and other assets that shall
         remain subject to this Agreement. Any funds remaining in the Trust
         after exhaustion of such remedies shall be distributed, subject to
         applicable escheat laws, by the Owner Trustee to the Depositor and
         Holders shall look solely to the Depositor for payment.

               (d) Any funds remaining in the Trust after funds for final
         distribution have been distributed or set aside for distribution shall
         be distributed by the Owner Trustee to the Depositor.

               (e) Upon the winding up of the Trust and its termination, the
         Owner Trustee shall cause the Certificate of Trust to be canceled by
         filing a certificate of cancellation with the Secretary of State in
         accordance with the provisions of Section 3810 of the Business Trust
         Statute. (f) Written notice of the termination of this Agreement and
         the Trust shall be given to each Rating Agency by the Owner Trustee.
  
                                    ARTICLE X

             Successor Owner Trustees and Additional Owner Trustees

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

         SECTION 10.1. Eligibility Requirements for Owner Trustee. The Owner
Trustee shall at all times be a corporation (i) satisfying the provisions of
Section 3807(a) of the Business Trust Statute; (ii) authorized to exercise
corporate trust powers; (iii) having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by Federal or State
authorities; (iv) having (or having a parent which has) a rating of at least
Baa3 by Moody's and A-1 by Standard & Poors; and (v) acceptable to the Insurer
in its sole discretion, so long as an Insurer Default shall not have occurred
and be continuing. If such corporation shall publish reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purpose of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. In case at any time the Owner Trustee shall cease to be eligible
in accordance with the provisions of this Section, the Owner Trustee shall
resign immediately in the manner and with the effect specified in Section 10.2.
-------------------------------------------------------------------------------

                                       26
<PAGE>

         SECTION 10.2. Resignation or Removal of Owner Trustee. The Owner
Trustee may at any time resign and be discharged from the trusts hereby created
by giving written notice thereof to the Depositor (or in the event that the
Depositor is not the sole Certificateholder, the Holders of Certificates
evidencing not less than a majority of the percentage ownership interest in the
Trust), the Insurer and the Servicer. Upon receiving such notice of resignation,
the Depositor shall promptly appoint a successor Owner Trustee, meeting the
qualifications set forth in Section 10.1 herein, by written instrument, in
duplicate, one copy of which instrument shall be delivered to the resigning
Owner Trustee and one copy to the successor Owner Trustee, provided that the
Depositor shall have received written confirmation from each of the Rating
Agencies that the proposed appointment will not result in an increased capital
charge to the Insurer by either of the Rating Agencies. If no successor Owner
Trustee shall have been so appointed and have accepted appointment within 30
days after the giving of such notice of resignation, the resigning Owner Trustee
or the Insurer may petition any court of competent jurisdiction for the
appointment of a successor Owner Trustee.

         If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.1 and shall fail to resign after
written request therefor by the Depositor, or if at any time the Owner Trustee
shall be legally unable to act, or shall be adjudged bankrupt or insolvent, or a
receiver of the Owner Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Owner Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Depositor with the consent of the Insurer (so long as an
Insurer Default shall not have occurred and be continuing) may remove the Owner
Trustee. If the Depositor shall remove the Owner Trustee under the authority of
the immediately preceding sentence, the Depositor shall promptly appoint a
successor Owner Trustee, meeting the qualifications set forth in Section 10.1
herein, by written instrument, in duplicate, one copy of which instrument shall
be delivered to the outgoing Owner Trustee so removed, one copy to the Insurer
and one copy to the successor Owner Trustee and payment of all fees owed to the
outgoing Owner Trustee.

         Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until acceptance of appointment by the successor Owner
Trustee pursuant to Section 10.3 and payment of all fees and expenses owed to
the outgoing Owner Trustee. The Depositor shall provide notice of such
resignation or removal of the Owner Trustee to each of the Rating Agencies.

         SECTION 10.3. Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Section 10.2 shall execute, acknowledge and deliver to the
Depositor, the Servicer, the Insurer and to its predecessor Owner Trustee an
instrument accepting such appointment under this Agreement, and thereupon the
resignation or removal of the predecessor Owner Trustee shall become effective
and such successor Owner Trustee, without any further act, deed or conveyance,
shall become fully vested with all the rights, powers, duties and
 
                                       27
<PAGE>
 obligations of its predecessor under this Agreement, with like effect as if
 originally named as Owner Trustee. The predecessor Owner Trustee shall upon
 payment of its fees and expenses deliver to the successor Owner Trustee all
 documents and statements and monies held by it under this Agreement; and the
 Depositor and the predecessor Owner Trustee shall execute and deliver such
 instruments and do such other things as may reasonably be required for fully
 and certainly vesting and confirming in the successor Owner Trustee all such
 rights, powers, duties and obligations.

         No successor Owner Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Owner Trustee shall
be eligible pursuant to Section 10.1.

         Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section, the Servicer shall mail notice of the successor of such Owner
Trustee to all Certificateholders, the Trustee, the Noteholders and the Rating
Agencies. If the Servicer shall fail to mail such notice within 10 days after
acceptance of appointment by the successor Owner Trustee, the successor Owner
Trustee shall cause such notice to be mailed at the expense of the Servicer.

         SECTION 10.4. Merger or Consolidation of Owner Trustee. Any corporation
into which the Owner Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Owner Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee hereunder, provided
such corporation shall be eligible pursuant to Section 10.1, without the
execution or filing of any instrument or any further act on the part of any of
the parties hereto, anything herein to the contrary notwithstanding; provided
further that the Owner Trustee shall mail notice of such merger or consolidation
to the Rating Agencies.

         SECTION 10.5. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Owner Trust Estate or any Financed Vehicle may at the time be located,
the Servicer and the Owner Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
the Owner Trustee and the Insurer to act as co-trustee, jointly with the Owner
Trustee, or separate trustee or separate trustees, of all or any part of the
Owner Trust Estate, and to vest in such Person, in such capacity, such title to
the Trust, or any part thereof, and, subject to the other provisions of this
Section, such powers, duties, obligations, rights and trusts as the Servicer and
the Owner Trustee may consider necessary or desirable. If the Servicer shall not
have joined in such appointment within 15 days after the receipt by it of a
request so to do, the Owner Trustee subject, unless an Insurer Default shall
have occurred and be continuing, to the approval of the Insurer (which approval
shall not be unreasonably withheld) shall have the power to make such
appointment. No co-trustee or separate trustee under this Agreement shall be
required to meet the terms of eligibility as a successor trustee pursuant to
Section 10.1 and no notice of the appointment of any co-trustee or separate
trustee shall be required pursuant to Section 10.3.

         Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:

               (i) all rights, powers, duties and obligations conferred or
         imposed upon the Owner Trustee shall be conferred upon and exercised or
         performed by the Owner Trustee and such separate trustee or co-trustee

                                       28
<PAGE>

         jointly (it being understood that such separate trustee or
         co-trustee is not authorized to act separately without the Owner
         Trustee joining in such act), except to the extent that under any law
         of any jurisdiction in which any particular act or acts are to be
         performed, the Owner Trustee shall be incompetent or unqualified to
         perform such act or acts, in which event such rights, powers, duties
         and obligations (including the holding of title to the Trust or any
         portion thereof in any such jurisdiction) shall be exercised and
         performed singly by such separate trustee or co-trustee, but solely at
         the direction of the Owner Trustee;

               (ii) no trustee under this Agreement shall be personally liable
         by reason of any act or omission of any other trustee under this
         Agreement; and 

               (iii) the Servicer and the Owner Trustee acting jointly may at
         any time accept the resignation of or remove any separate trustee or
         co-trustee. 

         Any notice, request or other writing given to the Owner Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Owner Trustee. Each such instrument shall be filed with the Owner
Trustee and a copy thereof given to the Servicer and the Insurer.

         Any separate trustee or co-trustee may at any time appoint the Owner
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Owner Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.

                                   ARTICLE XI

                                  Miscellaneous

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

         SECTION 11.1. Supplements and Amendments. (a) This Agreement may be
amended by the Depositor and the Owner Trustee, with the prior written consent
of the Insurer (so long as an Insurer Default shall not have occurred and be
continuing) and with prior written notice to the Rating Agencies, without the
consent of any of the Noteholders or, in the event that the Depositor is not the
sole Certificateholder, the Certificateholders, (i) to cure any ambiguity or
defect or (ii) to correct, supplement or modify any provisions in this
Agreement; provided, however, that such action shall not, as evidenced by an
Opinion of Counsel which may be based upon a certificate of the Servicer,

                                       29
<PAGE>
adversely affect in any material respect the interests of any Noteholder or
Certificateholder.

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

               (b) This Agreement may also be amended from time to time, with
         the prior written consent of the Insurer (so long as an Insurer Default
         shall not have occurred and be continuing) by the Depositor and the
         Owner Trustee, with prior written notice to the Rating Agencies, to the
         extent such amendment materially and adversely affects the interests of
         the Noteholders, with the consent of the Noteholders evidencing not
         less than a majority of the Outstanding Amount of the Notes and, the
         consent of the Certificateholders evidencing not less than a majority
         of the percentage ownership interest in the Trust (which consent of any
         Holder of a Certificate or Note given pursuant to this Section or
         pursuant to any other provision of this Agreement shall be conclusive
         and binding on such Holder and on all future Holders of such
         Certificate or Note and of any Certificate or Note issued upon the
         transfer thereof or in exchange thereof or in lieu thereof whether or
         not notation of such consent is made upon the Certificate or Note) for
         the purpose of adding any provisions to or changing in any manner or
         eliminating any of the provisions of this Agreement or of modifying in
         any manner the rights of the Noteholders or the Certificateholders;
         provided, however, that, subject to the express rights of the Insurer
         under the Basic Documents, no such amendment shall (a) increase or
         reduce in any manner the amount of, or accelerate or delay the timing
         of, collections of payments on Receivables or distributions that shall
         be required to be made for the benefit of the Noteholders or the
         Certificateholders or (b) reduce the aforesaid percentage of the
         Outstanding Amount of the Notes and the Certificates, the Holders of
         which are required to consent to any such amendment, without the
         consent of the Holders of all the outstanding Notes and Holders of all
         outstanding Certificates.
         -----------------------------------------------------------------------

         Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder, the Trustee and each of the
Rating Agencies.

         It shall not be necessary for the consent of Certificateholders, the
Noteholders or the Trustee pursuant to this Section to approve the particular
form of any proposed amendment or consent, but it shall be sufficient if such
consent shall approve the substance thereof. The manner of obtaining such
consents (and any other consents of Certificateholders provided for in this
Agreement or in any other Basic Document) and of evidencing the authorization of
the execution thereof by Certificateholders shall be subject to such reasonable
requirements as the Owner Trustee may prescribe. Promptly after the execution of
any amendment to the Certificate of Trust, the Owner Trustee shall cause the
filing of such amendment with the Secretary of State.

         Prior to the execution of any amendment to this Agreement or the
Certificate of Trust, the Owner Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent to
the execution and delivery of such amendment have been satisfied. The Owner
Trustee may, but shall not be obligated to, enter into any such amendment which
affects the Owner Trustee's own rights, duties or immunities under this
Agreement or otherwise.

                                       30
<PAGE>

         SECTION 11.2. Limitations on Rights of Others. Except for Section 2.7,
the provisions of this Agreement are solely for the benefit of the Owner
Trustee, the Depositor, the Certificateholders, the Servicer and, to the extent
expressly provided herein, the Insurer, the Trustee and the Noteholders, and
nothing in this Agreement, whether express or implied, shall be construed to
give to any other Person any legal or equitable right, remedy or claim in the
Owner Trust Estate or under or in respect of this Agreement or any covenants,
conditions or provisions contained herein.

         SECTION 11.3. Notices. (a) Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing and shall be
deemed given upon receipt personally delivered, delivered by overnight courier
or mailed first class mail or certified mail, in each case return receipt
requested, and shall be deemed to have been duly given upon receipt, if to the
Owner Trustee, addressed to the Corporate Trust Office; if to the Depositor,
addressed to National Financial Auto Funding Trust, One Park Place, Suite 200,
621 N.W. 53rd Street, Boca Raton, Florida 33487; if to the holder of the
Insurer, addressed to Insurer, Financial Security Assurance Inc., 350 Park
Avenue, New York, NY 10022, Attention: Surveillance Department, Re: National
Auto Finance 1997-1 Trust, 6.35% Automobile Receivables-Backed Notes, Telex No.:
(212) 688-3101, Confirmation: (212) 826-0100, Telecopy Nos.: (212) 339-3518,
(212) 339-3529 (in each case in which notice or other communication to the
Insurer refers to an Event of Default, a claim on the Note Policy or with
respect to which failure on the part of Financial Security to respond shall be
deemed to constitute consent or acceptance, then a copy of such notice or other
communication should also be sent to the attention of the General Counsel and
the Head-Financial Guaranty Group "URGENT MATERIAL ENCLOSED"); or, as to each
party, at such other address as shall be designated by such party in a written
notice to each other party.

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

               (b) Any notice required or permitted to be given to a
         Certificateholder shall be given by first-class mail, postage prepaid,
         at the address of such Holder as shown in the Certificate Register. Any
         notice so mailed within the time prescribed in this Agreement shall be
         conclusively presumed to have been duly given, whether or not the
         Certificateholder receives such notice.
--------------------------------------------------------------------------------

         SECTION 11.4. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

         SECTION 11.5. Separate Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.

         SECTION 11.6. Assignments; Insurer. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. This Agreement shall also inure to the benefit

                                       31
<PAGE>
of the Insurer for so long as an Insurer Default shall not have occurred and be
continuing. Without limiting the generality of the foregoing, all covenants and
agreements in this Agreement which confer rights upon the Insurer shall be for
the benefit of and run directly to the Insurer, and the Insurer shall be
entitled to rely on and enforce such covenants, subject, however, to the
limitations on such rights provided in this Agreement and the Basic Documents.
The Insurer may disclaim any of its rights and powers under this Agreement (but
not its duties and obligations under the Policies) upon delivery of a written
notice to the Owner Trustee.

         SECTION 11.7. No Petition. The Owner Trustee (not in its individual
capacity but solely as Owner Trustee), by entering into this Agreement, each
Certificateholder, by accepting a Certificate, and the Trustee and each
Noteholder by accepting the benefits of this Agreement, hereby covenants and
agrees that they will not at any time institute against the Depositor, or join
in any institution against the Depositor of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any United States Federal or state bankruptcy or similar law in connection with
any obligations relating to the Certificates, the Notes, this Agreement or any
of the Basic Documents.

         SECTION 11.8. No Recourse. Each Certificateholder by accepting a
Certificate acknowledges that such Certificateholder's Certificates represent
beneficial interests in the Trust only and do not represent interests in or
obligations of the Servicer, the Depositor, the Owner Trustee, the Trustee, the
Insurer or any Affiliate thereof and no recourse may be had against such parties
or their assets, except as may be expressly set forth or contemplated in this
Agreement, the Certificates or the Basic Documents.

         SECTION 11.9. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.

         SECTION 11.10. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

         SECTION 11.11. Servicer. The Servicer is authorized to prepare, or
cause to be prepared, execute and deliver on behalf of the Trust all such
documents, reports, filings, instruments, certificates and opinions as it shall
be the duty of the Trust or Owner Trustee to prepare, file or deliver pursuant
to the Basic Documents. Upon written request, the Owner Trustee shall execute
and deliver to the Servicer a limited power of attorney appointing the Servicer
the Trust's agent and attorney-in-fact to prepare, or cause to be prepared,
execute and deliver all such documents, reports, filings, instruments,
certificates and opinions.

                                       32

<PAGE>


         IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement
to be duly executed by their respective officers hereunto duly authorized as of
the day and year first above written.



         WILMINGTON TRUST COMPANY,
         Owner Trustee,


         By:_________________________________
              Name:
              Title:


         NATIONAL FINANCIAL AUTO FUNDING TRUST,
         Depositor,


         By:_________________________________
              Name:  Keith B. Stein
              Title:  Secretary


Acknowledged and Agreed:

NATIONAL AUTO FINANCE COMPANY, INC.,
Servicer,


By:____________________________
     Name:  Keith B. Stein
     Title:  Treasurer


                                       33



<PAGE>

                                    EXHIBIT A

                               FORM OF CERTIFICATE

NUMBER
1

                       SEE REVERSE FOR CERTAIN DEFINITIONS

         THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE IN
RELIANCE UPON EXEMPTIONS PROVIDED BY THE SECURITIES ACT AND SUCH STATE
SECURITIES LAWS. NO RESALE OR OTHER TRANSFER OF THIS CERTIFICATE MAY BE MADE
UNLESS SUCH RESALE OR TRANSFER (A) IS MADE IN ACCORDANCE WITH SECTION 3.4 OF THE
OWNER TRUST AGREEMENT PERTAINING TO THE NATIONAL AUTO FINANCE 1997-1 TRUST (THE
"AGREEMENT") AND (B) IS MADE (i) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, (ii) IN A TRANSACTION EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, (iii)
TO THE SELLER OR (iv) TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT THAT IS AWARE THAT THE RESALE OR OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A AND (C) UPON THE SATISFACTION OF CERTAIN OTHER
REQUIREMENTS SPECIFIED IN THE AGREEMENT. NEITHER THE SELLER, THE SERVICER, THE
TRUST NOR THE OWNER TRUSTEE IS OBLIGATED TO REGISTER THE CERTIFICATES UNDER THE
SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS.


         TRUST CERTIFICATE

evidencing a beneficial ownership interest in certain distributions of the
Trust, as defined below, the property of which includes a pool of retail
installment sale contracts secured by new or used automobiles, vans or light
duty trucks and sold to the Trust by National Financial Auto Funding Trust.

(This Certificate does not represent an interest in or obligation of National
Financial Auto Funding Trust or any of its Affiliates, except to the extent
described below.)

         THIS CERTIFIES THAT National Financial Auto Funding Trust is the
registered owner of a nonassessable, fully-paid, beneficial ownership interest

<PAGE>

in certain distributions of National Auto Finance 1997-1 Trust (the "Trust")
formed by National Financial Auto Funding Trust, a Delaware business trust (the
"Depositor").

                  OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION


         This is one of the Certificates referred to in the within mentioned
Trust Agreement.


WILMINGTON TRUST COMPANY not in its individual capacity but solely as Owner
Trustee

by ________________________________ Authenticating Agent 
by _______________________________

         The Trust was created pursuant to a Trust Agreement dated as of July ,
1997 (the "Trust Agreement"), between the Depositor and Wilmington Trust
Company, as owner trustee (the "Owner Trustee"), a summary of certain of the
pertinent provisions of which is set forth below. To the extent not otherwise
defined herein, the capitalized terms used herein have the meanings assigned to
them in the Trust Agreement.

         This Certificate is one of the duly authorized Certificates designated
as "Trust Certificates" (herein called the "Certificates"). This Certificate is
issued under and is subject to the terms, provisions and conditions of the Trust
Agreement, to which Trust Agreement the holder of this Certificate by virtue of
the acceptance hereof assents and by which such holder is bound. The property of
the Trust includes a pool of retail installment sale contracts secured by new
and used automobiles, vans or light duty trucks (the "Receivables"), all monies
due thereunder on or after Initial Cutoff Date, security interests in the
vehicles financed thereby, certain bank accounts and the proceeds thereof,
proceeds from claims on certain insurance policies and certain other rights
under the Trust Agreement and the Sale and Servicing Agreement, all right, to
and interest of the Depositor in and to the Purchase and Contribution Agreement
dated as of June 29, 1997 between National Auto Finance Company, Inc. and
National Financial Auto Funding Trust and all proceeds of the foregoing.

         Under the Trust Agreement, there will be distributed on the 21st day of
each month or, if such 21st day is not a Business Day, the next Business Day
(the "Distribution Date"), commencing on July 21, 1997, to the Person in whose
name this Certificate is registered at the close of business on the Business Day
preceding such Distribution Date (the "Record Date") such Certificateholder's
fractional undivided interest in the amount to be distributed to
Certificateholders on such Distribution Date.

         The holder of this Certificate acknowledges and agrees that its rights
to receive distributions in respect of this Certificate are subordinated to the
rights of the Noteholders as described in the Sale and Servicing Agreement, the
Indenture and the Trust Agreement, as applicable.


<PAGE>

         The holder of this Certificate, by acceptance of this Certificate,
specifically acknowledges that it has no right to or interest in any monies at
any time held pursuant to the Spread Account Agreement or prior to the release
of such monies pursuant to Section 5.7(b) of the Sale and Servicing Agreement,
such monies being held in trust for the benefit of the Noteholders and the
Insurer. Notwithstanding the foregoing, in the event that it is ever determined
that the monies held in the Spread Account constitute a pledge of collateral,
then the provisions of the Sale and Servicing Agreement and the Spread Account
Agreement shall be considered to constitute a security agreement and the holder
of this Certificate hereby grants to the Trust Collateral Agent for the benefit
of the Trustee and the Insurer a first priority perfected security interest in
such amounts, to be applied as set forth in Section 3.03 of the Spread Account
Agreement. In addition, each Certificateholder, by acceptance of its
Certificate, hereby appoints the Seller as its agent to pledge a first priority
perfected security interest in the Spread Account, and any amounts held therein
from time to time to the Collateral Agent for the benefit of the Trustee and the
Insurer pursuant to the Spread Account Agreement and agrees to execute and
deliver such instruments of conveyance, assignment, grant, confirmation, etc.,
as well as any financing statements, in each case as the Insurer shall consider
reasonably necessary in order to perfect the Trust Collateral Agent's security
interest in the Collateral.

         It is the intent of the Depositor, the Servicer, and the
Certificateholders that, for purposes of Federal income taxes, the Trust will be
treated as a branch. In the event that the Certificates are held more than one
Holder, it is the intent of the Depositor, the Servicer, and the
Certificateholders that, for purposes of Federal income taxes, the Trust will be
treated as a partnership and the Certificateholders will be treated as partners
in that partnership. The Depositor and any other Certificateholders, by
acceptance of a Certificate, agree to treat, and to take no action inconsistent
with the treatment of, the Certificates for such tax purposes as partnership
interests in the Trust. Each Certificateholder, by its acceptance of a
Certificate, covenants and agrees that such Certificateholder will not at any
time institute against the Trust or the Depositor, or join in any institution
against the Trust or the Depositor of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any United States Federal or state bankruptcy or similar law in connection with
any obligations relating to the Certificates, the Notes, the Trust Agreement or
any of the Basic Documents.

         Distributions on this Certificate will be made as provided in the Sale
and Servicing Agreement by the Trust Collateral Agent by wire transfer or check
mailed to the Certificateholder of record in the Certificate Register without
the presentation or surrender of this Certificate or the making of any notation
hereon. Except as otherwise provided in the Trust Agreement and notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Owner Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency
maintained for the purpose by the Owner Trustee in the Corporate Trust Office.

         Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.


<PAGE>

         Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual signature,
this Certificate shall not entitle the holder hereof to any benefit under the
Trust Agreement or the Sale and Servicing Agreement or be valid for any purpose.

         THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.

         IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not
in its individual capacity, has caused this Certificate to be duly executed.


                               NATIONAL AUTO FINANCE 1997-1 TRUST

                               By: WILMINGTON TRUST COMPANY not in its
                                   individual capacity but solely as
                                   Owner Trustee


Dated:                         By:__________________________________


                               By: ____________________________
                                   Name:
                                   Title:



<PAGE>

                            (Reverse of Certificate)

         The Certificates do not represent an obligation of, or an interest in,
the Depositor, the Servicer, the Owner Trustee or any Affiliates of any of them
and no recourse may be had against such parties or their assets, except as may
be expressly set forth or contemplated herein or in the Trust Agreement, the
Indenture or the Basic Documents. In addition, this Certificate is not
guaranteed by any governmental agency or instrumentality and is limited in right
of payment to certain collections with respect to the Receivables, as more
specifically set forth herein and in the Sale and Servicing Agreement. A copy of
each of the Sale and Servicing Agreement and the Trust Agreement may be examined
during normal business hours at the principal office of the Depositor, and at
such other places, if any, designated by the Depositor, by any Certificateholder
upon written request.

         The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Trust Agreement at
any time by the Depositor and the Owner Trustee with the prior written consent
of Financial Security Assurance Inc. (the "Insurer") so long as no Insurer
Default has occurred and is continuing, and with the consent of the holders of
the Notes and the Certificates evidencing not less than a majority of the
outstanding Notes and the percentage ownership interest of the Trust. Any such
consent by the holder of this Certificate shall be conclusive and binding on
such holder and on all future holders of this Certificate and of any Certificate
issued upon the transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent is made upon this Certificate. The Trust
Agreement also permits the amendment thereof, in certain limited circumstances,
without the consent of the holders of any of the Certificates (other than the
Depositor or the Insurer).

         As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registerable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies of the Certificate Registrar maintained by
the Owner Trustee in the Corporate Trust Office, accompanied by a written
instrument of transfer in form satisfactory to the Owner Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
evidencing the same percentage ownership interest in the Trust will be issued to
the designated transferee. The initial Certificate Registrar appointed under the
Trust Agreement is Wilmington Trust Company.

         Except for Certificates issued to the Depositor, the Certificates are
issuable only as registered Certificates. As provided in the Trust Agreement and
subject to certain limitations therein set forth, Certificates are exchangeable
for new Certificates evidencing the same aggregate percentage ownership interest
in the Trust, as requested by the holder surrendering the same. No service
charge will be made for any such registration of transfer or exchange, but the
Owner Trustee or the Certificate Registrar may require payment of a sum
sufficient to cover any tax or governmental charge payable in connection
therewith.


<PAGE>

         The Owner Trustee, the Certificate Registrar and any agent of the Owner
Trustee, the Certificate Registrar or the Insurer may treat the person in whose
name this Certificate is registered as the owner hereof for all purposes, and
none of the Owner Trustee, the Certificate Registrar nor any such agent shall be
affected by any notice to the contrary.

         The obligations and responsibilities created by the Trust Agreement and
the Trust created thereby shall terminate upon the payment to Certificateholders
of all amounts required to be paid to them pursuant to the Trust Agreement and
the Sale and Servicing Agreement and the disposition of all property held as
part of the Trust. The Servicer of the Receivables may at its option purchase
the corpus of the Trust at a price specified in the Sale and Servicing
Agreement, and such purchase of the Receivables and other property of the Trust
will effect a transfer of the Certificates; however, such right of purchase is
exercisable, subject to certain restrictions, only as of the last day of any
Monthly Period as of which the Pool Balance is 10% or less of the Original Pool
Balance.

         The Certificates may not be acquired by (a) an employee benefit plan
(as defined in Section 3(3) of ERISA) that is subject to the provisions of Title
I of ERISA, (b) a plan described in Section 4975(e) (1) of the Code or (c) any
entity whose underlying assets include plan assets by reason of a plan's
investment in the entity (each, a "Benefit Plan"). By accepting and holding this
Certificate, the Holder hereof shall be deemed to have represented and warranted
that it is not a Benefit Plan.

         The recitals contained herein shall be taken as the statements of the
Depositor or the Servicer, as the case may be, and the Owner Trustee assumes no
responsibility for the correctness thereof. The Owner Trustee makes no
representations as to the validity or sufficiency of this Certificate or of any
Receivable or related document.

         Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual or facsimile
signature, this Certificate shall not entitle the holder hereof to any benefit
under the Trust Agreement or the Sale and Servicing Agreement or be valid for
any purpose.

                                   ASSIGNMENT

FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto

PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE

--------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)

--------------------------------------------------------------------------------
the within Certificate, and all rights thereunder, hereby irrevocably

<PAGE>

constituting and appointing

____________________ Attorney to transfer said Certificate on the books of the
Certificate Registrar, with full power of substitution in the premises.

Dated:

                                            __________________________ *
                                            Signature Guaranteed:

                                            __________________________ *

------------
* NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Certificate in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Certificate Registrar, which requirements include membership
or participation in STAMP or such other "signature guarantee program" as may be
determined by the Certificate Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.



<PAGE>

                                    EXHIBIT B

                             CERTIFICATE OF TRUST OF
                       NATIONAL AUTO FINANCE 1997-1 TRUST

         This Certificate of Trust of National Auto Finance 1997-1 Trust (the
"Trust"), dated as of July 21, 1997, is being duly executed and filed by
Wilmington Trust Company, a Delaware banking corporation, as trustee, to form a
business trust under the Delaware Business Trust Act (12 Del. Code, ss. 3801 et
seq.).

                  1.  Name.  The name of the business trust formed hereby is
 National Auto Finance 1997-1 Trust.

                  2.  Delaware Trust.  The name and business address of the 
Trustee of the Trust in the State of Delaware is Wilmington Trust Company,
Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001.
Attn: Corporate Trust Administration.

                  3.  This Certificate of Trust will be effective July 21, 1997.

         IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust, has executed this Certificate of Trust as of the date first above
written.

                           WILMINGTON TRUST COMPANY not in its individual
                           capacity but solely as owner trustee of the Trust.


                           By:_________________________________
                               Name:
                               Title:


<PAGE>



                                    EXHIBIT C

                            FORM OF INVESTMENT LETTER

                            [lETTERHEAD OF PURCHASER]

                                     [Date]


Wilmington Trust Company, as trustee
  of National Auto Finance 1997-1 Trust
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001

Ladies and Gentlemen:

         The undersigned (the "Purchaser") proposes to purchase the Trust
Certificates issued pursuant to that certain Trust Agreement, dated as of July
21, 1997 (the "Trust Agreement"), between National Financial Auto Funding Trust,
a Delaware business trust, and Wilmington Trust Company, as trustee (the
"Trustee"). Unless the context or use indicates another or different meaning,
each capitalized term used herein and not otherwise defined herein shall have
the meaning ascribed to it in the Trust Agreement.

         1. The undersigned hereby certifies that, as indicated below, the
undersigned is a duly authorized officer of the Purchaser.

         2. In connection with the purchase by the Purchaser of the Trust
Certificates, the undersigned hereby certifies to you, and, if you act as broker
for one or more customers, to such customers, that the Purchaser is a "qualified
institutional buyer" as defined in Rule 144A ("Rule 144A") promulgated under the
Securities Act of 1933, as amended, because the Purchaser is an entity described
in paragraph (a) (1) ___ [refer to applicable subparagraph] of Rule 144A.

         3. The Purchaser certifies and acknowledges that it is familiar with
Rule 144A and understands that you and your customers (if you act as a broker
for one or more customers) are relying on the statements made therein.

         4. The Purchaser certifies that the Purchaser is purchasing the Trust
Certificates in the capacity marked below (check one):

[ ] The Purchaser certifies that the Purchaser is purchasing the Trust
Certificates for its own account only; or

<PAGE>

[ ] The Purchaser certifies that the Purchaser is purchasing the Trust
Certificates for the account of [one] [specify number] other qualified
institutional buyer(s), [each of] which is a "qualified institutional buyer."

         5. The Purchaser certifies that it has received from the Trust the
information that satisfies the requirements of paragraph (d)(4) of Rule 144A
(the "Rule 144A Information").

         6. The Purchaser certifies that it will comply with all applicable
federal and state securities laws in connection with any subsequent resale by
the Purchaser of the Trust Certificates.

         7. The Purchaser understands and acknowledges that the Trust
Certificates have not been and will not be registered under the Securities Act
of 1933, as amended, or any state securities laws and may be resold only if (a)
the Trust Certificates are registered pursuant to the provisions of the
Securities Act of 1933, as amended, and such state securities laws, or (b) if an
exemption from such registration is available. The Purchaser understands and
acknowledges that the Trust is not required to register the Trust Certificates
and that any transfer must comply with Section 3.4 of the Trust Agreement. The
Trustee is not obligated to provide Rule 144A Information.

         8. The Purchaser additionally represents (check one):

                  (  )     The Purchaser is not a Plan for ERISA purposes.

                  (  )     The Purchaser's acquisition of the Trust Certificates
will not cause the assets of the Trust to be assets of any Plan for ERISA
purposes.


                                                           Very truly yours,

                                                           [Purchaser]

                                                           By:
                                                           Name:
                                                           Title: