AMENDMENT AGREEMENT NO. 2

                                 to that certain

                           REVOLVING CREDIT AGREEMENT


         This AMENDMENT  AGREEMENT NO. 2 (the "Amendment"), dated as of
December 19, 1997, is among National Auto Finance Company, Inc. (the
"Borrower"), BankBoston, N.A. and the other lending institutions party thereto
(collectively the "Banks"), and BankBoston, N.A. as agent (the "Agent") for
itself and the other Banks.

         WHEREAS, the Borrower, the Banks and the Agent are parties to that
certain Revolving Credit Agreement, dated as of September 29, 1997 (as amended
by Amendment No. 1, dated as of October 1, 1997, the "Credit Agreement"),
pursuant to which the Banks, upon certain terms and conditions, have made loans
to the Borrower; and

         WHEREAS, the Borrower had requested that the Banks agree, and the Banks
have agreed, on the terms and subject to the conditions set forth herein, to
make certain changes to the Credit Agreement;

         NOW, THEREFORE, the parties hereto hereby agree as follows:

         SS.1.      DEFINED  TERMS.  Capitalized  terms  which  are used  herein
                    --------------
without definition and which are defined in the Credit Agreement shall have the
same meanings herein as in the Credit Agreement.

         SS.2.      AMENDMENT OF CREDIT AGREEMENT.  The Credit Agreement is
                    -----------------------------
hereby amended as follows:

                  (a) Section 1.1 of the Credit Agreement is amended and
         restated in its entirety to read as follows:

                           (i) clause (c) of the definition of Borrowing Base
                 set forth in such ss.1.1 is amended by deleting the text "prior
                 to the Termination Date" and "and on and after the Termination
                 Date, 0% of the Residual Value" contained in such definition.

                          (ii) the definitions of Consolidated Total Interest
                 Expense and EBIT set forth in such ss.1.1 are amended and
                 restated in their entirety to read as follows:

                           Consolidated Total Interest Expense. For any period,
                           the aggregate amount of (a) interest required to be
                           paid or accrued by the Borrower and its Subsidiaries
                           during such period on all Indebtedness of the
                           Borrower and its Subsidiaries outstanding during all
                           or any part of such period, whether such interest was

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                           or is required to be reflected as an item of expense
                           or capitalized, including payments consisting of
                           interest in respect of Capital Leases, and including
                           commitment fees, agency fees, facility fees, balance
                           deficiency fees and similar fees or expenses in
                           connection with the borrowing of money, plus (b) the
                           net amount payable (or minus the net amount
                           receivable) under Rate Hedging Agreements during such
                           period (whether or not actually paid or received
                           during such period) plus (c) dividends to be paid or
                           declared of the Borrower by the Borrower and its
                           Subsidiaries during such period on all shares of
                           preferred stock of the Borrower and its Subsidiaries
                           outstanding during all or any part of such period.

                           EBIT. With respect to any fiscal period, the sum of
                           (a) the Consolidated Net Income of the Borrower and
                           its Subsidiaries for such period (excluding
                           therefrom, to the extent included in determining
                           Consolidated Net Income, any items of extraordinary
                           gain (or loss), including net gains (or losses) on
                           sale of assets other than asset sales in the ordinary
                           course of business), (b) Consolidated Total Interest
                           Expense deducted from revenue in determining such
                           Consolidated Net Income and (c) Federal, state and
                           local income and franchise taxes deducted from
                           revenue in determining such Consolidated Net Income.

                           (iii) the definition of Reference Period set forth in
                  such ss.1.1 is amended by deleting each reference to the text
                  "calendar months" contained in such definition and
                  substituting, in each case, the text "fiscal quarters"
                  therefor.

                           (iv) the definition of Senior Subordinated Debt
                  Documents set forth in such ss.1.1 is amended by deleting the
                  reference to "Senior Subordinated Note Purchase Agreement"
                  contained in such definition and substituting "Securities
                  Purchase Agreement" therefor.

                           (v) the definition of Senior Subordinated Notes set
                  forth in such ss.1.1 is amended by deleting the amount of
                  "$12,000,000" contained in such definition and substituting
                  the amount "$40,000,000" therefor and by deleting the
                  reference to "Senior Subordinated Note Purchase Agreement"
                  contained in such definition and substituting "Securities
                  Purchase Agreement" therefor.

                           (vi) the definition of Subordination Agreements set
                  forth in such ss.1.1 is amended and restated in its entirety
                  to read as follows:

                           Subordination Agreements. Collectively, (a) Article
                           12 of the Securities Purchase Agreement and the
                           definitions and provisions applicable to such Article
                           12 contained therein and (b) the Junior Subordination
                           Agreement, dated as of December 22, 1997, among the

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                                       3

                           Agent, the holders of the Senior Subordinated Notes,
                           the holders of the Junior Subordinated Debt Documents
                           and the Borrower, each in form and substance
                           satisfactory to the Banks and the Agent.

                           (vii) Section 1.1 is further amended by adding the
                  following new definitions:

                           A. Consolidated Net Worth. As of the date of
                           determination, the stockholder's equity in the
                           Borrower (excluding any reductions resulting from
                           mergers accounted for as a pooling-of-interests in
                           accordance with generally accepted accounting
                           principles), determined in accordance with generally
                           accepted accounting principles.

                           B. Consolidated Tangible Net Worth. As of the date of
                           determination, the Consolidated Net Worth of the
                           Borrower plus the aggregate amount of Junior
                           Subordinated Debt plus such other Indebtedness that
                           (i) is expressly subordinated and made junior to the
                           Senior Subordinated Notes, (ii) is evidenced by a
                           written instrument, and (iii) is subject to a
                           subordination agreement among the holders of such
                           Indebtedness, the holders of the Senior Subordinated
                           Notes, the Borrower and the Agent, in each case, in
                           form and substance satisfactory to the Agent, minus
                           the total book value of all assets of the Borrower
                           and its Subsidiaries properly classified as
                           intangible assets under generally accepted accounting
                           principles.

                           C. Exchange Act. The Securities Exchange Act of 1934,
                           as amended, or any federal statute or code which is a
                           successor thereto.

                           D. Funded Debt. With respect to any Person and as at
                           any date of determination thereof, without
                           duplication, (a) all Indebtedness of such Person as
                           at such date for money borrowed, (b) the principal
                           component of all Capital Lease obligations, (c) all
                           Indebtedness for the deferred purchase price of
                           property or services represented by a note or other
                           security (other than in respect of any trade payable)
                           or other Indebtedness arising under any conditional
                           sale or other title retention agreement with respect
                           to property acquired by such Person (even though the
                           rights and remedies of the seller or lender under
                           such agreement in the event of default are limited to
                           repossession or sale of such property), and (d) all
                           Indebtedness of such Person secured by a purchase
                           money mortgage or other lien to secure all or part of
                           the purchase price of property subject to such
                           mortgage or lien.
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                                       4

                           E. Rate  Hedging  Agreements.  Any  written
                           agreements evidencing Rate Hedging Obligations.

                           F. Rate Hedging Obligations. Any and all obligations
                           of the Borrower or any of its Subsidiaries, whether
                           direct or indirect and whether absolute or
                           contingent, at any time created, arising, evidenced
                           or acquired (including all renewals, extensions,
                           modifications and amendments thereof and all
                           substitutions therefor), in respect of: (a) any and
                           all agreements, arrangements, devices and instruments
                           designed or intended to protect at least one of the
                           parties thereto from the fluctuations of interest
                           rates, exchange rates or forward rates applicable to
                           such party's assets, liabilities or exchange
                           transactions, including without limitation
                           dollar-denominated or cross currency interest rate
                           exchange agreements, forward rate currency or
                           interest rate options, puts and warrants and
                           so-called "rate swap" agreements; and (b) any and all
                           cancellations, buy-backs, reversals, terminations or
                           assignments of any of the foregoing.

                           G. Securities  Purchase  Agreement.  The Securities
                           Purchase Agreement, dated as of December 22, 1997,  
                           by and among the Borrower,  The 1818  Mezzanine
                           Fund, L.P., PC Investment Company,  Progressive 
                           Investment Company,  Inc. and Manufacturers Life 
                           Insurance Company (U.S.A.).

                           H. Total Indebtedness. Funded Debt of the Borrower
                           and its Subsidiaries on a consolidated basis minus
                           Junior Subordinated Debt.

                           (viii) Section 1.1 is also amended by deleting the
                  definition of Termination Date set forth in such ss.1.1 in its
                  entirety.

                  (b) Section 3.4 of the Credit Agreement is hereby deleted in
         its entirety.

                  (c) The first sentence of ss.6.17 of the Credit Agreement is
         amended by (i) deleting the text "prior to the Termination Date,"
         contained in such sentence and (ii) adding, immediately following the
         text "working capital" contained in such sentence, the text "and
         general corporate".

                  (d) Section 7.12 of the Credit Agreement is amended by (i)
         deleting the text "prior to the Termination Date," contained in such
         ss.7.12 and (ii) adding, immediately following the text "working
         capital" contained in such ss.7.12, the text "and general corporate".
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                                       5


                  (e) Section 8.5.2 of the Credit Agreement is amended by
         deleting all of the text immediately following the words "no Default or
         Event of Default" contained in such ss.8.5.2 and substituting the
         following therefor:

                  shall have occurred and be continuing or would occur after
                  giving effect thereto, (ii) the Borrower (or any of its
                  Subsidiaries, as the case may be) receives consideration at
                  the time of such disposition at least equal to the fair market
                  value of the assets sold or otherwise disposed of and, in the
                  case of a lease of assets, a lease providing for rent and
                  other conditions which are no less favorable than the then
                  prevailing market conditions, and (iii) the Borrower shall
                  apply, or cause a Subsidiary to apply, the net sale proceeds
                  from such disposition within 180 days of receipt thereof (A)
                  to make Investments in assets or properties that will be used
                  in the business of the Borrower and its Subsidiaries
                  consistent with ss.8.3 or (B) to repay any Indebtedness of the
                  Borrower subject to the provisions of Article 12 of the
                  Securities Purchase Agreement. Notwithstanding the foregoing
                  sentence, the Borrower may sell or transfer its assets or
                  properties in the ordinary course of business consistent with
                  past practice, including transfers made in a Permitted
                  Securitization Transaction and such transactions shall not be
                  subject to the conditions set forth in the previous sentence.

                  (f) Section 8.7 of the Credit Agreement is amended by adding
         at the end of clause (b) contained in such ss.8.7 and immediately
         before the semicolon the text 'other than the repayment in full of all
         Indebtedness under the Senior Subordinated Note Purchase Agreement and
         the "Senior Subordinated Notes" as defined therein on or prior to
         December 22, 1997 solely with the proceeds of the subordinated debt
         financing evidenced by the Securities Purchase Agreement'.

                  (g) Section 8.12 of the Credit Agreement is amended by
         deleting (i) from within the parenthetical contained in such ss.8.12
         the text "and the limitations contained in ss.5.9 of the Senior
         Subordinated Note Purchase Agreement" and (ii) immediately following
         the words "provided that", contained in such ss.8.12 the text "after
         the Termination Date,".

                  (h) Section 9 of the Credit Agreement is amended by adding the
         following new ss.9.9:

                  9.9 Leverage Ratio. In the event that the Borrower incurs
                  "Senior Indebtedness" (as defined in the Securities Purchase
                  Agreement) in excess of the Indebtedness permitted by clause
                  (iv) of Section 10.6(a) of the Securities Purchase Agreement
                  (the "Additional Senior Indebtedness") in addition to any
                  Indebtedness that is pari passu with the Indebtedness incurred

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                  under the Senior Subordinated Notes, the Borrower will not
                  permit, immediately after giving effect to the Additional
                  Senior Indebtedness, the ratio of Total Indebtedness to
                  Consolidated Tangible Net Worth to exceed 4.5:1.0.

                  (i) Clause (i) of ss.12.1 of the Credit Agreement is amended
         by adding at the end of such clause (i) and immediately prior to the
         semicolon the text "or any action which is not quashed or remains
         unstayed for a period in excess of fifteen days shall be legally taken
         by a judgment creditor to levy upon assets or properties of the
         Borrower or any of its Subsidiaries to enforce any such judgment".

                  (j) Section 12.1 of the Credit  Agreement  is further amended 
         by (i ) deleting the word "or" at the end of clause (u) in such ss.12.1
         and (ii ) adding the following new clauses (w) and (x) to such ss.12.1:

                           (w) a "Blockage Notice" as defined in Section 12.3(b)
                           of the Securities Purchase Agreement shall be given
                           by a holder of Senior Indebtedness (as defined
                           therein) other than the Agent; or

                           (x) a Change of Control shall occur.

                               For the purposes of this clause (x), 
                           "Change of Control" shall mean:

                                    (i) Any Person or "group" (within the
                           meaning of Section 13(d)(3) of the Exchange Act)
                           other than National Auto Finance Company, L.P., Gary
                           L. Shapiro, Keith B. Stein, First Union National Bank
                           of North Carolina (or any of its Affiliates) or the
                           Purchasers (as defined in the Securities Purchase
                           Agreement) (collectively the "Principal
                           Stockholders") is or becomes the beneficial owner,
                           directly or indirectly, of outstanding shares of
                           capital stock of the Borrower, entitling such Person
                           or Persons to exercise 50% or more of the total votes
                           entitled to be cast for the election of directors
                           under ordinary circumstances at a regular or special
                           meeting, or by action by written consent, of (i)
                           common stockholders of the Borrower if at least a
                           majority of the Borrower's Board of Directors are
                           elected by common stockholders, and (ii) voting
                           stockholders of the Borrower in all other
                           circumstances (the term "beneficial owner" shall be
                           determined in accordance with Rule 13d-3, promulgated
                           by the Commission under the Exchange Act);

                                    (ii) A majority of the Board of Directors of
                           the Borrower shall consist of Persons other than
                           Continuing Directors. The term "Continuing Director"
                           shall mean any member of the Board of Directors of

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                                       7

                           the Borrower on the Closing Date and any other member
                           of the Board of Directors who shall be recommended or
                           elected to succeed or become a Continuing Director by
                           a majority of Continuing Directors who are then
                           members of the Board of Directors of the Borrower.

                                    (iii) The stockholders of the Borrower shall
                           have approved a recapitalization, reorganization,
                           merger, consolidation, sale or other disposition of
                           all or substantially all the assets of the Borrower
                           (in one transaction or in a series of related
                           transactions) or similar transaction, in each case,
                           with respect to which all or substantially all the
                           Persons who were the respective beneficial owners of
                           the outstanding shares of capital stock of the
                           Borrower immediately prior to such recapitalization,
                           reorganization, merger or consolidation, beneficially
                           own, directly or indirectly, less than 10% of the
                           combined voting power of the then outstanding shares
                           of capital stock of the Borrower resulting from such
                           recapitalization, reorganization, merger,
                           consolidation or similar transaction or obtaining the
                           assets of the Borrower; or

                                    (iv) Upon the consummation of any
                           transaction the result of which is that the common
                           stock of the Borrower is not required to be
                           registered under Section 12 of the Exchange Act and
                           that the holders of common stock of the Borrower do
                           not receive common stock of the Person surviving such
                           transaction which is required to be registered under
                           Section 12 of the Exchange Act.


         SS.3. AFFIRMATION AND ACKNOWLEDGMENT OF THE BORROWER. The Borrower
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hereby ratifies and confirms all of its Obligations to the Banks, including,
without limitation the Loans, and the Borrower hereby affirms its absolute and
unconditional promise to pay to the Banks the Loans and all other amounts due
under the Credit Agreement as amended hereby. The Borrower hereby confirms that
the Obligations are and remain secured pursuant to the Security Documents and
pursuant to all other instruments and documents executed and delivered by the
Borrower as security for the Obligations.

         SS.4. REPRESENTATIONS  AND  WARRANTIES.  The Borrower  hereby
               -------------------------------- 
represents  and warrants to the Banks as follows:

                  (a) The execution and delivery by the Borrower of this
         Amendment and all other instruments and agreements required to be
         executed and delivered by the Borrower in connection with the
         transactions contemplated hereby or referred to herein (collectively,
         the "Amendment Documents"), and the performance by the Borrower of its
         obligations and agreements under the Amendment Documents and the Credit
         Agreement as amended hereby, are within the corporate authority of the
         Borrower, have been authorized by all necessary corporate proceedings
         on behalf of the Borrower, and do not and will not contravene any
         provision of law, statute, rule or regulation to which the Borrower or

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         any of its Subsidiaries is subject or any of the Borrower's charter,
         other incorporation papers, by-laws or any stock provision or any
         amendment thereof or of any indenture, agreement, instrument or
         undertaking binding upon the Borrower.

                  (b) The Amendment Documents and the Credit Agreement as
         amended hereby constitute legal, valid and binding obligations of the
         Borrower, enforceable in accordance with their respective terms, except
         as limited by bankruptcy, insolvency, reorganization, moratorium or
         similar laws relating to or affecting generally the enforcement of
         creditors' rights.

                  (c) No approval or consent of, or filing with, any
         governmental agency or authority is required to make valid and legally
         binding the execution, delivery or performance by the Borrower of the
         Amendment Documents or the Credit Agreement as amended hereby, or the
         consummation by the Borrower of the transactions among the parties
         contemplated hereby and thereby or referred to herein.

                  (d) The representations and warranties contained in ss.6 of
         the Credit Agreement were correct at and as of the date made. Except to
         the extent of changes resulting from transactions contemplated or
         permitted by the Credit Agreement and changes occurring in the ordinary
         course of business that singly or in the aggregate are not materially
         adverse and to the extent such representations and warranties relate
         expressly to an earlier date, such representations and warranties also
         are correct at and as of the date hereof.

                  (e) The Borrower has performed and complied in all material
         respects with all terms and conditions herein required to be performed
         or complied with by it prior to or at the time hereof, and as of the
         date hereof, after giving effect to the provisions hereof, there exists
         no Event of Default or Default.

         SS.5. EFFECTIVENESS. The effectiveness of this Amendment shall be 
               -------------
subject to the satisfaction of the following conditions:

                  (a) Delivery. Each of the Borrower and the Banks shall have
         executed and delivered this Amendment.

                  (b) Senior Subordinated Debt Arrangements.

                           (i) The transactions contemplated by the Securities
                           Purchase Agreement shall have been consummated (which
                           Agreement shall be in form and substance satisfactory
                           to the Agent and the Banks);

                           (ii) All Indebtedness under the Senior Subordinated
                           Note Purchase Agreement shall simultaneously be paid
                           in full and the Senior Subordinated Note Purchase
                           Agreement and the "Senior Subordinated Notes" as
                           defined therein shall simultaneously be terminated
                           and cancelled.

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                                       9


                  (c) Proceedings and Documents. All proceedings in connection
         with the transactions contemplated by this Amendment, the transactions
         contemplated by the Securities Purchase Agreement and all documents
         incident thereto shall be reasonably satisfactory in substance and form
         to the Banks, the Agent and the Agents' Special Counsel, and the Banks,
         the Agent and such counsel shall have received all information and such
         counterpart originals or certified or other copies of such documents as
         the Agent may reasonably request.

         SS.6 ACKNOWLEDGMENT OF SUBORDINATED DEBT. The Banks hereby acknowledge
              -----------------------------------
that the Indebtedness evidenced by the Securities Purchase Agreement and the
Senior Subordinated Notes as in effect on the date hereof shall be "Subordinated
Debt".

         SS.7. MISCELLANEOUS PROVISIONS. (a) Except as otherwise expressly
               ------------------------
provided by this Amendment, all of the terms, conditions and provisions of the
Credit Agreement shall remain the same. It is declared and agreed by each of the
parties hereto that the Credit Agreement, as amended hereby, shall continue in
full force and effect, and that this Amendment and the Credit Agreement shall be
read and construed as one instrument.

         (b) THIS AMENDMENT IS INTENDED TO TAKE EFFECT AS AN AGREEMENT UNDER
SEAL AND SHALL BE CONSTRUED ACCORDING TO AND GOVERNED BY THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS.

         (c) This Amendment may be executed in any number of counterparts, but
all such counterparts shall together constitute but one instrument. In making
proof of this Amendment it shall not be necessary to produce or account for more
than one counterpart signed by each party hereto by and against which
enforcement hereof is sought.

         (d) Pursuant to ss.15 of the Credit Agreement, the Borrower hereby
agrees to pay to the Agent, on demand by the Agent, all reasonable out-of-pocket
costs and expenses incurred or sustained by the Agent in connection with the
preparation of this Amendment (including reasonable legal fees).
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         IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first written above.

                                         NATIONAL AUTO FINANCE COMPANY,
                                          INC.


                                         By:____________________________________
                                                  Title:


                                         BANKBOSTON, N.A.,
                                            individually and as Agent


                                         By:____________________________________
                                                  Title: