<PAGE>   1
                                                                   EXHIBIT 10.89

                                                                  EXECUTION COPY


                             NOTE EXCHANGE AGREEMENT

                  Note Exchange Agreement, dated as of April 7, 1999 (the
"Agreement") by and among National Auto Finance Company, Inc., a Delaware
corporation (the "Company"), Nova Financial Corporation, a Delaware corporation
("Nova Financial"), Nova Corporation, a Delaware corporation ("Nova"), Stephen
L. Gurba ("Gurba"), Edgar Otto ("Otto") and Gary L. Shapiro ("Shapiro") (each of
Nova Financial, Nova, Gurba, Otto and Shapiro individually, a "Junior
Noteholder", and collectively, the "Junior Noteholders").

                                    RECITALS

         A. Reference is made to that certain Restructuring Agreement, dated as
of April 7, 1999 (the "Restructuring Agreement"), by and among the Company,
National Auto Finance Company, L.P., Shapiro, Otto, Gurba, The 1818 Mezzanine
Fund, L.P., PC Investment Company, Progressive Investment Company, Inc.,
Manufacturers Life Insurance Company (U.S.A.), The Structured Finance High Yield
Fund, LLC, Nova Financial and Nova.

         B. It is a condition precedent to the completion of the Restructuring
(as defined in the Restructuring Agreement) that each of the Junior Noteholders
agree to amend certain provisions of the Amended and Restated Promissory Notes
of the Company (the "Junior Notes") held by the Junior Noteholders.

         C. Each Junior Noteholder will derive financial and other benefits from
the Company's entering into the Restructuring Agreement.

         D. Each Junior Noteholder, by entering into this Agreement, wishes to
induce the Company to enter into the Restructuring Agreement.

         Now therefore, in consideration of the foregoing recitals, the mutual
covenants and agreements set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:

                                    AGREEMENT

                  1. Exchange of Junior Notes for New Junior Notes. Each Junior
         Noteholder agrees to exchange (the "Exchange"), on the Restructuring
         Date (as defined in the Restructuring Agreement), the Junior Note held
         by it for a new note (the "New Junior Note") substantially in the form
         of Exhibit A hereto. Each New Junior Note will have a principal amount
         equal to the sum of (a) the principal amount of the Junior Note for
         which it is exchanged and (b) the aggregate amount of accrued and
         unpaid interest on such Junior Note, through March 31, 1999. The
         Company agrees to issue a New Junior Note in exchange for each Junior
         Note immediately upon receipt of such Junior Note.




<PAGE>   2


                  2. Waiver and Release. Each Junior Noteholder hereby waives
         all currently existing defaults and breaches under the Junior Notes,
         including, but not limited to, defaults in the payment of interest
         (including default interest) on the Junior Notes by the Company through
         the Restructuring Date (as defined in the Restructuring Agreement).
         Each Junior Noteholder further agrees to relinquish any causes of
         action, at law or in equity, in any court, administrative proceeding or
         other tribunal in the United States or any foreign country, which any
         Junior Noteholder may have had, now has, or hereafter can, shall or may
         have, against the Company with respect to, or relating to either the
         Junior Notes or the issuance of the New Junior Notes in exchange
         therefor.

                  3. Representations. (a) The Company represents and warrants to
         each Junior Noteholder as follows:

                              (i)    it is a corporation duly organized, validly
                                     existing and in good standing under the
                                     laws of the state of Delaware, with full
                                     corporate power and authority (A) to issue
                                     and deliver the New Junior Note, (B) to
                                     execute and deliver this Agreement, and any
                                     other agreements and instruments to be
                                     executed and delivered by it pursuant
                                     hereto and thereto and (C) to consummate
                                     the transactions contemplated hereby and
                                     thereby;

                              (ii)   this Agreement and the New Junior Notes
                                     have been duly authorized, executed, issued
                                     and delivered by it and constitute legal,
                                     valid and binding obligations of it,
                                     enforceable against it in accordance with
                                     their respective terms (except as such
                                     enforceability may be limited by
                                     bankruptcy, insolvency or similar laws of
                                     general application from time to time
                                     affecting the rights of creditors generally
                                     and subject to general principles of
                                     equity);

                              (iii)  the execution and delivery of this
                                     Agreement and the New Junior Notes and the
                                     performance by it of its obligations
                                     hereunder or thereunder will not constitute
                                     a violation, breach or default (with or
                                     without the passage of time or the giving
                                     of notice, or both) on its part under its
                                     certificate of incorporation or by-laws, or
                                     under any federal, state or local law, rule
                                     or regulation, or under any order or
                                     judgment that is binding on it or any of
                                     its properties, or under any agreement,
                                     instrument or document to which it is a
                                     party or by which any of its properties are
                                     bound; and

                              (iv)   upon the issuance, to any Junior
                                     Noteholder, of shares of the Company's
                                     common stock, par value $.01 per share







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                                     (the "CONVERSION SHARES") upon the
                                     conversion by a Junior Noteholder of any
                                     convertible note issued to such Junior
                                     Noteholder in payment of interest on a New
                                     Junior Note, such Conversion Shares will be
                                     duly authorized, validly issued, fully paid
                                     and nonassessable and free and clear of any
                                     mortgage, pledge, security interest,
                                     encumbrance, charge or other lien.

                                     Notwithstanding the foregoing, the Junior
                                     Noteholders acknowledge that the Company
                                     will be required to amend its certificate
                                     of incorporation to increase the number of
                                     authorized shares of Common Stock in
                                     respect of the Conversion Shares.

                           (b) Each of Nova Financial and Nova, severally and
                  not jointly, represents to the Company as follows:

                              (i)    it is a corporation duly organized, validly
                                     existing and in good standing under the
                                     laws of its jurisdiction of organization,
                                     with full corporate power and authority to
                                     execute and deliver this Agreement and any
                                     other agreements and instruments to be
                                     executed and delivered by it pursuant
                                     hereto and thereto and to consummate the
                                     transactions contemplated hereby and
                                     thereby;

                              (ii)   this Agreement has been duly authorized,
                                     executed and delivered by it and
                                     constitutes the legal, valid and binding
                                     obligation of it, enforceable against it in
                                     accordance with its terms (except as such
                                     enforceability may be limited by
                                     bankruptcy, insolvency or similar laws of
                                     general application from time to time
                                     affecting the rights of creditors generally
                                     and subject to general principles of
                                     equity); and

                              (iii)  the execution and delivery of this
                                     Agreement and the performance by it of its
                                     obligations hereunder will not constitute a
                                     violation, breach or default (with or
                                     without the passage of time or the giving
                                     of notice, or both) on its part under any
                                     provision of its certificate of
                                     incorporation or by-laws or under any
                                     federal, state or local law, rule or
                                     regulation, or under any order or judgment
                                     that is binding on it or any of its
                                     properties, or under any agreement,
                                     instrument or document to which it is a
                                     party or by which any of its properties are
                                     bound.








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<PAGE>   4

                           (b) Each of Gurba, Otto and Shapiro, severally and
                  not jointly, represents and warrants to the Company as
                  follows:

                              (i)    he has full power and authority to execute
                                     and deliver this Agreement and any other
                                     agreements and instruments to be executed
                                     and delivered by him pursuant hereto and
                                     thereto and to consummate the transactions
                                     contemplated hereby and thereby;

                              (ii)   this Agreement has been duly authorized,
                                     executed and delivered by him and
                                     constitutes his legal, valid and binding
                                     obligations, enforceable against him in
                                     accordance with its terms (except as such
                                     enforceability may be limited by
                                     bankruptcy, insolvency or similar laws of
                                     general application from time to time
                                     affecting the rights of creditors generally
                                     and subject to general principles of
                                     equity); and

                              (iii)  the execution and delivery of this
                                     Agreement and the performance by him of his
                                     obligations hereunder will not constitute a
                                     violation, breach or default (with or
                                     without the passage of time or the giving
                                     of notice, or both) on his part under any
                                     federal, state or local law, rule or
                                     regulation, or under any order or judgment
                                     that is binding on him or any of his
                                     properties, or under any agreement,
                                     instrument or document to which he is a
                                     party or by which any of his properties are
                                     bound.

                  4. Choice of Law. This Agreement, including, without
         limitation, the interpretation, construction, validity and
         enforceability thereof, shall be governed for all purposes by the
         internal laws of the State of New York (without regard to the
         principles of conflict of laws thereof) and the laws of the United
         States applicable to transactions within such state.

                  5. Notices. Any and all notices or other communications
         provided for herein shall be given in accordance with the notice
         provisions set forth in the Restructuring Agreement.

                  6. Submission to Jurisdiction. (a) Any legal action or
         proceeding with respect to this Agreement or any document related
         hereto may be brought in the state courts of the State of New York or
         in the federal courts of the United States of America in the State of
         New York, and, by execution and delivery of this Agreement, each party
         hereby accepts for itself and in respect of its property, generally and
         unconditionally, the jurisdiction of the aforesaid courts. The parties
         hereto hereby irrevocably waive any objection, including, without
         limitation, any objection to the laying of venue or based on the







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         grounds of forum non conveniens, which any of them may now or hereafter
         have to the bringing of any such action or proceeding in such
         respective jurisdictions.

                           (a) Each party irrevocably consents to the service of
                  process of any of the aforesaid courts in any such action or
                  proceeding by the mailing of copies thereof by registered or
                  certified mail, postage prepaid, to such party at its address
                  provided herein.

                           (b) Nothing contained in this Section 6 shall affect
                  the right of any party hereto to serve process in any other
                  manner permitted by law.

                  7. Waiver of Jury Trial. Each of the parties hereto waives any
         right it may have to trial by jury in respect of any litigation based
         on, or arising out of, under or in connection with this Agreement, any
         course of conduct, course of dealing, verbal or written statement or
         action of any party hereto.

                  8. Cumulative Rights. The rights of the parties under this
         Agreement are cumulative and in addition to all similar and other
         rights of the parties under other agreements.

                  9. Entire Agreement. This Agreement, the exhibits attached
         hereto and the Restructuring Documents (as defined in the Restructuring
         Agreement) contain the entire understanding of the parties hereto
         respecting the subject matter hereof and supersedes all prior
         agreements, discussions and understandings with respect thereto.

                  10. Severability. If any term, provision, covenant, or
         restriction of this Agreement is held by a court of competent
         jurisdiction to be invalid, void, or unenforceable, the remainder of
         the terms, provisions, covenants, and restrictions of this Agreement
         shall remain in full force and effect and shall in no way be affected,
         impaired, or invalidated.

                  11. Section Headings. Headings contained in this Agreement are
         inserted only as a matter of convenience and in no way define, limit,
         or extend the scope or intent of this Agreement or any provisions
         hereof.

                  12. Counterparts. This Agreement may be executed in two or
         more counterparts and each counterpart shall be deemed to be an
         original and which counterparts together shall constitute one and the
         same agreement of the parties hereto.

                       [SIGNATURES CONTAINED ON NEXT PAGE]





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         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.


                                     NATIONAL AUTO FINANCE COMPANY, INC.


                                     By: /s/ KEITH B. STEIN
                                         ---------------------------------------
                                         Keith B. Stein
                                         Chief Executive Officer





<PAGE>   7


       IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as
of the date first above written.



                                    NATIONAL AUTO FINANCE COMPANY, INC.

                                    By:  /s/ KEITH B. STEIN
                                       ----------------------------------
                                       Keith B. Stein
                                       Chief Executive Officer


                                    NOVA FINANCIAL CORPORATION




                                    By: /s/  Executed by Authorized Officer
                                       -----------------------------------------
                                       Name: Executed by Authorized Officer
                                            ------------------------------------
                                       Title:
                                             -----------------------------------


                                    NOVA CORPORATION

                                    By:  /s/  Executed by Authorized Officer
                                       -----------------------------------------
                                       Name:  Executed by Authorized Officer
                                            ------------------------------------
                                       Title:
                                             -----------------------------------


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                                             /s/ Stephen L. Gurba
                                             -----------------------------------
                                             Stephen L. Gurba

                                             /s/ Edgar Otto
                                             -----------------------------------
                                             Edgar Otto

                                             /s/ Gary L. Shapiro
                                             -----------------------------------
                                             Gary L. Shapiro


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                                                                       EXHIBIT A

                      JUNIOR CONVERTIBLE SUBORDINATED NOTE

                  FOR VALUE RECEIVED, the undersigned, NATIONAL AUTO FINANCE
COMPANY, INC., a Delaware corporation (the "COMPANY"), promises to pay to the
order of [NAME OF INITIAL HOLDER] (the "HOLDER") the principal sum set forth on
Exhibit A attached hereto (which reflects interest payable on the principal
amount of the Primary Note (as defined below) and the interest accrued on such
interest) on January 31, 2002, (the "PRINCIPAL AMOUNT") with interest thereon
from time to time as provided herein.

         1. Primary Note. This Junior Convertible Subordinated Note (this
"JUNIOR CONVERTIBLE INTEREST NOTE") is being issued and delivered pursuant to
the Second Amended and Restated Promissory Note, dated April 7, 1999 (the
"PRIMARY NOTE"), by the Company in favor of Holder.

         2. Interest Payments. The Company shall (except as otherwise provided
below) pay the Holder accrued interest, in arrears in cash, at the rate of eight
percent (8%) per annum on the Principal Amount on each January 1, April 1, July
1 and November 1 commencing July 1, 1999 and continuing thereafter until January
31, 2002, at which time, the entire principal balance hereof and the interest
accrued hereon shall be immediately due and payable; provided that the Principal
Amount shall be reduced by the amount of any principal converted pursuant to
Section 5.1 hereof. Interest on this Note shall be paid by check payable to the
order of the Holder and sent to [ADDRESS OF HOLDER] or to such other address as
the Holder may designate from time to time; provided, however, that (a) in
respect of the period up to and ending on March 31, 2001, if the Company
elected, pursuant to Section 2 of the Amended Notes (as defined in the
Restructuring Agreement dated as of April 7, 1999 (the "Restructuring
Agreement") among the Company, National Auto Finance Company, L.P., The 1818
Mezzanine Fund, L.P., PC Investment Company, Progressive Investment Company,
Inc., Manufacturers Life Insurance Company (USA), The Structured Finance High
Yield Fund, LLC, Nova Financial Corporation, Nova Corporation, Gary L. Shapiro,
Edgar A. Otto and Stephen L. Gurba), to pay interest on the Amended Notes (as
defined in the Restructuring Agreement) on the immediately preceding interest
payment date thereunder by issuing Convertible Notes (as defined in the
Restructuring Agreement), the Company shall pay the Specified Percentage (the
"SPECIFIED PERCENTAGE") of the interest accrued on this Junior Convertible
Interest Note by amending Exhibit A to this Note to increase the principal
amount thereof by the amount of such payment and (b) after the period ending
March 31, 2001, the Company, at its option, may elect to pay an amount equal to
up to 100% of the interest accrued on this Note by amending Exhibit A to this
Note to increase the principal amount thereof by the amount of such payment.
Specified Percentage shall mean the product of (x) two and (y) the percentage of
the scheduled cash interest payments on the Amended Notes paid by the Company,
on such immediately preceding interest payment date, through the issuance of
Convertible Notes. Any past due interest shall accrue and shall be payable by
the undersigned at the rate which is the lesser of (1) the maximum rate of
interest permitted under applicable law and (2) eighteen percent (18%) per annum
provided, however, that interest paid by the issuance of this Junior Convertible
Interest Note (or the amendment thereof as provided above) shall not be deemed
past due.





<PAGE>   10

         3. Maturity Date. The entire principal balance of, and accrued interest
on, this Junior Convertible Interest Note shall be due and payable, without
notice or demand, on January 31, 2002.

         4. Prepayment. The Company shall have the right to prepay in cash,
without penalty, at any time and from time to time prior to maturity, all or any
part of the unpaid principal balance of this Junior Convertible Interest Note
and/or all of any part of the unpaid interest accrued to the date of such
prepayment, provided that any such principal thus paid is accompanied by accrued
interest on such principal.

         5. Conversion Rights.

            5.1 Conversion by the Holder. The Holder has the right, exercisable
at any time, to convert the principal amount of this Junior Convertible Interest
Note (or any portion thereof that is an integral multiple of $50) into that
number of fully paid nonassessable shares of common stock, par value, $.01 per
share (the "Common Stock"), of the Company obtained by dividing the principal
amount of this Junior Convertible Interest Note by $0.75 per share (the
"Conversion Price"). The Conversion Price shall be adjusted in the event of any
change in the capital structure of the Company (whether by merger,
consolidation, reorganization, recapitalization, stock dividend, stock split,
split-up, split-off, spin-off, combination of shares, exchange of shares, or
other similar change) such that this Junior Convertible Interest Note shall
thereafter be convertible into such securities, cash and/or other property as
would have been received in respect of the shares of Common Stock subject to
this Junior Convertible Interest Note had this Junior Convertible Interest Note
been converted in full immediately prior to such change.

            5.2 Conversion Procedure. To convert all or a portion of this Junior
Convertible Interest Note, a holder must (a) complete and sign an irrevocable
notice of election to convert (the "CONVERSION NOTICE"), substantially in the
form of Exhibit B attached hereto, and deliver such Conversion Notice to the
Company, (b) furnish appropriate endorsements or transfer documents if required
by the Company and (c) pay any transfer or similar tax, if required. Any accrued
but unpaid interest shall be paid on the Principal Amount of this Junior
Convertible Interest Note until the date that such Principal Amount is converted
by a holder into Common Stock. The Company shall make no payment or allowance
for dividends on the shares of Common Stock issued upon conversion.

            No fractional shares shall be issued upon conversion, but a cash
payment shall be made by the Company in lieu of fractional interests. The
outstanding Principal Amount of this Junior Convertible Interest Note shall be
reduced by the principal amount thereof converted into shares of Common Stock or
other shares of common stock of the Company.

            5.3 Satisfaction of Company's Obligation. The Company's delivery
upon conversion of the fixed number of shares of Common Stock or other shares of
common stock of the Company into which this Junior Convertible Interest Note is
then convertible (together with cash in lieu of fractional shares) shall be
deemed to satisfy the Company's obligation to pay that portion of the Principal
Amount that is converted at the maturity date of this Junior Convertible






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<PAGE>   11

Interest Note and any unpaid interest accrued on this Junior Convertible
Interest Note at the time of the conversion.

            6. Waiver. The Company and any endorsers, sureties, guarantors and
all others who are or may become liable for the payment hereof severally waive
notice of intent to accelerate, presentment for payment, demand, notice of
demand, notice of nonpayment or dishonor, protest and notice of protest with
respect to this Junior Convertible Interest Note, notice of acceleration and all
other notices in connection with the delivery, acceptance, performance, or
enforcement of or consideration for this Junior Convertible Interest Note.

            7. Stipulation of Jurisdiction. The parties hereby irrevocably and
unconditionally stipulate and agree that the Federal Courts in the State of New
York or the State Court of the State of New York shall have non-exclusive
jurisdiction to hear and finally determine any dispute, claim, or controversy or
action arising out of or connected (directly or indirectly) with this Note.

            8. Usury Savings Provision. Neither the undersigned nor any
guarantors, endorsers or other parties now or hereafter becoming liable for
payment of this Junior Convertible Interest Note shall ever be required to pay
interest on this Note at a rate in excess of the maximum interest that may be
lawfully charged under applicable law, and the provisions of this paragraph
shall control over all other provisions of this Junior Convertible Interest Note
and any other instruments now or hereafter executed in connection herewith which
may be in apparent conflict herewith.

            9. Governing Law. This Junior Convertible Interest Note and the
rights and duties of the parties hereunder shall be governed for all purposes by
the law of the State of New York and the law of the United States applicable to
transactions within such State.

            10. Subordination. This Junior Convertible Interest Note, and the
rights of any holder hereof, are subject to the subordination and other
provisions of that certain Amended and Restated Junior Subordination Agreement,
dated as of April 7, 1999, among the initial holder of the Primary Note (as one
of several subordinating creditors party thereto), certain other parties (as
senior creditors) and the Company.


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<PAGE>   12


            EXHIBIT A TO FORM OF JUNIOR CONVERTIBLE SUBORDINATED NOTE

Original Principal Amount:             $
                                        --------------
Interest Rate:
                                        --------------
Interest Period:
                                        --------------
Term:
                                        --------------

[ADDITIONAL INTEREST ON PRIMARY NOTE AND THE JUNIOR CONVERTIBLE SUBORDINATED
NOTE, IF ANY]


<TABLE>
<CAPTION>

Months                          Principal Balance            Interest Earned              New Balance
------------------------------- ---------------------------- ---------------------------- ----------------------------
<S>                             <C>                          <C>                          <C>



</TABLE>



<PAGE>   13



EXHIBIT B TO FORM OF JUNIOR CONVERTIBLE SUBORDINATED NOTE

To:  National Auto Finance Company, Inc.

         The undersigned holder of this Junior Convertible Subordinated Note
hereby irrevocably exercises the option to convert this Junior Convertible
Subordinated Note, or the portion below designated, into Common Stock of
National Auto Finance Company, Inc. (the "COMPANY"), or any other class of
common stock of the Company, as permitted by the Articles of Incorporation of
the Company, in accordance with the terms of this Junior Convertible
Subordinated Note, and directs that the shares issuable and deliverable upon
conversion, together with any check in payment for fractional shares, be issued
in the name of and delivered to the undersigned, unless a different name has
been indicated by assignment below. If shares are to be issued in the name of a
person other than the undersigned, the undersigned shall pay all transfer taxes
payable with respect thereto.

Date:
     ------------------

         Convert (circle one):  in whole/in part

         If conversion in part, portion of Principal Amount of the Junior
Convertible Interest Note to be converted: $____________


                                              [HOLDER]

                                        By:  /s/  Executed by Authorized Officer
                                            ------------------------------------
                                            Name: Executed by Authorized Officer
                                            Title:

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