EXECUTION COPY

                                 AMENDMENT NO. 1

                          dated as of October 1, 1997,

                                  by and among

                     NATIONAL FINANCIAL AUTO FUNDING TRUST,

                       FINANCIAL SECURITY ASSURANCE INC.,

                         HARRIS TRUST AND SAVINGS BANK,

                              as Collateral Agent,

                                       and

                       NATIONAL AUTO FINANCE COMPANY, INC.

                                       to

                         MASTER SPREAD ACCOUNT AGREEMENT

                         dated as of November 21, 1995,

                                       and

                         MASTER SPREAD ACCOUNT AGREEMENT

                         dated as of November 13, 1996,

                               in each case among

                     NATIONAL FINANCIAL AUTO FUNDING TRUST,

                        FINANCIAL SECURITY ASSURANCE INC.

                                       and

                         HARRIS TRUST AND SAVINGS BANK,

                       as Trustee and as Collateral Agent


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             AMENDMENT NO. 1 TO MASTER SPREAD ACCOUNT AGREEMENTS

      THIS AMENDMENT, dated as of October 1, 1997 (this "Amendment"), by and
among NATIONAL FINANCIAL AUTO FUNDING TRUST, a Delaware business trust (the
"Transferor"), FINANCIAL SECURITY ASSURANCE INC., a New York stock insurance
company ("Financial Security"), HARRIS TRUST AND SAVINGS BANK, an Illinois
banking corporation, as Collateral Agent ( "Harris Trust and Savings Bank" and,
in such capacity, the "Collateral Agent"), and NATIONAL AUTO FINANCE COMPANY,
INC., a Delaware corporation ("NAFI"; formerly National Auto Finance Company
L.P., a Delaware limited partnership), to MASTER SPREAD ACCOUNT AGREEMENT, dated
as of November 21, 1995 (the "Series 1995-1 Spread Account Agreement"), among
the Transferor, Financial Security and Harris Trust and Savings Bank, as the
Trustee (in such additional capacity, the "Trustee") and as Collateral Agent,
and to MASTER SPREAD ACCOUNT AGREEMENT, dated as of November 13, 1996 (the
"Series 1996-1 Spread Account Agreement"; the Series 1995-1 Spread Account
Agreement and the Series 1996-1 Spread Account Agreement each a "Spread Account
Agreement", and, collectively, the "Spread Account Agreements"), among the
Transferor, Financial Security, the Trustee and the Collateral Agent.

                                   RECITALS

      WHEREAS, Financial Security, the Transferor, the Trustee and the
Collateral Agent have entered into each of the Spread Account Agreements, and
Financial Security, the Transferor, the Collateral Agent and NAFI (Financial
Security, the Transferor, the Collateral Agent and NAFI each a "Party" hereto
and, collectively, the "Parties" hereto) desire to hereby amend the Spread
Account Agreements in certain respects as provided below.

      WHEREAS, pursuant to Section 8.03 of each of the Spread Account
Agreements, each of the Spread Account Agreements may be amended or otherwise
modified from time to time by the Transferor, Financial Security, the Collateral
Agent and, with respect to the Series 1995-1 Spread Account Agreement, NAFI.

                                  AGREEMENTS

      NOW, THEREFORE, in consideration of the recitals hereto, and for other
good and valuable consideration, the adequacy, receipt and sufficiency of which
are hereby acknowledged, the Parties hereto agree as follows:

                                  ARTICLE I

                                 DEFINITIONS

      SECTION 1.1. Defined Terms. Unless defined in this Amendment, capitalized
terms used in this Amendment (including in the preamble and the recitals hereto)
shall have the meanings assigned to such terms in the Series 1995-1 Spread
Account Agreement or the 1996-1

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Spread Account Agreement, as applicable, and in each case the related Pooling
and Servicing Agreement.

                                   ARTICLE II

                                   AMENDMENT

      SECTION 2.1. Amendments to Section 1.01 of the Spread Account Agreements.
(a) The following definitions set forth in Section 1.01 the Series 1995-1 Spread
Account Agreement are hereby amended by deleting the definitions set forth
therein in their entirety and substituting the following therefor:

                  "Deemed Cured" means, as of a Reporting Date, with respect to
            a Trigger Event that has occurred with respect to a Series, that no
            Trigger Event with respect to such Series shall have occurred as of
            such Reporting Date or as of any of the two consecutively preceding
            Reporting Dates."

                  "Requisite Amount" means, with respect to the Series 1995-1
            Certificates, as of any Reporting Date after giving effect to any
            distributions of the Certificate Distributable Amount to be made on
            the related Distribution Date, (i) if no Trigger Event shall have
            occurred as of such Reporting Date and all previous Trigger Events
            have been Deemed Cured and no Insurance Agreement Event of Default
            shall have occurred as of such Reporting Date, the lesser of (A) (I)
            with respect to any Reporting Date occurring prior to the September
            1997 Distribution Date, 2% of the Series 1995-1 Initial Balance,
            (II) with respect to any Reporting Date occurring subsequent to the
            September 1997 Distribution Date and prior to the June 1998
            Distribution Date, 7% of the Series 1995-1 Balance, and (III) with
            respect to any Reporting Date occurring subsequent to the June 1998
            Distribution Date, 2% of the Series 1995-1 Initial Balance and (B)
            the greater of (I) the Certificate Balance as of such Reporting
            Date, and (II) $100,000, (ii) if a Trigger Event shall have occurred
            as of such Reporting Date (and until such Trigger Event is Deemed
            Cured) and no Insurance Agreement Event of Default shall have
            occurred as of such Reporting Date, (A) with respect to any
            Reporting Date occurring prior to the September 1997 Distribution
            Date, 7% of the Series 1995-1 Balance, (B) with respect to any
            Reporting Date occurring subsequent to the September 1997
            Distribution Date and prior to the June 1998 Distribution Date, 11%
            of the Series 1995-1 Balance, and (C) with respect to any Reporting
            Date occurring subsequent to the June 1998 Distribution Date, 7% of
            the Series 1995-1 Balance; or (iii) if an Insurance Agreement Event
            of Default shall have occurred as of such Reporting Date, an
            unlimited amount.

                  "Trigger Event" means, with respect to the Series 1995-1
            Certificates, that as of any Reporting Date with respect to the
            Series 1995-1 Certificates that any one of the following events
            shall have occurred and shall not have been Deemed


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<PAGE>
            Cured: (a) the Average Delinquency Ratio as of such Reporting Date
            (i) occurring prior to the September 1997 Distribution Date is equal
            to or greater than 8.25%, (ii) relating to October 1997 Distribution
            Date is equal to or greater than 11.0%, (iii) relating to November
            1997 Distribution Date is equal to or greater than 10.5%, (iv)
            occurring subsequent to the November 1997 Distribution Date but
            prior to the March 1998 Distribution Date is equal to or greater
            than 10.0%, (v) occurring subsequent to the March 1998 Distribution
            Date but prior to the June 1998 Distribution Date is equal to or
            greater than 9.5%, and (vi) occurring subsequent to the June 1998
            Distribution Date is equal to or greater than 8.25%; or (b) the
            Average Default Rate as of any Reporting Date (i) occurring prior to
            the September 1997 Distribution Date is equal to or greater than
            18.0%, (ii) occurring subsequent to the September 1997 Distribution
            Date and prior to the June 1998 Distribution Date is equal to or
            greater than 20.0% and (iii) occurring subsequent to the June 1998
            Distribution Date is equal to or greater than 14.0%; and (c) the
            Average Net Loss Rate as of any Reporting Date (i) occurring prior
            to the September 1997 Distribution Date is equal to or greater than
            8.0%, (ii) occurring subsequent to the September 1997 Distribution
            Date and prior to the June 1998 Distribution Date is equal to or
            greater than 10.5% and (iii) occurring subsequent to the June 1998
            Distribution Date is equal to or greater than 8.0%.

      (c) The following definitions set forth in Section 1.01 the Series 1996-1
Spread Account Agreement are hereby amended by deleting the definitions set
forth therein in their entirety and substituting the following therefor:

                  "Requisite Amount" means, with respect to the Series 1996-1
            Certificates, as of any Reporting Date after giving effect to any
            distributions of the Certificate Distributable Amount to be made on
            the related Distribution Date, (i) if no Trigger Event shall have
            occurred as of such Reporting Date and all previous Trigger Events
            have been Deemed Cured and no Insurance Agreement Event of Default
            shall have occurred as of such Reporting Date, the lesser of (A) (I)
            with respect to any Reporting Date occurring prior to the September
            1997 Distribution Date, $1,364,791.20, (II) with respect to any
            Reporting Date occurring subsequent to the September 1997
            Distribution Date and prior to the June 1998 Distribution Date, 7%
            of the Series 1996-1 Balance, and (III) with respect to any
            Reporting Date occurring subsequent to the June 1998 Distribution
            Date, $1,364,791.20, and (B) the greater of (I) the Certificate
            Balance as of such Reporting Date, and (II) $100,000, (ii) if a
            Trigger Event shall have occurred as of such Reporting Date (and
            until such Trigger Event is Deemed Cured) and no Insurance Agreement
            Event of Default shall have occurred as of such Reporting Date, (A)
            with respect to any Reporting Date occurring prior to the September
            1997 Distribution Date, 7% of the Series 1996-1 Balance, (B) with
            respect to any Reporting Date occurring subsequent to the September
            1997 Distribution Date and prior to the June 1998 Distribution Date,
            11% of the Series 1996-1 Balance, and (C) with respect to any
            Reporting Date occurring subsequent to the June 1998


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<PAGE>
            Distribution Date, 7% of the Series 1996-1 Balance; or (c) if an
            Insurance Agreement Event of Default shall have occurred as of such
            Reporting Date, an unlimited amount.

                  "Trigger Event" means, with respect to the Series 1996-1
            Certificates, as of any Reporting Date with respect to the Series
            1996-1 Certificates that any one of the following events shall have
            occurred and shall not have been Deemed Cured: (a) the Average
            Delinquency Ratio as of such Reporting Date (i) occurring prior to
            the September 1997 Distribution Date is equal to or greater than
            8.25%, (ii) occurring subsequent to the September 1997 Distribution
            Date and prior to the June 1998 Distribution Date is equal to or
            greater than 9.75% and (iii) occurring subsequent to the June 1998
            Distribution Date is equal to or greater than 8.25%; or (b) the
            Average Default Rate as of such Reporting Date (i) occurring prior
            to the September 1997 Distribution Date is equal to or greater than
            18.0%, (ii) relating to the October 1997 Distribution Date is equal
            to or greater than 21.0%, (iii) occurring subsequent to the October
            1997 Distribution Date but prior to the June 1998 Distribution Date
            is equal to or greater than 20.0%, (iv) occurring subsequent to the
            June 1998 Distribution Date but prior to the October 1998
            Distribution Date is equal to or greater than 18.0% and (v)
            occurring subsequent to the October 1998 Distribution Date is equal
            to or greater than 14.0%; or (c) the Average Net Loss Rate as of
            such Reporting Date (i) occurring prior to the September 1997
            Distribution Date is equal to or greater than 8.0%, (ii) occurring
            subsequent to the September 1997 Distribution Date and prior to the
            June 1998 Distribution Date is equal to or greater than 10.0%, (iii)
            occurring subsequent to the June 1998 Distribution Date and prior to
            the October 1998 Distribution Date is equal to or greater than 8.0%,
            and (iv) occurring subsequent to the October 1998 Distribution Date
            is equal to or greater than 6.0%."

                                 ARTICLE III

                          CONDITION TO EFFECTIVENESS

      SECTION 3.1 Execution and Delivery. The amendments to the Spread Account
Agreements as set forth in Article 2 hereof shall become effective upon receipt
by Financial Security of counterparts hereof executed and delivered on behalf of
each of the Parties hereto. The Parties hereto by their respective execution and
delivery of this Amendment hereby acknowledge that Financial Security is the
Controlling Party with respect to the Series 1995-1 Certificates and the Series
1996-1 Certificates.




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<PAGE>
                                 ARTICLE IV

                                MISCELLANEOUS

      SECTION 4.1 Ratification. Except as expressly set forth herein, this
Amendment shall not by implication or otherwise limit, impair, constitute a
waiver of, or otherwise affect the rights and remedies of any of the Parties
hereto under the Spread Account Agreements, nor alter, modify, amend or in any
way affect any of the terms, conditions, obligations, covenants or agreements
contained in the Spread Account Agreements, all of which are hereby ratified and
affirmed in all respects by each of the Parties hereto and shall continue in
full force and effect. This Amendment shall apply and be effective only with
respect to the provisions of the Spread Account Agreements specifically referred
to herein and any references in any of the Spread Account Agreements to the
provisions of such Spread Account Agreement specifically referred to herein
shall be to such provisions as amended by this Amendment.

      Section 4.2. Counterparts. This Amendment may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all of such counterparts shall together constitute but one and the same
instrument.

      Section 4.3. GOVERNING LAW. THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE
PROVISIONS THEREOF REGARDING CONFLICTS OF LAWS), AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAW.

      Section 4.4. Waiver of Notice. Each of the Parties hereto waives any prior
notice and any notice period that may be required by any other agreement or
document in connection with the execution of this Amendment.

      Section 4.5. Headings. The headings of Sections contained in this
Amendment are provided for convenience only. They form no part of this Amendment
or the Spread Account Agreements and shall not affect the construction or
interpretation of this Amendment or the Spread Account Agreements or any
provisions hereof or thereof.

      Section 4.6. Direction by NAFI to Trustee. NAFI, by its execution of this
Amendment, hereby directs Chase Manhattan Bank Delaware, as Owner Trustee of
National Financial Auto Funding Trust, to consent to this Amendment and to
execute and deliver this Amendment.


                    [Remainder of Page Intentionally Blank]



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


                        NATIONAL FINANCIAL AUTO FUNDING TRUST

                        By CHASE MANHATTAN BANK DELAWARE,
                           not in its individual capacity, but solely as Owner
                           Trustee

                        By: ______________________________________
                             Name:
                             Title:


                        FINANCIAL SECURITY ASSURANCE INC.


                        By: ______________________________________
                             Name:
                             Title:


                        HARRIS TRUST AND SAVINGS BANK,
                        not in its individual capacity, but solely as Collateral
                        Agent


                        By: ______________________________________
                             Name:
                             Title:


                        NATIONAL AUTO FINANCE COMPANY, INC.

                        By: ______________________________________
                             Name:
                             Title:




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