<PAGE>   1
                                                                    EXHIBIT 10.5
                              EMPLOYMENT AGREEMENT

         THIS AGREEMENT (the "Agreement"), dated and effective as of the 1st day
of August, 1998, by and between National Auto Finance Company, Inc., a Delaware
corporation (the "Company"), and Martin J. Mattone ("Mattone"), residing at 6623
N.W. 72nd Place, Parkland, Florida.

                                   WITNESSETH

         WHEREAS, the Company is engaged in the business of non-prime specialty
consumer finance, including, without limitation, the purchasing, originating,
financing, securitizing, collecting and servicing of motor vehicle retail
installment sales contracts, and intends to develop service bureau and service
center businesses (collectively, the "Business"); and

         WHEREAS, the Company desires to retain the services of Mattone in the
capacity of Vice President, Loan Originations and Asset Remarketing, and Mattone
desires to provide such services in such capacity to the Company, on the terms
and subject to the conditions set forth in this Agreement;

         NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants, agreements and obligations set forth herein, the parties hereto,
intending to be legally bound, hereby agree as follows:

         1. Employment and Term. The Company hereby employs Mattone, and Mattone
hereby accepts employment by the Company, in the capacity and on the terms and
subject to the conditions set forth in this Agreement, for the period of time
commencing on August 1, 1998, and ending on July 31, 2001, unless this Agreement
is sooner terminated as provided herein (the "Term").

         2. Duties. During the Term, Mattone shall, in his capacity as the
Company's Vice President, Loan Originations and Asset Remarketing, serve the
Company faithfully and to the best of his ability and devote his full business
time to the Business of the Company, subject to the provisions of Section 3
herein, as (i) is necessary to carry out the duties and responsibilities
customarily incident to such a position, including, without limitation, the
management of the Company's loan originations department and asset remarketing
department and the supervision of employees of the Company who are subordinate
to Mattone, and (ii) may be reasonably 


<PAGE>   2



assigned to him from time to time by the Board of Directors or the Chairman,
Chief Executive Officer, President and/or Chief Operating Officer of the
Company, or by anyone else designated by those officers or directors. Mattone
shall report to the Board of Directors and to the Chairman, Chief Executive
Officer, President and/or Chief Operating Officer, if any, of the Company, or to
anyone else designated by those directors or officers.

         3. Other Business Activities. During the Term, Mattone shall not,
without the prior written consent of the Company, directly or indirectly engage
in any other business activities or pursuits, except activities in connection
with charitable or civic activities, personal investments, service as an
executor, trustee or in other similar fiduciary capacities and such other
activities as are not inconsistent with his position with the Company and do not
interfere with the performance of Mattone's duties, responsibilities and
obligations pursuant to this Agreement.

         4. Compensation.

         (a) Salary. During the Term, the Company shall pay Mattone, and Mattone
hereby agrees to accept, as compensation for all services rendered and for
Mattone's covenant not to compete as provided for in Section 9 hereof, a base
salary (the "Base Salary") at an annual rate as follows:

         (i)   $110,000 for the period August 1, 1998 through July 31, 1999; 
         (ii)  no less than $117,700 for the period August 1, 1999 through July 
               31, 2000; and 
         (iii) no less than $125,939 for the period August 1, 2000 through July 
               31, 2001.

The sole and final determination of whether Mattone will receive an increase of
his Base Salary for the second and third years of this Agreement in excess of
the minimum seven (7) percent annual increase will be made by the Compensation
Committee of the Company's Board of Directors or equivalent committee of any
successor entity or parent organization, pursuant to senior executive
compensation plans adopted by such committee. Payment of the Base Salary shall
be made in the same manner as the Company routinely pays its other executive
employees. All applicable income, social security and other taxes and charges
which are required by law to be withheld by the Company or which are requested
to be withheld by Mattone, shall be deducted from the Base Salary in accordance
with the Company's normal payroll practice for its salaried executives from time
to time in effect.

         (b) Incentive Bonus. Mattone shall be eligible for an incentive bonus
("Incentive Bonus") for each of calendar years 1998, 1999 and 2000. For calendar
year 1998, Mattone shall be entitled to an Incentive Bonus of $33,000, which is
equal to 30% of Mattone's 1998 Base Salary. Such Incentive Bonus earned for
calendar year 1998 shall be paid on or before March 31, 


                                      -2-

<PAGE>   3

1999. For calendar years 1999 and 2000, the Compensation Committee of the
Company's Board of Directors or equivalent committee of any successor entity or
parent organization will adopt a bonus program designed to allow Mattone the
opportunity to earn an Incentive Bonus equal to at least 30% of Mattone's annual
Base Salary. There is, however, no guaranteed Incentive Bonus for 1999 or 2000.
Any Incentive Bonus earned for calendar years 1999 or 2000 shall be paid on or
before March 31 of the next succeeding year.

         5.  Stock Option Plan. Mattone shall be entitled to participate in the
Company's 1996 Share Incentive Plan (as the same may be amended or modified from
time to time), and any other plans implemented by the Company or any successor
entity or parent organization (within the meaning of Rule 12 b-2 under the
Securities Exchange Act of 1934) granting shares of capital stock, options or
warrants to purchase shares of capital stock or other forms of equity or equity
derivative securities, of the Company or any successor entity or parent
organization, as such grants may be made from time to time by the Board of
Directors or Compensation Committee governing such plan. While Mattone shall be
eligible to participate in such stock option plan(s), the sole and final
determination of whether any grants will be made or the amount of any such grant
will be made by the Compensation Committee of the Company's Board of Directors
or equivalent committee of any successor entity or parent organization.
Notwithstanding anything set forth to the contrary herein, the Compensation
Committee of the Board of Directors of the Company did approve on June 29, 1998
granting Mattone an option to purchase shares of the common stock of the Company
equal to 0.5% of the outstanding common stock of the Company on a fully-diluted
basis, subject to the conditions and on the terms set forth in the grant letter
to be sent by the Company to Mattone.

         6.  Benefits and Expenses.

         (a) Benefits. Mattone shall be entitled to participate in such benefit
plans and programs, including pension, hospitalization, medical and dental
insurance, life and disability insurance, and vacation (collectively,
"Benefits"), as are made available to the executive employees of the Company
from time to time during the Term.

         (b) Expenses. Mattone shall be reimbursed by the Company for all
reasonable out-of-pocket business-related expenses, including travel and
entertainment expenses, incurred by him in furtherance of the performance of his
duties and responsibilities hereunder upon submission to the Company of receipts
supporting such expenses.

         (c) Automobile. The Company will provide Mattone with a car allowance
of Six Hundred Dollars ($600.00) gross per month ("Auto Allowance") and
reimburse Mattone for 


                                      -3-

<PAGE>   4

gasoline and normal maintenance expenses for his automobile upon submission to
the Company of receipts supporting such expenses.

         (d) Relocation. Mattone shall maintain his principal office with the
Company at its headquarters in Jacksonville, Florida, and shall establish his
primary residence in Jacksonville, Florida by August 1, 1998. In connection with
such relocation, the Company shall pay when due: (i) all reasonable
sales-related expenses incurred by Mattone in connection with the sale of his
residence at 6623 N.W. 72nd Place, Parkland, Florida, including, without
limitation, real estate commissions, inspection fees and closing costs; (ii) all
reasonable expenses associated with the moving of Mattone's household goods to
Jacksonville; and (iii) an amount equal to the difference between the purchase
price of Mattone's Parkland residence and the sale price of that residence.
Notwithstanding anything to the contrary set forth herein, the Company shall not
pay or reimburse Mattone for: (i) any expenses or costs related to the purchase,
sale or rental of a residence in Jacksonville for Mattone; (ii) costs or
expenses related to the storage of items or goods for Mattone; or (iii) expenses
or costs for Mattone or his family to travel to or from the South Florida area
once Mattone establishes his primary residence in Jacksonville.

         7.  Confidentiality.

         (a) Non-Disclosure. Mattone recognizes and acknowledges that the
Proprietary Information (as hereinafter defined) of the Company is a valuable,
special and unique asset of the Company. As a result, both during the Term and
thereafter, Mattone shall not, without the prior written consent of the Company,
for any reason, either directly or indirectly, divulge to any third party or use
for Mattone's own benefit, or for any purpose other than the exclusive benefit
of the Company, any and all confidential, proprietary, business or technical
information, or trade secrets of the Company which are revealed, obtained or
developed in the course of Mattone's employment with the Company (the
"Proprietary Information"). Such Proprietary Information shall include, but
shall not be limited to, business, financial, marketing and development plans,
models and efforts, cost information, pricing information, marketing methods,
collection and servicing methods, procedures and policies, identities of the
Company's dealers or obligors, the Company's relationships with or potential
relationships with its dealers, and any other confidential, proprietary,
business or technical information relating to the Business of the Company or
trade secrets of the Company; provided, however, that nothing herein contained
shall restrict Mattone's ability to make such disclosures during the course of
his employment as may be necessary or appropriate to the effective and efficient
discharge of his duties or as such disclosures may be required by law; and
further provided, that nothing herein contained shall restrict Mattone from
divulging or using for his own benefit or for any other purpose any Proprietary
Information which is readily available to the general public so long as such


                                      -4-

<PAGE>   5



information did not become available to the general public as a direct or
indirect result of Mattone's breach of this Section 7.

         (b) Inventions, Designs and Product Developments. All inventions,
discoveries, concepts, improvements, formulas, procedures, policies, processes,
devices, methods, innovations, designs, ideas and product developments
(collectively, "Developments"), developed or conceived by Mattone, solely or
jointly with others, whether or not patentable or copyrightable, at any time
during the Term or within one (1) year after the termination of this Agreement
and which relate to the actual or planned Business activities of the Company,
its divisions, subsidiaries, sister organizations, or parent organization, and
all of Mattone's right, title and interest therein, shall be the exclusive
property of the Company. Mattone hereby assigns, transfers and conveys to the
Company all of his right, title and interest in and to any and all such
Developments. Mattone shall disclose fully, as soon as practicable and in
writing, all Developments to the Chairman, Chief Executive Officer, President
and/or Chief Operating Officer of the Company or to anyone else designated by
those officers. At any time and from time to time, upon the request of the
Company, Mattone shall execute and deliver to the Company any and all
instruments, documents and papers, give evidence and do any and all other acts
which, in the opinion of counsel for the Company, are or may be necessary or
desirable to document such transfer or to enable the Company to file and
prosecute applications for and to acquire, maintain and enforce any and all
patents, trademarks, registrations or copyrights under United States or foreign
law with respect to any such Developments or to obtain any extension,
validation, reissue, continuance or renewal of any such patent, trademark or
copyright. The Company will, at its expense, be responsible for the preparation
of any such instruments, documents and papers and for the prosecution of any
such proceedings and will reimburse Mattone for all reasonable expenses Mattone
incurs in connection therewith upon submission to the Company of invoices with
respect thereto.

         8. Property of Company. All Proprietary Information and Developments
shall be and remain the sole property of the Company. During the Term of this
Agreement, Mattone shall not remove from the Company's offices or premises any
documents, records, notebooks, files, correspondence, reports, memoranda or
similar materials containing information of the type identified in Section 7
hereof, or other materials or property of any kind unless necessary or
appropriate in accordance with his duties and responsibilities and, in the event
that such materials or property are removed, all of the foregoing shall be
returned to their proper files or places of safekeeping as promptly as possible
after the removal shall serve its specific purpose. Mattone shall not make,
retain, remove and/or distribute any copies of any of the foregoing for any
reason whatsoever except as may be necessary in the discharge of his assigned
duties and shall not 

                                      -5-


<PAGE>   6

divulge to any third person the nature of and/or the contents of any of the
foregoing or of any other oral or written information to which he may have
access or with which for any reason he may become familiar, except as disclosure
shall be necessary in the performance of his duties; and upon the termination of
his employment with the Company, he shall leave with or return to the Company,
all originals and copies of the foregoing then in his possession, whether
prepared by Mattone or by others.

         9.       Covenant Not to Compete.

                  (a) Mattone shall not, during the Term, anywhere within the
United States of America or in any other location where the activities of
Mattone would, in the judgment of the Board of Directors of the Company or any
successor entity or parent organization, be competitive with the Business of the
Company, its divisions, subsidiaries, sister organizations, or parent
organization, do any of the following, directly or indirectly, without the prior
written consent of the Company:

                           (1)  solicit, either directly or indirectly, business
from any dealer, customer, obligor, financial institution or company with whom
the Company shall have dealt at any time;

                           (2) influence or attempt to influence any dealer, 
customer, obligor, financial institution or company with whom the Company shall
have dealt at any time or potential dealer, financial partner, company, customer
or obligor of the Company to terminate or modify any written or oral agreement,
arrangement or course of dealing with the Company; or

                           (3)  influence or attempt to influence any person to 
either (i) terminate or modify his employment, consulting, agency,
distributorship or other arrangement with the Company, its divisions,
subsidiaries, sister organizations, or parent organization, or (ii) employ or
retain, or arrange to have any other person or entity employ or retain, any
person who has been employed or retained by the Company, its divisions,
subsidiaries, sister organizations, or parent as an employee, salesman,
consultant or agent of the Company at any time during the one (1) year period
immediately preceding the effective date of Mattone's termination if the actions
enumerated in clauses (i) and (ii) would negatively affect the Business and/or
operations of the Company, its divisions, subsidiaries, sister organizations, or
parent organization for a period of two (2) years following the effective date
of Mattone's termination.

                  (b) The Company shall have the right, but not the obligation,
to require Mattone, for a six month period of time following the termination of
Mattone's employment (for whatever reason), anywhere within the United States of
America or in any other location where the activities of Mattone would, in the
judgment of the Board of Directors of the Company or any successor entity or
parent organization, be competitive with the Business of the Company, its


                                      -6-

<PAGE>   7

divisions, subsidiaries, sister organizations, or parent organization, not to
engage in the conduct proscribed by Section 9(a)(1), (2) and (3) by payment to
Mattone, over the extended covenant period, of fifty percent (50%) of the amount
paid to Mattone (as reflected in the Company's payroll records) by the Company
in the full calendar year immediately preceding Mattone's termination. Any
payments required by this Section 9(b) shall be paid by check in the same time
intervals as the Company routinely pays its executive employees. Any exercise of
the option shall be irrevocable.

                  (c) If the employment of Mattone shall either expire pursuant
to Section 1 hereof, or shall be terminated pursuant to Section 10 of this
Agreement, Mattone shall not, for a two (2) year period of time following such
termination, employ or retain, or arrange to have any other person or entity
employ or retain, any person who has been employed or retained by the Company,
its divisions, subsidiaries, sister organizations, or parent organization any
time during the one (1) year period immediately preceding the effective date of
Mattone's termination.

     10. Termination. This Agreement may be terminated during the Term upon the
occurrence of any of the events described in this Section 10. Upon termination,
Mattone shall be entitled to such compensation and benefits as are described in
this Section 10.

                  10.1  Termination for Disability.

                  (a) In the event of the disability of Mattone such that
Mattone is unable to perform his duties and responsibilities hereunder to the
full extent required by this Agreement by reason of illness, injury or
incapacity for a period of more than one hundred twenty (120) consecutive days
or for a cumulative period of one hundred twenty (120) days within a twelve (12)
month period ("Disability" or "Disabled"), Mattone's employment under this
Agreement may be terminated by the Company.

                  (b) In the event of a termination of Mattone's employment
pursuant to Section 10.1(a), the Company shall be obligated to pay Mattone (i)
all accrued but unpaid (as of the date of such termination) Base Salary,
Benefits and Auto Allowance, and to reimburse Mattone for all unreimbursed
out-of-pocket business-related expenses and (ii) an amount equal to Mattone's
Base Salary for a three (3) month period (at the rate then in effect at the time
of such termination). Except as specifically set forth in this Section 10.1(b),
the Company shall have no liability or obligation to Mattone for compensation or
benefits hereunder by reason of such termination.

                  (c) For purposes of this Section 10.1, except as hereinafter
provided, the determination as to whether Mattone is Disabled shall be made by a
licensed physician selected by Mattone and shall be based upon a full physical
examination and good faith opinion by such 


                                      -7-

<PAGE>   8


physician. In the event that the Board of Directors of the Company (or any
successor entity or parent organization) disagrees with such physician's
conclusion, the Board of Directors may require that Mattone submit to a full
physical examination by another licensed physician selected by Mattone and
approved by the Board of Directors. If the two opinions shall be inconsistent, a
third opinion shall be obtained after full physical examination by a third
licensed physician selected by Mattone and approved by the Board of Directors.
The majority of the three opinions shall be conclusive.

                  10.2 Termination by Death. In the event that Mattone dies
during the Term, Mattone's employment shall be terminated thereby and the
Company shall pay to Mattone's executors, legal representatives or
administrators an amount equal to all accrued but unpaid (as of the date of such
termination) Base Salary, Benefits and Auto Allowance and shall reimburse
Mattone for all unreimbursed out-of-pocket business-related expenses, all of
which payments shall be paid within thirty (30) days of the date of such death.
Except as specifically set forth in this Section 10.2, the Company shall have no
liability or obligation hereunder to Mattone's executors, legal representatives,
administrators, heirs or assigns or to any other person claiming under or
through him by reason of Mattone's death.

                  10.3 Termination for Cause.

                  (a) The Company may terminate Mattone's employment under this
Agreement at any time for "Cause" upon written notice to Mattone, which
termination shall become effective on the date specified in such notice. For
purposes of this Agreement, "Cause" (as hereinafter defined) shall mean: (i) any
material breach by Mattone of any of his obligations under Sections 7, 8 or 9 of
this Agreement; (ii) failure or refusal by Mattone to perform satisfactorily the
duties assigned to him pursuant to this Agreement; (iii) other conduct of
Mattone involving gross disloyalty or willful misconduct with respect to the
Company, including, without limitation, fraud, embezzlement, theft or proven
dishonesty in the course of his employment, or conviction of a felony; (iv)
Mattone's willful engagement in conduct materially injurious to the economic
interests or reputation of the Company; (v) Mattone's insubordination, acts of
moral turpitude or other gross misconduct; or (vi) Mattone's failure or refusal
to establish his permanent residence in Jacksonville, Florida by August 1, 1998.

                  (b) In the event of a termination of Mattone's employment
pursuant to Section 10.3(a), the Company shall be obligated to pay to Mattone
all accrued but unpaid (as of the date of such termination) Base Salary,
Benefits and Auto Allowance, and all Base Salary, Benefits and Auto Allowance
shall then cease at the time of such termination. Except as specifically set


                                      -8-

<PAGE>   9

forth in this Section 10.3(b), the Company shall have no liability or obligation
to Mattone for compensation or benefits hereunder by reason of such termination.

                  10.4 Termination without Cause.

                  (a)  The Company may terminate Mattone's employment under this
Agreement without Cause upon at least sixty (60) days prior written notice
thereof to Mattone, in which case this Agreement shall terminate on the date
specified in such notice.

                  (b)  In the event of a termination of Mattone's employment
pursuant to 10.4(a), the Company shall be obligated to pay to Mattone all
accrued but unpaid (as of the date of such termination) Base Salary, Benefits
and Auto Allowance and to reimburse Mattone for all unreimbursed out-of-pocket
business-related expenses. Mattone shall also be entitled to receive an amount
equal to his Base Salary (at the rate then in effect at the time of such
termination) for a six (6) month period, such amount to be paid over the
applicable period at times corresponding to the Company's normal payroll periods
for executive officers as if no such termination had occurred. Except as
specifically set forth in this Section 10.4(b), the Company shall have no
liability or obligation to Mattone for compensation or benefits hereunder by
reason of such termination.

                  10.5 Termination by Mattone for Good Reason.

                  (a) Mattone may terminate his employment under this Agreement
at any time for Good Reason (as hereinafter defined) effective upon the date
designated by Mattone in his written notice of termination of employment
pursuant to this Section 10.5(a); provided, that the effective date of such
termination shall not be less than ninety (90) days after such notice is given,
unless the Board of Directors of the Company (or any successor entity or parent
organization) declares such effective date to be earlier than that designated by
Mattone, which such Board shall be entitled to do (but not earlier than the date
such notice is received). For purposes of this Agreement, "Good Reason" shall
mean a material breach by the Company of its obligations under this Agreement,
including, but not limited to, the following: (i) the failure by the Company to
pay Base Salary or any other material form of compensation or material benefit
to be paid or provided to Mattone hereunder, which failure is not cured by the
Company within ten (10) days after the Company's receipt of written notification
from Mattone of such failure; and (ii) any material breach, not encompassed
within clause (i) of this Section 10.5(a), of the obligations of the Company
under this Agreement which breach is not cured within thirty (30) days after the
Company's receipt of written notification from Mattone of such material breach.

                  (b) In the event of a termination of Mattone's employment for
Good Reason pursuant to Section 10.5(a), the Company shall be obligated to pay
to Mattone all accrued but 


                                      -9-

<PAGE>   10
unpaid (as of the date of such termination) Base Salary, Benefits and Auto
Allowance and to reimburse Mattone for all unreimbursed out-of-pocket
business-related expenses. Mattone shall also be entitled to receive an amount
equal to his Base Salary (at the rate then in effect at the time of such
termination) for a six (6) month period, such amount to be paid over the
applicable period at times corresponding to the Company's normal payroll periods
for executive officers as if no such termination had occurred. Except as
specifically set forth in this Section 10.5(b), the Company shall have no
liability or obligation to Mattone for compensation or benefits hereunder by
reason of such termination.

                  10.6  Successor Party

                  The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the Business and/or assets of the Company (a "Successor")
to expressly assume and agree to perform this Agreement in the same manner and
to the same extent that the Company would be required to perform it. If no such
agreement prior to or simultaneously with the effectiveness of any such
succession is executed and delivered to Mattone, such failure shall constitute a
material breach of this Agreement. Mattone agrees that the assumption by any
successor party of the duties and responsibilities of the Company under this
Agreement shall relieve the Company of any and all duties or responsibilities
under this Agreement. Moreover, such a successor party to this Agreement shall
have all rights currently afforded the Company or its Board of Directors under
this Agreement.

         11. Survival of Provisions. The rights and obligations of Mattone
pursuant to Sections 7, 8, 9, 10 and 14 of this Agreement shall survive the
termination of Mattone's employment hereunder.

         12. Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the Company and Mattone and their respective successors,
executors, administrators, heirs and/or permitted assigns; provided, however,
that neither Mattone nor the Company may make any assignment of this Agreement
or any interest herein, by operation of law or otherwise, without the prior
written consent of the other parties hereto, except that, without such consent,
the Company may assign this Agreement to any Successor to all or substantially
all of the Company's assets and Business or the assets and business of any of
the Company's divisions, subsidiaries, sister organizations or parent
organization by means of liquidation, dissolution, merger, consolidation,
transfer of assets, or otherwise, provided that such Successor assumes in
writing all of the obligations of the Company under this Agreement.


                                      -10-


<PAGE>   11


         13. No Conflicting Agreements. Mattone represents to the Company that
(i) Mattone is not currently under contract to provide services to any other
party or entity; (ii) the execution, delivery and performance of this Agreement
by Mattone will not conflict with any other agreement to which Mattone is bound
or to which Mattone is a party; and (iii) Mattone is not currently bound by any
form of restrictive covenant which would restrict or limit the performance of
his duties pursuant to this Agreement.

         14 Employee Benefits. This Agreement shall not be construed to be in
lieu of or to the exclusion of any other rights, benefits and privileges to
which Mattone may be entitled as an employee of the Company under any
retirement, pension, profit-sharing, share incentive, insurance, hospitalization
or other plans or benefits which may now be in effect or which may hereafter be
adopted.

         15. Notice. Any notice or communication required or permitted under
this Agreement shall be made in writing and sent by certified or registered
mail, return receipt requested, or hand delivery, addressed as follows or to
such other address as any party may from time to time duly specify by notice
given to the other party in the manner specified above:

                  If to Mattone:

                                    Martin J. Mattone
                                    10135 Gate Parkway North, Apt. 408
                                    Jacksonville, Florida  32246

                  If to the Company:

                                    National Auto Finance Company, Inc.
                                    621 N.W. 53rd Street, Suite 200
                                    Boca Raton, Florida  33487
                                    Attention:  Joel B. Ronkin

         16. Entire Agreement; Amendments. This Agreement contains the entire
Agreement and understanding of the parties hereto relating to the subject matter
hereof, and merges and supersedes all prior discussions, offer letters,
agreements and understandings of every nature between the parties hereto
relating to the employment of Mattone with the Company. This Agreement may not
be changed or modified, except by an agreement in writing signed by both of the
parties hereto.


                                      -11-


<PAGE>   12


         17. Waiver. The waiver of the breach of any term or provision of this
Agreement shall not operate as or be construed to be a waiver of any other or
subsequent breach of this Agreement.

         18. Governing Law. This Agreement shall be governed, construed and
enforced in accordance with the laws of the State of Florida, without regard to
conflict of law principles.

         19. Invalidity. In case any one or more of the provisions contained in
this Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect the validity of any other provision of this Agreement, and such
provision(s) shall be deemed modified to the extent necessary to make it
enforceable.

         20. Section Headings. The section headings in this Agreement are for
convenience only. They form no part of this Agreement and shall not affect its
interpretation.

         21. Number of Days. In computing the number of days for purposes of
this Agreement, all days shall be counted, including Saturdays, Sundays and
legal holidays; provided, however, that if the final day of any time period
falls on a Saturday, Sunday or day which is a holiday in the State of Florida,
then such final day shall be deemed to be the next day which is not a Saturday,
Sunday or legal holiday.

         22. Specific Enforcement. Mattone acknowledges that the restrictions
contained in Sections 7, 8 and 9 hereof are reasonable and necessary to protect
the legitimate interests of the Company and its affiliates and that the Company
would not have entered into this Agreement in the absence of such restrictions.
Mattone also acknowledges that the nature of both his services to the Company
and the obligations undertaken by Mattone in Sections 7, 8 and 9 hereof are
unique and that any breach by him of Sections 7, 8, and 9 hereof will cause
continuing and irreparable injury to the Company for which monetary damages
would not be adequate remedy. In the event of such breach by Mattone, the
Company shall have the right to specific enforcement of the provisions of
Sections 7, 8 and 9 of this Agreement, or injunctive or other relief in any
court, and this Agreement shall not in any way limit remedies of law or in
equity otherwise available to the Company. In the event that the provisions of
Sections 7, 8 and 9 hereof should ever be adjudicated to exceed the time,
geographic, or other limitations permitted by applicable law in any
jurisdiction, then such provisions shall be deemed reformed in such jurisdiction
to the maximum time, geographic, or other limitations permitted by applicable
law.


                                      -12-


<PAGE>   13

         23. Arbitration. Any controversy or claim arising out of or relating to
Section 10 hereof, or the breach thereof, shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association, and judgment upon the award rendered by the Arbitration may be
entered into any court having jurisdiction thereof. The arbitration shall be
heard by a single Arbitrator, and shall be conducted in Jacksonville, Florida.

                  IN WITNESS WHEREOF, the parties hereto have executed or caused
this Agreement to become effective as of the date first above written.

                                     EMPLOYEE:


                                     /s/ MARTIN J. MATTONE
                                     -----------------------------
                                     Martin J. Mattone


                                     COMPANY:
                                     NATIONAL AUTO FINANCE COMPANY, INC.


                                     By: /s/ WILLIAM G. MAGRO
                                         -------------------------
                                             William G. Magro
                                            Executive Vice President
                                             and Chief Operating Officer



                                      -13-