<PAGE>
                                       
                        SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C.  20549

                                    FORM 10-Q
(Mark One)

/ X /     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
          EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 1998

                                        OR

/   /     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
          EXCHANGE ACT OF 1934

For the transition period from __________________ to ___________________

Commission File Number 001-1181
                                       
                      CROSS-CONTINENT AUTO RETAILERS, INC.
             (Exact name of registrant as specified in its charter)

              DELAWARE                                75-2653095
    (State or other jurisdiction of                 (IRS Employer
    incorporation or organization)                Identification No.)

         1201 S. TAYLOR
         AMARILLO, TEXAS                                   79101
(Address of principal executive offices)                (Zip Code)
                                       
                                 (806) 374-8653
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant:  (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter period that the 
registrant was required to file such reports), and (2) has been subject to 
such filing requirements for the past 90 days. Yes X .  No     . 

Number of shares outstanding of each of the issuer's classes of common stock, 
as of November 12, 1998:

<TABLE>
               Class                                         Shares Outstanding
--------------------------------------                       ------------------
<C>                                                          <S>
Common Stock, $.01 par value per share                           13,573,908
</TABLE>

                                       1
<PAGE>

                                       
                      CROSS-CONTINENT AUTO RETAILERS, INC.

                                     INDEX
PART I

<TABLE>
<CAPTION>
               FINANCIAL INFORMATION                                            PAGE
<S>            <C>                                                              <C>
     Item 1    Financial Statements

                  Consolidated Statements of Operations
                  Three Months Ended September 30, 1998 and September 30, 1997
                  Nine Months Ended September 30, 1998 and September 30, 1997    3

                  Consolidated Balance Sheets at
                  September 30, 1998 and December 31, 1997                       4

                  Consolidated Statements of Cash Flows
                  Nine Months Ended September 30, 1998 and September 30, 1997    5

                  Notes to Consolidated Financial Statements                     6
 
                  Independent Accountants' Review Report                         12

     Item 2    Management's Discussion and Analysis of Financial
               Condition and Results of Operations                               13

                  Consolidated Margin Statistics                                 15

                  Same Store Comparisons Margin Statistics                       16

                  Results of Operations
                  Three months ended September 30, 1998                          17

                  Results of Operations
                  Nine months ended September 30, 1998                           21


PART II

     OTHER INFORMATION

     Item 1    Legal Proceedings                                                 27
 
     Item 6    Exhibits and Reports on Form 8-K                                  28
</TABLE>

                                       2
<PAGE>

                         CROSS-CONTINENT AUTO RETAILERS, INC.
                        CONSOLIDATED STATEMENTS OF OPERATIONS
                        (IN THOUSANDS - EXCEPT PER SHARE DATA)
                                     (UNAUDITED)
<TABLE>
<CAPTION>
                                                       THREE MONTHS ENDED            NINE MONTHS ENDED
                                                         SEPTEMBER 30,                  SEPTEMBER 30,
                                                  --------------------------    ---------------------------
                                                     1998           1997            1998           1997
                                                  ---------      -----------    -----------    ------------
<S>                                               <C>            <C>            <C>            <C>
REVENUES
     Vehicle sales                                $  152,607     $  118,078     $  428,961     $  315,043
     Other operating revenue                          23,176         16,706         63,575         44,150
                                                  -----------    -----------    -----------    ------------
                  Total revenues                     175,783        134,784        492,536        359,193

Cost of sales                                        143,743        111,061        405,145        296,756
                                                  -----------    -----------    -----------    ------------
     Gross profit                                     32,040         23,723         87,391         62,437
                                                  -----------    -----------    -----------    ------------
Operating expenses
     Selling, general and administrative              24,806         16,786         67,187         45,429
     Depreciation and amortization                     1,029            815          2,868          1,814
     Employee severance charge (Note 9)                    -              -            815              -
     Merger related expenses (Note 2)                    750              -            750              -
     Loss from sale of dealerships (Note 6)                -              -              -            347
                                                  -----------    -----------    -----------    ------------
                  Total operating expenses            26,585         17,601         71,620         47,590
                                                  -----------    -----------    -----------    ------------
     Income before interest and taxes                  5,455          6,122         15,771         14,847

Other income (expense)
     Interest income                                     195            159            489            992
     Interest expense                                 (2,379)        (2,112)        (7,149)        (5,058)
                                                  -----------    -----------    -----------    ------------
     Income before income taxes                        3,271          4,169          9,111         10,781

     Income tax provision                              1,467          1,557          3,649          4,157
                                                  -----------    -----------    -----------    ------------
                  Net income                        $  1,804       $  2,612       $  5,462        $ 6,624
                                                  -----------    -----------    -----------    ------------
                                                  -----------    -----------    -----------    ------------
Basic and diluted net income per share              $    .13       $   0.19       $   0.40        $  0.48
                                                  -----------    -----------    -----------    ------------
                                                  -----------    -----------    -----------    ------------
Weighted average common shares outstanding:
     Basic                                            13,574         13,446         13,569         13,764
     Diluted                                          13,648         13,564         13,698         13,831
</TABLE>


The accompanying notes are an integral part of these financial statements.


                                       3
<PAGE>

                      CROSS-CONTINENT AUTO RETAILERS, INC.
                           CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)

                                     ASSETS

<TABLE>
<CAPTION>
                                                                           SEPTEMBER 30, 1998   DECEMBER 31, 1997
                                                                           ------------------   -----------------
                                                                                (UNAUDITED)
<S>                                                                     <C>                  <C>
Current assets
  Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . .           $   7,141          $   15,173
  Accounts receivable. . . . . . . . . . . . . . . . . . . . . . . . .              24,778              16,884
  Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . .              60,347              55,807
  Other current assets . . . . . . . . . . . . . . . . . . . . . . . .               1,543               1,792
                                                                                  --------           ---------
          Total current assets . . . . . . . . . . . . . . . . . . . .              93,809              89,656

Property and equipment, net. . . . . . . . . . . . . . . . . . . . . .               9,228              33,165
Goodwill and other intangible assets, net. . . . . . . . . . . . . . .              83,604              67,988
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               6,356               6,464
                                                                                  --------           ---------
          Total assets . . . . . . . . . . . . . . . . . . . . . . . .           $ 192,997          $  197,273
                                                                                  --------           ---------
                                                                                  --------           ---------
                                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
  Floor plan notes payable . . . . . . . . . . . . . . . . . . . . . .           $  51,239          $   53,368
  Current maturities of long-term debt . . . . . . . . . . . . . . . .                 876                 727
  Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . .               7,303               6,117
  Due to affiliates. . . . . . . . . . . . . . . . . . . . . . . . . .               2,400              15,150
  Accrued expenses and other liabilities . . . . . . . . . . . . . . .              13,152              10,559
  Deferred income taxes. . . . . . . . . . . . . . . . . . . . . . . .               1,396                 647
                                                                                  --------           ---------
          Total current liabilities. . . . . . . . . . . . . . . . . .              76,366              86,568

Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . .              41,529              44,263
Other liabilities and deferred credits . . . . . . . . . . . . . . . .               4,378               3,180
                                                                                  --------           ---------
          Total long-term liabilities. . . . . . . . . . . . . . . . .              45,907              47,443

Stockholders' equity
  Preferred stock, $.01 par value, 10,000,000 shares
  authorized, none issued. . . . . . . . . . . . . . . . . . . . . . .                   -                   -
  Common stock, $.01 par value, 100,000,000 shares
  authorized, 14,205,703 issued. . . . . . . . . . . . . . . . . . . .                 142                 142
  Paid-in capital. . . . . . . . . . . . . . . . . . . . . . . . . . .              55,054              54,528
  Retained earnings. . . . . . . . . . . . . . . . . . . . . . . . . .              22,794              17,332
  Treasury stock, 631,795 and 760,000 shares at cost
   at September 30, 1998 and December 31, 1997, respectively . . . . .              (7,266)             (8,740)
                                                                                  --------           ---------
          Total stockholders' equity . . . . . . . . . . . . . . . . .              70,724              63,262

Commitments and contingencies

          Total liabilities and stockholders' equity . . . . . . . . .           $ 192,997           $ 197,273
                                                                                  --------           ---------
                                                                                  --------           ---------
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                       4
<PAGE>

                      CROSS-CONTINENT AUTO RETAILERS, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                      NINE MONTHS ENDED
                                                                         SEPTEMBER 30,
                                                                     --------------------
                                                                      1998          1997
                                                                     ------        ------
<S>                                                                  <C>            <C>
Cash flows from operating activities
  Net income . . . . . . . . . . . . . . . . . . . . . . . .         $5,462         $6,624
  Adjustments to reconcile net income to net cash
  provided by operating activities
    Depreciation and amortization. . . . . . . . . . . . . .          2,868          1,814
    Amortization of deferred warranty revenue. . . . . . . .         (1,189)        (1,907)
    Deferred taxes and other . . . . . . . . . . . . . . . .              -           (748)
  (Increase) decrease in
    Accounts receivable. . . . . . . . . . . . . . . . . . .         (4,552)         4,178
    Inventory. . . . . . . . . . . . . . . . . . . . . . . .          9,677          3,812
    Other assets . . . . . . . . . . . . . . . . . . . . . .           (227)        (2,135)
  Increase (decrease) in
    Accounts payable - trade . . . . . . . . . . . . . . . .         (3,760)        (4,067)
    Accrued expenses and other liabilities . . . . . . . . .          1,787          1,383
                                                                    -------         ------
      Net cash provided by operating activities. . . . . . .         10,066          8,954

Cash flows from investing activities
  Acquisition of property and equipment. . . . . . . . . . .         (2,291)        (1,504)
  Construction costs . . . . . . . . . . . . . . . . . . . .         (6,131)        (4,935)
  Acquisition of dealerships . . . . . . . . . . . . . . . .        (13,964)       (41,620)
  Proceeds from sale/leaseback . . . . . . . . . . . . . . .         35,450              -
                                                                    -------         ------
      Net cash provided by (used in) investing activities. .         13,064        (48,059)

Cash flows from financing activities
  Change in floor plan notes payable . . . . . . . . . . . .        (12,359)          (903)
  Net proceeds from borrowings . . . . . . . . . . . . . . .              -         30,037
  Long-term debt repayments. . . . . . . . . . . . . . . . .         (6,053)       (17,702)
  Due to affiliates. . . . . . . . . . . . . . . . . . . . .           (443)        (7,121)
  Proceeds from borrowings - affiliates. . . . . . . . . . .          3,008              -
  Debt repayments - affiliates . . . . . . . . . . . . . . .        (15,315)             -
                                                                    -------         ------
    Net cash provided by (used in) financing activities. . .        (31,162)         4,311

Decrease in cash and cash equivalents. . . . . . . . . . . .         (8,032)       (34,794)
Cash and cash equivalents at beginning of period . . . . . .         15,173         36,946
                                                                    -------         ------
Cash and cash equivalents at end of period . . . . . . . . .       $  7,141       $  2,152
                                                                    -------         ------
                                                                    -------         ------
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                       5
<PAGE>

                         CROSS-CONTINENT AUTO RETAILERS, INC.
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                  SEPTEMBER 30, 1998


NOTE 1.   UNAUDITED INTERIM FINANCIAL INFORMATION

         The accompanying unaudited consolidated financial statements have 
been prepared in accordance with the instructions to Form 10-Q and do not 
include all of the information and footnotes required by generally accepted 
accounting principles for complete financial statements. In the opinion of 
management, all adjustments (consisting of normal recurring accruals) 
considered necessary for a fair presentation have been included. Operating 
results for the three and nine months ended September 30, 1998 are not 
necessarily indicative of the results that may be expected for the year 
ending December 31, 1998. This interim report should be read in conjunction 
with the consolidated financial statements and notes related thereto, and 
management's discussion and analysis of results of operations and financial 
condition included in Cross-Continent Auto Retailers, Inc.'s Annual Report on 
Form 10-K for the year ended December 31, 1997. Unless the context indicates 
otherwise, references to "C-CAR" or the "Company" are to Cross-Continent Auto 
Retailers, Inc and its subsidiaries. The accompanying unaudited consolidated 
financial statements have been subject to review by the Company's independent 
accountants whose report is included herein.

NOTE 2.   MERGER

         The Company entered into an Agreement and Plan of Merger, dated as 
of September 3, 1998 (the "Merger Agreement"), which provides for a 
wholly-owned subsidiary of Republic Industries, Inc. ("Republic") to be 
merged with and into the Company ("Merger"). Upon consummation of the 
proposed Merger, the Company will become a wholly-owned subsidiary of 
Republic, and the Company's stockholders will be entitled to receive $10.70 
in cash, without interest, for each share of the Company's common stock held 
by them. The Merger is subject to certain closing conditions including 
government and manufacturer approvals, and the approval of the Company's 
stockholders. Consummation of the Merger is also conditioned on the 
divestiture of the Company's dealership in Denver, Colorado, and the 
divestiture, or assignment, of the Company's interest in one of its pending 
acquisitions (see Note 8). The divestitures, or assignments, of these 
dealerships are expected to coincide with the completion of the Merger. The 
Merger is expected to close in the first quarter of 1999; however, there can 
be no assurance that the Merger, or the transactions contemplated thereunder, 
will be completed.

         The Company incurred and recorded merger-related expenses of 
approximately $750,000 during the quarter ended September 30, 1998. The 
Company will record all additional merger-related expenses as incurred until 
the proposed Merger is consummated or abandoned.

NOTE 3.      NET INCOME PER COMMON SHARE

         As of September 30, 1998, the Company had 1,159,541 stock options 
outstanding with exercise prices ranging from $8.00 to $19.25 which have been 
excluded from the diluted earnings per share calculations as the effect of 
such would have been anti-dilutive. As of September 30, 1997 the Company had 
263,494 options outstanding with exercise prices ranging from $10.00 to 
$19.25 which have been excluded from the diluted earnings per share 
calculations as the effect of such would have been anti-dilutive. The Company 
is contingently committed to issue additional shares in connection with the 
Chaisson (as hereinafter defined) acquisition (See 

                                       6
<PAGE>

Note 5). The Company has included 74,000 shares and 124,000 shares in the 
diluted share calculations for the three and nine months ending September 30, 
1998, as if it were the end of the contingent period. The actual contingent 
period ends January 5, 1999.

NOTE 4.     RELATED PARTY TRANSACTIONS

         In connection with its business travel, the Company from time to 
time uses an airplane that is owned and operated by Plains Air, Inc. Plains 
Air, Inc. is owned by Bill A. Gilliland, Chairman of the Board and Chief 
Executive Officer. Currently, the Company pays Plains Air, Inc. $20,000 per 
month for fixed costs, $800 per hour for operating expenses and actual fuel 
cost when the airplane is used by the Company. During the three months ended 
September 30, 1998 and 1997, the Company paid Plains Air, Inc. an aggregate 
of approximately $102,000 and $130,000, respectively, for the use of the 
airplane; for the nine months ended September 30, 1998 and 1997, the Company 
paid approximately $407,000 and $399,000, respectively. In July, the Company 
began using an airplane owned by R. Douglas Spedding, an officer of the 
Company, in addition to the airplane above. The Company pays R. Douglas 
Spedding $800 per hour for operating expenses. For the three and nine months 
ended September 30, 1998, the Company paid R. Douglas Spedding approximately 
$69,000 for the use of the plane.

         In general, the Company is required to pay for all vehicles 
purchased from the manufacturers upon delivery of the vehicles to the 
Company. The Company purchases new vehicles and certain used vehicles through 
financing obtained from manufacturer's captive finance companies and a 
certain bank. This type of financing is known as "floor plan financing" or 
"flooring." Under arrangements with the manufacturer's captive finance 
companies, the Company may deposit funds with such finance companies in an 
amount up to a certain percentage of the outstanding floor plan balance. Such 
funds earn interest at approximately the same rate charged on outstanding 
floor plan balances. From time to time certain Company executives and other 
affiliates will advance funds to the Company primarily for the purpose of 
investing excess cash with the finance companies. The Company acts only as an 
intermediary in this process. As of September 30, 1998, the Company had 
withdrawn and repaid all advanced funds and interest earned. The amount of 
interest accrued pursuant to these arrangements during the three months ended 
September 30, 1998 approximated $62,000. The amount of interest accrued 
during the nine months ended September 30, 1998 and 1997 approximated 
$160,000 and $193,000, respectively.

         Subsequent to the acquisition of Toyota West Sales & Service, Inc. 
and Douglas Toyota, Inc. (see Note 5), the seller, R. Douglas Spedding, 
became an officer of the Company. In connection with the acquisition of 
Toyota West Sales & Service, Inc. ("Toyota West") and Douglas Toyota, Inc. 
("Denver Toyota"), the Company purchased two tracts of land from R. Douglas 
Spedding in exchange for a total of $7.5 million in seller-financed notes. 
The plots of land were used to relocate the Las Vegas, Nevada and the Denver, 
Colorado dealerships to newly constructed facilities. In connection with 
interim financing on construction projects at the two new locations, the 
Company entered into an Interim Construction and Master Loan Agreement ("Loan 
Agreement") with R. Douglas Spedding. The Loan Agreement provided interim 
financing up to $7.7 million for use on construction of the new automobile 
dealership facilities in Las Vegas, Nevada and Denver, Colorado. Interest 
accrued at the prime rate plus 1% payable monthly, and any outstanding 
balance, if any, was to be payable on October 31, 1998. Upon completion of 
the sale and leaseback transaction for Denver Toyota and Toyota West (see 
Note 7), the Company retired approximately $7.7 million of the outstanding 
Loan Agreement and $7.5 million of the seller-financed land notes. The Loan 
Agreement and all seller-financed land notes and related interest have been 
paid in full. Interest on the construction and land notes totaled 
approximately $514,000 for the nine month period ended September 30, 1998.    

                                       7
<PAGE>

      On January 16, 1998, the Company entered into a floor plan financing 
arrangement with R. Douglas Spedding, an officer of the Company, for $3.0 
million. The purpose of the arrangement is to provide financing for the 
Company's used vehicle operations at its Toyota dealerships in Denver, 
Colorado and Las Vegas, Nevada. The notes mature on December 1, 1998 and bear 
interest at 9%. Total amount outstanding at September 30, 1998 was $2.4 
million. The aggregate amount outstanding is included due to affiliates in 
the accompanying balance sheet. Interest on the floor plan notes for the 
three and nine months ended September 30, 1998 totaled approximately $54,000 
and $148,000, respectively.

NOTE 5.   ACQUISITIONS

         Effective January 1, 1998, the Company acquired JRJ Investments, 
Inc. ("Chaisson") which owns Chaisson Motor Cars, a multi-line dealership 
operating in Las Vegas, Nevada, and Chaisson BMW, in Henderson, Nevada. The 
purchase price was $18.8 million, including acquisition costs. The cash 
portion, $14.0 million, was funded under the Company's credit line and from 
available working capital. The Company also issued a note for $2.8 million 
payable to the seller bearing interest at 8%. Principal and interest on the 
note are payable monthly over five years. The Company also issued 128,205 
shares of its Common Stock to the seller. The Company has guaranteed the 
seller a price of the Common Stock of $15.60 per share one year from the date 
of closing, January 5, 1999. To the extent the stock price is less than 
$15.60 the Company must make up the difference in cash or by issuing 
additional shares of common stock to provide a total value of $2.0 million as 
of January 5, 1999. The Chaisson acquisition has been accounted for as a 
purchase and the results of Chaisson's operations have been included in the 
Company's consolidated statement of operations since January 1, 1998. A 
summary of the purchase price allocation for Chaisson is presented below (in 
thousands):

<TABLE>
<S>                                                               <C>
      Property and equipment                                      $  1,620
      Goodwill and other intangibles                                17,197
                                                                  --------
           Total                                                  $ 18,817
                                                                  --------
                                                                  --------
</TABLE>

         Effective July 1, 1997, the Company acquired Sahara Nissan, Inc. 
("Nissan West") for approximately $14.3 million. Effective April 1, 1997, the 
Company acquired Toyota West and Denver Toyota for an aggregate purchase 
price of approximately $40.7 million. Each of these transactions have been 
accounted for as a purchase and the results of operations from these 
dealerships have been included in the Company's consolidated statement of 
operations since the dates of acquisition.

         The unaudited consolidated statement of operations data as of 
September 30, 1997, is presented below on a pro forma basis as though the 
acquisitions of Chaisson, Nissan West, Toyota West, and Denver Toyota 
(collectively, the "Acquisitions") had all occurred as of January 1, 1997 (in 
thousands, except per share data):

<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED               NINE MONTHS ENDED
                                                                     SEPTEMBER 30, 1997              SEPTEMBER 30, 1997
                                                                     ------------------              ------------------
<S>                                                                  <C>                             <C>
      Pro forma revenue                                                         156,702                         506,610
      Pro forma net income                                                        2,606                           7,087
      Pro forma net income per share                                                .19                             .51
      Pro forma weighted average shares                                          13,574                          13,827
</TABLE>

                                       8
<PAGE>

        The adjustments to arrive at pro forma revenue include the historic 
revenue of the Acquisitions prior to the purchase of each. Pro forma net 
income includes historic income of the Acquisitions adjusted for additional 
amortization expense related to purchased goodwill and other intangibles, 
increased interest expense associated with the debt incurred in the 
Acquisitions and the tax effects of these adjustments.

        The pro forma results of operations information is not necessarily 
indicative of the operating results that would have occurred had the 
Acquisitions occurred as of January 1, 1997, nor is it necessarily indicative 
of future operating results.

NOTE 6.   DISPOSITION

        Effective July 1, 1997, the Company sold 100% of the stock in 
Performance Dodge, Inc. and Performance Nissan, Inc. ("Performance"), both in 
the Oklahoma City, Oklahoma market, to Benji Investments, Ltd., a Texas 
limited partnership controlled by Emmett M. Rice, Jr., the Company's former 
Chief Operating Officer (also a shareholder and former Director of the 
Company), in exchange for 760,000 shares of the Company's stock valued at a 
total of $8.7 million. During the quarter ended June 30, 1997, the Company 
recorded an estimated loss on the disposition of $347,000, which included 
estimated selling expenses. In conjunction with the sale, the Company repaid 
$4.3 million in long-term debt associated with the acquisition of these 
dealerships. The Company also retained ownership of the Performance Dodge 
facilities and the related mortgage, and is leasing such facilities to Benji 
Investments, LTD. The combined revenue and operating loss from these 
dealerships for the six-month periods ended June 30, 1998 and 1997 are 
presented (in thousands) below:

<TABLE>
<CAPTION>
                                                         SIX MONTHS ENDED
                                                             JUNE 30
                                                    --------------------------
                                                      1998              1997
                                                      ----              ----
<S>                                                 <C>              <C>
      Revenue                                        $   -           $37,312
      Operating loss                                 $   -           $   561
</TABLE>

NOTE 7.   SALE AND LEASEBACK TRANSACTIONS

        On December 31, 1997, the Company entered into a contract with a 
third party to sell all of its dealership real property in Amarillo, Texas 
and the recently constructed dealership properties located in Denver, 
Colorado and Las Vegas, Nevada. The total sales price approximated $36.0 
million. In connection with the sale, the Company exercised its option to 
purchase certain real property under lease used by its Quality Nissen 
dealership in Amarillo, Texas for $400,000, and included the property in the 
sale. The Company has leased back all the property for a term of ten years 
with two ten year renewal options. The initial annual lease rate for all the 
property is approximately $4.1 million triple net with annual escalation not 
to exceed 2.5% per year beginning the fourth year of the initial lease term. 
On February 24, 1998, the Company completed the sale of the Amarillo 
properties. The Company received proceeds of $13.2 million and retired 
existing mortgages of approximately $5.5 million. The Denver, Colorado 
transaction was completed on March 31, 1998. The Company received $8.9 
million in sales proceeds and retired approximately $3.4 million in interim 
construction notes and $2.0 million in land purchase notes. The Las Vegas, 
Nevada transaction was completed on May 19, 1998. The Company received 
approximately $13.8 million in sales proceeds and retired approximately $4.3 
million in interim construction notes and $5.5 million in land purchase 
notes. The remaining proceeds will and have been used for general corporate 
purposes including the reduction of other debt, acquisitions and working 
capital needs. A gain of approximately $2.5 million has been deferred and is 
being amortized into income as a reduction of lease costs over the lease term.

                                       9
<PAGE>


NOTE 8.    PENDING ACQUISITIONS

        The Company has entered into a contract to acquire a certain 
dealership in California. The proposed purchase price is approximately $6.0 
million consisting of approximately $4.1 million in cash, $1.4 million in 
seller financed notes and $500,000 in assumed debt. During the nine months 
ended September 30, 1998, the Company advanced approximately $2.1 million 
towards the closing of this transaction. Consummation of the Merger (Note 2) 
is conditioned on the divestiture, or assignment, of the Company's interest 
in its pending acquisition of the California dealership. The Company expects 
that the divestiture, or assignment, will coincide with the completion of the 
Merger; however, there can be no assurance the divestiture or the Merger will 
be completed.

        The Company has entered into a contract to acquire a certain 
dealership in Nevada. The proposed purchase price is approximately $12.5 
million consisting of approximately $9.0 million in cash, $3.2 million in 
seller financed notes and approximately $300,000 in value of the Company's 
common stock. The Company has not obtained approval from the related 
manufacturer, and the purchase contract expires January 1, 1999. As a result, 
the Company has been negotiating with and intends to enter into an agreement 
with Republic to sell or assign its interests in this Nevada dealership to 
Republic. The Company has advanced approximately $1.5 million toward the 
closing of this transaction.

        The Company is currently managing the dealerships discussed above 
under management agreements. Under the agreements, the Company provides 
management of day-to-day operations in exchange for non-refundable fees equal 
to the dealerships' pre-tax profits above a fixed monthly amount. During the 
three months and nine months ended September 30, 1998, the Company recognized 
approximately $824,000 and $2.0 million, respectively, in management fee 
income, which is reflected in other operating revenue in the accompanying 
consolidated statements of operations.

NOTE 9.   EMPLOYEE SEVERANCE CHARGE

        The Company recorded a pre-tax charge of $815,000 during the nine 
months ended September 30, 1998, representing employee severance incurred 
with the realignment of management and certain other personnel.

NOTE 10.   CONTINGENCIES

        The Company is subject to certain agreements with the various 
manufacturers that supply new vehicles and parts to each of its dealerships. 
These agreements generally limit the locations of dealerships, contain 
provisions regarding the adequacy of facilities and retain manufacturer 
approval rights over changes in dealership management and ownership. Each 
manufacturer is also entitled to terminate these agreements for a dealership 
if the dealership is in material breach of the terms. Nissan Motor Corp., 
U.S.A. ("Nissan") has advised the Company that the facility where Nissan West 
is located does not meet Nissan's current requirements. Also, the Company has 
agreed to make certain changes at its BMW of North America, Inc. ("BMW") 
location in Las Vegas, Nevada, including making the location exclusively a 
BMW retail location. The Company is developing a facilities plan to meet the 
requirements of Nissan and BMW and believes it will be able to satisfy the 
requirements of these manufacturers without any significant interruption of 
business. However, there can be no assurance that these plans will be 
acceptable to Nissan or BMW, as the case may be.

        The Company is a defendant in three class action lawsuits that have 
been filed by several claimants against approximately 700 automobile 
dealerships across the State of Texas. The plaintiffs allege that the 
charging of the vehicle inventory taxes to vehicle purchasers constitutes 
fraud, violates the Texas Deceptive Trade Practices 

                                       10
<PAGE>

Act, and constitutes price fixing in violation of the Clayton Antitrust Act. 
The Texas Automobile Dealers Association has hired counsel to represent the 
defendants in these lawsuits. The defendants have denied the allegations and 
the affiliates contend that they have charged the vehicle inventory taxes to 
vehicle purchasers in compliance with applicable law. The Company has 
answered interrogatories and document production request in one of the 
lawsuits. The defendants intend to vigorously defend their position.

        From time to time, the Company is named in claims involving the 
manufacture of automobiles, contractual disputes and other matters arising in 
the ordinary course of the Company's business. Currently, no legal 
proceedings are pending against or involve the Company that, in the opinion 
of management, could be expected to have a material adverse effect on the 
business, financial condition or results of operations of the Company.

                                      11
<PAGE>
                                       
                    INDEPENDENT ACCOUNTANTS' REVIEW REPORT

To:  The Board of Directors and Stockholders of
     Cross-Continent Auto Retailers, Inc.


We have reviewed the accompanying condensed consolidated balance sheet of 
Cross-Continent Auto Retailers, Inc. and its subsidiaries (the "Company") as 
of September 30, 1998, and the related condensed consolidated statements of 
income for the three and nine month periods ended September 30, 1998 and 
1997, and cash flows for the nine month periods ended September 30, 1998 and 
1997. These financial statements are the responsibility of the Company's 
management.

We conducted our review in accordance with standards established by the 
American Institute of Certified Public Accountants. A review of interim 
financial information consists principally of applying analytical procedures 
to financial data, and making inquiries of persons responsible for financial 
and accounting matters. It is substantially less in scope than an audit 
conducted in accordance with generally accepted auditing standards, the 
objective of which is the expression of an opinion regarding the financial 
statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that 
should be made to the accompanying consolidated financial statements referred 
to above for them to be in conformity with generally-accepted accounting 
principles.

We previously audited, in accordance with generally-accepted auditing 
standards, the consolidated balance sheet of the Company as of December 31, 
1997, and the related consolidated statements of income, shareholders' 
equity, and cash flows for the year then ended (not presented herein) and in 
our report dated February 13, 1998, we expressed an unqualified opinion on 
those consolidated financial statements. In our opinion, the accompanying 
consolidated balance sheet information as of December 31, 1997, is fairly 
stated, in all material respects, in relation to the consolidated balance 
sheet from which it has been derived.



PricewaterhouseCoopers LLP


Fort Worth, Texas
November 12, 1998



                                      12
<PAGE>


ITEM 2.    MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
RESULTS OF OPERATIONS

FACTORS THAT MAY AFFECT FUTURE RESULTS

        The statements, other than statements of historical facts included in 
this Quarterly Report on Form 10-Q, including statements set forth under 
"Management's Discussion and Analysis of Financial Condition and Results of 
Operations" regarding the Company's future financial positions, business 
strategy, budgets, project cost and plans and objectives of management for 
future operations and recent and future acquisitions, are forward-looking 
statements. In addition, forward-looking statements generally can be 
identified by the use of forward-looking terminology such as "may," "will," 
"expect," "intends," "estimate," "anticipate," or "believe" or the negative 
thereof or variation thereon or similar terminology. Although the Company 
believes the expectations reflected in such forward-looking statements will 
prove correct, there can be no assurance that such expectations will prove to 
have been correct. Stockholders are cautioned not to place undue reliance on 
these forward-looking statements, which speak only as of the date of this 
Quarterly Report. Other than as prescribed by law, the Company undertakes no 
obligation to publicly release any revisions to these forward-looking 
statements to reflect events or circumstances after the date of the Quarterly 
Report to reflect the occurrence of unanticipated events. Important factors 
that could cause actual results to differ materially from the Company's 
expectations may include, but are not limited to, local, regional and 
national economic conditions, changes in the consumer demand for products 
offered by the Company, manufacturer employee strikes and other matters that 
may adversely affect the availability of products and pricing, state and 
federal regulatory environment, availability of additional funding for 
acquisitions, failure to assimilate the operations and personnel of the 
acquired dealerships, failure of the Merger, and other risks identified in 
the Company's previous filings with the Commissions. The Company can not 
control these risks and uncertainties and in many cases, can not predict the 
risks and uncertainties that could cause its actual results to differ 
materially from the indicated by the forward-looking statements.

GENERAL

        C-Car currently owns and operates a group of automobile dealerships 
in the Amarillo, Texas, Oklahoma City, Oklahoma, Denver, Colorado and Las 
Vegas, Nevada markets. The financial condition and results of operations 
reported herein are based upon the results of operations of the dealerships 
operated by the Company for the time periods reported. The Company generates 
its revenues from sales of new and used vehicles, fees for repair and 
maintenance services, sale of replacement parts, and fees and commissions 
from arranging financing, extended warranties, and credit insurance in 
connection with vehicle sales.

        The Company entered into the Merger Agreement, which provides for a 
wholly-owned subsidiary of Republic to be merged with and into the Company. 
Upon consummation of the proposed Merger, the Company will become a 
wholly-owned subsidiary of Republic, and the Company's stockholders will be 
entitled to receive $10.70 in cash, without interest, for each share of the 
Company's common stock held by them. The Merger is subject to certain closing 
conditions including government and manufacturer approvals, and the approval 
of the Company's stockholders. The Merger is also conditioned on the 
divestiture of the Company's dealership in Denver, Colorado, and the 
divestiture, or assignment, of the Company's interest in one of its pending 
acquisitions. The divestiture of these dealerships is expected to coincide 
with the completion of the Merger. The Merger is expected to close in the 
first quarter of 1999; however, there can be no assurances the Merger, or the 
transactions contemplated thereunder, will be completed.

                                      13
<PAGE>

        Until the Merger is completed, the proposed Merger, and the proposed 
transactions contemplated thereunder, may be a distraction to certain key 
employees of the Company and could have a negative impact on the Company's 
results of operations. While the Company plans to minimize the distractions 
to key employees, there can be no assurance that the distractions will not 
occur.

        In April, 1997, the Company completed the purchase of Toyota West in 
Las Vegas, Nevada and Denver Toyota in Denver, Colorado, from owner R. 
Douglas Spedding. In July, 1997, the Company acquired Nissan West in Las 
Vegas, Nevada. In January, 1998, the Company acquired Chaisson, also in Las 
Vegas. The term "Acquisitions" refers collectively to the aforementioned 
dealerships, but only for the time period in which the dealership is not 
included in the same periods of 1998 and 1997. The Acquisitions were 
accounted for as purchases and, accordingly, the operating results of the 
acquired dealerships have been included in the operating results of the 
Company since their respective dates of acquisition. The Company also has two 
acquisitions pending in Nevada and California and is currently operating 
those dealerships under management agreements.

        Effective July 1, 1997, the Company completed the sale of Performance 
to Benji Investments, Ltd., a Texas limited partnership controlled by Emmett 
M. Rice, Jr., a former Officer and Director of the Company (the 
"Divestiture"). Because of the significant growth of the Company since its 
formation, as a result of the aforementioned Merger, Acquisitions and the 
Divestiture, the Company's historical results of operations, its 
period-to-period comparisons of such results and certain financial data may 
not be meaningful or indicative of future results.

                                      14
<PAGE>


                      CROSS-CONTINENT AUTO RETAILERS, INC.
                        CONSOLIDATED MARGIN STATISTICS

<TABLE>
<CAPTION>
                                     QTR. ENDED            QTR. ENDED                  YTD                       YTD
                                SEPTEMBER 30, 1998     SEPTEMBER 30, 1997      SEPTEMBER. 30, 1998       SEPTEMBER 30, 1997
                                ------------------     ------------------      -------------------       ------------------
                                                      (IN THOUSANDS,EXCEPT UNITS AND PERCENTAGES)
<S>                             <C>                    <C>                     <C>                       <C>
New vehicle sales
   Units ........................      3,719                   2,891                   9,946                     7,393
  Revenue .......................   $ 89,399                $ 65,260                $241,690                  $163,550
  Average selling price .........   $   24.0                $   22.6                $   24.3                  $   22.1
Used vehicle sales (1)
  Units .........................      6,444                   5,691                  18,814                    16,631
  Revenue .......................   $ 63,208                $ 52,818                $187,272                  $151,493
  Average selling price .........   $    9.8                $    9.3                $   10.0                  $    9.1
Total Vehicles Sales
  Units .........................     10,163                   8,582                  28,760                    24,024
  Revenue .......................   $152,607                $118,078                $428,962                  $315,043
Other operating revenue
  Finance and insurance .........   $  6,809                $  5,231                $ 17,898                  $ 13,975
  Parts and service .............     13,700                  10,242                  38,221                    26,879
  Other revenue .................      2,667                   1,233                   7,455                     3,296
                                    --------                --------                --------                  --------
    Total other operating revenue     23,176                  16,706                  63,574                    44,150
Total revenue ...................   $175,783                $134,784                $492,536                  $359,193
                                    --------                --------                --------                  --------
                                    --------                --------                --------                  --------
Gross profit
  New vehicles ..................   $  8,777                $  6,523                $ 23,878                  $ 17,288
  Used vehicles(1) ..............      6,572                   5,882                  18,793                    15,375
         Finance and insurance ..      6,381                   4,772                  16,735                    12,592
  Parts and service .............      7,643                   5,313                  20,530                    13,886
  Other revenue .................      2,667                   1,233                   7,455                     3,296
                                    --------                --------                --------                  --------
Total gross profit ..............   $ 32,040                $ 23,723                $ 87,391                  $ 62,437
                                    --------                --------                --------                  --------
                                    --------                --------                --------                  --------
Gross profit percent
  New vehicles ..................        9.8%                   10.0%                    9.9%                     10.6%
  Used vehicles(1) ..............       10.4%                   11.1%                   10.0%                     10.1%
  Finance and insurance .........       93.7%                   91.2%                   93.5%                     90.1%
  Parts and service .............       55.8%                   51.9%                   53.7%                     51.7%
  Other revenue .................      100.0%                  100.0%                  100.0%                    100.0%
                                    --------                --------                --------                  --------
Total gross profit percent ......       18.2%                   17.6%                   17.7%                     17.4%
                                    --------                --------                --------                  --------
                                    --------                --------                --------                  --------
</TABLE>

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

(1) Used vehicle information includes the Company's retail and wholesale used 
vehicle activities.

                                      15
<PAGE>

                                       
                      CROSS-CONTINENT AUTO RETAILERS, INC.
                  (1)SAME STORE COMPARISONS MARGIN STATISTICS

<TABLE>
<CAPTION>
                                   QTR. ENDED               QTR. ENDED                 YTD                       YTD
                               SEPTEMBER 30, 1998      SEPTEMBER 30, 1997      SEPTEMBER 30, 1998       SEPTEMBER 30, 1997
                               ------------------      ------------------      ------------------       ------------------
                                                       (IN THOUSANDS,EXCEPT UNITS AND PERCENTAGES)
<S>                            <C>                     <C>                     <C>                      <C>
New vehicle sales
  Units .........................      3,238                   2,891                   6,947                     6,637
  Revenue .......................   $ 74,347                $ 65,260                $160,287                  $149,522
  Average selling price .........   $   23.0                $   22.6                $   23.1                  $   22.5
Used vehicle sales (2)
  Units .........................      5,840                   5,691                  13,782                    14,467
  Revenue .......................   $ 54,872                $ 52,818                $130,113                  $133,866
  Average selling price .........   $    9.4                $    9.3                $    9.4                  $    9.3
Total Vehicles Sales
  Units .........................      9,078                   8,582                  20,729                    21,104
  Revenue .......................   $129,219                $118,078                $290,400                  $283,388
Other operating revenue
  Finance and insurance .........   $  6,168                $  5,231                $ 13,223                  $ 12,546
  Parts and service .............     10,903                  10,241                  24,130                    23,003
  Other revenue .................      2,303                   1,233                   4,948                     2,944
                                    --------                --------                --------                  --------
    Total other operating revenue     19,374                  16,705                  42,301                    38,493

Total revenue ...................   $148,593                $134,783                $332,701                  $321,881
                                    --------                --------                --------                  --------
                                    --------                --------                --------                  --------
Gross profit
  New vehicles ..................   $  7,359                $  6,523                $ 15,508                  $ 15,761
  Used vehicles (2) .............      6,092                   5,882                  12,950                    14,631
  Finance and insurance .........      5,741                   4,772                  12,216                    11,230
  Parts and service .............      6,030                   5,313                  13,027                    12,364
  Other revenue .................      2,303                   1,233                   4,948                     2,944
                                    --------                --------                --------                  --------

Total gross profit ..............   $ 27,525                $ 23,723                $ 58,649                  $ 56,930
                                    --------                --------                --------                  --------
                                    --------                --------                --------                  --------
Gross profit percent
  New vehicles ..................        9.9%                   10.0%                    9.7%                     10.5%
  Used vehicles (2) .............       11.1%                   11.1%                   10.0%                     10.9%
  Finance and insurance .........       93.1%                   91.2%                   92.4%                     89.5%
  Parts and service .............       55.3%                   51.9%                   54.0%                     53.7%
  Other revenue .................      100.0%                  100.0%                  100.0%                    100.0%
                                    --------                --------                --------                  --------

Total gross profit percent ......       18.5%                   17.6%                   17.6%                     17.7%
                                    --------                --------                --------                  --------
                                    --------                --------                --------                  --------
</TABLE>

------------------
(1) "Same Store" information relates to the dealerships for which their results
    of operations are included in the Consolidated Statements of Operations for
    the same periods of 1998 and 1997.
(2) Used vehicle information includes the Company's retail and wholesale used
    vehicle activities.


                                       16
<PAGE>


RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1998
REVENUES AND GROSS PROFIT
NEW VEHICLES -

        Same store unit sales (which are defined as the results of the 
Company's dealerships which are included in the Consolidated Statements of 
Operations for the same periods of 1998 and 1997) increased 347 units, or 
12.0%, from the third quarter of 1997 to the third quarter of 1998. The 
increase in same store unit sales is primarily attributable to an increase in 
same store unit sales in the Las Vegas, Nevada, and Denver, Colorado, 
markets, partially offset by a decrease in same store unit sales in the 
Amarillo, Texas, market. Unit sales in the Denver and Las Vegas markets 
increased 501 units, or 35.1%, primarily attributable to the relocation of 
the Company's Toyota dealerships to new larger facilities and to a 
continuation of manufacturer consumer incentive programs designed to 
stimulate retail demand for new vehicles. The consumer incentives offered by 
the manufacturers generally consist of discounts, rebates and favorable 
financing and leasing programs. Unit sales in the Amarillo market declined 
263 units, or 22.4%, primarily attributable to the General Motors strike that 
caused a disruption in the availability of new vehicle inventory at the 
Company's Chevrolet dealerships. Same store average selling price per unit 
increased $387, or 1.7%, primarily attributable to model mix and manufacturer 
cost increases passed on in the sales price of new vehicles. As a result of 
these factors, same store sales increased by approximately $9.1 million, or 
13.9% from the third quarter of 1997 to the third quarter of 1998. The 
Chaisson acquisition added approximately $15.1 million in new vehicle revenue 
and 481 new unit sales with an average price of $31,293.

        Same store gross profit on new vehicle sales increased approximately 
$836,000, or 12.8%, which is primarily attributable to the increase in same 
store new vehicle unit sales. The Chaisson acquisition added approximately 
$1.4 million in gross profit with a gross profit percentage of 9.4%. The 
Company expects lower new vehicle sales and gross profit in the fourth fiscal 
quarter of 1998 as the Company enters its slower selling season.

        The table below sets forth a reconciliation of new vehicle units, 
revenues, and gross profit from the third quarter of 1997 to the third 
quarter of 1998 accounting for the variance in same store results and the 
Acquisitions.

<TABLE>
<CAPTION>
                                                                  UNITS              REVENUES             GROSS PROFIT
                                                                  -----              --------             ------------
<S>                                                               <C>             <C>                     <C>
Quarter ended September 30, 1997 ...                              2,891             $65,260,000               $6,523,000
Same store variance ................                                347               9,087,000                  836,000
Acquisitions .......................                                481              15,052,000                1,418,000
                                                                  -----             -----------              -----------

Quarter ended September 30, 1998 ...                              3,719             $89,399,000               $8,777,000
                                                                  -----             -----------              -----------
                                                                  -----             -----------              -----------
</TABLE>

USED VEHICLES -

         Same store unit sales increased 149 units, or 2.6%, including retail 
and wholesale sales, primarily attributable to the Company's continued 
efforts to improve its used vehicle operations at its existing dealerships. 
Same store sales excluding the Oklahoma City, Oklahoma market increased by 
approximately $5.4 million, or 11.6%. Unit sales in Oklahoma City, Oklahoma 
declined by 248 units in the third quarter of 1998 compared to the third 
quarter of 1997. Management believes the decline in unit sales at the 
Oklahoma City, Oklahoma dealership is primarily attributable to the Company's 
continued efforts to change the sales method to eliminate 

                                       17
<PAGE>

low margin, highly promotional, volume selling. The Chaisson acquisition 
added approximately $8.3 million in used vehicle revenue and 604 used vehicle 
unit sales with an average price of $13,801.

        Same store gross profit excluding the Oklahoma City, Oklahoma market 
increased approximately $407,000, or 7.7%, from the third quarter of 1997 to 
the third quarter of 1998, which is primarily attributable to increased used 
vehicle unit sales. The Chaisson acquisition added approximately $480,000 in 
gross profit with a gross profit percentage of 5.7%. Chaisson's gross profit 
margin is lower than the Company's other dealerships, primarily due to the 
fact that Chaisson sells on average a higher priced used vehicle.

       The table below sets forth a reconciliation of used vehicle units, 
revenues, and gross profit from the third quarter of 1997 to the third 
quarter of 1998 accounting for the variance in same store results and the 
Acquisitions.

<TABLE>
<CAPTION>
                                                UNITS               REVENUES               GROSS PROFIT
                                                -----               --------               ------------
<S>                                             <C>             <C>                        <C>
Quarter ended September 30, 1997 ...            5,691             $52,818,000               $5,882,000
Same store variance ................              149               2,054,000                  210,000
Acquisitions .......................              604               8,336,000                  480,000
                                                -----           -------------               ----------

Quarter ended September 30, 1998 ...            6,444             $63,208,000               $6,572,000
                                                -----           -------------               ----------
                                                -----           -------------               ----------
</TABLE>

OTHER OPERATING REVENUE -

         Finance and insurance (F&I) revenue primarily represents fees and 
commissions the Company earns for selling and placing customers' retail 
finance and lease contracts, credit life insurance contracts and third party 
extended warranty contracts. Same store F&I revenue increased approximately 
$937,000, or 17.9%, primarily attributable to increased vehicle sales and F&I 
penetration rates at the Company's dealerships in the Las Vegas, Nevada and 
Denver, Colorado markets. The Chaisson acquisition added approximately 
$641,000 in F&I revenue.

         Same store F&I gross profit increased approximately $969,000, or 
20.3%, from the third quarter of 1997 to the third quarter of 1998. Gross 
profit percentage increased to 93.1% in the third quarter of 1998 from 91.2% 
in the third quarter of 1997, primarily attributable to a decrease in the 
cost of extended warranties.

         Parts and service revenue represents the retail and wholesale sales 
of repair and replacement parts and the sale of labor for servicing customers 
vehicles. Same store parts and service revenue increased approximately 
$662,000, or 6.5%, primarily attributable to increased capacity at the 
Company's two recently relocated dealerships. The Chaisson acquisition added 
approximately $2.8 million in parts and service revenue.

         Same store parts and service gross profit increased approximately 
$717,000, or 13.5%. The gross profit percentage increased from 51.9% in the 
third quarter of 1997 to 55.3% in the third quarter of 1998, primarily 
attributable to a change in the mix of retail and wholesale parts and service 
sales. The Chaisson acquisition added approximately $1.6 million in gross 
profit from parts and service activities with a gross profit percentage of 
57.7%.

         Other revenue primarily consists of documentation fees charged by 
the Company to its customers on vehicle sales. The amount of fees is usually 
governed by state statute, regulation or regulatory agency. Also included in 
other revenue are management fee income and rental income. Same store revenue 
and gross profit from other revenue increased $1.1 million, or 86.8%, from 
the third quarter of 1997 primarily as a result of the management fee revenue 
from two dealerships the Company currently manages under management 
agreements. The Chaisson acquisition added approximately $364,000 in other 
revenue and gross profit primarily from documentation fees.

                                       18
<PAGE>

         The table below sets forth a reconciliation of other operating 
revenue and gross profit by major category accounting for the variance in 
same store results and the Acquisitions.

<TABLE>
<CAPTION>
                                                  F&I           PARTS & SERVICE     OTHER REVENUE           TOTAL
                                                  ---           ---------------     -------------           -----
                                                        GROSS              GROSS               GROSS               GROSS
                                            REVENUE    PROFIT   REVENUE   PROFIT    REVENUE   PROFIT   REVENUE    PROFIT
                                            -------    ------   -------   ------    -------   ------   -------    ------
<S>                                         <C>        <C>      <C>       <C>       <C>       <C>      <C>        <C>
   Quarter ended September 30, 1997 ...      $5,231    $4,772   $10,241   $5,313     $1,233   $1,233   $16,705   $11,318
   Same store variance ................         937       969       662      717      1,070    1,070     2,669     2,756
   Acquisitions .......................         641       640     2,797    1,613        364      364     3,802     2,617
                                            -------    ------   -------   ------     ------   ------   -------   -------
   Quarter ended September 30, 1998 ...      $6,809    $6,381   $13,700   $7,643     $2,667   $2,667   $23,176   $16,691
                                            -------    ------   -------   ------     ------   ------   -------   -------
                                            -------    ------   -------   ------     ------   ------   -------   -------
</TABLE>

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (SG&A) -

        Selling, general and administrative expenses increased approximately 
$8.0, to $24.8, million for the third quarter ended September 30, 1998. The 
primary reasons for the increase in selling, general and administrative 
expenses are the inclusion of the Chaisson acquisition which added 
approximately $3.4 million in expense, rent expense attributable to the sale 
and leaseback transaction that was completed in the second quarter of 1998 
which increased expense approximated $1.0 million, and overall higher 
corporate and operating expenses as a result of the Company's acquisition 
strategy. In the comparable period last year, the Company modified pay plans 
of certain officers and key employees resulting in a reduction in 
compensation expense of approximately $1.3 million. As part of the modified 
pay plans, the Company granted these officers and employees options to 
purchase 492,214 shares of the Company's common stock at an exercise price of 
$8.06 per share, representing the market price of the shares on the date of 
grant. The Company believes the selling, general and administrative expenses 
will increase in the future due to the Company's acquisition strategy and 
additional lease expense as a result of the sale and leaseback transaction.

        The Company incurred and recorded merger-related expenses of 
approximately $750,000 during the quarter ended September 30, 1998. The 
Company will record all additional merger-related expenses as incurred until 
the proposed Merger is consummated or abandoned.

DEPRECIATION AND AMORTIZATION -

        Depreciation and amortization increased approximately $214,000, 
primarily attributable to the inclusion of amortization expense as a result 
of the Chaisson acquisition. The Company expects this expense to increase 
throughout 1998 as compared to 1997 due to a full year impact from the 
Acquisitions.

INTEREST EXPENSE -

        The Company's interest expense, net of interest income, increased 
approximately $231,000 from the comparable period last year primarily due to 
higher debt levels and floor plan interest expense resulting from the 
Chaisson acquisition which was partially offset by reduced mortgage financing 
as a result of the sale and leaseback transaction. The Chaisson acquisition 
added approximately $186,000 in interest expense for the three month period 
ended September 30, 1998. Long-term debt increased from approximately $39.7 
million at September 30, 1997 to approximately $42.4 million at September 30, 
1998, primarily due to debt incurred to finance the Acquisitions. The Company 
expects interest expense to increase throughout 1998 due to the full year 
effect of the additional long-term debt and increased floor plan notes 
attributable to the Acquisitions. These increases will be partially offset by 
reduced interest associated with property mortgages which were repaid with 
the proceeds from the sale leaseback transaction. Net interest expense may be 
further impacted by the future direction of interest rates.

                                       19
<PAGE>

INCOME TAX PROVISION -

        The Company's effective tax rate for the quarter ended September 30, 
1998 approximated 44.8%, compared to 37.3%, for the quarter ended September 
30, 1997. The Company recorded merger-related expenses of $750,000 during the 
quarter ended September 30, 1998, which are not deductible for purposes of 
calculating federal income tax. Before the charge for non-deductible merger 
expenses, the effective tax rate for the quarter ended September 30, 1998 
approximated 36.5%. The decrease in the effective tax rate is attributable to 
a higher percentage of the Company's taxable income being generated in 
Nevada, which has no state income tax. Excluding non-deductible 
merger-related expenses, management expects the effective tax rate for 1998 
to remain in the 36.5% to 37.5% range.

BASIC AND DILUTED NET INCOME PER SHARE -

        Basic and diluted net income per share was $.13 for the third quarter 
of 1998 compared to $.19 for the third quarter of 1997. Excluding the 
non-deductible merger expenses of $750,000, the Company's basic and diluted 
net income per share was $.19 for the third quarter ended September 30, 1998.

                                       20
<PAGE>



RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1998

REVENUES AND GROSS PROFIT

NEW VEHICLES -

         Same store unit sales increased 310 units, or 4.7%, from the first 
nine months of 1997 to the first nine months of 1998. The increase in same 
store unit sales is primarily attributable to an increase in same store unit 
sales in the Las Vegas, Nevada, and Denver, Colorado, markets, partially 
offset by a decrease in same store unit sales in the Amarillo, Texas, market. 
Unit sales in the Denver and Las Vegas markets increased 497 units, or 19.8%, 
primarily attributable to the relocation of the Company's Toyota dealerships 
to new larger facilities and to a continuation of manufacturer consumer 
incentive programs designed to stimulate retail demand for new vehicles. The 
consumer incentives offered by the manufacturers generally consist of 
discounts, rebates and favorable financing and leasing programs. Unit sales 
in the Amarillo market declined 336 units, or 10.7%, primarily attributable 
to the General Motors strike that caused a disruption in the availability of 
new vehicle inventory at the Company's Chevrolet dealerships. As a result of 
these factors, same store sales increased by approximately $10.8 million, or 
7.2%, from the nine months ended September 30, 1997 to the nine months ended 
September 30, 1998. Same store sales average selling price per unit increased 
$544, or 2.4%. The Acquisitions added approximately $81.4 million in new 
vehicle revenue and 2,999 new unit sales with an average price of $27,143. 
The average sales price at the dealerships acquired in the Acquisitions, 
excluding Chaisson which sells higher priced vehicles, was $22,270.

         Same store gross profit on new vehicle sales decreased approximately 
$253,000, or 1.6%, primarily attributable to higher inventory costs at the 
Amarillo dealerships affected by the General Motors strike. The Company 
purchased new vehicle inventory from other dealers in an attempt to mitigate 
the effect of the General Motors strike. The units purchased from the other 
dealers were purchased at a higher cost than units purchased directly from 
General Motors. The Acquisitions added approximately $8.4 million in gross 
profit with a gross profit percentage of 10.3%.

         The table below sets forth a reconciliation of new vehicle units, 
revenues, and gross profit from the first nine months of 1997 to the first 
nine months of 1998 accounting for the variance in same store results, the 
Acquisitions and Divestiture.

<TABLE>
<CAPTION>
                                                      UNITS              REVENUES      GROSS PROFIT
                                                      -----              --------      ------------
<S>                                                   <C>            <C>               <C>
Nine months ended September 30, 1997 ............     7,393          $163,550,000       $17,288,000
Same store variance .............................       310            10,765,000          (253,000)
Acquisitions ....................................     2,999            81,403,000         8,370,000
Effects of the Divestiture ......................      (756)          (14,028,000)       (1,527,000)
                                                      -----            ----------         ---------

Nine months ended September 30, 1998 ............     9,946          $241,690,000       $23,878,000
                                                      -----          ------------       -----------
                                                      -----            ----------         ---------
</TABLE>

USED VEHICLES -

         Same store unit sales decreased 685 units, or 4.7%, including retail 
and wholesale sales. Same store sales, excluding the Oklahoma City, Oklahoma 
dealership, increased by approximately $10.8 million, or 7.1%, primarily 
attributable to the Company's continued focus on improving used vehicle 
operations at its existing dealerships. Unit sales at the Oklahoma City, 
Oklahoma dealership declined by 1,594 units in the first nine months of 1998. 
Management believes the decline in unit sales at the Oklahoma City, Oklahoma 
dealership is primarily attributable to a less than desirable used vehicle 
inventory, the Company's continued effort to change 

                                       21
<PAGE>

the sales method to eliminate low margin highly promotional volume selling 
and high personnel turnover. The Acquisitions added approximately $57.2 
million used vehicle revenue and 5,032 used vehicle unit sales at an average 
price of $11,359.

         Same store gross profit decreased approximately $1.7 million, or 
11.5%, primarily attributable to the decline in sales at the Company's 
Oklahoma City, Oklahoma dealership. The Acquisitions added approximately $5.8 
million in gross profit with a gross profit percentage of 10.2%.

         The table below sets forth a reconciliation of used vehicle units, 
revenues, and gross profit from the first nine months of 1997 to the first 
nine months of 1998 accounting for the variance in same store results, the 
Acquisitions and Divestiture.

<TABLE>
<CAPTION>
                                                                           UNITS              REVENUES      GROSS PROFIT
                                                                           -----              --------      ------------
<S>                                                                       <C>             <C>               <C>
Nine months ended September 30, 1997 ..............................       16,631          $151,493,000       $15,375,000
Same store variance ...............................................         (685)           (3,753,000)       (1,681,000)
Acquisitions ......................................................        5,032            57,159,000         5,843,000
Effects of the Divestiture ........................................       (2,164)          (17,627,000)         (744,000)
                                                                           -----          ------------        ----------

Nine months ended September 30, 1998 ..............................       18,814          $187,272,000       $18,793,000
                                                                           -----          ------------        ----------
                                                                           -----          ------------        ----------
</TABLE>

OTHER OPERATING REVENUE -

         Finance and insurance (F&I) revenue primarily represents fees and 
commissions the Company earns for selling and placing customers' retail 
finance and lease contracts, credit life insurance contracts and third party 
extended warranty contracts. Same store F&I revenue increased approximately 
$677,000, or 5.4%, primarily attributable to an increase in unit sales at the 
Denver, Colorado and Las Vegas, Nevada dealerships. The Acquisitions added 
approximately $4.7 million in F&I revenue.

         Same store F&I gross profit increased by approximately $986,000, or 
8.8%, from the first nine months of 1997 to the first nine months of 1998. 
Same store gross profit percentage increased from 89.5% to 92.4% for the 
comparable nine month periods, primarily attributable to a reduction in 
extended warranty costs.

         Parts and service revenue represents the retail and wholesale sales 
of repair and replacement parts and the sale of labor for servicing customers 
vehicles. Same store parts and service revenue increased approximately $1.1 
million, or 4.9%, in the first nine months of 1998 compared to the first nine 
months of 1997. Same store parts and service revenue, excluding the Oklahoma 
City, Oklahoma dealership, increased by approximately $2.5 million, or 13.4%, 
primarily attributable to increased capacity at the Company's two recently 
relocated dealerships. The Acquisitions added approximately $14.1 million in 
parts and service revenue.

         Same store parts and service gross profit increased approximately 
$663,000, or 5.4%. Same store gross profit percentage increased from 53.7% to 
54.0% for the comparable nine months, primarily attributable to a change in 
the mix of retail and wholesale parts and service sales. The Acquisitions 
added approximately $7.5 million in parts and service gross profit at a gross 
profit percentage of 53.2%.

         Other revenue primarily consists of documentation fees charged by 
the Company to its customers on vehicle sales. The amount of fees is usually 
governed by state statute, regulation or regulatory agency. Also included in 
the other revenue is management fee income and rental income. Same store 
other revenue and gross profit increased $2.0 million, or 68.1%, from the 
first nine months of 1997 to the first nine months of 1998, 

                                       22
<PAGE>

primarily as a result of the management fee revenue from two dealerships the 
Company currently manages under management agreements. The Acquisitions added 
approximately $2.5 million in other revenue and gross profit primarily from 
documentation fees. The Acquisitions are located in states which permit 
higher documentation fees compared to the Company's other same store 
dealerships.

         The table below sets forth a reconciliation of other operating 
revenue and gross profit by major category accounting for the variance in 
same store results, the Acquisitions and Divestiture.

<TABLE>
<CAPTION>
                                                  F&I           PARTS & SERVICE    OTHER REVENUE          TOTAL
                                                  ---           ---------------    -------------          -----
                                                         GROSS              GROSS             GROSS               GROSS
                                               REVENUE  PROFIT    REVENUE  PROFIT   REVENUE  PROFIT   REVENUE    PROFIT
                                               -------  ------    -------  ------   -------  ------   -------    ------
<S>                                            <C>      <C>       <C>     <C>       <C>      <C>      <C>       <C>    
Nine months ended September 30, 1997 ......    $13,975 $12,592    $26,879 $13,886    $3,296  $3,296   $44,150   $29,774
Same store variance .......................        677     986      1,127     663     2,004   2,004     3,808     3,653
Acquisitions ..............................      4,675   4,519     14,091   7,503     2,507   2,507    21,273    14,529
Effects of the Divestiture ................     (1,429) (1,362)    (3,876) (1,522)     (352)   (352)   (5,657)   (3,236)
                                                 -----   -----    ------- -------    ------  ------   -------   -------
Nine months ended September 30, 1998 ......    $17,898 $16,735    $38,221 $20,530    $7,455  $7,455   $63,574   $44,720
                                                 -----   -----    ------- -------    ------  ------   -------   -------
                                                 -----   -----    ------- -------    ------  ------   -------   -------
</TABLE>

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (SG&A) -

         Selling, general and administrative expenses increased approximately 
$21.8 million for the comparable nine month periods of 1997 to 1998. The 
Acquisitions added approximately $20.8 million while the Divestiture reduced 
selling, general and administrative expenses approximately $5.6 million. The 
Company's selling, general and administrative expenses were 13.6% of revenues 
for the nine months ended September 30, 1998 versus 12.6% for the nine months 
ended September 30, 1997. This increased percentage is primarily attributable 
to higher corporate and operating expenses as a result of the Company's 
acquisition strategy and increased lease expense as a result of the sale and 
leaseback transaction. In the third quarter of 1997, the Company modified pay 
plans of certain officers and key employees resulting in a reduction in 
compensation expense of approximately $1.3 million. The Company expects 
additional lease expense for the remainder of 1998 as a result of the sale 
and leaseback transaction. The annualized rent expense under the contract is 
$4.1 million for the properties, net of the amortization of the deferred gain.

DEPRECIATION AND AMORTIZATION -

         Depreciation and amortization increased approximately $1.1 million, 
or 58.1%, primarily attributable to the inclusion of amortization expense 
from the Acquisitions. The Company expects this expense to increase 
throughout 1998 due to a full year impact from the Acquisitions.

INTEREST EXPENSE -

         The Company's interest expense, net of interest income, increased 
approximately $2.6 million from the comparable period last year due to higher 
debt levels and floor plan interest expense resulting from the Acquisitions. 
The Acquisitions added approximately $1.2 million in interest expense for the 
nine month period ended September 30, 1998. The Company's long-term debt 
increased from approximately $39.7 million at September 30, 1997 to 
approximately $42.4 million at September 30, 1998, primarily due to debt 
incurred to finance the Acquisitions. The Company expects interest expense to 
increase throughout 1998 due to the full year effect of the additional 
long-term debt and increased floor plan notes payable attributable to the 
Acquisitions. These increases will be partially offset by reduced interest 
associated with property mortgages which were repaid with the proceeds from 
the sale leaseback transaction. Net interest expense may be further impacted 
by additional borrowings to finance acquisitions and the future direction of 
interest rates.

                                       23
<PAGE>

INCOME TAX PROVISION -

         The effective tax rate for the nine months ended September 30, 1998 
was 40.0%, compared to the Company's effective income tax rate for the nine 
months ended September 30, 1997 of approximately 38.6%. Before the charge for 
non-deductible merger-related expenses, the effective rate for the nine 
months ended September 30, 1998 was 37.0%. Excluding non-deductible 
merger-related expenses, management expects its effective tax rate for 1998 
to be in the 36.5% to 37.5% range.

BASIC AND DILUTED NET INCOME PER SHARE -

         Basic and diluted net income per share decreased from $.48 in the 
first nine months of 1997 to $.40 in the first nine months of 1998. Before 
considering an employee severance charge and a merger-related expense charge 
during the nine months ended September 30, 1998, and a loss recorded on the 
Divestiture in 1997, basic net income per share remained unchanged at $.50. 
Diluted net income per share before the respective charges decreased from 
$.50 in 1997 to $.49 in 1998. The weighted average shares outstanding and 
diluted weighted average shares outstanding decreased from approximately 13.8 
million to approximately 13.6 million for the nine-month periods of 1997 and 
1998 primarily due to treasury shares received in the Divestiture offset by 
shares issued in the Acquisitions.

         The Company believes several factors are in place that will affect 
net income throughout the remainder of 1998 and into 1999. The Company 
expects lower volume of new and used vehicle sales in the fourth and first 
quarters as these are traditionally slower selling seasons. The Company will 
have the benefit of a full year impact from the Acquisitions. The Company 
will also be receiving management fees from two dealerships currently under 
management contract until the acquisitions are divested, assigned or 
terminated. The Company anticipates additional non-deductible merger-related 
expenses will be incurred. Also the plan to divest certain operations as a 
result of the Merger, or any other realignment of its dealerships, may have a 
negative impact on revenues, gross profits, and selling, general and 
administrative expenses. The Company does not expect volume or margin growth 
in its Amarillo, Texas market and expects negative comparisons for Oklahoma 
City, Oklahoma for both volume and gross profit. While the Denver, Colorado 
and Las Vegas, Nevada markets continue to grow, national and regional sales 
trends indicate flat demand for new vehicles throughout 1998.

LIQUIDITY AND CAPITAL RESOURCES -

         During the first nine months of 1998, cash provided from operating 
activities totaled approximately $10.3 million, compared to net cash provided 
from operating activities of approximately $9.0 million during the first nine 
months of 1997. The increase is primarily attributable to a reduction in 
inventory as the Company enters the slower selling season.

         Cash provided from investing activities of approximately $13.0 
million during the first nine months of 1998 related primarily to the net 
proceeds received on the sale and leaseback transactions offset by the 
acquisition of Chaisson and the construction costs related to the two new 
dealership facilities for Denver Toyota and Toyota West. The Company 
completed the sale and leaseback transactions during the first six months of 
1998, netted approximately $35.4 million in proceeds.

          Cash used in financing activities totaled approximately $31.2 
million for the first nine months of 1998 compared to cash provided of 
approximately $4.3 million for the first nine months of 1997. The Company's 
cash used in financing activities for the nine months ended September 30, 
1998 related primarily to the cash used in reducing floor plan debt and 
retiring mortgage debt and affiliate debt in connection with the sale and 
leaseback transaction of approximately $20.7 million.

                                       24
<PAGE>

         The Company finances its purchases of new vehicle inventory with 
manufacturer captive finance companies and commercial banks. The Company also 
maintains lines of credit with manufacturer captive finance companies for the 
financing of used vehicle inventories. The lenders receive a security 
interest in all inventory it finances. The Company makes monthly interest 
payments on the amount financed and must repay the principal amount of the 
indebtedness with respect to any vehicle within a few days of the sale of 
such vehicle by the Company. The Company periodically renegotiates the terms 
of its financing, including the interest rate. At September 30, 1998, the 
Company had outstanding floor plan debt of approximately $51.2 million which 
incurred an average annual interest rate of approximately 8.8% during the 
first nine months of 1998.

         The Company began financing its used vehicle operations at its 
Denver Toyota and Toyota West dealerships on January 16, 1998. The amount of 
this floor plan line is $3.0 million and is provided by R. Douglas Spedding, 
an officer of the Company. The notes mature on December 1, 1998 and bear an 
interest rate of 9%. Total amount outstanding at September 30, 1998 was 
approximately $2.4 million.

         The Company has entered into a contract to acquire a certain 
dealership in California. The proposed purchase price is approximately $6.0 
million consisting of approximately $4.1 million in cash and $1.4 million in 
seller financed notes and $500,000 in assumed debt. During the first nine 
months of 1998, the Company advanced approximately $2.1 million towards the 
closing of this transaction. The Company anticipates divesting, or assigning, 
its interest in this pending acquisition as part of the Merger Agreement.

         The Company has entered into a contract to acquire a certain 
dealership in Nevada. The proposed purchase price is approximately $12.5 
million consisting of approximately $9.0 million in cash, $3.2 million in 
seller financed notes and approximately $300,000 in value of the Company's 
common stock. During the first nine months of 1998 the Company advanced 
approximately $1.5 million towards the closing of this transaction. The 
Company anticipates selling, or assigning, its interest in this acquisition 
to Republic .

         The Company has incurred a deferred tax liability of approximately 
$4.0 million in connection with the change in its tax basis of accounting for 
inventory from LIFO to FIFO effective for 1996. The Company believes that it 
is required to pay this liability in six annual installments, beginning in 
1997, and believes that it will be able to pay such obligation with cash 
provided by operations.

         The Company believes that its existing capital resources, including 
cash on hand, cash from operations, and funds available under the credit 
facility will be sufficient to run the Company's operations in the ordinary 
course of business and fund its debt service requirements. Additional 
financing may be required to fund one of the pending Acquisitions should the 
Merger not be completed. To the extent the Company pursues additional 
acquisitions, it most likely will need to raise additional capital either 
through the public or private issuance of equity or debt securities or 
through additional bank borrowings.

SEASONALITY

         The Company generally experiences a higher volume of new and used 
vehicle sales in the second and third quarters of each year. If the Company 
acquires dealerships in other markets, it may be affected by other seasonal 
or consumer buying trends.

                                       25
<PAGE>

YEAR 2000 ISSUES

         The Year 2000 ("Y2K") issue is a global concern that computer 
programs, processors and embedded chips programmed to recognize date formats 
with two-digit years will not be able to distinguish between the year 1900 
and the year 2000. As a result, companies are at risk for possible mistakes 
or system failures that could cause disruptions in their business operations. 
The Company has initiated its plan of action to address the Y2K issue. This 
plan of action is necessary to insure that the Company's hardware, software 
and data feeds that consider and process date sensitive information will 
continue to function properly after December 31, 1999.

         The Company's plan of action has identified all areas of material 
concern and has separated the concerns between mission critical systems and 
non-mission critical systems. The mission critical systems have been 
primarily identified as operational and financial computer systems, 
dealership communication systems, electronic parts cataloging systems, 
telecommunication systems and outside vendor systems. These mission critical 
systems have been and will be addressed first in the Company's Y2K plan of 
action. The non-mission critical systems have been primarily identified as 
dealership security systems and a network of personal computers.

         The Company utilizes an integrated operational and financial 
computer information system that supports the Company's core business 
processes, including vehicle sales, parts and service sales, customer 
financing, inventory management, payroll and accounting. The Company has 
identified this integrated information system as its primary mission critical 
system. One vendor supplies the Company's operational and financial computer 
software for its primary mission critical systems. On November 1, 1998, the 
Company upgraded its primary mission critical system to the most current 
release of the software that is certified Y2K compliant. All of the Company's 
existing dealerships are on this system except Chaisson Motor Cars and 
Chaisson BMW. To install the Y2K compliant software at Chaisson Motor Cars 
and Chaisson BMW, the Company will need to upgrade the dealerships' existing 
computer system or further expand the Company's primary computer system to 
include the two Chaisson dealerships. The Company has developed a plan of 
action to bring Chaisson Motor Cars and Chaisson BMW into Y2K compliance by 
the end of the first quarter of 1999.

         With the upgrade of the Company's primary mission critical system, 
all dealerships' electronic parts cataloging systems (EPC) and most 
dealership communications systems (DCS) and are now Y2K compliant. Three 
dealerships have ordered and are awaiting upgraded DCS's from their 
respective franchisors. These DCS upgrades are expected to be completed by 
the end of the second quarter of 1999.

         The Company's two pending Acquisitions were not included in the 
upgrade of the primary mission critical system. The Company has received 
documentation from the pending Acquisitions' primary system vendor that 
upgrades to bring their systems into Y2K compliance will be shipped in 1998. 
Should the upgrade not bring the system into Y2K compliance, the Company has 
contingently planned to convert the two pending Acquisitions' systems to the 
primary computer system used by the Company's existing dealerships which is 
currently Y2K compliant. The Company's plan of action for the two pending 
Acquisitions is contingent on the selling, assigning or divesting of its 
interest in the dealerships as related to the Merger.

         As of November 1, 1998, the Company had completed testing all the 
dealership telecommunication systems. The Company has identified four 
dealerships whose phone systems will need to be upgraded or replaced. The 
Company has also initiated a plan to send letters of compliance to major 
vendors used by each dealership, in order to verify Y2K compliance by the 
vendor. The major vendors include, but are not limited to, automobile 
manufacturers, automobile parts suppliers, banks, finance companies and 
warranty companies.

         The Company's plan of action to test all identified non-mission 
critical systems is in process and will be intensified once the mission 
critical systems issues have been addressed. The Company is currently testing 
all 

                                       26
<PAGE>

Company personal computers and related software. All personal computers and 
software will be Y2K compliant by the end of 1999. The Company does not 
anticipate any material costs related to the personal computer and software 
upgrades.

         The upgrade for the primary mission critical system was supplied and 
installed by the Company's primary vendor and all costs were covered by the 
Company's existing maintenance and support fees. The Company anticipates 
leasing the Y2K compliant upgrade for the existing system at Chaisson Motor 
Cars and Chaisson BMW at a cost of approximately $126,000. The DCS upgrades 
yet to be installed on the primary mission critical system are anticipated to 
be leased at a cost of approximately $10,000 each. If the Company determines 
that the primary integrated computer system needs to be upgraded for the 
Chaisson dealerships or the pending Acquisitions, each dealership conversion 
will be leased at a cost of approximately $125,000. Upgrading or replacing 
the four dealerships' phone systems has been estimated to cost up to 
$200,000. The funds for updating or replacing the phone systems will be 
provided by funds from normal operations. The Company will be expensing Y2K 
costs as incurred.

         The failure to correct a material Y2K problem could result in an 
interruption in, or a failure of, certain normal business activities or 
operations. Such failures could materially and adversely affect the Company's 
results of operations, liquidity and financial condition. The Company is 
concerned that failure to correct a material Y2K problem could cause 
manufacturers problems in shipping inventory to the dealerships and cause 
financial institutions problems in financing customer purchases and providing 
the necessary cash flow for normal day-to-day operations. At this time, the 
Company cannot determine whether failure to correct a material Y2K problem 
will have material and adverse effects on the Company's operations. The 
Company believes that the plan of action for Y2K compliance it has undertaken 
will significantly reduce the possibility of material and adverse effects on 
the Company's operations.

PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         The Company is a defendant in three class action lawsuits that have 
been filed by several claimants against approximately 700 automobile 
dealerships across the State of Texas. The plaintiffs allege that the 
charging of the vehicle inventory taxes to vehicle purchasers constitutes 
fraud, violates the Texas Deceptive Trade Practices Act, and constitutes 
price fixing in violation of the Clayton Antitrust Act. The Texas Automobile 
Dealers Association has hired counsel to represent the defendants in these 
lawsuits. The defendants have denied the allegations and the affiliates 
contend that they have charged the vehicle inventory taxes to vehicle 
purchasers in compliance with applicable law. The Company has answered 
interrogatories and document production request in one of the lawsuits. The 
defendants intend to vigorously defend their position.

         From time to time, the Company is named in claims involving the 
manufacture of automobiles, contractual disputes and other matters arising in 
the ordinary course of the Company's business. Currently, no legal 
proceedings are pending against or involve the Company that, in the opinion 
of management, could be expected to have a material adverse effect on the 
business, financial condition or results of operations of the Company.

                                       27
<PAGE>


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)   LISTING OF EXHIBITS

               A list of exhibits required by Item 601 of Regulation S-K and
               filed as part of this report is set forth in the Exhibit Index,
               which immediately precedes such exhibits.

         (b)   REPORTS ON FORM 8-K

               None.


                                       28
<PAGE>


                                       
                                  SIGNATURES


         Pursuant to the requirements of the Securities Exchange Act of 1934, 
the registrant has duly caused this report to be signed on its behalf by the 
undersigned, thereunto duly authorized.

                                           CROSS-CONTINENT AUTO RETAILERS, INC.


Date:    November 12, 1998                   By: /s/ John W. Gaines
                                                 -------------------------------
                                                     John W. Gaines,
                                                     Vice President-Finance and
                                                     Chief Financial Officer



Date:    November 12, 1998                   By: /s/ Charles D. Winton
                                                 -------------------------------
                                                     Charles D. Winton,
                                                     Vice President and Chief 
                                                     Accounting Officer


                                       29
<PAGE>


                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER            DESCRIPTION
-------     ---------------------------------------------------
<S>         <C>
2.1          Asset Purchase  Agreement  dated as of June 17, 1996,  among Lynn Hickey Dodge,  Inc.,  Lynn Hickey,  and Cross Country
             Dodge, Inc. (1)
2.2          Stock Purchase  Agreement,  dated as of January 23, 1997, by and between  Cross-Continent  Auto Retailers,  Inc. and R.
             Douglas Spedding (2)
2.3          Amendment to Stock Purchase Agreement dated as of April 1, 1997, by and between  Cross-Continent  Auto Retailers,  Inc.
             and R. Douglas Spedding (3)
2.4          Stock Purchase Agreement dated as of February 28, 1997, among Cross-Continent Auto Retailers, Inc., Jack Biegger, Dale 
             Edwards, and Sahara Datsun, Inc., d/b/a Jack Biegger Nissan, as amended by the Amendment to Stock Purchase Agreement 
             dated as of March 17, 1997, among Cross-Continent Auto Retailers, Inc., Jack Biegger, Dale Edwards, and Sahara Nissan,
             Inc., d/b/a Jack Biegger Nissan (10)
2.5          Second  Amendment  to Stock  Purchase  Agreement  dated as of April  30,  1997,  by and  between  Cross-Continent  Auto
             Retailers,  Inc., Jack Biegger,  Dale Edwards,  and Sahara Datsun,  Inc., d/b/a Jack Biegger Nissan,  as amended by the
             Amendment to Stock Purchase  Agreement dated as of March 17, 1997,  among  Cross-Continent  Auto Retailers,  Inc., Jack
             Biegger, Dale Edwards, and Sahara Nissan, Inc., d/b/a Jack Biegger Nissan (10)
2.6          Asset Purchase Agreement dated as of April 16, 1997, by and between JRJ Investments,  Inc., a Nevada  corporation,  The
             Chaisson Family Trust R-501, and Cross-Continent Auto Retailers, Inc. (11)
2.6.1        Consent to Termination of Agreements dated as of August 5, 1997, among  Cross-Continent Auto Retailers,  Inc.,
             JRJ Investments, Inc. and The Chaisson Family Trust R-501 (11)
2.7          Purchase  Agreement dated as of March 1, 1997,  between RDS, Inc. and  Cross-Continent  Auto Retailers,  Inc. (omitting
             exhibits thereto, which will be furnished supplementally to the Commission upon request) (3)
2.8          Purchase  Agreement dated as of March 1, 1997,  between R. Douglas Spedding and  Cross-Continent  Auto Retailers,  Inc.
             (omitting exhibits thereto, which will be furnished supplementally to the Commission upon request) (3)
2.9          Third Amendment to Stock Purchase Agreement,  dated as of May 9, 1997, among Cross-Continent Auto Retailers,  Inc., The
             Jack Biegger  Revocable  Living Trust, The Dale M. Edwards  Revocable Family Trust, and Sahara Nissan,  Inc. d/b/a Jack
             Biegger Nissan. (9)
2.10         Stock Purchase  Agreement dated as of June 20, 1997 between  Cross-Continent  Auto  Retailers,  Inc. and Benji
             Investments,  Ltd. (omitting exhibits thereto, which will be furnished  supplementally to the Commission upon request).
             (11)
2.11         Stock Purchase Agreement dated as of October 8, 1997, by and among Cross-Continent Auto Retailers, Inc., The Chaisson 
             Family Trust R-501, and JRJ Investments, Inc. (omitting exhibits thereto, which will be furnished supplementally to 
             the Commission upon request) (13)
2.12         Amendment  to Stock  Purchase  Agreement  dated as of October  14,  1997,  by and among  Cross-Continent  Auto
             Retailers, Inc., The Chaisson Family Trust R-501, and JRJ Investments, Inc. (13)
2.13         Amended and Restated Stock Purchase Agreement dated as of November 1, 1997, by and among Cross-Continent Auto 
             Retailers, Inc., The Chaisson Family Trust R-501, and JRJ Investments, Inc. (omitting exhibits thereto, which will be
             furnished supplementally to the Commission upon request) (15)
2.14         Stock Purchase Agreement dated October 16, 1997, by and among Cross-Continent Auto Retailers,  Inc., Thomas A.
             Randt, Ronald J. Blomquist,  and Tar-Car,  Inc. (omitting exhibits thereto,  which will be furnished  supplementally to
             the Commission upon request) (16)
2.15         Amendment to Stock Purchase  Agreement  dated January 14, 1998, by and among  Cross-Continent  Auto Retailers,
             Inc., Thomas A. Randt, Ronald J. Blomquist, and Tar-Car, Inc. (16)

                                       30
<PAGE>

2.16         Asset Purchase Agreement dated December 17, 1997, by and among Vinci, Inc., Ronald C. Vinci, and Sahara Imports, Inc.
             (omitting exhibits thereto, which will be furnished supplementally to the Commission upon request) (16)
2.17         Amendment to Asset Purchase  Agreement dated January 29, 1998, by and among Vinci,  Inc., Ronald C. Vinci, and
             Sahara Imports, Inc. (16)
2.18         Agreement and Plan of Merger dated September 3, 1998, by and among Cross-Continent Auto Retailers, Inc., Republic
             Industries, Inc., and RI/BG Merger Corp. (omitting exhibits thereto, which will be furnished supplementally to the 
             Commission upon request)
3.1          Amended and Restated Certificate of Incorporation of Cross-Continent Auto Retailers, Inc. (4)
3.3          Amended and Restated Bylaws of Cross-Continent Auto Retailers, Inc. (4)
4.1          Specimen Common Stock Certificate (4)
4.2          Rights Agreement between Cross-Continent Auto Retailers, Inc. and The Bank of New York, as rights agent (4)
4.3          Amended and Restated 1996 Stock Option Plan of Cross-Continent Auto Retailers, Inc. (5)
4.4          Registration  Rights Agreement dated as of April 1, 1997, by and between  Cross-Continent  Auto Retailers,  Inc. and R.
             Douglas Spedding (3)
4.5          Registration  Rights  Agreement  dated January 5, 1998, by and between  Cross-Continent  Auto  Retailers,  Inc. and The
             Chaisson Family Trust R-501 (16)
4.6          First Amendment to Rights Agreement between  Cross-Continent  Auto Retailers,  Inc. and The Bank of New York, as rights
             agent, dated September 2, 1998 (18)
10.1         Dealer Sales and Service Agreement dated November 1, 1995, between the Chevrolet Division of General Motors Corporation
             and Plains Chevrolet, Inc., as amended by Supplemental Agreement dated as of July 29, 1996 (1)(6)
10.2         Sales and Service Agreement between Performance Dodge, Inc. and Chrysler  Corporation,  dated as of October 1,
             1996 (1)
10.3         Dealer Sales and Service  Agreement  dated  September  23, 1996,  between the Nissan  Division of Nissan Motor
             Corporation, U.S.A., Quality Nissan, Inc. and Cross-Continent Auto Retailers, Inc. (4)
10.4         Dealer Sales and Service  Agreement  dated  September  23, 1996,  between the Nissan  Division of Nissan Motor
             Corporation, U.S.A., Performance Nissan and Cross-Continent Auto Retailers, Inc. (4)
10.4(a)      Dollar Volume Contract dated April 1, 1997, between Plains Chevrolet,  Inc., Westgate Chevrolet,  Inc., Midway
             Chevrolet, Inc., Quality Nissan, Inc. and Amarillo Globe News (1)
10.5         Sublease  Agreement dated June 1, 1995,  between  Gilliland Group Family  Partnership and Performance  Nissan,
             Inc. (1)
10.6         Lease  Agreement  dated March 1, 1994,  among John W. Adams,  Eleanore A. Braly as Trustee of the  Eleanore A.
             Braly Trust, Romie G. Carpenter, Melody Lynn Goff, and Selden Simpson and Quality Nissan, Inc. (1)
10.7         Office Lease dated June 1, 1996,  between Gilliland Group Family Partnership and Cross-Country Auto Retailers,
             Inc. (now named Cross-Continent Auto Retailers, Inc.) (1)
10.8         Wholesale  Security  Agreement,  as  amended,  dated  December  4, 1995,  between  General  Motors  Acceptance
             Corporation and Performance Dodge, Inc. (1) (7)
10.9         Corporation and Shareholders' Agreement of Xaris Management Co. (1)
10.10        Documents  dated December 4, 1995,  relating to $5,550,000  loan by General Motors  Acceptance  Corporation to
             Performance Dodge, Inc. (1)
10.10.1      Promissory  Note by  Performance  Dodge,  Inc.  to General  Motors  Acceptance  Corporation,  in the amount of
             $1,850,000 (2)
10.10.2      Promissory  Note by  Performance  Dodge,  Inc.  to General  Motors  Acceptance  Corporation,  in the amount of
             $3,700,000 (fully repaid)(2)
10.10.4      Security Agreement between General Motors Acceptance Corporation and Performance Dodge, Inc. (2)
10.10.5      Mortgage,  Assignment and Security  Agreement  between General Motors  Acceptance  Corporation and Performance
             Dodge, Inc. (2)
10.11        Documents relating to loan by General Motors Acceptance Corporation to Midway Chevrolet, Inc. (1)

                                       31
<PAGE>

10.11.1      Promissory Note dated December 15, 1989, by Midway Chevrolet,  Inc. to General Motors Acceptance  Corporation,
             in the amount of $977,249.74 (2)
10.11.2      Renewal,  Extension and  Modification  Agreement dated February 20, 1995,  between  General Motors  Acceptance
             Corporation and Midway Chevrolet, Inc. (2)
10.11.3      Security  Agreement  dated  February  20, 1995,  between  General  Motors  Acceptance  Corporation  and Midway
             Chevrolet, Inc. (2)
10.12        Documents  dated December 4, 1995,  relating to $1,350,000  loan by General Motors  Acceptance  Corporation to
             Performance Nissan, L.L.C. (1)
10.12.1      Promissory Note by Performance  Nissan,  L.L.C.  to General Motors  Acceptance  Corporation,  in the amount of
             $1,350,000 (2)
10.12.2      Cross-Default  and  Cross-Collateralization  Agreement  between  General  Motors  Acceptance  Corporation  and
             Performance Nissan, L.L.C. (2)
10.12.3      Security Agreement between General Motors Acceptance Corporation and Performance Nissan, L.L.C. (2)
10.13        Documents  relating  to  used  vehicle  inventory  financing  agreements  between  General  Motors  Acceptance
             Corporation and Cross-Continent Auto Retailers, Inc. dealership subsidiaries (1)
10.13.1      Used Vehicle  Wholesale  Borrowing Base Credit Line Loan Agreement dated June 7, 1996,  between General Motors
             Acceptance Corporation and Plains Chevrolet, Inc. (2)(7)
10.13.2      Promissory Note dated June 7, 1996, by Plains  Chevrolet,  Inc. to General Motors Acceptance  Corporation,  in
             the amount of $3,000,000 (2)(8)
10.13.3      Cross-Default and Cross-Collateralization  Agreements between General Motors Acceptance Corporation and Midway
             Chevrolet, Inc., Plains Chevrolet, Inc., Quality Nissan, Inc., and Westgate Chevrolet, Inc. (2)
10.14        Employment Contract dated February 21, 1997, by and between Cross-Continent Auto Retailers,  Inc. and James F.
             Purser (2)
10.15        Employment Contract dated February 18, 1997, by and between Cross-Continent Auto Retailers,  Inc. and R. Wayne
             Moore (11)
10.16        Employment  Agreement dated as of April 1, 1997, by and between R. Douglas Spedding and  Cross-Continent  Auto
             Retailers, Inc. (3)
10.17        Employment  Agreement dated as of April 1, 1997, by and between Douglas J. Spedding and  Cross-Continent  Auto
             Retailers, Inc. (3)
10.18        Promissory  Note dated April 1, 1997,  by  Cross-Continent  Auto  Retailers,  Inc. to the order of R.  Douglas
             Spedding in the principal amount of $7,000,000 (fully repaid)(3)
10.19        Promissory Note dated April 4, 1997, by Cross-Continent Auto Retailers,  Inc. to Amarillo National Bank in the
             principal amount of $8,000,000 (fully repaid)(3)
10.20        Documents dated April 10, 1997,  relating to promissory note by  Cross-Continent  Auto Retailers,  Inc. to the
             order of RDS, Inc. in the principal amount of $2,000,000 (3)
10.20.1      Promissory Note by Cross-Continent Auto Retailers, Inc. to the order of RDS, Inc. (3)
10.20.2      Security Agreement between Cross-Continent Auto Retailers, Inc. and RDS, Inc. (3)
10.20.3      Deed of Trust between Cross-Continent Auto Retailers, Inc. and RDS, Inc. (3)
10.21        Documents dated April 10, 1997,  relating to promissory note by  Cross-Continent  Auto Retailers,  Inc. to the
             order of R. Douglas Spedding in the principal amount of $5,500,000 (3)
10.21.1      Promissory Note by Cross-Continent Auto Retailers, Inc. to the order of R. Douglas Spedding (3)
10.21.2      Security Agreement between Cross-Continent Auto Retailers, Inc. and R. Douglas Spedding (3)
10.21.3      Deed of Trust between Cross-Continent Auto Retailers, Inc. and R. Douglas Spedding (3)
10.22        Release and  Indemnification  Agreement dated as of April 10, 1997,  between  Cross-Continent  Auto Retailers,
             Inc. and R. Douglas Spedding (3)
10.23        Unsecured  Promissory Note dated July 1, 1997, by  Cross-Continent  Auto  Retailers,  Inc. to The Jack Biegger
             Revocable Living Trust, in the principal amount of $360,000.00. (9)
10.24        Unsecured Promissory Note, dated July 1, 1997, by Cross-Continent Auto Retailers,  Inc. to The Dale M. Edwards
             Revocable Family Trust, in the principal amount of $240,000.00. (9)


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<PAGE>

10.25        Unsecured  Promissory  Note, dated July 1, 1997, by Sahara Nissan,  Inc. to The Jack Biegger  Revocable Living
             Trust, in the principal amount of $275,000.00.  (9)
10.26        Unsecured  Promissory Note, dated July 1, 1997, by Sahara Nissan, Inc. to The Dale M. Edwards Revocable Family
             Trust, in the principal amount of $125,000.00.  (9)
10.27        Documents,  dated as of June 26, 1997,  relating to line of credit for  Cross-Continent  Auto Retailers,  Inc.
             with Texas Commerce Bank National Association, individually and as agent. (9)
10.27.1      Revolving  Credit Agreement  between  Cross-Continent  Auto Retailers,  Inc., and Texas Commerce Bank National
             Association. (9)
10.27.2      Revolving Note by  Cross-Continent  Auto  Retailers,  Inc. and all of its  subsidiaries  to the order of Texas
             Commerce Bank National Association. (9)
10.27.3      Pledge and Security Agreement between  Cross-Continent  Auto Retailers,  Inc. and Texas Commerce Bank National
             Association. (9)
10.28        Dealer  Sales and  Service  Agreement  dated  July 1,  1997,  between  the  Nissan  Division  of Nissan  Motor
             Corporation, U.S.A., Sahara Nissan, Inc., Cross-Continent Auto Retailers, Inc., and Bill A. Gilliland. (9)
10.29        Environmental Agreement dated July 1, 1997 between  Cross-Continent Auto Retailers,  Inc. and The Jack Biegger
             Revocable Living Trust. (9)
10.30        Separation  Agreement dated as of June 20, 1997 between  Cross-Continent  Auto  Retailers,  Inc. and Emmett M.
             Rice, Jr. (11)
10.32        Documents, dated as of August 7, 1997, relating to the line of credit for Cross-Continent Auto Retailers, Inc.
             with Texas Commerce Bank National Association, individually and as agent (13)
10.32.1      First Amendment to Revolving Credit Agreement among  Cross-Continent  Auto Retailers,  Inc.; its subsidiaries;
             Texas Commerce Bank National Association;  Amarillo National Bank; The Bank of Tokyo-Mitsubishi,  Ltd., Houston Agency;
             and U.S. Bank. (13)
10.32.2      Revolving Note by  Cross-Continent  Auto  Retailers,  Inc. and all of its  subsidiaries  to the order of Texas
             Commerce Bank National Association in the principal amount of $22,500,000 (13)
10.32.3      Revolving Note by  Cross-Continent  Auto Retailers,  Inc. and all of its subsidiaries to the order of Amarillo
             National Bank in the principal amount of $7,500,000 (13)
10.32.4      Revolving Note by  Cross-Continent  Auto Retailers,  Inc. and all of its  subsidiaries to the order of Bank of
             Tokyo-Mitsubishi, Ltd., Houston Agency, in the principal amount of $5,000,000 (13)
10.32.5      Revolving Note by Cross-Continent Auto Retailers,  Inc. and all of its subsidiaries to the order of U. S. Bank
             in the principal amount of $5,000,000 (13)
10.33        Lease Agreement dated August 15, 1997 between  Cross-Continent  Auto  Retailers,  Inc. and Performance  Dodge,
             Inc. (12)
10.34        Joinder Agreement dated July 1, 1997 between Sahara Nissan, Inc. and Texas Commerce Bank National  Association
             (13)
10.35        Documents dated as of September 30, 1997 relating to the loan agreement between Cross-Continent Auto Retailers,
             Inc. and R. Douglas Spedding (omitting exhibits thereto, which will be furnished supplementally to the 
             Commission upon request) (13)
10.35.1      Master  Construction  and Master Loan Agreement  among Toyota West Sales and Service,  Inc.,  Douglas  Toyota,
             Inc., Sahara Imports,  Inc., and Cross-Continent Auto Retailers,  Inc. as Borrowers,  and R. Douglas Spedding as Lender
             (13)
10.35.2      Promissory Note by Cross-Continent  Auto Retailers,  Inc. to the order of R. Douglas Spedding in the principal
             amount of $7,400,000 (13)
10.35.3      Deed of Trust among  Cross-Continent  Auto  Retailers,  Inc. as Borrower,  the Public Trustee of Adams County,
             Colorado, as Trustee, and R. Douglas Spedding as Lender (13)
10.35.4      Deed of Trust and Assignment of Rents among  Cross-Continent  Auto  Retailers,  Inc. as Grantor,  Old Republic
             Title Company of Nevada as Trustee, and R. Douglas Spedding as Beneficiary (13)
10.35.5      Security Agreement between  Cross-Continent  Auto Retailers,  Inc., Douglas Toyota, Inc. and Toyota West Sales
             and Service, Inc. as Debtors and R. Douglas Spedding as Lender (13)
10.35.6      Guaranty by Bill A. Gilliland in favor of R. Douglas Spedding (13)
10.36        Documents dated August 22, 1997 relating to loans by General Motors Acceptance  Corporation to Cross-Continent
             Auto Retailers, Inc. and certain subsidiaries (13)

                                       33
<PAGE>

10.36.1      Cross Default and Cross Collateralization Agreement among General Motors Acceptance Corporation and Midway 
             Chevrolet, Inc., Plains Chevrolet, Inc., Quality Nissan, Inc., Westgate Chevrolet, Inc., Sahara Nissan, Inc.,
             and Cross-Continent Auto Retailers, Inc. (13)
10.36.2      Guaranty Agreement between Cross-Continent Auto Retailers, Inc. and General Motors Acceptance Corporation (13)
10.37        Assumption  Agreement dated August 22, 1997 between General Motors Acceptance  Corporation and Cross-Continent
             Auto  Retailers,  Inc.  relating  to  Performance  Dodge,  Inc.  (omitting  exhibit  thereto,  which will be  furnished
             supplementally to the Commission upon request) (13)
10.38        Amendment to Office Lease dated October 1, 1997,  between Gilliland Group Family Partnership and Cross-Country
             Auto Retailers, Inc. (now named Cross-Continent Auto Retailers, Inc.) (13)
10.39        Amendment No. 1 to Nissan Dealer Term Sales and Service  Agreement dated October 13, 1997,  between the Nissan
             Division of Nissan Motor Corporation U.S.A. and Sahara Nissan, Inc. d/b/a Jack Biegger Nissan (13)
10.40        Management  Agreement  dated  as of the  16th  day of  October,  1997,  by and  between  Cross-Continent  Auto
             Retailers, Inc. and Tar-Car, Inc. (16)
10.41        Amendment to  Management  Agreement  effective  as of November 1, 1997,  by and between  Cross-Continent  Auto
             Retailers, Inc. and Tar-Car, Inc. (16)
10.42        Management  Agreement  dated as of the 17th day of December,  1997, by and between  Sahara  Imports,  Inc. and
             Vinci, Inc. (16)
10.43        Management Agreement dated as of November 1, 1997 by and among Cross-Continent Auto Retailers, Inc., JRJ 
             Investments, Inc., and the Chaisson Family Trust R-501 (15)
10.44        Triple Net Lease Agreement dated November 1, 1997 covering 2333 South Decatur  Boulevard,  Las Vegas,  Nevada,
             by and between JRJ Properties and JRJ Investments, Inc. (15)
10.45        Triple Net Lease Agreement dated November 1, 1997 covering 261 and 251 Auto Mall Drive, Henderson,  Nevada, by
             and between The Chaisson Family Trust R-501 and JRJ Investments, Inc. (15)
10.46        Unsecured  Promissory  Note dated January 5, 1998, by  Cross-Continent  Auto  Retailers,  Inc. to The Chaisson
             Family Trust R-501 (15)
10.47        Management  Agreement  dated  January  5,  1998,  by and  among  Cross-Continent  Auto  Retailers,  Inc.,  JRJ
             Investments, Inc., and The Chaisson Family Trust R-501. (15)
10.48        Escrow  Agreement  dated January 5, 1998, by and among  Cross-Continent  Auto  Retailers,  Inc.,  The Chaisson
             Family Trust R-501, and United Title of Nevada, Inc. (15)
10.49        Agreement  Regarding Stock Options dated January 5, 1998, between James J. Chaisson,  Jr. and  Cross-Continent
             Auto Retailers, Inc. (15)
10.50        Real Property Purchase Agreement dated as of December 31, 1997, by and among Capital Automotive REIT, Capital
             Automotive, L.P., Plains Chevrolet, Inc., Midway Chevrolet, Inc., Westgate Chevrolet, Inc., Quality Nissan, Inc.,
             and Cross-Continent Auto Retailers, Inc. (omitting exhibits thereto, which will be furnished supplementally
             to the Commission upon request) (16)
10.51        Documents  dated  January 16, 1998  relating to financing  for the purchase of used vehicles at T-West Sales &
             Service, Inc. and Douglas Motors, Inc. (16)
10.51.1      Promissory Note from T-West Sales & Service,  Inc. to R. Douglas  Spedding,  with Guaranty by  Cross-Continent
             Auto Retailers, Inc. (16)
10.51.2      Security Agreement between T-West Sales & Service, Inc. and R. Douglas Spedding (16)
10.51.3      Promissory  Note from Douglas  Motors,  Inc. to R. Douglas  Spedding,  with Guaranty by  Cross-Continent  Auto
             Retailers, Inc. (16)
10.51.4      Security Agreement between Douglas Motors, Inc. and R. Douglas Spedding (16)
10.52        Sublease  Agreement  dated  February 25, 1998 by and between  Allied 2000  Collision  Center,  Inc. and Plains
             Chevrolet, Inc. (16)
10.53        Sublease  Agreement  dated  February  25, 1998 by and between  Working  Man's  Credit  Plan,  Inc.  and Plains
             Chevrolet, Inc. (16)
10.54        Sublease Agreement dated February 25, 1998 by and between Westgate Chevrolet,  Inc. and Enterprise  Rent-A-Car
             Company (16)

                                       34
<PAGE>

10.55        Guaranty and Subordination Agreement dated February 25, 1998 by Cross-Continent Auto Retailers,  Inc. in favor
             of Capital Automotive, L.P. (16)
10.56        Lease Agreement dated February 25, 1998 by and between Capital  Automotive,  L. P. and Plains Chevrolet,  Inc.
             (14) (16)
10.57        Dealer  Agreement  effective  as of  February  1,  1998 by and  between  BMW of North  America,  Inc.  and JRJ
             Investments, Inc. (16)
10.58        Waiver and Second Amendment to Revolving  Credit  Agreement dated March 27, 1998 by and among  Cross-Continent
             Auto Retailers,  Inc. and 12 of its subsidiaries;  Chase Bank of Texas, National  Association,  formerly known 
             as Texas
             Commerce Bank National Association; Amarillo National Bank; The Bank of Tokyo-Mitsubishi; and U.S. Bank. (17)
10.59        Settlement Agreement and Release dated March 23, 1998 between  Cross-Continent Auto Retailers,  Inc. and James
             F. Purser. (17)
10.60        Amendment to Real Property Purchase Agreement and Lease Agreement dated May 14, 1998, by and among Capital 
             Automotive L.P., Capital Automotive REIT, Cross-Continent Auto Retailers, Inc., and T-West Sales & Service, Inc.
             (19)
10.61        Waiver and Third  Amendment to Revolving  Credit  Agreement  dated June 30, 1998 by and among  Cross-Continent
             Auto Retailers,  Inc. and 12 of its subsidiaries;  Chase Bank of Texas, National  Association,  formerly known as Texas
             Commerce Bank National Association; Amarillo National Bank; The Bank of Tokyo-Mitsubishi; and U.S. Bank. (19)
27.1         Financial Data Table

</TABLE>

<TABLE>

<S>  <C>
(1)  Previously filed as an exhibit to the Company's Registration Statement on
     Form S-1 (Registration No. 333-0685), incorporated herein by reference.
(2)  Previously filed as an exhibit to the Company's Annual Report on Form 10-K
     for the fiscal year ended December 31, 1996, incorporated herein by
     reference.
(3)  Previously filed as an exhibit to the Company's Current Report on Form 8-K 
     dated April 10, 1997, incorporated herein by reference.
(4)  Previously filed as an exhibit to the Company's Quarterly Report on Form
     10-Q for the Quarterly Period Ended September 30, 1996, incorporated herein
     by reference.
(5)  Previously filed as an exhibit to the Company's Registration Statement on
     Form S-8, filed with the Securities and Exchange Commission on March 7,
     1997, incorporated herein by reference.
(6)  Substantially identical agreements exist between the Chevrolet Division and
     each of Midway Chevrolet, Inc. and Westgate Chevrolet, Inc.
(7)  Substantially identical Agreements exist between General Motors Acceptance
     Corporation and each of Midway Chevrolet, Inc., Westgate Chevrolet, Inc.,
     and Quality Nissan, Inc.
(8)  Substantially identical Promissory Notes have been executed by Midway
     Chevrolet, Inc., Westgate Chevrolet, Inc., and Quality Nissan, Inc., in the
     amounts indicated for each dealership subsidiary in the Cross-Default and
     Cross-Collateralization Agreement (Exhibit 10.13.3)
(9)  Previously filed as an exhibit to the Company's Current Report on Form 8-K 
     dated July 15, 1997, incorporated herein by reference.
(10) Previously filed as an exhibit to the Company's Quarterly Report on Form
     10-Q for the quarterly period ended March 31, 1997, incorporated herein by
     reference.
(11) Previously filed as an exhibit to the Company's Quarterly Report on Form
     10-Q for the quarterly period ended June 30, 1997, incorporated herein by
     reference.
(12) Previously filed as an exhibit to the Company's Current Report on Form 8-K
     dated September 2, 1997, incorporated herein by reference.
(13) Previously filed as an exhibit to the Company's Quarterly Report on Form
     10-Q for the quarterly period ended September 30, 1997, incorporated herein
     by reference.

                                       35
<PAGE>

(14) Substantially identical agreements exist between Capital Automotive, L.P.
     and each of Midway Chevrolet, Inc., Westgate Chevrolet, Inc., Quality
     Nissan, Inc., Douglas Motors, Inc., and T-West Sales & Service, Inc.
(15) Previously filed as an exhibit to the Company's Current Report on Form 8-K
     dated January 5, 1998, incorporated herein by reference.
(16) Previously filed as an exhibit to the Company's Annual Report on Form 10-K
     for the fiscal year ended December 31, 1997, incorporated herein by
     reference.
(17) Previously filed as an exhibit to the Company's Quarterly Report on Form
     10-Q for the quarterly period ended March 31, 1998, incorporated herein by
     reference.
(18) Previously filed as an exhibit to the Company's Registration Statement on
     Form 8-A/A dated September 29, 1998, incorporated herein by reference.
(19) Previously filed as an exhibit to the Company's Quarterly Report on Form
     10-Q for the quarterly period ended June 30, 1998, incorporated herein by
     reference.
</TABLE>

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