Exhibit 4.11(b)
                                                                 ---------------

                               SECOND AMENDMENT TO
                               SECURITY AGREEMENT

THIS  SECOND  AMENDMENT  TO SECURITY  AGREEMENT  (the  "Amendment")  dated as of
December  31,  2001  (this  "Amendment"),  is  entered  into by and among  UNION
ACCEPTANCE FUNDING CORPORATION, as Seller, VARIABLE FUNDING CAPITAL CORPORATION,
as a Company,  UAFC-2  CORPORATION,  as Debtor,  UNION  ACCEPTANCE  CORPORATION,
individually  and  as  Collection  Agent,  FIRST  UNION  SECURITIES,   INC.,  as
Collateral Agent and Deal Agent,  FIRST UNION NATIONAL BANK, as Paying Agent and
the BANK  INVESTORS  named  herein.  Capitalized  terms  used and not  otherwise
defined herein are used as defined in this Agreement (as defined below).

     WHEREAS,  the parties hereto entered into that certain Security  Agreement,
dated as of August 31, 2001, as amended (the "Agreement");

     WHEREAS,  the  parties  hereto  desire to amend the  Agreement  in  certain
respects as provided herein;

     NOW  THEREFORE,  in  consideration  of the  premises  and the other  mutual
covenants contained herein, the parties hereto agree as follows:

     SECTION 1. Amendments.

     (a) The  definition  of "Fixed Charge  Coverage  Ratio" in Exhibit C to the
Agreement is hereby amended in its entirety to read as follows:

     Fixed Charge Coverage Ratio means, as of the end of any calendar month, for
     the twelve (12)  calendar  month  period  then ended,  the ratio of (i) the
     Collection  Agent's Adjusted EBITDA, to (ii) the aggregate Interest Expense
     for the 12 month period  immediately  preceding  the date of  determination
     plus the excess,  if any, of (a) the sum of (1) Current  Maturities and (2)
     $10,000,000  over (b) the sum of (1) available cash and (2) Total Warehouse
     Borrowing Capacity less Warehouse Outstandings.

     (b) The definition of "Total Warehouse  Borrowing Capacity" in Exhibit C to
the Agreement is hereby  amended by replacing the word "Agents" where it appears
in the third line thereof with the word "Agent."

     (c) The following definitions are hereby added to Exhibit C in alphabetical
order thereto:

     Warehouse  Facility:   Any  warehouse  facility  of  the  Collection  Agent
     involving the financing of motor vehicle  contracts,  whether such facility
     be a securitization or otherwise secured.

     Warehouse  Outstandings  means the aggregate  principal amount  outstanding
     (less any prefunding (or similar) amounts) under any Warehouse Facility.

     SECTION 2. Agreement in Full Force and Effect as Amended.

     Except as specifically  amended hereby,  the Agreement shall remain in full
force and effect.  All  references to the Agreement  shall be deemed to mean the
Agreement, as modified hereby. This Agreement shall not constitute a novation of
the Agreement,  but shall  constitute an amendment  thereof.  The parties hereto
agree to be bound by the terms and  conditions of the  Agreement,  as amended by
this Amendment, as though such terms and conditions were set forth herein.

     SECTION 3. Miscellaneous.

     (a) This  Amendment may be executed in any number of  counterparts,  and by
the different parties hereto on the same or separate counterparts, each of which
shall be deemed to be an original  instrument  but all of which  together  shall
constitute one and the same agreement.  Delivery of an executed counterpart of a
signature page to this Amendment by facsimile  shall be effective as delivery of
a manually executed counterpart.

     (b) The descriptive  headings of the various sections of this Amendment are
inserted for convenience of reference only and shall not be deemed to affect the
meaning or construction of any of the provisions hereof.

     (c) This  Amendment  may not be amended  or  otherwise  modified  except as
provided in the Agreement.


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     (d) THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
AMENDMENT  SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.

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<PAGE>


     IN WITNESS  WHEREOF,  the parties have caused this Amendment to be executed
by their respective  officers  thereunto duly  authorized,  as of the date first
above written.

                                  UAFC-2 CORPORATION
                                  as Debtor


                                  By:/s/ Leeanne W. Graziani
                                     -------------------------------------------
                                  Name:    Leeanne W. Graziani
                                        ----------------------------------------
                                  Title:   President
                                         ---------------------------------------



                                  UNION ACCEPTANCE FUNDING CORPORATION
                                  as Seller


                                  By:/s/ Lee Ervin
                                     -------------------------------------------
                                  Name: Lee Ervin
                                        ----------------------------------------
                                  Title:
                                         ---------------------------------------


                                  UNION ACCEPTANCE CORPORATION
                                  Individually and as Collection Agent


                                  By:/s/ Melanie S. Otto
                                     -------------------------------------------
                                  Name:    Melanie S. Otto
                                        ----------------------------------------
                                  Title:
                                         ---------------------------------------



                                  VARIABLE FUNDING CAPITAL CORPORATION,


                                  By:/s/ Frank Weise
                                     -------------------------------------------
                                  Name:     Frank Weise
                                        ----------------------------------------
                                  Title:    VP
                                         ---------------------------------------



                                 FIRST UNION SECURITIES, INC.
                                 as Collateral Agent and Deal Agent


                                  By:/s/ Curt Sidden
                                     -------------------------------------------
                                  Name:     Curt Sidden
                                        ----------------------------------------
                                  Title:    Director
                                         ---------------------------------------


                                 FIRST UNION NATIONAL BANK,
                                 as Paying Agent and Bank Investor


                                  By:/s/ David M. Roberts
                                     -------------------------------------------
                                  Name:      David M. Roberts
                                        ----------------------------------------
                                  Title:     Senior Vice President
                                         ---------------------------------------