Document:

EXHIBIT 10.32

                                    GUARANTY

            GUARANTY (this "Guaranty") dated _______________, 2001 made by each
of the entities listed on the signature pages hereto, jointly and severally,
(each referred to individually herein as a "Guarantor", and collectively, the
"Guarantors"), in favor of FORD MOTOR CREDIT COMPANY, a Delaware corporation
("Ford Credit").

PRELIMINARY STATEMENTS

      WHEREAS, Ford Credit has extended and will extend wholesale credit lines
and other credit facilities (the "Wholesale Facilities") to Hometown Auto
Retailers, Inc., a Delaware corporation ("Hometown") and to certain dealership
subsidiaries now existing or hereafter acquired by Hometown over which Hometown
exercises control, directly or indirectly (collectively, the "Dealerships" and
individually, each a "Dealership"); and

      WHEREAS, Shaker's Lincoln/Mercury Car Care, Inc. and E.R.R. Enterprises,
Inc., both of which are subsidiaries of Hometown, believe that the extension of
the Wholesale Facilities will be in their interest,

      WHEREAS, it is a condition precedent to extending the Wholesale Facilities
that each Guarantor executes and delivers this Guaranty; and

      NOW, THEREFORE, in consideration of the premises and in order to induce
the Ford Credit to extend the Wholesale Facilities, each Guarantor hereby agrees
as follows:

      Section 1. Guaranty. (a) Each Guarantor hereby unconditionally and
irrevocably guarantees the punctual payment when due, whether at stated
maturity, by acceleration or otherwise, of all obligations of Hometown Auto
Framingham, Inc., Muller Automotive Group, Inc., Good Day Chevrolet, Oldsmobile,
Isuzu, Inc., Hometown Newburgh, Inc., and each Guarantor to whom Ford Credit has
extended a Wholesale Facility now or hereafter existing under or in respect of
the Wholesale Facilities (including, without limitation, any extensions,
modifications, substitutions, amendments or renewals of any or all of the
foregoing obligations), whether direct or indirect, absolute or contingent, and
whether for principal, interest, premiums, fees, indemnities, contract causes of
action, costs, expenses or otherwise (such obligations being the "Guaranteed
Obligations"), and agrees to pay any and all expenses (including reasonable
counsel fees and expenses) incurred by Ford Credit in enforcing any rights under
this Guaranty. Without limiting the generality of the foregoing, each
Guarantor's liability shall extend to all amounts that constitute part of the
Guaranteed Obligations and would be owed by any Dealership to Ford Credit but
for the fact that they are unenforceable or not allowable due to the existence
of a bankruptcy, reorganization or similar proceeding involving such Dealership.

      (b) Each Guarantor, and by its acceptance of this Guaranty, Ford Credit,
hereby confirms that it is the intention of the parties that this Guaranty and
the obligations of each Guarantor hereunder not constitute a fraudulent transfer
or conveyance for purposes of Bankruptcy Law (as hereinafter defined), the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar foreign, federal or state law to the extent applicable to this Guaranty
and the obligations of each Guarantor hereunder. To effectuate the foregoing
intention, Ford Credit and the Guarantors hereby irrevocably agree that the
obligations of each Guarantor under this Guaranty at any time shall be limited
to the maximum amount as will result in the obligations of such Guarantor under
this Guaranty not constituting a fraudulent transfer or conveyance. For purposes
hereof, "Bankruptcy Law" means any proceeding of the type

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referred to in Section 6.1(f) and (g) of the Credit Agreement or Title 11, U.S.
Code, or any similar foreign, federal or state law for the relief of debtors.

      (c) Each Guarantor hereby unconditionally and irrevocably agrees that, in
the event any payment shall be required to be made to Ford Credit under this
Guaranty or any other by the Ford Credit in enforcing any rights under this
Guaranty), such Guarantor will contribute, to the maximum extent permitted by
law, such amounts to each other Guarantor and each other guarantor so as to
maximize the aggregate amount paid to Ford Credit under or in respect of the
Wholesale Facilities.

      Section 2. Guaranty Absolute. Each Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of the
Wholesale Facilities, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of Ford Credit with respect thereto. The obligations of each Guarantor
under this Guaranty are independent of the Guaranteed Obligations or any other
obligations of any other party under the Wholesale Facilities, and a separate
action or actions may be brought and prosecuted against each Guarantor to
enforce this Guaranty, irrespective of whether any action is brought against the
Dealership to whom the Wholesale Facility was extended is joined in any such
action or actions. This Guaranty is a guaranty of payment and performance and
not of collection. The liability of each Guarantor under this Guaranty shall be
irrevocable, absolute and unconditional irrespective of, and each Guarantor
hereby irrevocably waives any defenses it may now or hereafter have in any way
relating to, any or all of the following:

      (a) any lack of validity or enforceability of any Wholesale Facility or
any agreement or instrument relating thereto;

      (b) any change in the time, manner or place of payment of, or in any other
term of, all or any of the Guaranteed Obligations, or any other amendment or
waiver of or any consent to departure from any Wholesale Facility, including,
without limitation, any increase in the Guaranteed Obligations resulting from
the extension of additional credit to the Dealership to whom the Wholesale
Facility was extended or otherwise;

      (c) any taking, exchange, release or non-perfection of any Collateral, or
any taking, release or amendment or waiver of or consent to departure from any
other guaranty, for all or any of the Guaranteed Obligations;

      (d) any manner of application of Collateral, or proceeds thereof, to all
or any of the Guaranteed Obligations, or any manner of sale or other disposition
of any Collateral for all or any of the Guaranteed Obligations under the
Wholesale Facilities or any other assets of any Guarantor;

      (e) any change, restructuring or termination of the corporate structure or
existence of any Guarantor;

      (f) any failure of Ford Credit to disclose to any Guarantor any
information relating to the business, condition (financial or otherwise),
operations, performance, properties or prospects of any other Guarantor now or
hereafter known to Ford Credit (each Guarantor waiving any duty on the part of
Ford Credit to disclose such information);

      (g) the failure of any other Person to execute or deliver this Guaranty or
any other guaranty or agreement or the release or reduction of liability of any
Guarantor or other guarantor or surety with respect to the Guaranteed
Obligations; or

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      (h) any other circumstance (including, without limitation, any statute of
limitations) or any existence of or reliance on any representation by Ford
Credit that might otherwise constitute a defense available to, or a discharge
of, any Guarantor or any other guarantor or surety.

      This Guaranty shall continue to be effective or be reinstated, as the case
may be, if at any time any payment of any of the Guaranteed Obligations is
rescinded or must otherwise be returned by Ford Credit or any other person upon
the insolvency, bankruptcy or reorganization of any Guarantor or otherwise, all
as though such payment had not been made.

      Section 3. Waivers and Acknowledgments. (a) Each Guarantor hereby waives
promptness, diligence, notice of acceptance and any other notice with respect to
any of the Guaranteed Obligations and this Guaranty and any requirement that
Ford Credit protect, secure, perfect or insure any lien or any property subject
thereto or exhaust any right or take any action against any Guarantor or any
other Person or any specific Collateral.

      (b) Each Guarantor hereby waives any right to revoke this Guaranty, and
acknowledges that this Guaranty is continuing in nature and applies to all
Guaranteed Obligations, whether existing now or in the future.

      (c) Each Guarantor acknowledges that it will receive substantial direct
and indirect benefits from the financing arrangements contemplated by the
Wholesale Facilities and that the waivers set forth in this Guaranty are
knowingly made in contemplation of such benefits.

      (d) Each Guarantor hereby unconditionally and irrevocably waives (i) any
defense arising by reason of any claim or defense based upon an election of
remedies by Ford Credit that in any manner impairs, reduces, releases or
otherwise adversely affects the subrogation, reimbursement, exoneration,
contribution or indemnification rights of such Guarantor or other rights of such
Guarantor to proceed against any of the other Guarantors, or any other Person or
any specific Collateral and (ii) any defense based on any right of set-off or
counterclaim against or in respect of the obligations of such Guarantor
hereunder.

      (e) Each Guarantor hereby unconditionally and irrevocably waives any duty
on the part of Ford Credit to disclose to such Guarantor any matter, fact or
thing relating to the business, condition (financial or otherwise), operations,
performance, properties or prospects of any other Guarantor or any of its
Subsidiaries now or hereafter known by Ford Credit.

      Section 4. Subrogation. No Guarantor will exercise any rights that it may
now or hereafter acquire against any other Guarantor that arise from the
existence, payment, performance or enforcement of the Guarantor's obligations
under this Guaranty, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of Ford Credit against any Guarantor or any
specific Collateral, whether or not such claim, remedy or right arises in equity
or under contract, statute or common law, including, without limitation, the
right to take or receive from any Guarantor directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or security on
account of such claim, remedy or right, unless and until all of the Guaranteed
Obligations and all other amounts payable under this Guaranty shall have been
paid in full in cash in accordance with the terms of the Wholesale Facilities.
If any amount shall be paid to any Guarantor in violation of the preceding
sentence at any time prior to the payment in full in cash of the Guaranteed
Obligations and all other amounts payable under this Guaranty, such amount shall
be held in trust for the benefit of Ford Credit and shall forthwith be paid to
Ford Credit to be credited and applied to the Guaranteed Obligations and all
other amounts payable under this Guaranty, whether matured or unmatured, in
accordance with the terms of the Wholesale Facilities, or to be held as
Collateral for any Guaranteed Obligations or other amounts payable under this
Guaranty thereafter arising. If (i) any Guarantor shall make payment to Ford
Credit of all or any part of the Guaranteed Obligations, (ii) all of the
Guaranteed Obligations and all other amounts payable under this Guaranty shall
be paid

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in full in cash and (iii) the Wholesale Facilities extended by Ford Credit shall
have terminated in accordance with their own terms, Ford Credit will, at the
Guarantors' request and expense, execute and deliver to the Guarantors
appropriate documents, without recourse and without representation or warranty,
necessary to evidence the transfer by subrogation to the Guarantors of an
interest in the Guaranteed Obligations resulting from such payment by a
Guarantor.

      Section 5. Representations and Warranties. Each Guarantor hereby
represents and warrants as follows:

      (a) Each Guarantor (i) is a corporation, limited liability company or
limited partnership duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (ii) is duly qualified and in
good standing in each other jurisdiction in which it owns or leases property or
in which the conduct of its business requires it to so qualify or be licensed),
and (iii) has all requisite power and authority to own or lease and operate its
properties and to carry on its business as now conducted and as proposed to be
conducted.

      (b) The execution, delivery and performance by each Guarantor of this
Guaranty are within each such Guarantor's powers, have been duly authorized by
all necessary corporate, limited liability company, or limited partnership
action, and do not (i) contravene each such Guarantor's charter or bylaws or
similar organizational documents, (ii) violate any law (including, without
limitation, the Securities Exchange Act of 1934 and the Racketeer Influenced and
Corrupt Organizations Chapter of the Organized Crime Control Act of 1970), rule,
regulation (including, without limitation, Regulations T, U and X of the Board
of Governors of the Federal Reserve System), order, writ, judgment, injunction,
decree, determination or award, (iii) conflict with or result in the breach of,
or constitute a default under, any loan agreement, contract, indenture,
mortgage, deed of trust, lease or other instrument binding on or affecting such
Guarantor, any of its subsidiaries or any of its or their properties, the effect
of which conflict, breach or default is reasonably likely to have a Material
Adverse Effect, or (iv) except for the liens permitted under the Wholesale
Facilities, result in or require the creation or imposition of any lien upon or
with respect to any of the properties of any such Guarantor or any of its
Subsidiaries. No Guarantor is in violation of any such law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award, or in breach
of any such contract, loan agreement, indenture, mortgage, deed of trust, lease
or other instrument.

      (c) No authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body or any other third
party is required for (i) the due execution, delivery, recordation, filing or
performance by any Guarantor of this Guaranty, and (ii) the exercise by Ford
Credit of its rights under this Guaranty, except for (a) those that have been
made, obtained or given, and (b) filings necessary to create or perfect security
interests in the Collateral.

      (d) This Guaranty has been duly executed and delivered by each Guarantor.
This Guaranty is the legal, valid and binding obligation of each Guarantor,
enforceable against each Guarantor in accordance with its terms except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or limiting creditors' rights or by
equitable principles generally.

      (e) There are no conditions precedent to the effectiveness of this
Guaranty that have not been satisfied or waived.

      (f) Each Guarantor has, independently and without reliance upon Ford
Credit, and based on such documents and information as it has deemed
appropriate, made its own decision to enter into this Guaranty.

      Section 6. Covenants. Each Guarantor covenants and agrees that, so long as
any part of the Guaranteed Obligations shall remain unpaid or any of the
Wholesale Facilities extended

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by Ford Credit shall be in effect, such Guarantor will perform and observe, and
cause each of its Subsidiaries to perform and observe, all of the terms,
covenants and agreements set forth in the Wholesale Facilities on its or their
part to be performed or observed or that Hometown has agreed to cause such
Guarantor or such Subsidiaries to perform or observe.

      Section 7. Addition of Guarantors. Hometown agrees to cause each
Dealership and each Subsidiary of Hometown that manages a Dealership, directly
or indirectly, to agree to guarantee the Guaranteed Obligations by acknowledging
and agreeing to be bound by the terms and conditions of this Guaranty. Each
Guarantor waives any defense that may accrue to it by the addition of any entity
acquired by Hometown and added as a party to this Guaranty. Furthermore, each
Guarantor acknowledges that Ford Credit may extend to any such Dealership
acquired by Hometown, Wholesale Facilities that will be included in the
Guaranteed Obligations.

      Section 8. No Waiver, Remedies. No failure on the part of Ford Credit to
exercise, and no delay in exercising, any right under any Wholesale Facility
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies in the Wholesale Facilities are
cumulative and not exclusive of any remedies provided by law.

      Section 9. Indemnification. (a) Each Guarantor agrees to defend, protect,
indemnify, and hold harmless Ford Credit and each of its respective Affiliates,
and each of the Ford Credit's, or Affiliate's respective officers, directors,
employees, attorneys and agents (including, without limitation, those retained
in connection with the satisfaction or attempted satisfaction of any of the
conditions set forth in Article III) (collectively, the "Indemnified Parties"
and each an "Indemnified Party") from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses of any kind or nature whatsoever (including, without limitation,
the fees and disbursements of counsel for such Indemnitees in connection with
any investigative, administrative or judicial proceeding, whether or not such
Indemnitees shall be designated a party thereto), imposed on, incurred by, or
asserted against such Indemnitees in any manner relating to or arising out of:

            (i) the execution of this Guaranty and the Wholesale Facilities, or
      any act, event or transaction related or attendant thereto, or any of the
      other transactions contemplated by the Wholesale Facilities;

            (ii) any liabilities, obligations, responsibilities, losses,
      damages, personal injury, death, punitive damages, economic damages,
      consequential damages, treble damages, intentional, willful or wanton
      injury, damage or threat to the environment, natural resources or public
      health or welfare, costs and expenses (including, without limitation,
      attorney, expert and consulting fees and costs of investigation,
      feasibility or remedial action studies), fines, penalties and monetary
      sanctions, interest, direct or indirect, known or unknown, absolute or
      contingent, past, present or future relating to violation of any
      Environmental, Health or Safety Requirements of Law arising from or in
      connection with the past, present or future operations of Hometown, any
      Guarantor or any of their respective predecessors in interest, or, the
      past, present or future environmental, health or safety condition of any
      respective property of Hometown or any Guarantor, the presence of
      asbestos-containing materials at any respective property of Hometown or
      any Guarantor or the Release or threatened Release of any Contaminant into
      the environment (collectively, the "Indemnified Matters");

provided, however, that no Guarantor shall have any obligation to an Indemnified
Party hereunder with respect to any of the aforementioned indemnified matters
caused by or resulting from the willful misconduct or gross negligence of such
Indemnified Party as determined by the final non-appealed judgment of a court of
competent jurisdiction. If the undertaking to indemnify, pay and hold harmless
set forth in the preceding sentence may be unenforceable because it is

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violative of any law or public policy, each Guarantor shall contribute the
maximum portion which it is permitted to pay and satisfy under applicable law,
to the payment and satisfaction of all Indemnified Matters incurred by the
Indemnified Parties. It is understood and agreed that, to the extent not
precluded by a conflict of interest, each Indemnitee shall endeavor to work
cooperatively with the Borrower with a view toward minimizing the legal and
other expenses associated with any defense and any potential settlement or
judgment. Settlement of any claim or litigation involving any material
indemnified amount will require the approval of Hometown (which may not be
unreasonably withheld), provided, however, that no Guarantor shall have any
obligation to an Indemnified Party hereunder with respect to any of the
aforementioned indemnified matters caused by or resulting from the willful
misconduct or gross negligence of such Indemnified Party as determined by the
final non-appealed judgment of a court of competent jurisdiction.

      (b) Each Guarantor hereby also agrees that none of the Indemnified Parties
shall have any liability (whether direct or indirect, in contract, tort or
otherwise) to any of the Guarantors or any of their respective Affiliates or any
of their respective officers, directors, employees, agents and advisors, and
each Guarantor hereby agrees not to assert any claim against any Indemnified
Party on any theory of liability, for special, indirect, consequential or
punitive damages arising out of or otherwise relating to this Guaranty or the
Wholesale Facilities, the actual or proposed use of the proceeds of the advances
made under the Wholesale Facilities, or any of the transactions contemplated by
the Wholesale Facilities.

      (c) Without prejudice to the survival of any of the other agreements of
any Guarantor under this Guaranty or any of the other Wholesale Facilities, the
agreements and obligations of each Guarantor contained in Section 1(a) (with
respect to enforcement expenses), the last sentence of Section 2 and this
Section 9 shall survive the payment in full of the Guaranteed Obligations and
all of the other amounts payable under this Guaranty.

      Section 10. Subordination. Each Guarantor hereby subordinates any and all
debts, liabilities and other Obligations owed to such Guarantor by any other
Guarantor (the "Subordinated Obligations") to the Guaranteed Obligations to the
extent and in the manner hereinafter set forth in this Section 10:

      (a) Prohibited Payments. Except during the continuance of an event of
default under any of the Wholesale Facilities (including the commencement and
continuation of any proceeding under any Bankruptcy Law relating to any
Guarantor), to the extent permitted by the Wholesale Facilities, each Guarantor
may receive regularly scheduled payments from any other Guarantor on account of
the Subordinated Obligations. After the occurrence and during the continuance of
any event of default under any of the Wholesale Facilities (including the
commencement and continuation of any proceeding under any Bankruptcy Law
relating to any Guarantor), however, unless Ford Credit otherwise agrees, no
Guarantor shall demand, accept or take any action to collect any payment on
account of the Subordinated Obligations.

      (b) Prior Payment of Guaranteed Obligations. In any proceeding under any
Bankruptcy Law relating to any Guarantor, each Guarantor agrees that Ford Credit
shall be entitled to receive payment in full in cash of all Guaranteed
Obligations (including all interest and expenses accruing after the commencement
of a proceeding under any Bankruptcy Law, whether or not constituting an allowed
claim in such proceeding ("Post Petition Interest")) before such Guarantor
receives payment of any Subordinated Obligations.

      (c) Turn-Over. After the occurrence and during the continuance of any
event of default under any of the Wholesale Facilities (including the
commencement and continuation of any proceeding under any Bankruptcy Law
relating to any Guarantor), each Guarantor shall, if Ford Credit so requests,
collect, enforce and receive payments on account of the Subordinated Obligations
as trustee for Ford Credit and deliver such payments to Ford Credit on account
of the Guaranteed Obligations (including all Post Petition Interest), together
with any necessary

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endorsements or other instruments of transfer, but without reducing or affecting
in any manner the liability of such Guarantor under the other provisions of this
Guaranty and the Wholesale Facilities.

      (d) Administrative Agent Authorization. After the occurrence and during
the continuance of any event of default under any of the Wholesale Facilities
(including the commencement and continuation of any proceeding under any
Bankruptcy Law relating to any Guarantor), Ford Credit is authorized and
empowered (but without any obligation to so do), in its discretion, (i) in the
name of each Guarantor, to collect and enforce, and to submit claims in respect
of, Subordinated Obligations and to apply any amounts received thereon to the
Guaranteed Obligations (including any and all Post Petition Interest), and (ii)
to require each Guarantor (A) to collect and enforce, and to submit claims in
respect of, Subordinated Obligations and (B) to pay any amounts received on such
obligations to Ford Credit for application to the Guaranteed Obligations
(including any and all Post Petition Interest).

      Section 11. Continuing Guaranty. This Guaranty is a continuing guaranty
and shall (a) remain in full force and effect until the later of the payment in
full in cash of the Guaranteed Obligations and all other amounts payable under
this Guaranty and the date the Wholesale Facilities shall have terminated in
accordance with their own terms, (b) be binding upon each Guarantor, its
successors and assigns, and (c) inure to the benefit of and be enforceable by
Ford Credit and its successors, transferees and assigns.

      Section 12. Definitions. With respect to all documents executed by a
Guarantor in connection with the Wholesale Facilities, the singular shall
include the plural and vice versa and any gender shall include any other gender
as the context may require.

      Section 13. Successors and Assigns. This Guaranty shall be binding upon
and inure to the benefit of the Guarantor, Ford Credit, and their respective
successors and assigns. The Guarantor's successors and assigns shall include,
without limitation, a receiver, trustee or debtor-in-possession of or for the
Guarantor.

      Section 14. Governing Law; Severability. This Guaranty shall be governed
by, and construed in accordance with, the internal laws (as opposed to conflict
of laws provisions) of the State of Michigan. Whenever possible, each provision
of this Guaranty shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Guaranty shall be held
to be prohibited or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Guaranty or any other document executed in connection with a Wholesale Facility.

      Section 15. Advice of Counsel. Each Guarantor represents and warrants to
Ford Credit that it has consulted with its legal counsel regarding all waivers
under this Guaranty and the Wholesale Facilities, it believes that it fully
understands all rights that it is waiving and the effect of such waivers, that
it assumes the risk of any misunderstanding that it may have regarding any of
the foregoing, and that it intends that such waivers shall be a material
inducement to Ford Credit to extend the indebtedness secured hereby.

      Section 16. Further Assurances. Each Guarantor agrees that it will
cooperate with Ford Credit and will execute and deliver, or cause to be executed
and delivered, all such other agreements, instruments, documents, stock powers
and proxies and will take all such other actions, including, without limitation,
the execution and filing of financing statements, as Ford Credit may reasonably
request from time to time in order to carry out the provisions and purposes of
this Guaranty and the Wholesale Facilities.

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      Section 17. Costs and Expenses. Each Guarantor will upon demand pay to
Ford Credit the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, which
Ford Credit may incur in connection with (i) the administration of the Wholesale
Facilities, (ii) the custody or preservation of, or the sale of, collection
from, or other realization upon, any of collateral in which the Guarantor has
separately granted Ford Credit a security interest ("Collateral"), (iii) the
exercise or enforcement of any of the rights of Ford Credit under the Wholesale
Facilities or this Guaranty, or (iv) the failure by any Dealership to perform or
observe any of the provisions of the Wholesale Facilities.

      Section 18. Notices. All notices and other communications provided for
under this Guaranty shall be in writing (including telecopier, telegraphic,
telex or cable communication) and mailed, telecopied, telegraphed, telexed,
cabled or delivered, if to the Guarantor, care of Hometown at its address at 774
Straits Turnpike, Watertown, CT; if to the Ford Credit, at its address (insert
address); or, as to each party, at such other address as shall be designated by
such party in a written notice to the other party. All such notices and
communications shall be effective, upon receipt, or in the case of (i) notice by
mail, five days after being deposited in the United States mails, first class
postage prepaid, (ii) notice by overnight courier, one business day after being
deposited with a national overnight courier service, (iii) notice by telex, when
telexed against receipt of answer back or (iv) notice by facsimile copy, when
transmitted against mechanical confirmation of successful transmission.

      Section 19. Amendments, Waivers and Consents. No amendment or waiver of
any provision of this Guaranty or in any Wholesale Facility nor consent to any
departure by any Guarantor therefrom, shall in any event be effective unless the
same shall be in writing and signed by Ford Credit and then such amendment,
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.

      Section 20. Section Headings. The section headings herein are for
convenience of reference only, and shall not affect in any way the
interpretation of any of the provisions hereof.

      Section 21. Execution in Counterparts. This Guaranty may be executed in
any number of counterparts, each of which shall be an original, but all of which
shall together constitute one and the same agreement.

      Section 22. Merger. This Guaranty represents the final agreement of each
Guarantor with respect to the matters contained herein and may not be
contradicted by evidence of prior or contemporaneous agreements, or subsequent
oral agreements, between any Guarantor and Ford Credit.

      Section 23. No Strict Construction. The parties to the Wholesale
Facilities have participated jointly in the negotiation and drafting of the
Wholesale Facilities. In the event an ambiguity or question of intent or
interpretation arises, the Wholesale Facilities shall be construed as if drafted
jointly by the parties hereto and no presumption or burden or proof shall arise
favoring or disfavoring any party by virtue of the authorship of any provisions
of the Wholesale Facilities.

      Section 24. Waiver of Jury Trial. To the maximum extent of applicable law,
Ford Credit and each of the Guarantors waives any right to trial by jury in any
dispute, whether sounding in contract, tort, or otherwise, between Ford Credit,
any Guarantor or any other Person arising out of or related to this Guaranty or
the Wholesale Facilities executed with Ford Credit by any Guarantor and the
transactions contemplated by this Guaranty and the Wholesale Facilities executed
with Ford Credit by any Guarantor or any other

<PAGE>

instrument, document or agreement executed or delivered in connection herewith
or therewith. The Guarantors or Ford Credit may file an original counterpart or
a copy of this Guaranty with any court as written evidence of the consent of the
parties hereto to the waiver of their right to trial by jury.

      Section 25. Consent to Jurisdiction; Service of Process; Jury Trial. (a)
Non Exclusive Jurisdiction. Each Guarantor irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
Michigan state court or federal court of the United States of America sitting in
Michigan, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Guaranty or the Wholesale Facilities or
arising out of or relating to the relationship established among them in
connection with this Guaranty or any of the Wholesale Facilities, or for
recognition or enforcement of any judgment, and each Guarantor irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in any such Michigan state court or, to
the fullest extent permitted by law, in such federal court. Each Guarantor
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Guaranty shall affect any
right that any party may otherwise have to bring any action or proceeding
relating to this Guaranty or any of the Wholesale Facilities in the courts of
any jurisdiction. Each Guarantor irrevocably and unconditionally waives, to the
fullest extend it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Guaranty or any of the Wholesale Facilities
to which it is a party in any Michigan state or federal court. Each Guarantor
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

            (b) Other Jurisdictions. Ford Credit shall have the right to proceed
against any Guarantor or its real or personal property in a court in any
location to enable Ford Credit to obtain personal jurisdiction over the
Guarantor, to realize on the Collateral or any other security for the
obligations or to enforce a judgment or other court order entered in favor of
Ford Credit. No Guarantor shall assert any permissive counterclaims in any
proceeding brought by Ford Credit under this Section 25.

            (c) Venue; Forum Non Conveniens. Each of Ford Credit and the
Guarantors waives any objection that it may have (including, without limitation,
any objection to the laying of venue or based on forum non conveniens) to the
location of the court in which any proceeding is commenced in accordance with
this Section 25.

      Section 26. Service of Process. Each Guarantor waives personal service of
any process upon it and, as security for the Guaranteed Obligations, irrevocably
appoints CT CORPORATION as its registered agent for the purpose of accepting
service of process issued by any court in connection with any dispute between
any Guarantor and Ford Credit arising out of or related to this Guaranty, the
Wholesale Facilities or the relationship established between them in connection
with the Wholesale Facilities or any other document to which any Guarantor is a
party.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                           [SIGNATURE PAGES TO FOLLOW]

<PAGE>

            IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
      duly executed under seal and delivered by its officer thereunto duly
      authorized as of the date first above written.

Guarantor:                               Each of the entities listed on the
                                         remainder of this page

                                         HOMETOWN BRATTLEBORO, INC.

                                         By: __________________________________
                                         Name:  _______________________________
                                         Title: _______________________________

                                         FAMILY FORD, INC.

                                         By: __________________________________
                                         Name:  _______________________________
                                         Title: _______________________________

                                         SHAKER'S INC.

                                         By: __________________________________
                                         Name:  _______________________________
                                         Title: _______________________________

                                         WESTWOOD LINCOLN/MERCURY
                                         SALES, INC.

                                         By: __________________________________
                                         Name:  _______________________________
                                         Title: _______________________________

                                    SHAKER'S LINCOLN/MERCURY CAR CARE, INC.

                                          By: __________________________________
                                          Name:  _______________________________
                                          Title: _______________________________

                                         E.R.R. ENTERPRISES INC.

                                          By: __________________________________
                                          Name:  _______________________________
                                          Title: _______________________________

                                          HOMETOWN AUTO RETAILERS, INC.

                                          By: __________________________________
                                          Name:  _______________________________
                                          Title: _______________________________EXHIBIT 10.33

                                    GUARANTY

            GUARANTY (this "Guaranty") dated _______________, 2001 made by each
of the entities listed on the signature pages hereto, jointly and severally,
(each referred to individually herein as a "Guarantor", and collectively, the
"Guarantors"), in favor of FORD MOTOR CREDIT COMPANY, a Delaware corporation
("Ford Credit").

PRELIMINARY STATEMENTS

      WHEREAS, Ford Credit has extended and will extend wholesale credit lines
and other credit facilities (the "Wholesale Facilities") to Hometown Auto
Retailers, Inc., a Delaware corporation ("Hometown") and to certain dealership
subsidiaries now existing or hereafter acquired by Hometown over which Hometown
exercises control, directly or indirectly (collectively, the "Dealerships" and
individually, each a "Dealership"); and

      WHEREAS, it is a condition precedent to extending the Wholesale Facilities
that each Guarantor executes and delivers this Guaranty; and

      NOW, THEREFORE, in consideration of the premises and in order to induce
the Ford Credit to extend the Wholesale Facilities, each Guarantor hereby agrees
as follows:

      Section 1. Guaranty. (a) Each Guarantor hereby unconditionally and
irrevocably guarantees the punctual payment when due, whether at stated
maturity, by acceleration or otherwise, of all obligations of each Guarantor to
whom Ford Credit has extended a Wholesale Facility now or hereafter existing
under or in respect of the Wholesale Facilities (including, without limitation,
any extensions, modifications, substitutions, amendments or renewals of any or
all of the foregoing obligations), whether direct or indirect, absolute or
contingent, and whether for principal, interest, premiums, fees, indemnities,
contract causes of action, costs, expenses or otherwise (such obligations being
the "Guaranteed Obligations"), and agrees to pay any and all expenses (including
reasonable counsel fees and expenses) incurred by Ford Credit in enforcing any
rights under this Guaranty. Without limiting the generality of the foregoing,
each Guarantor's liability shall extend to all amounts that constitute part of
the Guaranteed Obligations and would be owed by any Dealership to Ford Credit
but for the fact that they are unenforceable or not allowable due to the
existence of a bankruptcy, reorganization or similar proceeding involving such
Dealership.

      (b) Each Guarantor, and by its acceptance of this Guaranty, Ford Credit,
hereby confirms that it is the intention of the parties that this Guaranty and
the obligations of each Guarantor hereunder not constitute a fraudulent transfer
or conveyance for purposes of Bankruptcy Law (as hereinafter defined), the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar foreign, federal or state law to the extent applicable to this Guaranty
and the obligations of each Guarantor hereunder. To effectuate the foregoing
intention, Ford Credit and the Guarantors hereby irrevocably agree that the
obligations of each Guarantor under this Guaranty at any time shall be limited
to the maximum amount as will result in the obligations of such Guarantor under
this Guaranty not constituting a fraudulent transfer or conveyance. For purposes
hereof, "Bankruptcy Law" means any proceeding of the type referred to in Section
6.1(f) and (g) of the Credit Agreement or Title 11, U.S. Code, or any similar
foreign, federal or state law for the relief of debtors.

      (c) Each Guarantor hereby unconditionally and irrevocably agrees that, in
the event any payment shall be required to be made to Ford Credit under this
Guaranty or any other by the Ford Credit in enforcing any rights under this
Guaranty), such Guarantor will contribute, to

<PAGE>

the maximum extent permitted by law, such amounts to each other Guarantor and
each other guarantor so as to maximize the aggregate amount paid to Ford Credit
under or in respect of the Wholesale Facilities.

      Section 2. Guaranty Absolute. Each Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of the
Wholesale Facilities, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of Ford Credit with respect thereto. The obligations of each Guarantor
under this Guaranty are independent of the Guaranteed Obligations or any other
obligations of any other party under the Wholesale Facilities, and a separate
action or actions may be brought and prosecuted against each Guarantor to
enforce this Guaranty, irrespective of whether any action is brought against the
Dealership to whom the Wholesale Facility was extended is joined in any such
action or actions. This Guaranty is a guaranty of payment and performance and
not of collection. The liability of each Guarantor under this Guaranty shall be
irrevocable, absolute and unconditional irrespective of, and each Guarantor
hereby irrevocably waives any defenses it may now or hereafter have in any way
relating to, any or all of the following:

      (a) any lack of validity or enforceability of any Wholesale Facility or
any agreement or instrument relating thereto;

      (b) any change in the time, manner or place of payment of, or in any other
term of, all or any of the Guaranteed Obligations, or any other amendment or
waiver of or any consent to departure from any Wholesale Facility, including,
without limitation, any increase in the Guaranteed Obligations resulting from
the extension of additional credit to the Dealership to whom the Wholesale
Facility was extended or otherwise;

      (c) any taking, exchange, release or non-perfection of any Collateral, or
any taking, release or amendment or waiver of or consent to departure from any
other guaranty, for all or any of the Guaranteed Obligations;

      (d) any manner of application of Collateral, or proceeds thereof, to all
or any of the Guaranteed Obligations, or any manner of sale or other disposition
of any Collateral for all or any of the Guaranteed Obligations under the
Wholesale Facilities or any other assets of any Guarantor;

      (e) any change, restructuring or termination of the corporate structure or
existence of any Guarantor;

      (f) any failure of Ford Credit to disclose to any Guarantor any
information relating to the business, condition (financial or otherwise),
operations, performance, properties or prospects of any other Guarantor now or
hereafter known to Ford Credit (each Guarantor waiving any duty on the part of
Ford Credit to disclose such information);

      (g) the failure of any other Person to execute or deliver this Guaranty or
any other guaranty or agreement or the release or reduction of liability of any
Guarantor or other guarantor or surety with respect to the Guaranteed
Obligations; or

      (h) any other circumstance (including, without limitation, any statute of
limitations) or any existence of or reliance on any representation by Ford
Credit that might otherwise constitute a defense available to, or a discharge
of, any Guarantor or any other guarantor or surety.

      This Guaranty shall continue to be effective or be reinstated, as the case
may be, if at any time any payment of any of the Guaranteed Obligations is
rescinded or must otherwise be returned by Ford Credit or any other person upon
the insolvency, bankruptcy or reorganization of any Guarantor or otherwise, all
as though such payment had not been made.

<PAGE>

      Section 3. Waivers and Acknowledgments. (a) Each Guarantor hereby waives
promptness, diligence, notice of acceptance and any other notice with respect to
any of the Guaranteed Obligations and this Guaranty and any requirement that
Ford Credit protect, secure, perfect or insure any lien or any property subject
thereto or exhaust any right or take any action against any Guarantor or any
other Person or any specific Collateral.

      (b) Each Guarantor hereby waives any right to revoke this Guaranty, and
acknowledges that this Guaranty is continuing in nature and applies to all
Guaranteed Obligations, whether existing now or in the future.

      (c) Each Guarantor acknowledges that it will receive substantial direct
and indirect benefits from the financing arrangements contemplated by the
Wholesale Facilities and that the waivers set forth in this Guaranty are
knowingly made in contemplation of such benefits.

      (d) Each Guarantor hereby unconditionally and irrevocably waives (i) any
defense arising by reason of any claim or defense based upon an election of
remedies by Ford Credit that in any manner impairs, reduces, releases or
otherwise adversely affects the subrogation, reimbursement, exoneration,
contribution or indemnification rights of such Guarantor or other rights of such
Guarantor to proceed against any of the other Guarantors, or any other Person or
any specific Collateral and (ii) any defense based on any right of set-off or
counterclaim against or in respect of the obligations of such Guarantor
hereunder.

      (e) Each Guarantor hereby unconditionally and irrevocably waives any duty
on the part of Ford Credit to disclose to such Guarantor any matter, fact or
thing relating to the business, condition (financial or otherwise), operations,
performance, properties or prospects of any other Guarantor or any of its
Subsidiaries now or hereafter known by Ford Credit.

      Section 4. Subrogation. No Guarantor will exercise any rights that it may
now or hereafter acquire against any other Guarantor that arise from the
existence, payment, performance or enforcement of the Guarantor's obligations
under this Guaranty, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of Ford Credit against any Guarantor or any
specific Collateral, whether or not such claim, remedy or right arises in equity
or under contract, statute or common law, including, without limitation, the
right to take or receive from any Guarantor directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or security on
account of such claim, remedy or right, unless and until all of the Guaranteed
Obligations and all other amounts payable under this Guaranty shall have been
paid in full in cash in accordance with the terms of the Wholesale Facilities.
If any amount shall be paid to any Guarantor in violation of the preceding
sentence at any time prior to the payment in full in cash of the Guaranteed
Obligations and all other amounts payable under this Guaranty, such amount shall
be held in trust for the benefit of Ford Credit and shall forthwith be paid to
Ford Credit to be credited and applied to the Guaranteed Obligations and all
other amounts payable under this Guaranty, whether matured or unmatured, in
accordance with the terms of the Wholesale Facilities, or to be held as
Collateral for any Guaranteed Obligations or other amounts payable under this
Guaranty thereafter arising. If (i) any Guarantor shall make payment to Ford
Credit of all or any part of the Guaranteed Obligations, (ii) all of the
Guaranteed Obligations and all other amounts payable under this Guaranty shall
be paid in full in cash and (iii) the Wholesale Facilities extended by Ford
Credit shall have terminated in accordance with their own terms, Ford Credit
will, at the Guarantors' request and expense, execute and deliver to the
Guarantors appropriate documents, without recourse and without representation or
warranty, necessary to evidence the transfer by subrogation to the Guarantors of
an interest in the Guaranteed Obligations resulting from such payment by a
Guarantor.

      Section 5. Representations and Warranties. Each Guarantor hereby
represents and warrants as follows:

<PAGE>

      (a) Each Guarantor (i) is a corporation, limited liability company or
limited partnership duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (ii) is duly qualified and in
good standing in each other jurisdiction in which it owns or leases property or
in which the conduct of its business requires it to so qualify or be licensed),
and (iii) has all requisite power and authority to own or lease and operate its
properties and to carry on its business as now conducted and as proposed to be
conducted.

      (b) The execution, delivery and performance by each Guarantor of this
Guaranty are within each such Guarantor's powers, have been duly authorized by
all necessary corporate, limited liability company, or limited partnership
action, and do not (i) contravene each such Guarantor's charter or bylaws or
similar organizational documents, (ii) violate any law (including, without
limitation, the Securities Exchange Act of 1934 and the Racketeer Influenced and
Corrupt Organizations Chapter of the Organized Crime Control Act of 1970), rule,
regulation (including, without limitation, Regulations T, U and X of the Board
of Governors of the Federal Reserve System), order, writ, judgment, injunction,
decree, determination or award, (iii) conflict with or result in the breach of,
or constitute a default under, any loan agreement, contract, indenture,
mortgage, deed of trust, lease or other instrument binding on or affecting such
Guarantor, any of its subsidiaries or any of its or their properties, the effect
of which conflict, breach or default is reasonably likely to have a Material
Adverse Effect, or (iv) except for the liens permitted under the Wholesale
Facilities, result in or require the creation or imposition of any lien upon or
with respect to any of the properties of any such Guarantor or any of its
Subsidiaries. No Guarantor is in violation of any such law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award, or in breach
of any such contract, loan agreement, indenture, mortgage, deed of trust, lease
or other instrument.

      (c) No authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body or any other third
party is required for (i) the due execution, delivery, recordation, filing or
performance by any Guarantor of this Guaranty, and (ii) the exercise by Ford
Credit of its rights under this Guaranty, except for (a) those that have been
made, obtained or given, and (b) filings necessary to create or perfect security
interests in the Collateral.

      (d) This Guaranty has been duly executed and delivered by each Guarantor.
This Guaranty is the legal, valid and binding obligation of each Guarantor,
enforceable against each Guarantor in accordance with its terms except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or limiting creditors' rights or by
equitable principles generally.

      (e) There are no conditions precedent to the effectiveness of this
Guaranty that have not been satisfied or waived.

      (f) Each Guarantor has, independently and without reliance upon Ford
Credit, and based on such documents and information as it has deemed
appropriate, made its own decision to enter into this Guaranty.

      Section 6. Covenants. Each Guarantor covenants and agrees that, so long as
any part of the Guaranteed Obligations shall remain unpaid or any of the
Wholesale Facilities extended by Ford Credit shall be in effect, such Guarantor
will perform and observe, and cause each of its Subsidiaries to perform and
observe, all of the terms, covenants and agreements set forth in the Wholesale
Facilities on its or their part to be performed or observed or that Hometown has
agreed to cause such Guarantor or such Subsidiaries to perform or observe.

      Section 7. Addition of Guarantors. Hometown agrees to cause each
Dealership and each Subsidiary of Hometown that manages a Dealership, directly
or indirectly, to agree to guarantee the Guaranteed Obligations by acknowledging
and agreeing to be bound by the

<PAGE>

terms and conditions of this Guaranty. Each Guarantor waives any defense that
may accrue to it by the addition of any entity acquired by Hometown and added as
a party to this Guaranty. Furthermore, each Guarantor acknowledges that Ford
Credit may extend to any such Dealership acquired by Hometown, Wholesale
Facilities that will be included in the Guaranteed Obligations.

      Section 8. No Waiver, Remedies. No failure on the part of Ford Credit to
exercise, and no delay in exercising, any right under any Wholesale Facility
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies in the Wholesale Facilities are
cumulative and not exclusive of any remedies provided by law.

      Section 9. Indemnification. (a) Each Guarantor agrees to defend, protect,
indemnify, and hold harmless Ford Credit and each of its respective Affiliates,
and each of the Ford Credit's, or Affiliate's respective officers, directors,
employees, attorneys and agents (including, without limitation, those retained
in connection with the satisfaction or attempted satisfaction of any of the
conditions set forth in Article III) (collectively, the "Indemnified Parties"
and each an "Indemnified Party") from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses of any kind or nature whatsoever (including, without limitation,
the fees and disbursements of counsel for such Indemnitees in connection with
any investigative, administrative or judicial proceeding, whether or not such
Indemnitees shall be designated a party thereto), imposed on, incurred by, or
asserted against such Indemnitees in any manner relating to or arising out of:

            (i) the execution of this Guaranty and the Wholesale Facilities, or
      any act, event or transaction related or attendant thereto, or any of the
      other transactions contemplated by the Wholesale Facilities;

            (ii) any liabilities, obligations, responsibilities, losses,
      damages, personal injury, death, punitive damages, economic damages,
      consequential damages, treble damages, intentional, willful or wanton
      injury, damage or threat to the environment, natural resources or public
      health or welfare, costs and expenses (including, without limitation,
      attorney, expert and consulting fees and costs of investigation,
      feasibility or remedial action studies), fines, penalties and monetary
      sanctions, interest, direct or indirect, known or unknown, absolute or
      contingent, past, present or future relating to violation of any
      Environmental, Health or Safety Requirements of Law arising from or in
      connection with the past, present or future operations of Hometown, any
      Guarantor or any of their respective predecessors in interest, or, the
      past, present or future environmental, health or safety condition of any
      respective property of Hometown or any Guarantor, the presence of
      asbestos-containing materials at any respective property of Hometown or
      any Guarantor or the Release or threatened Release of any Contaminant into
      the environment (collectively, the "Indemnified Matters");

provided, however, that no Guarantor shall have any obligation to an Indemnified
Party hereunder with respect to any of the aforementioned indemnified matters
caused by or resulting from the willful misconduct or gross negligence of such
Indemnified Party as determined by the final non-appealed judgment of a court of
competent jurisdiction. If the undertaking to indemnify, pay and hold harmless
set forth in the preceding sentence may be unenforceable because it is violative
of any law or public policy, each Guarantor shall contribute the maximum portion
which it is permitted to pay and satisfy under applicable law, to the payment
and satisfaction of all Indemnified Matters incurred by the Indemnified Parties.
It is understood and agreed that, to the extent not precluded by a conflict of
interest, each Indemnitee shall endeavor to work cooperatively with the Borrower
with a view toward minimizing the legal and other expenses associated with any
defense and any potential settlement or judgment. Settlement of any claim or
litigation involving any material indemnified amount will require the approval
of Hometown (which may not be unreasonably withheld), provided, however, that no
Guarantor shall have

<PAGE>

any obligation to an Indemnified Party hereunder with respect to any of the
aforementioned indemnified matters caused by or resulting from the willful
misconduct or gross negligence of such Indemnified Party as determined by the
final non-appealed judgment of a court of competent jurisdiction.

      (b) Each Guarantor hereby also agrees that none of the Indemnified Parties
shall have any liability (whether direct or indirect, in contract, tort or
otherwise) to any of the Guarantors or any of their respective Affiliates or any
of their respective officers, directors, employees, agents and advisors, and
each Guarantor hereby agrees not to assert any claim against any Indemnified
Party on any theory of liability, for special, indirect, consequential or
punitive damages arising out of or otherwise relating to this Guaranty or the
Wholesale Facilities, the actual or proposed use of the proceeds of the advances
made under the Wholesale Facilities, or any of the transactions contemplated by
the Wholesale Facilities.

      (c) Without prejudice to the survival of any of the other agreements of
any Guarantor under this Guaranty or any of the other Wholesale Facilities, the
agreements and obligations of each Guarantor contained in Section 1(a) (with
respect to enforcement expenses), the last sentence of Section 2 and this
Section 9 shall survive the payment in full of the Guaranteed Obligations and
all of the other amounts payable under this Guaranty.

      Section 10. Subordination. Each Guarantor hereby subordinates any and all
debts, liabilities and other Obligations owed to such Guarantor by any other
Guarantor (the "Subordinated Obligations") to the Guaranteed Obligations to the
extent and in the manner hereinafter set forth in this Section 10:

      (a) Prohibited Payments. Except during the continuance of an event of
default under any of the Wholesale Facilities (including the commencement and
continuation of any proceeding under any Bankruptcy Law relating to any
Guarantor), to the extent permitted by the Wholesale Facilities, each Guarantor
may receive regularly scheduled payments from any other Guarantor on account of
the Subordinated Obligations. After the occurrence and during the continuance of
any event of default under any of the Wholesale Facilities (including the
commencement and continuation of any proceeding under any Bankruptcy Law
relating to any Guarantor), however, unless Ford Credit otherwise agrees, no
Guarantor shall demand, accept or take any action to collect any payment on
account of the Subordinated Obligations.

      (b) Prior Payment of Guaranteed Obligations. In any proceeding under any
Bankruptcy Law relating to any Guarantor, each Guarantor agrees that Ford Credit
shall be entitled to receive payment in full in cash of all Guaranteed
Obligations (including all interest and expenses accruing after the commencement
of a proceeding under any Bankruptcy Law, whether or not constituting an allowed
claim in such proceeding ("Post Petition Interest")) before such Guarantor
receives payment of any Subordinated Obligations.

      (c) Turn-Over. After the occurrence and during the continuance of any
event of default under any of the Wholesale Facilities (including the
commencement and continuation of any proceeding under any Bankruptcy Law
relating to any Guarantor), each Guarantor shall, if Ford Credit so requests,
collect, enforce and receive payments on account of the Subordinated Obligations
as trustee for Ford Credit and deliver such payments to Ford Credit on account
of the Guaranteed Obligations (including all Post Petition Interest), together
with any necessary endorsements or other instruments of transfer, but without
reducing or affecting in any manner the liability of such Guarantor under the
other provisions of this Guaranty and the Wholesale Facilities.

      (d) Administrative Agent Authorization. After the occurrence and during
the continuance of any event of default under any of the Wholesale Facilities
(including the commencement and continuation of any proceeding under any
Bankruptcy Law relating to any Guarantor), Ford Credit is authorized and
empowered (but without any obligation to so do), in its

<PAGE>

discretion, (i) in the name of each Guarantor, to collect and enforce, and to
submit claims in respect of, Subordinated Obligations and to apply any amounts
received thereon to the Guaranteed Obligations (including any and all Post
Petition Interest), and (ii) to require each Guarantor (A) to collect and
enforce, and to submit claims in respect of, Subordinated Obligations and (B) to
pay any amounts received on such obligations to Ford Credit for application to
the Guaranteed Obligations (including any and all Post Petition Interest).

      Section 11. Continuing Guaranty. This Guaranty is a continuing guaranty
and shall (a) remain in full force and effect until the later of the payment in
full in cash of the Guaranteed Obligations and all other amounts payable under
this Guaranty and the date the Wholesale Facilities shall have terminated in
accordance with their own terms, (b) be binding upon each Guarantor, its
successors and assigns, and (c) inure to the benefit of and be enforceable by
Ford Credit and its successors, transferees and assigns.

      Section 12. Definitions. With respect to all documents executed by a
Guarantor in connection with the Wholesale Facilities, the singular shall
include the plural and vice versa and any gender shall include any other gender
as the context may require.

      Section 13. Successors and Assigns. This Guaranty shall be binding upon
and inure to the benefit of the Guarantor, Ford Credit, and their respective
successors and assigns. The Guarantor's successors and assigns shall include,
without limitation, a receiver, trustee or debtor-in-possession of or for the
Guarantor.

      Section 14. Governing Law; Severability. This Guaranty shall be governed
by, and construed in accordance with, the internal laws (as opposed to conflict
of laws provisions) of the State of Michigan. Whenever possible, each provision
of this Guaranty shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Guaranty shall be held
to be prohibited or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Guaranty or any other document executed in connection with a Wholesale Facility.

      Section 15. Advice of Counsel. Each Guarantor represents and warrants to
Ford Credit that it has consulted with its legal counsel regarding all waivers
under this Guaranty and the Wholesale Facilities, it believes that it fully
understands all rights that it is waiving and the effect of such waivers, that
it assumes the risk of any misunderstanding that it may have regarding any of
the foregoing, and that it intends that such waivers shall be a material
inducement to Ford Credit to extend the indebtedness secured hereby.

      Section 16. Further Assurances. Each Guarantor agrees that it will
cooperate with Ford Credit and will execute and deliver, or cause to be executed
and delivered, all such other agreements, instruments, documents, stock powers
and proxies and will take all such other actions, including, without limitation,
the execution and filing of financing statements, as Ford Credit may reasonably
request from time to time in order to carry out the provisions and purposes of
this Guaranty and the Wholesale Facilities.

      Section 17. Costs and Expenses. Each Guarantor will upon demand pay to
Ford Credit the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, which
Ford Credit may incur in connection with (i) the administration of the Wholesale
Facilities, (ii) the custody or preservation of, or the sale of, collection
from, or other realization upon, any of collateral in which the Guarantor has
separately granted Ford Credit a security interest ("Collateral"), (iii) the
exercise or enforcement of any of the rights of Ford Credit under the Wholesale
Facilities or this Guaranty, or (iv) the failure by any Dealership to perform or
observe any of the provisions of the Wholesale Facilities.

<PAGE>

      Section 18. Notices. All notices and other communications provided for
under this Guaranty shall be in writing (including telecopier, telegraphic,
telex or cable communication) and mailed, telecopied, telegraphed, telexed,
cabled or delivered, if to the Guarantor, care of Hometown at its address at 774
Straits Turnpike, Watertown, CT; if to the Ford Credit, at its address (insert
address); or, as to each party, at such other address as shall be designated by
such party in a written notice to the other party. All such notices and
communications shall be effective, upon receipt, or in the case of (i) notice by
mail, five days after being deposited in the United States mails, first class
postage prepaid, (ii) notice by overnight courier, one business day after being
deposited with a national overnight courier service, (iii) notice by telex, when
telexed against receipt of answer back or (iv) notice by facsimile copy, when
transmitted against mechanical confirmation of successful transmission.

      Section 19. Amendments, Waivers and Consents. No amendment or waiver of
any provision of this Guaranty or in any Wholesale Facility nor consent to any
departure by any Guarantor therefrom, shall in any event be effective unless the
same shall be in writing and signed by Ford Credit and then such amendment,
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.

      Section 20. Section Headings. The section headings herein are for
convenience of reference only, and shall not affect in any way the
interpretation of any of the provisions hereof.

      Section 21. Execution in Counterparts. This Guaranty may be executed in
any number of counterparts, each of which shall be an original, but all of which
shall together constitute one and the same agreement.

      Section 22. Merger. This Guaranty represents the final agreement of each
Guarantor with respect to the matters contained herein and may not be
contradicted by evidence of prior or contemporaneous agreements, or subsequent
oral agreements, between any Guarantor and Ford Credit.

      Section 23. No Strict Construction. The parties to the Wholesale
Facilities have participated jointly in the negotiation and drafting of the
Wholesale Facilities. In the event an ambiguity or question of intent or
interpretation arises, the Wholesale Facilities shall be construed as if drafted
jointly by the parties hereto and no presumption or burden or proof shall arise
favoring or disfavoring any party by virtue of the authorship of any provisions
of the Wholesale Facilities.

      Section 24. Waiver of Jury Trial. To the maximum extent of applicable law,
Ford Credit and each of the Guarantors waives any right to trial by jury in any
dispute, whether sounding in contract, tort, or otherwise, between Ford Credit,
any Guarantor or any other Person arising out of or related to this Guaranty or
the Wholesale Facilities executed with Ford Credit by any Guarantor and the
transactions contemplated by this Guaranty and the Wholesale Facilities executed
with Ford Credit by any Guarantor or any other instrument, document or agreement
executed or delivered in connection herewith or therewith. The Guarantors or
Ford Credit may file an original counterpart or a copy of this Guaranty with any
court as written evidence of the consent of the parties hereto to the waiver of
their right to trial by jury.

      Section 25. Consent to Jurisdiction; Service of Process; Jury Trial. (a)
Non Exclusive Jurisdiction. Each Guarantor irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
Michigan state court or federal court of the United States of America sitting in
Michigan, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Guaranty or the Wholesale Facilities or
arising out of or relating to the relationship established among them in
connection with this Guaranty or any of the Wholesale Facilities, or for
recognition or enforcement of any judgment, and each Guarantor irrevocably and
unconditionally agrees that all claims in respect of any such action or

<PAGE>

proceeding may be heard and determined in any such Michigan state court or, to
the fullest extent permitted by law, in such federal court. Each Guarantor
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Guaranty shall affect any
right that any party may otherwise have to bring any action or proceeding
relating to this Guaranty or any of the Wholesale Facilities in the courts of
any jurisdiction. Each Guarantor irrevocably and unconditionally waives, to the
fullest extend it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Guaranty or any of the Wholesale Facilities
to which it is a party in any Michigan state or federal court. Each Guarantor
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

            (b) Other Jurisdictions. Ford Credit shall have the right to proceed
against any Guarantor or its real or personal property in a court in any
location to enable Ford Credit to obtain personal jurisdiction over the
Guarantor, to realize on the Collateral or any other security for the
obligations or to enforce a judgment or other court order entered in favor of
Ford Credit. No Guarantor shall assert any permissive counterclaims in any
proceeding brought by Ford Credit under this Section 25.

            (c) Venue; Forum Non Conveniens. Each of Ford Credit and the
Guarantors waives any objection that it may have (including, without limitation,
any objection to the laying of venue or based on forum non conveniens) to the
location of the court in which any proceeding is commenced in accordance with
this Section 25.

      Section 26. Service of Process. Each Guarantor waives personal service of
any process upon it and, as security for the Guaranteed Obligations, irrevocably
appoints CT CORPORATION as its registered agent for the purpose of accepting
service of process issued by any court in connection with any dispute between
any Guarantor and Ford Credit arising out of or related to this Guaranty, the
Wholesale Facilities or the relationship established between them in connection
with the Wholesale Facilities or any other document to which any Guarantor is a
party.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                           [SIGNATURE PAGES TO FOLLOW]

<PAGE>

            IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
duly executed under seal and delivered by its officer thereunto duly authorized
as of the date first above written.

Guarantor:                               Each of the entities listed on the
                                         remainder of this page

                                          HOMETOWN AUTO FRAMINGHAM, INC.

                                          By: __________________________________

                                          Name:  _______________________________
                                          Title: _______________________________

                                          MULLER AUTOMOTIVE GROUP, INC.

                                          By: __________________________________

                                          Name:  _______________________________
                                          Title: _______________________________

                                          G0OD DAY CHEVROLET, OLDSMOBILE,
                                          ISUZU, INC.

                                          By: __________________________________

                                          Name:  _______________________________
                                          Title: _______________________________

                                          HOMETOWN NEWBURGH, INC.

                                          By: __________________________________

                                          Name:  _______________________________
                                          Title: _______________________________

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