EMPLOYMENT AGREEMENT





        EMPLOYMENT AGREEMENT (this "Agreement"), effective as of November 3,

2000 (the "Effective Date"), between JAMES J. MCNAMARA ("Executive") and

NATIONAL AUTO CREDIT, INC., a Delaware corporation ("Employer").



        In consideration of the premises and the mutual covenants hereinafter

set forth and other good and valuable consideration, the receipt and sufficiency

of which is hereby acknowledged, the parties hereto hereby agree as follows:



1.      EMPLOYMENT OF EXECUTIVE



        Employer hereby agrees to employ Executive, and Executive hereby agrees

to be and remain in the employ of Employer, upon the terms and conditions

hereinafter set forth.



2.      EMPLOYMENT PERIOD; EMPLOYMENT YEAR



        2.1 EMPLOYMENT PERIOD. Subject to earlier termination as provided in

Section 5, the term of Executive's employment under this Agreement shall

commence as of the date hereof and shall continue until December 31, 2003 (the

"Initial Employment Period"). Unless either party gives notice of non-renewal at

least ninety (90) days prior to the expiration of the Initial Employment Period

or any extension thereof, the term of this Agreement shall be extended for an

additional one (1) year period beyond the end of the Initial Employment Period,

or the end of any extension thereof, as the case may be (the Initial Employment

Period and any extension thereof is hereafter referred to as the "Employment

Period").



        2.2 EMPLOYMENT YEAR. Each 12-month period ending on October 31 shall be

hereinafter considered an "Employment Year."



3.      DUTIES AND RESPONSIBILITIES; PLACE OF PERFORMANCE



        3.1 DUTIES AND RESPONSIBILITIES. During the Employment Period, Executive

shall have the titles of Chairman of the Board and Chief Executive Officer of

the Employer. Executive shall devote substantially all of his business time to

the Employer. Executive shall be responsible for the affairs of the Employer and

its subsidiaries in pursuit of the Employer's Business. Executive shall perform

such duties, consistent with his status as Chairman of the Board and Chief

Executive Officer of Employer, as he may be assigned from time to time by

Employer's Board of Directors (the "Board").



        3.2 PLACE OF PERFORMANCE. In connection with his employment during the

Employment Period, the Executive shall be based at the Employer's current

principal offices in Solon, Ohio or such other principal offices as may be

established in the future by the Board. Executive shall travel to such principal

office, as necessary, from his home and shall be reimbursed by Employer for all

expenses thereof. Employer shall maintain an office for the Executive in either

New York, New York or Palm Beach County, Florida.



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4.      COMPENSATION AND RELATED MATTERS



        4.1 BASE SALARY. Employer shall pay to Executive a base salary at the

rate of $500,000 per annum, subject to increase at the discretion of the Board

(the initial base salary, including any Board approved increase thereof, the

"Base Salary"), payable in advance in monthly increments.



        4.2 ANNUAL BONUS. Schedule A hereto sets forth certain performance

objectives (each a "Milestone") for the Employer to achieve during each

Employment Year during the Initial Employment Period. To the extent the relevant

Milestone for any Employment Year is achieved, Executive shall receive a cash

bonus based on a target of $250,000 per year (the "Target Bonus"). Executive's

bonus in any Employment Year may be increased above the Target Bonus if, in the

opinion of the Board, such increase is appropriate to reward Executive's

performance for such year (the Target Bonus, together with any increase, being

hereinafter referred to as the "Bonus"). Except as otherwise set forth in

Section 6 hereof, if any Milestone for the Employment Year in which the

Employment Period terminates has been achieved prior to such termination,

Executive shall be entitled to receive the full amount of the Target Bonus.



        (a) Schedule A contains Milestones expressed in terms of the Stock Price

of Employer. As used herein, "Stock Price" shall mean the average of the closing

bid prices of the Common Stock ("Common Stock"), par value $.05 per share, of

Employer, as reported by the principal market where the Common Stock is then

traded, over the [10] trading days preceding October 31 in each Employment Year

(as adjusted for stock splits, stock dividends, reclassification or other

similar events). If, at the end of the particular Employment Year, the

Employer's Stock Price is equal to or exceeds one or more of the prices

specified, Executive shall be entitled to the percentage of the Target Bonus set

forth next to the highest such price achieved. Any Bonus earned as a result of

achieving the Stock Price target shall be paid to Executive within three

business days of the end of the Employment Year in which the Milestone is

achieved.



        (b) Achievement of multiple Milestones in any Employment Year shall not

entitle Executive to more than 100% of the Target Bonus for such Employment

Year, unless the Board increases the Bonus with respect to such Employment Year.

The maximum aggregate Target Bonus during the Initial Employment Period shall be

three (3) times the Target Bonus, unless the Board increases the Bonus with

respect to one or more Employment Years.



        (c) In the event of a Change in Control (as defined below) of Employer,

Executive shall be immediately entitled to the full amount of the Target Bonus

with respect to any Employment Years remaining in the Employment Period. As used

in this Agreement, the term "Change in Control" means (i) any sale, lease,

exchange or other transfer (in one transaction or a series of related

transactions) of all or substantially all of the assets of the Employer; (ii)

any sale, lease exchange or other transfer (in one transaction or a series of

related transactions) of shares of capital stock of the Employer such that any

person or group (other than the holders generally of the Employer's capital

stock immediately prior to such transaction or series of transactions) shall







                                      -2-

<PAGE>   3





become the owner, directly or indirectly, beneficially or of record, of shares

representing more than thirty-three percent (33%) of the aggregate ordinary

voting power represented by the issued and outstanding voting securities of the

Employer; or (iii) any merger, consolidation, recapitalization, acquisition or

similar transaction (other than any such transaction involving only the Employer

and/or one or more wholly owned subsidiaries of the Employer) in which the

outstanding voting securities of the Employer are converted into or exchanged

for cash, securities or other property, such that immediately after such

transaction any person or group (other than the holders generally of such

capital stock immediately prior to such transaction or series of transactions)

shall become the owner, directly or indirectly , beneficially or of record, of

shares representing more than twenty percent (20%) of the aggregate ordinary

voting power represented by the issued and outstanding voting securities of the

Employer.



        4.3 SIGNING BONUS AND COMPENSATION FOR PAST SERVICES; BONUS FOR STOCK

LISTING. Within 10 days of the execution of this Agreement, Employer shall pay

to Executive a lump-sum payment of $750,000 as a signing bonus and as

compensation for services previously performed by Executive for the Employer.

Executive shall also receive a $1,000,000 cash bonus immediately upon the

Employer's Common Stock being listed on the NASDAQ Stock Market, the American

Stock Exchange or the New York Stock Exchange; PROVIDED, HOWEVER, that such

listing shall have occurred during the Initial Employment Period and that

Executive's employment hereunder shall not have been terminated for "Cause" (as

defined in Section 5.2 below) prior to the date of such listing.



        4.4 LIFE INSURANCE. Employer shall maintain in effect at all times

during the Employment Period, at Employer's expense, a policy of split dollar

life insurance on the life of Executive with a death benefit equal to three (3)

times the Base Salary, naming such person as Executive shall designate from time

to time as the owner and beneficiary thereof; PROVIDED, HOWEVER, that the

premium for such life insurance shall not exceed $50,000 per year.



        4.5 AUTOMOBILE ALLOWANCE. Employer shall provide Executive with a

monthly allowance during the Employment Period of $1,250 to cover the costs of a

leased automobile, including maintenance, fuel, and insurance.



        4.6 OTHER BENEFITS. During the Employment Period, subject to, and to the

extent Executive is eligible under their respective terms, Executive shall be

entitled to receive such fringe benefits as are, or are from time to time

hereafter generally provided by Employer to Employer's senior management

employees or other employees (other than those provided under or pursuant to

separately negotiated individual employment agreements or arrangements) under

any pension or retirement plan, disability plan or insurance, group life

insurance, medical and dental insurance, accidental death and dismemberment

insurance, travel accident insurance or other similar plan or program of

Employer. Employer shall provide short-term and long-term disability insurance

for Executive which provides benefits equal to at least 60% of Base Salary. To

the degree that Employer's medical insurance does not fully cover the cost of an

annual physical examination for Executive, Employer shall reimburse Executive

for such expense promptly after such expense is incurred. Executive's Base

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