Rent-A-Wreck to Merge with MBFG, Inc.

OWINGS MILLS, Md.--Jan. 20, 2006--Rent-A-Wreck of America, Inc. ("Rent-A-Wreck") is pleased to announce that on January 20, 2006, it entered into an agreement to merge with MBFG, Inc., a Delaware corporation ("MBFG"). Following the merger, Rent-A-Wreck will be the surviving corporation and all shares of Rent-A-Wreck stock will be held by MBFG. Closing of the merger is anticipated to occur within the next week.

MBFG is a wholly-owned subsidiary of J.J.F. Management Services, Inc. of Kensington, Maryland ("JJF Management Services"). JJF Management Services and its subsidiaries own and operate 10 Budget and 14 NextCar car and truck rental locations with 2500 vehicles. JJF Management Services also owns and operates 33 automobile and truck franchises in thirteen locations in Maryland, Pennsylvania and Florida. JJF Management Services' total revenues in calendar 2005 were in excess of $600 million.

Upon closing of the merger, holders of Rent-A-Wreck stock are expected to receive $0.40 in cash per share of Rent-A-Wreck Common Stock and $0.88 in cash per share of Rent-A-Wreck Series A Convertible Preferred Stock ("Preferred Stock"). As of January 20, 2006, Rent-A-Wreck had 4,186,296 outstanding shares of Common Stock and 1,084,375 outstanding shares of Preferred Stock.

The merger has been approved by the respective boards of directors of MBFG and Rent-A-Wreck, by JJF Management Services as the sole shareholder of MBFG, as well as by the written consent of holders of a majority of the issued and outstanding shares of both Rent-A-Wreck's Preferred Stock and Rent-A-Wreck's Common Stock entitled to vote thereon, voting together on an as converted basis, and by holders of a majority of the issued and outstanding shares of Preferred Stock entitled to vote thereon, voting as a separate class. Rent-A-Wreck will send a notice to all of its stockholders who did not consent to the merger.

Rent-A-Wreck's merger with MBFG follows its unconsummated attempt to sell its business to San Diego Car Rentals, Inc. ("SDCR"). Rent-A-Wreck originally entered into an agreement and plan of merger with SDCR on October 7, 2005. The shareholders of Rent-A-Wreck approved the merger with SDCR at a meeting on November 17, 2005. However, in the end, Rent-A-Wreck and SDCR were not able to consummate their merger, and Rent-A-Wreck terminated the agreement and plan of merger with SDCR. Thereafter, Rent-A-Wreck's board of directors entertained offers from other parties.

Rent-A-Wreck ultimately accepted the offer from MBFG, the terms of which Rent-A-Wreck believes are even more favorable to Rent-A-Wreck and its shareholders than the offer made by SDCR and others.

"We have been continuously working to improve the Company and its value for the benefit of Rent-A-Wreck shareholders," said Kenneth Blum, Sr., President of Rent-A-Wreck. "We believe that this merger permits shareholders to realize a return on their investment and creates an opportunity for Rent-A-Wreck licensees to grow their businesses," said Michael DeLorenzo, Vice President of MBFG.