---

Rent-A-Wreck of America Announces Q1 Results

15 August 2000

    OWINGS MILLS, Md. - Rent-A-Wreck of America, Inc. announced earnings for its first fiscal quarter ended June 30, 2000.

    The Company reported an increase in operating cash flow (EBITDA) of 35%. Net income was $292,732, or $.05 per common share (Diluted), an increase of approximately 26% over net income of $233,031 in the same period last year. Net revenues increased 17% from $1,479,161 to $1,729,677.

    The increase was mainly due to a 20% increase in continuing license fees and a 46% increase in premiums in connection with the new reinsurance program. Net income applicable to common shares increased by 29% to $270,632, or $.08 per common share (Basic).

    The statements regarding anticipated future performance of the Company contained in this press release are forward-looking statements which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

CONDENSED CONSOLIDATED FINANCIAL STATEMENT ATTACHED


                                Three Months ended June 30, 
                                     1999         2000         
                                 ----------------------
                             (in thousands except per share
                             amounts and number of franchises)
                                        (Unaudited)
Franchisees' Results

Franchisees' revenue (1)          $11,322       $13,590
Number of franchised locations        655           663

Results of Operations

Total revenue                     $ 1,479       $ 1,730
Total expense                       1,158         1,298
Income before income
  taxes                               339           476
Net income                            233           293
Earnings per common share

 Basic                            $   .05       $   .08
 Weighted average common
  shares                            3,940         3,568

 Diluted                          $   .04       $   .05
 Weighted average common
  shares plus convertible
   preferred stock, and options
    and warrants                    5,893         5,421


EBITDA (2)                            378           511

(1) The franchisees' revenue data have been derived from unaudited reports provided by franchisees in paying license fees.

(2) "EBITDA" is earnings before interest expense, depreciation, amortization, taxes and repurchase of options. EBITDA should not be interpreted as a measure of operating results, cash flow provided by operating activities, a measure of liquidity, or as an alternative to any generally accepted accounting principle measure of performance. The Company is reporting EBITDA because it is a widely used financial measure of the potential capacity of a company to incur and service debt. Rent-A-Wreck's reported EBITDA may not be comparable to similarly titled measures used by other companies.