Edgar Filing: SMART CHOICE AUTOMOTIVE GROUP INC

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SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss.240.14a-12

SMART CHOICE AUTOMOTIVE GROUP, INC.
-----------------------------------
(Name of Registrant as Specified in Its Charter)

Not applicable
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):

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[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
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(1) Amount Previously Paid: __________________________________________________

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(4) Date Filed: :____________________________________
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SMART CHOICE AUTOMOTIVE GROUP, INC.
1555 NORTH SEMORAN BOULEVARD
WINTER PARK, FLORIDA 32792

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 24, 2001

To the Shareholders of Smart Choice Automotive Group, Inc.,

Notice is hereby given that the 2001 Annual Meeting of Shareholders of
Smart Choice Automotive Group, Inc., a Florida corporation, will be held at the
corporate headquarters of Paaco Automotive Group, Inc., a subsidiary of Smart
Choice, at 2915 Alouette Drive, Grand Prairie, Texas, on Wednesday, October 24,
2001, at 2:00 p.m., local time, for the following purposes:

(1) To elect five directors to serve for a term of one year and
until their successors have been elected and qualified; and

(2) To conduct such other business as may properly come before the
meeting or any adjournment or postponement thereof.

Only shareholders of record as of the close of business on August 27,
2001 will be entitled to notice of and to vote at the meeting or any adjournment
or postponement thereof.

A proxy statement and a proxy solicited by the Board of Directors are
enclosed herewith. Please sign, date and return the proxy promptly. If you
attend the meeting, you may, if you wish, withdraw your proxy and vote in
person.

By Order of the Board of Directors,

/s/ Edward R. McMurphy

Edward R. McMurphy
Chairman of the Board

August 27, 2001

WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, YOU ARE URGED TO
COMPLETE, SIGN, DATE AND MAIL THE ENCLOSED PROXY IN THE ACCOMPANYING RETURN
ENVELOPE, TO WHICH NO POSTAGE IS REQUIRED IF MAILED WITHIN THE UNITED STATES.
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SMART CHOICE AUTOMOTIVE GROUP, INC.
1555 NORTH SEMORAN BOULEVARD
WINTER PARK, FLORIDA 32792

ANNUAL MEETING OF SHAREHOLDERS
OCTOBER 24, 2001

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PROXY STATEMENT

------------------------

This proxy statement, which is first being mailed to shareholders on or
about September 10, 2001, is furnished in connection with the solicitation of
proxies by and on behalf of the Board of Directors of Smart Choice Automotive
Group, Inc., for use at Smart Choice's 2001 Annual Meeting of Shareholders, to
be held at the corporate headquarters of Paaco Automotive Group, Inc., a
subsidiary of Smart Choice, at 2915 Alouette Drive, Grand Prairie, Texas, on
Wednesday, October 24, 2001, at 2:00 p.m., local time, and at any adjournments
or postponements thereof. The address of the principal executive offices of
Smart Choice is 1555 North Semoran Boulevard, Winter Park, Florida 32792, and
Smart Choice's telephone number at that address is (407) 671-1200.

The total cost of this solicitation will be borne by Smart Choice. In
addition to the U.S. mail, proxies may be solicited by officers and regular
employees of Smart Choice, without remuneration, by personal interviews,
telephone and facsimile. It is anticipated that banks, brokerage houses and
other custodians, nominees and fiduciaries will forward soliciting material to
beneficial owners of stock entitled to vote at the Annual Meeting.

Any person giving a proxy pursuant to this proxy statement may revoke
it at any time before it is exercised at the Annual Meeting by notifying in
writing the Secretary of Smart Choice, Ronald Anderson, at 1555 North Semoran
Boulevard, Winter Park, Florida 32792, prior to the Annual Meeting date. In
addition, if the person executing the proxy is present at the Annual Meeting, he
may, but need not, revoke the proxy, by giving notice of such revocation to the
Secretary of the Annual Meeting, and vote his shares in person. Proxies in the
form enclosed, if duly signed and received in time for voting, and not so
revoked, will be voted at the Annual Meeting in accordance with the instructions
specified therein. Where no choice is specified, proxies will be voted FOR the
election of the director nominees named herein and, on any other matters
presented for a vote, in accordance with the judgment of the persons acting
under the proxies. Abstentions and broker non-votes will not be counted as votes
either in favor of or against the matter with respect to which the abstention or
broker non-vote relates.

Only shareholders of record at the close of business on August 27,
2001, will be entitled to notice of and to vote at the Annual Meeting and any
adjournments or postponements thereof. Each share of common stock issued and
outstanding on such record date is entitled to one vote. As of August 27, 2001,
Smart Choice had outstanding 9,762,270 shares of common stock.

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AGENDA ITEM ONE
ELECTION OF DIRECTORS

Pursuant to the Bylaws of Smart Choice, the Board of Directors has set
the number of directors for the ensuing year at five, all of whom are proposed
to be elected at the Annual Meeting. In the event any nominee is unable or
declines to serve as a director at the time of the meeting, the persons named as
proxies will have discretionary authority to vote the proxies for the election
of such person or persons as may be nominated in substitution by the Board of
Directors. Management knows of no current circumstances which would render any
nominee named herein unable to accept nomination or election. Directors shall be
elected by a plurality of the votes cast by the holders of shares entitled to
vote in the election of directors at a meeting of shareholders at which a quorum
is present.

Members of the Board of Directors are elected annually to serve until
the next annual meeting of shareholders and until their successors are elected
and qualified.

The Board of Directors is presently composed of the following
individuals, each of whom has been nominated for re-election at the Annual
Meeting:

EDWARD R. MCMURPHY, age 50, has served as Chairman of the Board of
Smart Choice since December 1999. He has served as the Chief Executive Officer
and Chairman of Crown Group, Inc. since July 1984, and has served as a director
of Crown Group since its inception in April 1983.

J. EDWARD ERNST, C.P.A., age 50, has served as President and Chief
Executive Officer and as a director of Smart Choice since December 1999. Prior
to joining Smart Choice, Mr. Ernst served as a consultant to Crown Group from
November 1998 until December 1999. From December 1995 until October 1998, he
served as President and Chief Executive Officer of Casino Magic Corporation.

LARRY W. LANGE, age 61, has served as a director and Vice President of
Smart Choice since Smart Choice acquired PAACO Automotive Group, Inc. in
December 1999. Mr. Lange, the founder of PAACO, served as its President and
Chief Executive Officer from its inception in 1992 until December 1999. Prior to
1992, he owned and operated several new car franchises.

TILMAN J. FALGOUT, III, age 52, has served as Executive Vice President
and General Counsel of Crown Group since March 1995, and as a director of Crown
Group since September 1992. Mr. Falgout has served as a director of Smart Choice
since December 1999. From 1978 until June 1995, Mr. Falgout was a partner in the
law firm of Stumpf & Falgout, Houston, Texas.

ROBERT J. ABRAHAMS, age 74, has served as a director of Smart Choice
since 1997. For the past eleven years, Mr. Abrahams has been self employed as an
independent consultant in the financial services industry. Mr. Abrahams also
serves on the Board of Directors of HMI Industries, Inc., a public company, and
four private independent consumer finance companies.

COMMITTEES OF THE BOARD AND MEETINGS

The Board of Directors of Smart Choice presently has a standing Audit
Committee, composed of Robert Abrahams and Tilman J. Falgout, III, which is
authorized to nominate Smart Choice's independent auditors and to review with
the independent auditors the scope and results of the audit engagement. The
Board of Directors has not adopted an Audit Committee Charter. Messrs. Falgout
and Abrahams are "independent," as that term is defined in Rule 4200(a)(14) of
the National Association of Securities Dealer's listing standards. The Audit
Committee held one meeting during the fiscal year ended April 30, 2001. The
report of the Audit Committee appears below.

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Smart Choice does not have a Compensation Committee or a Directors
Nominating Committee, such functions being reserved to the entire Board of
Directors. The Board of Directors held one meeting during the year ended April
30, 2001.

REPORT OF AUDIT COMMITTEE

The Audit Committee assists the Board of Directors in fulfilling its
responsibility for oversight of the quality and integrity of the accounting,
auditing and financial reporting practices of Smart Choice. In discharging its
oversight responsibility as to the audit process, the Audit Committee has
reviewed and discussed with management Smart Choice's audited financial
statements as of and for the year ended April 30, 2001 and has discussed with
Grant Thornton LLP, the independent auditors and accountants for Smart Choice,
the matters required to be discussed by Statement on Auditing Standards No. 61
(Communications with Audit Committees) with respect to those statements.

The Audit Committee has received and reviewed the letter from Grant
Thornton required by Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees) and has discussed with Grant Thornton its
independence in connection with its audit of Smart Choice's most recent
financial statements. The Audit Committee has also considered whether Grant
Thornton's provision of non-audit services to Smart Choice is compatible with
maintaining such firm's independence. See "Independent Public Accountants."
Based on the foregoing, the Audit Committee recommended to the Board of
Directors that the audited financial statements be included in Smart Choice's
Annual Report on Form 10-K for the fiscal year ended April 30, 2001.

Respectfully submitted,

Tilman J. Falgout, III
Robert Abrahams

The information in the foregoing Report of the Audit Committee shall
not be deemed to be soliciting material, or be filed with the SEC or subject to
Regulation 14A or 14C or to liabilities of Section 18 of the Securities Act, nor
shall it be deemed to be incorporated by reference into any filing under the
Securities Act or the Exchange Act, except to the extent that we specifically
incorporate these paragraphs by reference.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Board of Directors presently does not have a standing compensation
committee, and the entire Board of Directors acts to determine the remuneration
which will be paid to senior management. The following members of the Board of
Directors are also employed by Smart Choice as executive officers: J. Edward
Ernst and Larry W. Lange.

EXECUTIVE OFFICERS

The executive officers of Smart Choice are as follows:

Name Position and Office
---- -------------------

J. Edward Ernst President and Chief Executive Officer
Ronald W. Anderson Vice President and Chief Operating Officer
Larry W. Lange Vice President

Biographical information regarding Messrs. Ernst and Lange appears
above. Ronald W. Anderson, age 54, has served as Smart Choice's Vice President
and Chief Operating Officer since April 1997. From June 1996 to March 1997, he
was Vice President of Marketing for North American Mortgage Insurance Group.

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EXECUTIVE COMPENSATION

The following table sets forth, for the twelve months ended April 30,
2001, 2000, and 1999, the compensation paid or accrued by Smart Choice to or on
behalf of Smart Choice's Chief Executive Officer and each other executive
officer who received salary and bonus in excess of $100,000 during the fiscal
year ended April 30, 2001 (the "Named Executive Officers").

SUMMARY COMPENSATION TABLE

Annual Long-Term
Compensation Compensation
-------------------------- -----------------
Twelve Number of Shares
Name and Months of Common Stock All Other
Principal Position Ended Salary Bonus Underlying Options Compensation
------------------ -------- -------- -------- ------------------ ------------

J. Edward Ernst (1) 04/30/01 $296,667 -- 200,000 $ 7,981 (5)
President and Chief 04/30/00 $118,846 -- -- $90,000 (2)
Executive Officer

Ronald W. Anderson 04/30/01 $164,640 -- 50,000 $11,440 (5)
Vice President and 04/30/00 $192,408 $100,000 3,750 --
Chief Operating Officer 04/30/99 $215,077 -- -- --

Larry W. Lange (3) 04/30/01 $275,000 $275,000 100,000 $ 5,629 (5)
Vice President 04/30/00 $114,583 -- -- --

Gary R. Smith (4) 04/30/01 $272,692 -- 100,000 $69,988 (6)
Former Vice President 04/30/00 $285,580 -- 3,750 --
04/30/99 $323,077 -- -- --

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(1) Mr. Ernst joined Smart Choice effective December 1, 1999.
(2) Represents payment in consideration of services rendered in connection
with, and prior to, the acquisition of PAACO by Smart Choice.
(3) Mr. Lange joined Smart Choice effective December 1, 1999.
(4) Mr. Smith resigned as a director and officer of Smart Choice effective
March 31, 2001.
(5) Represents 401(k) contributions and health and disability insurance
premiums.
(6) Represents 401(k) contributions and health and disability insurance
premiums in the aggregate amount of $11,975, and payments of $58,013 in
connection with the termination of Mr. Smith's employment.

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STOCK OPTION PLAN

The following table sets forth certain information regarding grants of
stock options to the Named Executive Officers under Smart Choice's 1998
Executive Incentive Compensation Plan during the fiscal year ended April 30,
2001.

OPTION GRANTS IN FISCAL 2001

Potential Realizable Value
at Assumed Annual Rates of
% of Total Stock Price Appreciation
Number of Options Granted for Option Term (2)
Options to Employees Exercise Price Expiration --------------------------
Name Granted in Fiscal Year Per Share (1) Date 5% 10%
---- --------- ---------------- --------------- ----------- --------- --------

J. Edward Ernst 200,000 40.0% $2.00 7-26-10 $251,558 $637,497
Ronald W. Anderson 50,000 10.0% $2.00 7-26-10 $ 62,889 $159,374
Larry W. Lange 100,000 20.0% $2.00 7-26-10 $125,779 $318,748
Gary R. Smith 100,000 20.0% $2.00 (3) (3) (3)

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(1) Stock options were granted with an exercise price equal to the fair
market value of Smart Choice's common stock on the date of grant.
(2) The dollar amounts under these columns represent the potential
realizable value of each grant of options assuming that the market
price of Smart Choice's common stock appreciates in value from the date
of grant at the 5% and 10% annual rates prescribed by the Securities
and Exchange Commission and therefore are not intended to forecast
possible future appreciation, if any, of the price of Smart Choice's
common stock.
(3) These options have expired in accordance with their terms as a result
of Mr. Smith's resignation from Smart Choice effective March 31, 2001.

During the fiscal year ended April 30, 2001, no options were exercised
by any Named Executive Officer. The following table sets forth certain
information regarding the amount and value of stock options held by the Named
Executive Officers at April 30, 2001.

FISCAL YEAR END OPTION VALUES

Number of Securities
Underlying Value of Unexercised
Unexercised Options at In-the-Money Options
Fiscal Year End at Fiscal Year End
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
---- ----------------------- --------------------

J. Edward Ernst 50,000 / 150,000 $0 / $0
Ronald W. Anderson 25,134 / 37,500 $0 / $0
Larry W. Lange 25,000 / 75,000 $0 / $0
Gary R. Smith 0 / 0 --

DIRECTOR COMPENSATION

No director of Smart Choice other than Robert Abrahams receives any
separate compensation for his service as a director. Mr. Abrahams has entered
into an agreement with Smart Choice pursuant to which he receives monthly
payments in the amount of $5,000 as payment for certain consulting services
related to Smart Choice's credit policies and as compensation for his service as
a member of the Board of Directors.

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Notwithstanding anything to the contrary set forth in any of Smart
Choice's previous filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that might incorporate future
filings, including this proxy statement, in whole or in part, the following
Report of the Board of Directors on Executive Compensation and the Shareholder
Return Performance Graph shall not be incorporated by reference into any such
filings.

REPORT OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION

Because Smart Choice does not have a compensation committee, the Board
of Directors establishes compensation levels for the company's executive
officers, including the Chief Executive Officer. Smart Choice's compensation
program for executive officers consists primarily of base salary, bonus, and
short and long-term incentives in the form of stock option grants. Executives
also participate in various other benefit plans, including medical and 401(k)
plans, versions of which are generally available to all employees of Smart
Choice. The philosophy of the Board is to pay base salaries to executives at
levels that enable Smart Choice to attract, motivate and retain highly qualified
executives, and to reward executives through the granting of bonuses, based upon
the contribution of the executive and the overall financial results of the
company. Stock options may also be granted under Smart Choice's 1998 Executive
Incentive Compensation Plan, which will have no value if Smart Choice's stock
price does not appreciate, but will provide substantial reward if the stock
price appreciates significantly.

In addition to base salary, each executive officer is eligible to
receive an annual bonus based on performance criteria established by the Board
of Directors. The amount of bonus and the performance criteria vary with the
position and role of the executive within the company, although all bonuses are
tied to the company's financial performance.

The Board of Directors may from time to time provide additional
incentive compensation to the executive officers and other employees of Smart
Choice through the award of stock options under the company's 1998 Executive
Incentive Compensation Plan.

The Board of Directors will continue to evaluate Smart Choice's
compensation policies in light of the company's financial position and results
of operations and with the goal of rewarding members of management for their
contributions to Smart Choice's success and aligning the financial interests of
executive officers with those of the Smart Choice's shareholders.

EDWARD R. J. EDWARD TILMAN J. LARRY W. ROBERT J.
MCMURPHY ERNST FALGOUT, III LANGE ABRAHAMS

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SHAREHOLDER RETURN PERFORMANCE GRAPH

Set forth below is a line graph comparing the cumulative total
shareholder return on Smart Choice's common stock with (i) the cumulative total
return of the Nasdaq Market Index (U.S. companies), and (ii) the MG Group Index
744 - Auto Dealerships ("Automobile Index"), for the period commencing on April
30, 1997 and ending on April 30, 2001.

Smart Choice believes the Automobile Index is an accurate reflection of
Smart Choice's peer group as the Automobile Index is comprised of companies
involved in the sale of automobiles and other vehicles through dealerships. The
graph assumes that the value of the investment in Smart Choice's common stock
and each index was $100 on April 30, 1997.

COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG SMART CHOICE AUTOMOTIVE GROUP, INC.,
NASDAQ MARKET INDEX AND MG GROUP INDEX

[Performance Graph Appears Here]

ASSUMES $100 INVESTED APRIL 30, 1997
ASSUMES DIVIDENDS REINVESTED

4/30/97 4/30/98 4/30/99 4/30/00 4/30/01
------- ------- ------- ------- -------

Smart Choice Automotive Group, Inc. $100.00 $89.36 $ 21.81 $ 5.32 $ 11.91
Automobile Index $100.00 $68.18 $ 60.20 $ 39.91 $ 48.17
Nasdaq Market Index $100.00 $92.88 $138.87 $190.46 $157.31

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SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information as of August 15,
2001, with respect to the ownership of Smart Choice's outstanding common stock
by (i) all persons known to Smart Choice to own beneficially more than five
percent of the issued and outstanding shares of Smart Choice common stock, (ii)
each director and Named Executive Officer, and (iii) all directors and executive
officers as a group. Unless otherwise indicated, each shareholder possesses sole
voting and investment power with respect to the shares owned by the shareholder.

Shares Beneficially Percent of
Beneficial Owner Owned (1) Class (2)
---------------- ------------------- ---------

Crown Group, Inc..................................... 6,955,407 (3) 70.5%
Finova Mezzanine Capital, Inc. ...................... 1,171,722 (4) 12.0%
Edward R. McMurphy................................... -- --
J. Edward Ernst...................................... 50,000 (5) *
Robert J. Abrahams................................... 25,347 (6) *
T. J. Falgout, III................................... -- --
Larry W. Lange....................................... 372,794 (7) 3.8%
Ronald W. Anderson................................... 25,634 (8) *
All directors and executive
officers as a group (6 persons).................. 473,775 (9) 4.8%

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* Less than 1%

(1) In accordance with Rule 13d-3 under the Securities Exchange Act of
1934, a person is deemed to be the beneficial owner of a security if
the person has or shares voting power or dispositive power with respect
to such security or has the right to acquire such ownership within 60
days. As used herein, "voting power" is the power to vote or direct the
voting of shares, and "dispositive power" is the power to dispose or
direct the disposition of shares, irrespective of any economic interest
therein.
(2) In calculating the percentage ownership for a given shareholder or
group of shareholders, the number of shares of the class of stock
outstanding includes unissued shares subject to options, warrants,
rights or conversion privileges exercisable within 60 days held by such
shareholder or group of shareholders, but such unissued shares are not
deemed outstanding in calculating the percentage ownership for other
shareholders.
(3) Includes 97,500 shares of common stock subject to presently exercisable
warrants. The business address of Crown Group is 4040 North MacArthur
Boulevard, Suite 100, Irving, Texas 75038.
(4) Finova's address is 500 Church Street, Suite 200, Nashville, Tennessee
37219.
(5) Represents 50,000 shares subject to presently exercisable options.
(6) Includes 14,320 shares subject to presently exercisable options.
(7) Includes 25,000 shares subject to presently exercisable options.
(8) Includes 25,134 shares subject to presently exercisable options.
(9) Includes 114,454 shares subject to presently exercisable options.

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COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Securities Exchange Act of 1934 requires Smart
Choice's directors, certain officers, and persons who own more than 10% of the
outstanding common stock of Smart Choice, to file with the Securities and
Exchange Commission reports of changes in ownership of the common stock of Smart
Choice held by such persons. Officers, directors and greater than 10%
shareholders are also required to furnish Smart Choice with copies of all forms
they file under this regulation. To Smart Choice's knowledge, based solely on a
review of the copies of such reports furnished to Smart Choice, during the
fiscal year ended April 30, 2001, all Section 16(a) filing requirements
applicable to its officers, directors and greater than 10% shareholders were
complied with.

CERTAIN TRANSACTIONS

Gary Smith, a former director and officer of Smart Choice, leases to
Smart Choice certain real property and improvements located in Pinellas Park,
Florida on which Smart Choice operates two of its used car dealerships. The
aggregate amount of the lease payments made by Smart Choice to Mr. Smith during
the fiscal year ended April 30, 2001 was approximately $135,000.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE

On December 1, 1999 the appointment of BDO Siedman, LLP ("BDO") as
independent public accountants for Smart Choice was terminated. On January 28,
2000 Smart Choice engaged Grant Thornton LLP as its new independent accountants.

BDO's report on the financial statements of Smart Choice for 1998 and
1997 did not contain an adverse opinion or a disclaimer of opinion, and was not
qualified or modified as to uncertainty, audit scope or accounting principles.

During the two most recent fiscal years and the subsequent interim
period preceding the dismissal of BDO, there were no disagreements with BDO on
any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements, if not resolved
to the satisfaction of BDO, would have caused it to make reference to the
subject matter of the disagreements in connection with its report.

No event listed in Paragraphs (A) through (D) of Item 304 a(1)(v) of
Regulation S-K occurred within Smart Choice's two most recent fiscal years and
the subsequent interim period preceding the dismissal of BDO.

During the two most recent fiscal years and subsequent interim period
preceding the engagement of Grant Thornton LLP, Smart Choice did not consult
with Grant Thornton LLP on (i) the application of accounting principles to a
specified transaction, (ii) the type of audit opinion that might be rendered on
Smart Choice's financial statements, or (iii) any matter that was either the
subject of a disagreement or a reportable event.

INDEPENDENT PUBLIC ACCOUNTANTS

Grant Thornton LLP served as Smart Choice's independent auditors for
the fiscal year ended April 30, 2001. Smart Choice has not as yet executed an
engagement letter with respect to the audit of Smart Choice's financial
statements for the fiscal year ending April 30, 2002, but expects to do so in
due course.

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A representative of Grant Thornton is expected to be present at the
Annual Meeting, will have an opportunity to make a statement, and will be
available to respond to appropriate questions which shareholders might have.
Smart Choice knows of no direct or indirect material financial interest or
relationship that members of Grant Thornton have with Smart Choice.

AUDIT FEES. The aggregate fees billed by Grant Thornton for professional
services rendered for the audit of Smart Choice's annual financial statements
for the year ended April 30, 2001 and the review of the financial statements
included in Smart Choice's Forms 10-Q for that year were approximately $158,500.

FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. During the
year ended April 30, 2001, Grant Thornton did not perform any services with
regard to financial information systems design and implementation.

ALL OTHER FEES. The aggregate fees for non-audit services provided by
Grant Thornton during the fiscal year ended April 30, 2001 were approximately
$6,500.

The Audit Committee of the Board of Directors has considered whether the
provision of non-audit services by Grant Thornton to Smart Choice is compatible
with maintaining such firm's independence. See also "Report of Audit Committee."

REPORT ON FORM 10-K

Smart Choice's Annual Report on Form 10-K for the fiscal year ended
April 30, 2001, as filed with the Securities and Exchange Commission, is
available to shareholders who make written request therefor to the Secretary of
Smart Choice, Ronald Anderson, at the offices of Smart Choice, 1555 North
Semoran Boulevard, Winter Park, Florida 32792. Copies of exhibits filed with
that report or referenced therein will be furnished to shareholders of record
upon request and payment of Smart Choice's expenses in furnishing such
documents.

SHAREHOLDER PROPOSALS

Any proposal to be presented at next year's Annual Meeting must be
received at the principal executive offices of Smart Choice not later than May
20, 2002, directed to the attention of the Secretary, for consideration for
inclusion in Smart Choice's proxy statement and form of proxy relating to that
meeting. In connection with Smart Choice's Annual Meeting of shareholders to be
held in 2002, if Smart Choice does not receive notice of a matter or proposal to
be considered by August 3, 2002, then the persons appointed by the Board of
Directors to act as the proxies for such Annual Meeting (named in the form of
proxy) will be allowed to use their discretionary voting authority with respect
to any such matter or proposal at the Annual Meeting, if such matter or proposal
is raised at that Annual Meeting. Any such proposals must comply in all respects
with the rules and regulations of the Securities and Exchange Commission.

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OTHER MATTERS

Management does not know of any matter to be brought before the meeting
other than those described above. If any other matter properly comes before the
meeting, the persons designated as proxies will vote on each such matter in
accordance with their best judgment.

By Order of the Board of Directors,

/s/ Edward R. McMurphy

Edward R. McMurphy
Chairman of the Board

August 27, 2001

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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF
SMART CHOICE AUTOMOTIVE GROUP, INC.

The undersigned shareholder(s) of Smart Choice Automotive Group, Inc.,
a Florida corporation, hereby appoints J. Edward Ernst and Ronald W. Anderson,
and each of them, proxies and attorneys-in-fact, with full power to each of
substitution, on behalf and in the name of the undersigned, to represent the
undersigned at the 2001 Annual Meeting of Shareholders of Smart Choice
Automotive Group, Inc. to be held at 2915 Alouette Drive, Grand Prairie, Texas,
on Wednesday, October 24, 2001, at 2:00 p.m. local time, to vote the shares of
common stock which the undersigned would be entitled to vote if then and there
personally present, on the matters set forth below:

(1) To elect five directors, each to serve for a term of one year and until
his successor is elected and qualified:

[ ] FOR all nominees listed below (except as indicated to
the contrary below)
[ ] WITHHOLD authority to vote for all nominees
NOMINEES: Edward R. McMurphy, J. Edward Ernst,
Larry W. Lange, Tilman J. Falgout, III and
Robert J. Abrahams
INSTRUCTION: To withhold authority to vote for one or more
individual nominees, write that nominee's name
in the following space:________________________

(2) In their discretion, upon such other matter or matters which may
properly come before the meeting or any adjournment or adjournments
thereof.

PLEASE COMPLETE, DATE, SIGN AND RETURN THIS PROXY PROMPTLY. This proxy, when
properly executed, will be voted in accordance with directions given by the
undersigned shareholder. IF NO DIRECTION IS MADE, IT WILL BE VOTED FOR ELECTION
OF EACH OF NOMINEES NAMED ABOVE AND AS THE PROXIES DEEM ADVISABLE ON SUCH OTHER
MATTERS AS MAY COME BEFORE THE MEETING.

Dated , 2001
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Signature

(This proxy should be marked, dated, and
signed by the shareholder(s) exactly as his
or her name appears hereon, and returned
promptly in the enclosed envelope. Persons
signing in a fiduciary capacity should so
indicate. If shares are held by joint
tenants or as community property, both
should sign.