SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|

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|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only
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|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12

HOMETOWN AUTO RETAILERS, INC.
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(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment of Filing Fee (Check the appropriate box):

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HOMETOWN AUTO RETAILERS, INC.

Notice of Annual Meeting of Stockholders
To Be Held On June 21, 2001 at 10:00 A.M.

TO THE STOCKHOLDERS OF HOMETOWN AUTO RETAILERS, INC.:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Hometown
Auto Retailers, Inc. ("Hometown") will be held at the Sheraton Waterbury Hotel,
3580 East Main Street, Waterbury, Connecticut 06705, on Thursday, June 21, 2001
at 10:00 A.M., Eastern Standard Time, for the following purposes:

1. To elect six directors for one year terms.

2. To transact such other business as may properly be brought
before the meeting or any adjournment or postponements
thereof.

The Board of Directors has fixed the close of business on May 14, 2001 as
the record date for the determination of the stockholders entitled to notice of
and to vote at this meeting and at any adjournment or postponements thereof.

BY ORDER OF THE BOARD OF DIRECTORS

/s/ Corey E. Shaker
Corey E. Shaker, President

Dated: Watertown, Connecticut
May 14, 2001

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IMPORTANT: Whether or not you expect to attend in person, please complete,
sign, date, and return the enclosed Proxy at your earliest
convenience. This will ensure the presence of a quorum at the
meeting. Promptly signing, dating, and returning the Proxy will save
Hometown the expense and extra work of additional solicitation. An
addressed envelope for which no postage is required has been
enclosed for that purpose. Sending in your Proxy will not prevent
you from voting your stock at the meeting if you desire to do so, as
your Proxy is revocable at your option.
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HOMETOWN AUTO RETAILERS, INC.

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PROXY STATEMENT

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FOR ANNUAL MEETING OF STOCKHOLDERS
To Be Held June 21, 2001

This Statement is furnished to the stockholders of Hometown Auto
Retailers, Inc., a Delaware corporation ("Hometown"), in connection with the
solicitation by the Board of Directors of proxies to be used at the 2000 Annual
Meeting of Stockholders of Hometown to be held at the Sheraton Waterbury Hotel,
3580 East Main Street, Waterbury Connecticut 06705, on Thursday, June 21, 2001
at 10:00 A.M., Eastern Daylight Time, and at any adjournments thereof. The
approximate date on which this Statement and the accompanying proxy will be
mailed to stockholders is May 14, 2001.

THE VOTING & VOTE REQUIRED

On the record date for the meeting, the close of business on May 14, 2001
(the "Record Date"), there were outstanding 2,301,109 shares of Class A common
stock, par value $.001 per share, each of which will be entitled to one vote and
3,695,000 shares of Class B common stock, par value $.001 per share, each of
which will be entitled to ten votes. Shares represented by each properly
executed, unrevoked proxy received in time for the meeting will be voted as
specified.

Directors are elected by a plurality of the votes cast at the meeting. In
the case of election of directors, shares represented by a proxy which are
marked "WITHHOLD" to vote for all six nominees will not be counted in
determining whether a plurality vote has been received for the election of
directors.

All shares represented by valid proxies will be voted in accordance with
the instructions contained therein. A proxy may be revoked by the stockholder
giving the proxy at any time before it is voted by delivering oral or written
notice to the acting Chief Financial Officer of Hometown at or prior to the
meeting, and a prior proxy is automatically revoked by a stockholder giving a
subsequent proxy or attending and voting at the meeting. Attendance at the
meeting in and of itself does not revoke a prior proxy.

ELECTION OF DIRECTORS AND MANAGEMENT INFORMATION

At this meeting six directors are to be elected to serve for one-year
terms, each to hold office until his successor is duly elected and qualified. It
is not contemplated that any nominee will be unable to serve as a director, but
if such contingency should occur prior to the meeting, the persons named as
proxies in the enclosed proxy or their substitutes will have the right to vote
for substitute nominees. The nominees were selected by the Board of Directors of
Hometown are all currently directors. The first three nominees are also officers
of Hometown. Certain information with respect to each nominee is stated below.

Directors Nominated for One-Year Terms:

Name Age Position Director Since
- ---- --- -------- --------------

Corey E. Shaker 43 President, Chief Executive Officer and 1997
Director

William C. Muller Jr. 49 Regional Vice President - South Division 1997
and Director

James Christ 44 General Manager - Muller Toyota and 1997
Director

Joseph Shaker 33 Director 1997

Dominic Colasacco * 52 Director 1997

Louis I. Margolis * 56 Director 1997

- ----------
*Member of Audit and Compensation Committees

Corey E. Shaker was named President and Chief Operating Officer on
February 7, 2000, and added the title of Chief Executive Officer on August 29,
2000. In addition, he was Vice President-Connecticut Operations since October 1,
1997 and was in charge of Hometown's Company-wide sales training efforts. Prior
to that, from 1989 he was Chief Operating Officer and General Manager of Family
Ford Inc. where he was responsible for all aspects of its operations. He is a
member of NADA Ford F01 20 group. He was awarded the Lincoln Mercury Salesperson
of the Nation award in 1980 and is a three time winner of the Lincoln Mercury
Inner Circle award. He is also a first cousin to both Steven and Joseph Shaker,
respectively. He holds a B.S. in Business Administration from Providence
College.

William C. Muller Jr. has been Regional Vice President - South Division
since March 2000. Mr. Muller has been Vice President-New Jersey Operations since
October 1, 1997. In addition, from 1980 he was the President of Muller Toyota,
Inc. and of Muller Chevrolet, Oldsmobile, Isuzu, Inc (both of which are
currently known as Muller Automotive Group, Inc. and Good Day Chevrolet,
Oldsmobile, Isuzu, Inc., respectively.) Under his management, Muller Toyota has
been: (a) a 9-time recipient of Toyota's Prestigious President's Award, given to
those dealers with superior levels of customer satisfaction who also exceed
capital standards and have high market penetration and facilities that meet or
exceed Toyota standards; (b) a 13-time recipient of Toyota Parts Excellence
Award; (c) a 9-time winner of Toyota Service Excellence Award; and (d) a 3-time
winner of Toyota's Sales Excellence Award. He holds a B.A. degree from Fairleigh
Dickinson University.

James Christ has been General Manager of the Muller Toyota division of
Hometown since October 1, 1997. In addition, from 1995 he was General Manager of
Muller Toyota in Clinton, New Jersey. From March 1986 to November 1994, he was
Vice President and General Manager of Liberty Toyota, Inc. in Burlington, New
Jersey and from August 1989 to November 1994, he was Vice President of
Richardson Imports, Inc. a Lexus dealership, in Cherry Hill, New Jersey. Prior
thereto he had more than 5 years experience in managerial capacities at Toyota.
He holds a B.S. in Business Administration from West Chester University.

Joseph Shaker was President and Chief Operating Officer from October 1,
1997 to February 7, 2000, and was in charge of Hometown's dealer acquisition
program, including the implementation of such programs as may be necessary to
assimilate new dealers into Hometown's operational model. In addition, from 1991
he was the Chief Operating Officer of Shaker's Lincoln Mercury, Shaker's Jeep
Eagle and Lincoln Mercury Autocare in Connecticut. In 1992, at the request of
Ford Motor Company, he developed the pilot free-standing neighborhood Autocare
Center which has become the model for free-standing neighborhood auto
maintenance centers established by Ford Motor with certain of its other dealers.
He also started Shaker's Lincoln Mercury limousine department in 1992 and has
been responsible for its growth and implementation. He is a Member of the
Executive Committee of the NADA 20 Group. He is the brother of Steven Shaker and
a first cousin of Corey E. Shaker. He holds a B.S. (Management) degree from
Bentley College.

Domenic Colasacco is Chairman of the Board and President of United States
Trust Company (USTC), a Boston based firm specializing in trust and investment
management services for institutional and personal clients. Mr. Colasacco has
been serving as the Chief Investment Officer of USTC since 1980. From 1990 to
March 1998, he was also a director of UST Corp., the holding company for USTC
and USTrust, a commercial and retail bank in Greater Boston. He holds both a
bachelors degree and an M.B.A. from Babson College and is a Chartered Financial
Analyst.

Louis I. Margolis has been a General Partner of Pine Street Associates,
L.P., a private investment partnership that invests in other private limited
partnerships since January 1994. In January 1997, Mr. Margolis formed and is the
President and sole shareholder of Chapel Hill Capital Corp., a financial
services company. From 1991 through 1993, he was a Member of the Management
Committee of Nomura Securities International. From 1993 through 1995, he was
Chairman of Classic Capital Inc., a registered investment advisor. Mr. Margolis
has been a director of Milestone Scientific, Inc., a manufacturer of dental
devices, since 1997. Mr. Margolis has been a member of the Financial Products
Advisory Committee of the Commodity Futures Trading Commission since its
formation in 1986, a Trustee of the Futures Industry Institute since 1991 and a
Trustee of Saint Barnabas Hospital in Livingston, New Jersey since 1994.

The Board Unanimously Recommends A Vote FOR The Election Of Each Of The
Nominees.

Committees of the Board of Directors

During the last fiscal year Hometown's Board of Directors held 9 meetings.
Hometown's Board of Directors has established compensation and audit committees,
whose members are composed of two non-employee directors: Messrs. Colasacco and
Margolis. It is the intention of Hometown to appoint only independent directors
to the Audit and Compensation Committees.

The Compensation Committee reviews and recommends to the Board of
Directors the compensation and benefits of all officers of Hometown, reviews
general policy matters relating to compensation and benefits of employees of
Hometown and administers the issuance of stock options and discretionary cash
bonuses to Hometown's officers, employees, directors and consultants. The
Compensation Committee met 2 times in fiscal year 2000. The report of the
Compensation Committee appears below.

Hometown's Board of Directors has adopted a written charter for the Audit
Committee which is attached hereto as Appendix II. The Audit Committee meets
with management and Hometown's independent public accountants to determine the
adequacy of internal controls and other financial reporting matters. The Audit
Committee met with the auditors to review the planned scope and the results of
the audit. The members of the Audit Committee consist of Messrs. Colasacco and
Margolis, both of who are independent (as defined in Rule 4200(a)(14) of the
National Association of Securities Dealers'.) The Audit Committee met 1 time in
fiscal year 2000. (See also "Audit Committee Report," below.)

All directors attended at least 75% of the aggregate of the total number
of meetings of the Board of Directors and of all committees of the Board on
which that director served.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Leases

Hometown has leased from various affiliates the premises occupied by
certain of its dealerships. Each of the governing leases became effective as of
the closing of the initial public offering, has a term expiring in 2013, is on a
triple net basis and provides for a consumer price index ("CPI") increase to the
base rent for the five-year periods commencing January 1, 2004 and 2009.

Hometown leases, for an initial annual base rental of $240,000, the
premises occupied by its Lincoln/Mercury dealership in Watertown, Connecticut
from Shaker Enterprises, a Connecticut general partnership whose seven partners
include Joseph Shaker, Corey E. Shaker, Steven Shaker and Janet Shaker. Corey E.
Shaker is a director, President and Chief Executive Officer of Hometown and a
principal stockholder of Hometown. Joseph Shaker is a director and a principal
stockholder of Hometown. Steven Shaker is the Regional Vice President - North
Division and a principal stockholder of Hometown. Janet Shaker is a principal
stockholder of Hometown.

Hometown leases, for an initial annual base rental of $360,000 and
$396,000 respectively the premises occupied by its Toyota dealership in Clinton,
New Jersey and its Chevrolet/Oldsmobile/Isuzu dealership in Stewartsville, New
Jersey from Rellum Realty Company, a New Jersey general partnership, one of
whose two partners is William C. Muller Jr. Mr. Muller is a director and the
Regional Vice President - South Division and a principal stockholder of
Hometown.

Hometown leases, for an initial annual base rental of $360,000 the
premises occupied by its Lincoln Mercury dealership in Emerson, New Jersey from
Salvatore A. Vergopia and his wife. Mr. Vergopia is a director and a principal
stockholder of Hometown.

Legal Proceedings

On or about February 7, 2001, Salvatore A. Vergopia and Edward A.
Vergopia, directors and formerly executive officers of Hometown, and Janet
Vergopia, the wife of Salvatore A. Vergopia (the "Vergopias") filed a complaint
in the Superior Court of New Jersey in Bergen County, against Hometown, its
officers and directors, certain holders of its Class B common stock, and certain
other unnamed persons, alleging breach of two employment agreements, wrongful
termination of employment, breach of a stockholders' agreement and certain other
wrongful conduct, including age discrimination and breach of fiduciary duty. The
Vergopias are seeking back pay, front pay, compensatory, consequential and
punitive damages, in an unspecified amount as well as, reinstatement, injunctive
and other legal and equitable relief.

Hometown has retained litigation counsel to represent it in this action
and filed an answer to the initial complaint denying liability and asserting
affirmative defenses and counterclaims for breach of contract and fiduciary duty
against each of Salvatore and Edward Vergopia. Subsequently, plaintiffs filed an
amended complaint to which answers are not yet due. The defendant officers and
directors have not yet filed an answer and Hometown has not yet engaged in any
pre-trial discovery.

Hometown believes that the Vergopias commenced this action in response to
its dismissal of both Salvatore A. Vergopia and Edward A. Vergopia from their
officerships an employment positions with Hometown. Hometown and its officers
and directors believe that they have meritorious defenses and intend to
vigorously defend this action. Hometown has asserted various counterclaims to
the initial complaint and intends to assert similar counterclaims to the amended
compliant. Hometown does not believe that the eventual outcome of the case will
have a material adverse effect on Hometown's consolidated financial position or
results of operations.

EXECUTIVE COMPENSATION AND TRANSACTIONS WITH DIRECTORS, OFFICERS AND PRINCIPAL
HOLDERS

The following Summary Compensation Table sets forth all compensation
earned in all capacities, during the fiscal year ended December 31, 2000, 1999
and 1998 by (i) Hometown's Chief Executive Officer and (ii) the four most highly
compensated executive officers, other than the CEO, who were serving as
executive officers at the end of the 2000 fiscal year and whose salary, exceeded
$100,000 (collectively, the "Name Executive Officers").

COMPENSATION TABLE

Annual Compensation
-------------------------------------------------
Fiscal Annual
Year
Name and Principal Position Compensation $ Salary Bonus (1) Other
- -------------------------------- ------------ -------- --------- ------

Salvatore A. Vergopia 2000 250,000 -- 28,000
Chairman 1999(3) 250,000 -- 75,000
1998 318,000 -- --

Corey E. Shaker President and 2000 200,000 -- 7,000
Chief Executive Officer 1999(3) 200,000 -- --
1998(3)(4) 163,000 336,000 --

William C. Muller, Jr. 2000 200,000 -- --
Regional Vice President-South 1999(3) 200,000 -- 3,000
Division 1998(3) 258,000 -- --

Steven Shaker Regional 2000 110,000 -- 3,000
Vice President-North Division 1999 100,000 -- --
1998 100,000 319,000 --

Michael Shonborn 2000 135,000 -- 7,000
Chief Financial Officer and 1999 23,000 -- --
Secretary(2) 1998 -- -- --

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(1) The amount shown are cash bonuses earned in the specified year and paid in
the first quarter of the following year.
(2) In February 2001, resigned from his positions as Chief Financial Officer
and Secretary.
(3) Includes compensation paid by predecessor companies with respect to 1998.
(4) Reflects bonuses paid by predecessor companies for services rendered prior
to Hometown's initial public offering.

OPTIONS/SAR GRANTS IN LAST FISCAL YEAR

No options were granted to the Named Executive Officers during 2000.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL
YEAR AND FISCAL YEAR END OPTION/SAR VALUES

The following table summarizes options and SARs exercised during fiscal
2000 and presents the value of unexercised options and SARs held by the Named
Executive Officers at fiscal year end:

Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
Fiscal Year-End Fiscal Year-End
Acquired on Value Exercisable (E) Exercisable (E)
Name Exercise Realized Unexercisable (U) Unexercisable (U)
- ------------------------- ----------- -------- ----------------- -----------------

Corey E. Shaker -- -- 34,332 E --
President and Chief 32,168 U
Executive Officer

William C. Muller, Jr. -- -- 13,332 E --
Regional Vice President 6,668 U

Salvatore A. Vergopia -- -- 2,000 E --
Chairman 1,000 U

Steven Shaker -- -- 6,668 E --
Vice President-South 3,332 U
Division

Michael Shonborn 3,334 E
Chief Financial Officer 6,666 U
and Secretary

All shares vest ratably through 2001, except for 30,000 options of Corey
E. Shaker and 10,000 options of Michael Shonborn, which vest ratably through
2002. In general, the option agreements shall be exercisable only so long as the
optionee shall continue to be an employee of Hometown and within the thirty day
period after the date of termination of his employment to the extent it was
exercisable on the day prior to the date of termination. In the event the
Optionee is unable to continue his employment with Hometown as a result of his
total and permanent disability, he may, but only within three (3) months from
the date of disability, exercise the option to the extent he was entitled to
exercise it at the date of such disability. In the event of death of the
Optionee, the option may be exercised, at any time within twelve (12) months
following the date of death, by the Optionee's estate or by a person who
acquired the right to exercise this option by bequest or inheritance, but only
to the extent of the right that would have accrued had the Optionee continued
living one (1) month after the date of death, provided that at the time of his
death the Optionee is an employee of Hometown and shall have been in Continuous
Status (as defined in Hometown's Stock Option Plan) as an employee from the date
hereof; or within thirty (30) days after the termination of Continuous Status as
an employee, the option may be exercised, at any time within three (3) months
following the date of death, by the Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only to
the extent of the right to exercise that had accrued at the date of termination.

Employment Contracts

In April 1998, Hometown entered into five-year employment agreements,
effective as of the closing of Hometown's initial public offering in July, 1998,
with all of the Named Executive Officers with the exception of Michael Shonborn.
Each of their agreements provides for an annual base salary of $200,000, except
that the agreement for Steven Shaker provides for an annual base salary of
$100,000, increased to $125,000 in 2001.

In October 1999, Hometown entered into a four-year employment agreement
with the Michael Shonborn at an annual base salary of $90,000, increased to
$145,000 when he became Hometown's Chief Financial Officer and Secretary. Mr.
Shonborn's employment agreement was terminated upon his resignation, effective
February 2, 2001.

Each agreement also provides for participation by the employee in all
executive benefit plans and, if employment is terminated without cause (as
defined in the agreement), payment of an amount equal to the salary which would
have been payable over the unexpired term of his employment agreement.

Compensation Committee Interlocks and Insider Participation in Compensation
Decisions

None of the directors serving on the Compensation Committee are employees
or officers of Hometown. No director or executive officer of Hometown is a
director or executive officer of any other corporation that has a director or
executive officer who is also a director of Hometown.

1998 Stock Option Plan

In February 1998, in order to attract and retain persons necessary for the
success of Hometown, Hometown adopted its 1998 Stock Option Plan (the "Stock
Option Plan") covering up to 480,000 shares of Class A Common Stock. Pursuant to
the Stock Option Plan officers, directors and key employees of Hometown and
consultants to Hometown are eligible to receive incentive and/or non- incentive
stock options. The Board of Directors will administer the Stock Option Plan,
which expires in January 2008, or a committee designated by the Board of
Directors. The selection of participants, allotment of shares, determination of
price and other conditions relating to the purchase of options will be
determined by the Board of Directors, or a committee thereof, in its sole
discretion. Stock options granted under the Stock Option Plan are exercisable
for a period of up to 10 years from the date of grant at an exercise price which
is not less than the fair market value of the Common Stock on the date of the
grant, except that the term of an incentive stock option granted under the Stock
Option Plan to a stockholder owning more than 10% of the outstanding Common
Stock may not exceed five years and its exercise price may not be less than 110%
of the fair market value of the Common Stock on the date of the grant. For
grants to the Named Executive Officers see the chart above titled "AGGREGATED
OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION/SAR VALUES."

Employee Benefit Plan

In October 1999, Hometown amended and restated the E.R.R. Enterprises,
Inc. Profit Sharing/401(k) Plan, (the "Amended Plan") into the HOMETOWN AUTO
RETAILERS, INC. 401K Plan (the "Plan") effective October 1, 1999, for the
benefit of eligible employees, as defined. Participants may make voluntary
contributions of up to 15% of their compensation, subject to certain IRS
limitations. Hometown may make annual matching contributions to the Plan at its
discretion. No Contributions were made by Hometown to the Plan for the year
ended December 31, 2000. Contributions under the Plan were $48,000, $33,000 in
1999, 1998 and 1997, respectively. Corey E. Shaker and Joseph Shaker are the
Trustees of the Plan.

Compensation of Directors

Each non-employee Director receives a fee of $1,000, for each meeting
attended in person and $250 for each meeting attended telephonically and
reimbursement for travel costs and other out-of-pocket expenses incurred in
attending each Directors' meeting. In addition, committee members receive $500
for each committee meeting attended in person, other than meeting directly
following or preceding Board meetings and $125 for each committee meeting
attended telephonically. Additionally, pursuant to the Plan, each non-employee
Director, will receive options to purchase 5,000 shares of Common Stock
exercisable at the fair market value on the date of grant. These options will
vest one-third on the date of grant and one-third at the end of each subsequent
year of service on the Board. In addition, each non-employee Director receives
options to purchase an additional 2,500 shares of Common Stock on the date of
Hometown's annual stockholders' meeting. Such options will have an exercise
price equal to the fair market value of the Common Stock on the date of grant
and will vest one-third upon grant and one-third on each of the first and second
anniversary of the date of grant.

Limitation of Directors' Liability and Indemnification

The Delaware General Corporation Law authorizes corporations to limit or
eliminate the personal liability of directors to corporations and their
shareholders for monetary damages for breach of directors' fiduciary duty of
care. Hometown's Certificate of Incorporation limits the liability of its
Directors to or its shareholders to the fullest extent permitted by Delaware
law.

Hometown's Certificate of Incorporation provides mandatory indemnification
rights to each of its officers or Directors who, by reason of the fact that he
or she is an officer or Director of Hometown, is involved in a legal proceeding
of any nature. Such indemnification rights include reimbursement for expenses
incurred by such officer or Director in advance of the final disposition of such
proceeding in accordance with the applicable provisions of Delaware law. Insofar
as indemnification for liabilities under the Securities Act may be provided to
officers and Directors or persons controlling Hometown, Hometown has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.

Report of the Compensation Committee on Executive Compensation

The primary purposes of the Compensation Committee are to establish and
maintain competitive, fair and equitable compensation practices designed to
attract and retain key management employees throughout Hometown and to establish
appropriate incentives to motivate and reward key management employees for
achieving or exceeding established performance goals; and to oversee the
competency and qualifications of senior management personnel and the provisions
of senior management succession planning. The Compensation Committee is
responsible for a broad range of activities which include (i) recommending to
the full Board of Directors the salary(ies) of the Chairman of the Board, Chief
Executive Officer, Chief Operating Officer and Chief Financial Officer after an
evaluation of market data, internal salary relationships as provided by
Hometown's executive compensation professionals, and such other factors as the
Committee deems appropriate; (ii) recommending to the full Board of Directors
the salaries for other elected Corporate Officers and selected key management
employees after reviewing the recommendations made by the Chief Executive
Officer and the Chief Operating Officer; (iii) recommending to the full Board of
Directors the type of incentive plans, if any, which will be offered to
management employees; and (iv) administering Hometown's 1998 Incentive Stock
Option Plan, to include, after reviewing the recommendations of the Chief
Executive Officer and the Chief Operating Officer, determining the employees to
be eligible for plan participation.

Due to the existence of five year employment agreements between Hometown
and its key officers, which do not expire until July 2003, the scope of the
Compensation Committee's duties has been limited.

COMPENSATION COMMITTEE

Domenic Colasacco
Louis I. Margolis

COMPANY PERFORMANCE
AND COMPARISON OF 3 YEAR CUMULATIVE TOTAL RETURN AMONG HOMETOWN
AUTO RETAILERS, INC., THE NASDAQ MARKET INDEX,
AND A PEER GROUP

The following graph shows a three year comparison of cumulative
total returns for Hometown, the NASDAQ Market Index, and a Peer Group.

[PERFORMANCE GRAPH APPEARS HERE AND IS SUMMARIZED BELOW]

Company/ Index/ 07/29/1998 12/31/1998 12/31/1999 12/31/2000
Market
- ----------------------------------------------------------------------------------------------------

Hometown Auto 100 49.29 40.71 5.71
Retailers, Inc.
- ----------------------------------------------------------------------------------------------------
New & Used Car 100 102.76 65.26 43.26
Dealers(1)
- ----------------------------------------------------------------------------------------------------
Nasdaq Market 100 118.38 208.79 131.23
Index

(1) The Peer Group Index includes the following companies: AutoNation Inc.,
Circuit City/CarMax, Group, Group 1 Automotive, Inc., Lithia Motors Inc., Rush
Enterprises, Inc., Sonic Automotive Inc., United Auto Group, Inc.,Nostalgia
Motorcars, and Autocorp Equities Inc.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information known to Hometown
regarding the beneficial ownership of Common Stock as of May 1, 2001 by (i) each
person known to Hometown to be the beneficial owner of more than 5% of its
outstanding shares of Common Stock, (ii) each Director of Hometown, (iii) each
Named Executive Officer and (iv) all Directors, and Executive Officers of
Hometown as a group. Except as otherwise indicated, the persons or entities
listed below have sole voting and investment power with respect to all shares of
Common Stock owned by them.

% of
Common Stock Beneficially % of Aggregate
Owned(2) Outstanding voting
---------------------------- Equity Power of
Name of Beneficial Owner(1) Class A Class B Owned(3) all Classes
- --------------------------- ----------- ------------ ----------- -----------

Salvatore Vergopia -- 705,000(4) 11.75 17.96
Corey E. Shaker 47,332(5) 265,080 5.18 6.87
William C. Muller, Jr 17,582(6) 453,034 7.83 11.58
Edward Vergopia -- 235,000 3.91 5.99
James Christ 13,332(7) 90,248 1.72 2.33
*William C. Muller, Sr. (9) -- 308,786 5.15 7.87
Steven Shaker 14,668(8) 206,424 3.68 5.29
Joseph Shaker 28,516(10) 262,592 4.83 6.76
Dominic Colasacco (11) 833 -- ** **
Louis I. Margolis (11) 833 -- ** **
All Directors, and Executive
Officers as a group (9
persons)(11) 123,096 2,217,378 38.43 56.67

* William C. Muller, Sr. is not an Officer or Director of Hometown

** Ownership is less than 1%
- --------------------------------------------------------------------------------

(1) The respective addresses of the beneficial owners are: Salvatore A.
Vergopia and Edward A. Vergopia, c/o Westwood Lincoln Mercury, 55
Kinderkamack Road, Emerson, New Jersey 07630; Corey E Shaker, 774 Straits
Turnpike, Watertown Connecticut 06795; William C. Muller Jr., James Christ
and William C. Muller Sr. c/o Muller Toyota Inc., Route 31, PO Box J,
Clinton, New Jersey, 08809; Steven Shaker, c/o Family Ford, Inc., 1200
Wolcott Street, Waterbury, Connecticut 06705; Joseph Shaker, c/o CarDay
Inc., 245 Fifth Avenue, New York, New York 10016; Dominic Colasacco, 40
Court Street, Boston Massachusetts 02108; and Louis I. Margolis, 717 Fifth
Avenue, New York, New York, 10022.

(2) A person is deemed to be a beneficial owner of securities that can be
acquired by such person within 60 days from the filing of this report upon
the exercise of options and warrants or conversion of convertible
securities. Each beneficial owner's percentage ownership is determined by
assuming that options, warrants and convertible securities that are held
by such person (but not held by any other person) and that are exercisable
or convertible within 60 days from the filing of this report have been
exercise or converted. Except as otherwise indicated, and subject to
applicable community property and similar laws, each of the persons named
has sole voting and investment power with respect to the shares shown as
beneficially owned. All percentages of beneficial ownership are calculated
based the number of shares outstanding as of May 1, 2001, 5,996,109, which
includes 2,301,109 shares of Class A Common Stock and 3,695,000 shares of
Class B common stock. Unless otherwise specified herein, shares of common
stock shall be shares of Class B common stock of Hometown.

(3) Percentages based on number of shares of all classes.

(4) Includes 225,600 shares owned by his wife Janet.

(5) Includes (i) 15,980 shares held by the Edward Shaker Family Trust of which
he is the Trustee and a beneficiary, (ii) 13,000 shares of Class A common
stock, (iii) an option to purchase 24,332 shares of Class A common stock,
exercisable within the next 60 days at $9.00 per share and (iv) an option
to purchase 10,000 shares of Class A common stock, exercisable within the
next 60 days at $3.00 per share.

(6) Includes 4,250 shares of Class A common stock and an option to purchase
13,332 shares of Class A common stock, exercisable within the next 60 days
at $9.00 per share.

(7) Includes an option to purchase 13,332 shares of Class A common stock,
exercisable within the next 60 days at $9.00 per share.

(8) Includes 8,000 shares of Class A common stock and an option to purchase
6,668 shares of Class A common stock, exercisable within the next 60 days
at $9.00 per share.

(9) All shares are owned by The William C. Muller Revocable Living Trust of
which the William C. Muller Sr. is Trustee. William C. Muller Sr. is
neither an officer nor director.

(10) Includes (i) 15,980 shares held by the Richard Shaker Family Trust of
which Mr. Shaker is the Trustee and a beneficiary, (ii) 40,000 share held
by the Shaker Irrevocable Trust of which Mr. Shaker is Trustee, (iii)
4,184 shares of Class A common stock, and (iv) an option to purchase
24,332 shares of Class A common stock, exercisable within the next 60 days
at $9.00 per share.

(11) Includes options to purchase 833 shares of Class A common stock,
exercisable within the next 60 days at $1.4375 per share.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires Hometown's
officers and directors, and persons who own more than ten percent of a
registered class of Hometown's equity securities, to file reports of ownership
and changes in ownership with the Securities and Exchange Commission ("SEC").
Officers, directors and greater than ten-percent stockholders are required by
SEC regulation to furnish Hometown with copies of all Section 16(a) forms they
file.

To the best of Hometown's knowledge, based solely on review of the copies
of such forms furnished to Hometown, or written representations that no other
forms were required, Hometown believes that all Section 16(a) filing
requirements applicable with respect to all its current officers, directors and
ten percent shareholders have been complied with as of the filing date of this
Annual Report. However, Michael Shonborn was late in filing his Initial
Statement of Beneficial Ownership of Securities on Form 3 and one (1) Statement
of Changes in Beneficial Ownership on Form 4 during 2000 but has subsequently
come into compliance. With respect to any former directors, officers, and ten
percent shareholders of the Hometown, the Hometown does not have any knowledge
of any known failures to comply with the filing requirements of Section 16(a).

Audit Committee Report

The Audit Committee has reviewed Hometown's audited statements for the
year ended December 31, 2000. In conjunction with its review, the Audit
Committee has met with the management of Hometown to discuss the audited
financial statements. In addition, Hometown has discussed with its independent
auditors, Arthur Andersen LLP, the matters required pursuant to Statement on
Accounting Standards No. 61 and has received the written disclosures and the
letter from Arthur Andersen LLP required by the Independence Standards Board No.
1. The Audit Committee has also discussed with Arthur Andersen LLP its
independence from management and Hometown. Arthur Andersen LLP has full and free
access to the Audit Committee.

Based on this review and discussion, the Audit Committee recommended to
the Board of Directors that the audited financial statements be included in
Hometown's Annual Report on Form 10-K for the fiscal year ended December 31,
2000 for filing with the Securities and Exchange Commission.

AUDIT COMMITTEE:

Louis I. Margolis

Domenic Colasacco

Audit Fees

The aggregate fees billed for the professional services rendered by Arthur
Andersen LLP for the audit of Hometown's annual financial statements included in
Hometown's Form 10-K filing for fiscal year 2000 and the reviews of Hometown's
quarterly financial statements included in Hometown's Form 10-Q filings for
fiscal year 2000 totaled $302,000.

Financial Information System Design and Implementation Fees

Hometown did not incur any fees for professional services rendered by
Arthur Andersen LLP in connection with information systems design and
implementation during the 2000 fiscal year.

All Other Fees

Hometown did not incur any other fees for professional services rendered
by Arthur Andersen LLP other than the services covered in the paragraph above
titled "Audit Fees".

Audit Committee Consideration

Hometown's Audit Committee has considered whether Arthur Andersen LLP's
provision of the services which generated the Audit and Other Fees reported
above is compatible with maintaining Arthur Andersen LLP 's independence as
Hometown's principal independent accounting firm.

Work Performed by Principal Accountant's Full Time Permanent Employees

Arthur Andersen LLP's services rendered in performing Hometown's audits
for fiscal year 2000 were performed by full time, permanent employees and
partners of Arthur Andersen LLP.

In order for Hometown to remain in a position that allows it to explore
alternative choices meeting the needs of Hometown and its shareholders, Hometown
is not seeking at this point, shareholders' approval for independent auditors
for fiscal year 2001. Arthur Andersen LLP has been Hometown's independent
auditors since 1998. The report of Arthur Andersen LLP with respect to
Hometown's financial statements appears in Hometown's annual report for the
fiscal year ended December 31, 2000. A representative of Arthur Andersen LLP
will be at the annual meeting and will have an opportunity to make a statement
if he or she desires to do so and will be available to respond to appropriate
questions.

MISCELLANEOUS

Stockholder Proposals

Stockholder proposals intended to be presented at Hometown's 2002 Annual
Meeting must be received by Hometown for inclusion in Hometown's proxy statement
relating to that meeting not later than March 30, 2002. Such proposals should be
addressed to John J. Stavola, acting Chief Financial Officer, Hometown Auto
Retailers, Inc., 774 Straits Turnpike, Watertown, Connecticut, 06795.

Other Matters

The management knows of no other business which will be presented for
consideration at the Annual Meeting other than that stated in the notice of
meeting.

Solicitation Of Proxies

The cost of this proxy solicitation and any additional material relating
to the meeting which may be furnished to the stockholders will be borne by
Hometown. In addition, solicitation by telephone, telegraph or other means may
be made personally, without additional compensation, by officers, directors and
regular employees of Hometown. Hometown also will request brokers, dealers,
banks and voting trustees and their nominees holding shares of record but not
beneficially to forward proxy soliciting material to beneficial owners of such
shares, and Hometown, upon request, will reimburse them for their expenses in so
doing.

Reports And Financial Statements

Hometown's Annual Report for the year ended 2000, including Audited
Financial Statements is included with this proxy material. The Financial
Statements contained in the Annual Report are incorporated by reference and are
part of this soliciting material.

A copy of Hometown's Annual Report to the Securities and Exchange
Commission on Form 10-K, without exhibits, will be provided without charge to
any stockholder submitting a written request. Such request should be addressed
to John J. Stavola, acting Chief Financial Officer, Hometown Auto Retailers,
Inc., 774 Straits Turnpike, Watertown, Connecticut, 06795.

EVERY STOCKHOLDER, WHETHER OR NOT HE OR SHE EXPECTS TO ATTEND THE ANNUAL
MEETING IN PERSON, IS URGED TO EXECUTE THE PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED BUSINESS REPLY ENVELOPE.

BY ORDER OF THE BOARD OF DIRECTORS

/s/ Corey E. Shaker
Corey E. Shaker, President

Dated: Watertown, Connecticut
May 14, 2001

APPENDIX I(FORM OF PROXY)

HOMETOWN AUTO RETAILERS, INC.
P R O X Y
FOR ANNUAL MEETING OF THE STOCKHOLDERS
June 21, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Corey E. Shaker and John J. Stavola, and each of
them, with full power of substitution, as proxies to vote the shares which the
undersigned is entitled to vote at the Annual Meeting of the Stockholders of
Hometown Auto Retailers, Inc. ("Hometown") to be held at the Sheraton Waterbury
Hotel, 3580 East Main Street, Waterbury, Connecticut 06705, on Thursday, June
21, 2001 at 10:00 A.M., Eastern Daylight Time and at any adjournments thereof,
hereby revoking any proxies heretofore given, to vote all shares of common stock
of Hometown held or owned by the undersigned as indicated on the proposals as
more fully set forth in the Proxy Statement, and in their discretion upon such
other matters as may come before the meeting.

Please mark "X" your votes as indicated :

ELECTION OF DIRECTORS: Corey E. Shaker, William C. Muller, Jr., Joseph Shaker,
James Christ, Domenic Colasacco, and Louis I. Margolis

FOR election of all nominees |_|
WITHHOLD vote from all nominees |_|

FOR all nominees, |_|
EXCEPT for nominee(s) listed below
from whom Vote is withheld.
(Continued, and to be signed, on the Reverse Side)
- --------------------------------------------------------------------------------

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[Reverse Side]

THIS PROXY WHEN PROPERLY SIGNED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR THE PROPOSAL.

The undersigned hereby acknowledges receipt of the Notice of, and Proxy
Statement for, the aforesaid Annual Meeting.

Dated: , 2001

________________________________________
Signature of Stockholder

NOTE: When shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee, or guardian, please give full
title as such. If a corporation, please sign in full corporate name by
President or other authorized officer. If a partnership, please sign in
partnership name by an authorized person.

IMPORTANT - PLEASE FILL IN, SIGN AND RETURN PROMPTLY USING THE ENCLOSED
ENVELOPE.

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APPENDIX II (AUDIT COMMITTEE CHARTER)

CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS

I. PURPOSE AND SCOPE

The primary purposes of the Audit Committee are, on behalf of the Board of
Directors and through the oversight of the independent auditors: (1) to obtain a
reasonable level of assurance that the Corporation's financial reports,
practices, procedures and controls are within acceptable limits of sound
practice and in accordance with the statutes, regulations, or statements of the
Financial Accounting Standards Board, the Securities and Exchange Commission,
the NASDAQ Stock Market and other relevant agencies and; and (2) to review such
reports, practices, procedures and controls at least annually and at such other
times if so desired by the Committee to gain insight as to the financial health
of the Corporation and important factors and trends related thereto and
compliance with the Corporation's practices for managing legal and regulatory
compliance.

The Board of Directors shall annually appoint an Audit Committee, which
shall consist of not less than three members of the Board of Directors. Members
may not be officers of the Corporation or any of its subsidiaries and also shall
be independent of management. At the time of appointment of the Committee, the
Directors shall designate one of the members of the Committee to be its
Chairman, to serve until a successor is designated. The Committee has the
authority to retain counsel and experts as deemed appropriate.

II. DUTIES AND RESPONSIBILITIES

The Audit Committee is responsible for a broad range of activities which
include:

o Recommend to the Board the selection, retention or termination of
the Corporation's independent public accountants.

o Discuss and approve the scope of professional services provided by
the independent public accountants and consider the possible effect
of the performance of such service on the independence of the public
accountants.

o Discuss and approve the arrangements (including the estimated fee)
and the proposed overall scope of the annual audit with management
and the independent public accountants.

o Review and concur in the appointment, replacement, reassignment, or
dismissal of the Corporation's Chief Financial Officer.

o Discuss matters of concern to the Audit Committee, the independent
public accountants or management relating to the annual financial
statements or other results of the audit.

o Consider and review with the independent public accountants and the
Corporation's Chief Financial Officer their options as to the
adequacy of the Corporation's system of internal accounting
controls.

o Review with management and the independent public accountants at the
completion of the annual examination:

> The Corporation's annual financial statements and related
footnotes.

> The independent public accountants' audit of the financial
statements and their report thereon.

> The independent public accountants' management letter with
respect to the audit and proposals for changes emanating
therefrom.

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> Any significant changes required in the independent public
accountants' audit plan.

> Any serious difficulties or disputes with management
encountered during the course of the audit.

> Other matters related to the conduct of the audit which are to
be communicated to the Audit Committee under generally
accepted auditing standards.

Consider and review with management and the Corporation's Chief
Financial Officer:

> The scope of the annual audit plan:

> Significant findings during the year and management's
responses thereto.

> Any difficulties encountered in the course of their audits,
including any restrictions on the scope of their work or
access to required information.

> Any changes required in the planned scope of their audit plan.

o Review with the independent public accountants the methods of
establishing and monitoring the Corporation's policies to prohibit
unethical, questionable or illegal activities by employees of the
Corporation.

o Review with management and the independent public accountants the
anticipated effect of any material changes in accounting policies or
standards as well as any unusual or significant commitments or
contingent liabilities.

o Review, with the Corporation's counsel, any legal matters that could
have a significant impact on the Corporation's financial statements.

o Meet with the independent public accountants in separate executive
sessions to discuss any matters that the Audit Committee or the
independent public accountants believe should be discussed privately
with the Audit Committee.

The Audit Committee will perform such other functions as assigned by law,
the Corporation's charter or bylaws, or the Board of Directors.

III. OPERATING PROCEDURES

The operating procedures for this Committee with respect to meetings,
Notice of Meetings, Quorums and Manner of Acting, and Records shall be the
same as stipulated for the Board as spelled out in the Corporation's
By-laws.

IV. ACCOUNTABILITY

This Committee shall report to the Board of Directors at its next regular
meeting all such actions it has taken since the previous report.

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