UDC.IC/PRESS RELEASE/8K



CONTACTS:                  Steven T. Darak
                           Senior Vice President and Chief Financial Officer
                           (602) 852-6600

                           Investor Relations
                           Ugly Duckling Corporation
                           Investor-relations@uglyduckling.com

FOR IMMEDIATE RELEASE

UGLY DUCKLING ANNOUNCES CLOSING OF AN INVENTORY LINE OF CREDIT

     PHOENIX - September 6, 2001 - Ugly Duckling  Corporation (Nasdaq NM: UGLY),
today announced that it has entered into a $36 million  inventory line of credit
with Automotive Finance  Corporation (AFC), a wholly owned subsidiary of ALLETE,
Inc.  This line of credit  replaces the  company's  existing  inventory  line of
credit. As previously announced, the company's prior lender has made a strategic
decision to exit the automobile finance business. The new inventory facility has
an  interest  rate set at an  increment  above the prime rate,  an advance  rate
starting at 80% of the company's  investment in its inventory and expires at the
end of June 2003.

     Bob Fulton,  Vice President and Treasurer of the company,  stated:  "We are
very  pleased to have closed this  inventory  line of credit with a  significant
increase  in both the total line and the  advance  rate on our  inventory.  This
facility with AFC is a great  opportunity  for us to build on a relationship  we
currently have with its sister company, the ADESA Corporation auto auctions, one
of North America's largest and fastest growing auto auctions."

About Ugly Duckling Corporation

     Headquartered in Phoenix, Arizona, Ugly Duckling Corporation is the largest
operator of used car dealerships  focused  exclusively on the sub-prime  market.
The Company underwrites,  finances and services sub-prime contracts generated at
its 76 Ugly  Duckling  dealerships,  located in 11  metropolitan  areas in eight
states. *****

     This press release  includes  statements  that  constitute  forward-looking
statements  within the  meaning of the safe  harbor  provisions  of the  Private
Securities  Litigation  Reform  Act of 1995.  We  claim  the  protection  of the
safe-harbor for our forward looking statements.  Forward-looking  statements are
often characterized by the words "may," "anticipates,"  "believes," "estimates,"
"projects,"  "expects"  or similar  expressions  and do not  reflect  historical
facts.  Forward-looking  statements in this release relate, among other matters,
to  the  positive   financial  impact  of  the  new  inventory  line  and  Adesa
relationship.  Forward looking statements include risks, uncertainties and other
factors which may cause our actual  results,  performance or  achievements to be
materially  different  from those  expressed or implied by such forward  looking
statements.  Factors  that could affect our results and cause or  contribute  to
differences from these  forward-looking  statements include, but are not limited
to: any decline in consumer  acceptance of our car sales strategies or marketing
campaigns;  any inability of the Company to finance its operations in light of a
tight credit market for the sub-prime  industry,  any  deterioration in the used
car finance  industry,  increased  competition in the used car sales and finance
industry or adverse economic conditions; any inability of the Company to monitor
and improve its underwriting and collection processes;  any changes in estimates
and  assumptions  in, and the  ongoing  adequacy  of, our  allowance  for credit
losses, including losses occurring at or below expected levels; any inability of
the Company to continue to reduce  operating  expenses as a percentage of sales;
any material  litigation  against us or  material,  unexpected  developments  in
existing  litigation;  and any new or revised accounting,  tax or legal guidance
that adversely affect used car sales or financing. Other factors are detailed in
the  sections  entitled  "Management's  Discussion  and  Analysis  of  Financial
Condition and Results of Operations -- Risk  Factors,"  "Factors That May Affect
Future  Results and  Financial  Condition"  and "Factors  That May Affect Future
Stock  Performance"  in our most  recent  reports  on Form  10-K  and Form  10-Q
(including  Exhibit  99  attached  to any such Form 10-Q) and  elsewhere  in our
Securities and Exchange Commission  filings. In addition,  the foregoing factors
may affect generally our business, results of operations and financial position.
There may also be other  factors  that we are  currently  unable to  identify or
quantify,  but that may arise or become  known in the  future.  Forward  looking
statements  speak only as of the date the  statement  was made.  By making these
forward-looking   statements,   we  undertake  no  obligation  to  update  these
statements for revisions or changes after the date of this report. References to
Ugly Duckling  Corporation  as the largest  chain of buy-here  pay-here used car
dealerships in the United States is management's belief based upon the knowledge
of the industry and not on any current independent third party study.