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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A

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 [_]

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 (S) 240.14a-11(c) or (S) 240.14a-12

PRECISION AUTO CARE, INC.
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(Name of Registrant as Specified In Its Charter)

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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:

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(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 of its filing.

(1) Amount Previously Paid:

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(4) Date Filed:

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Notes:

[PRECISION AUTO CARE LOGO]

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOVEMBER 28, 2001

The Annual Meeting of Shareholders of Precision Auto Care, Inc. (the
"Company") for 2001 will be held at the Company's headquarters located at 748
Miller Drive, S.E., Leesburg, Virginia on Wednesday, November 28, 2001, at
11:00 a.m., for the following purposes:

1. To amend the Company's Articles of Incorporation to reduce the
minimum number of directors;

2. To amend the Company's Articles of Incorporation to reduce the term
of office for each director from three years to one year;

3. To elect Directors for the coming year;

4. To ratify the appointment of Grant Thornton LLP as independent
auditors for the fiscal year ending June 30, 2002; and

5. To transact such other business as may properly come before the
meeting or any adjournment thereof.

Only holders of shares of Common Stock of record on the books of the
Company at the close of business October 1, 2001 will be entitled to notice of
and to vote at the 2001 Annual Meeting or any adjournment thereof.

In order that your shares may be represented at the Annual Meeting, you are
urged to promptly complete, sign, date and return the accompanying Proxy in
the enclosed envelope, whether or not you plan to attend the Annual Meeting.
If you attend the Annual Meeting in person you may, if you wish, vote
personally on all matters brought before the Annual Meeting even if you have
previously returned your Proxy.

By Order of the Board of Directors,
/s/ Frederick F. Simmons
Frederick F. Simmons
Vice President, General Counsel and
Secretary

748 Miller Drive, S.E
Leesburg, Virginia 20175
October 29, 2001

PRECISION AUTO CARE, INC.
748 MILLER DRIVE, S.E.
LEESBURG, VIRGINIA 20175

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PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
November 28, 2001

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INFORMATION CONCERNING TIMING OF THE MEETING, SOLICITATION AND VOTING

General

The following information is submitted concerning the enclosed form of
proxy and the matters to be acted upon under authority thereof at the 2001
Annual Meeting of Shareholders of the Company to be held on Wednesday,
November 28, 2001, commencing at 11:00 a.m., or at any adjournment thereof,
pursuant to the accompanying notice of this meeting. The 2001 Annual Meeting
will be held at the Company's headquarters located at 748 Miller Drive, S.E.,
Leesburg, Virginia 20175. The Company intends to mail this proxy statement and
accompanying proxy to all shareholders entitled to vote at the Annual Meeting
on or about October 29, 2001.

Solicitation and Revocability of Proxies

The proxy is solicited on behalf of the Board of Directors of the Company.
It may be revoked by the shareholder at any time prior to the exercise thereof
by filing with the Secretary of the Company a written revocation or a duly
executed proxy bearing a later date. The proxy shall be suspended if the
shareholder shall be present at the meeting and elect to vote in person.
Attendance at the meeting will not, by itself, revoke a proxy. Shares
represented by proxies received will be voted. Where the shareholder has
specified his or her choice with respect to the proposal to be acted upon, the
shares will be voted in accordance with the specification so made, and in the
absence thereof will be voted by the proxy holders as directed by management.

The cost of solicitation of proxies will be borne by the Company. In
addition to solicitation by mail, certain directors, officers and regular
employees of the Company may solicit proxies by facsimile, telephone or
personal interview for which they will receive no additional compensation. In
addition, arrangements will be made with brokerage firms and other custodians,
nominees and fiduciaries to forward solicitation material for the meeting to
beneficial owners, and the Company will reimburse them for their reasonable
expenses in so doing.

Voting Rights and Outstanding Shares

Only shareholders of record on the books of the Company at the close of
business on October 1, 2001 (the "Record Date") will be entitled to notice of
and to vote at the Annual Meeting. As of that date, there were 10,081,808
shares of Common Stock issued and outstanding and entitled to vote. Each share
of Common Stock is entitled to one vote for each matter submitted to the
shareholders for approval.

A majority of the outstanding shares entitled to vote must be present in
person or represented by proxy at the 2001 Annual Meeting to constitute a
quorum. Abstentions and shares of record held by a broker or its nominee
("Broker Shares") that are voted on any matter at the meeting, will be counted
for purposes of determining if a quorum exists. Broker Shares that are not
voted on any matter at the meeting will not be included in determining whether
a quorum is present.

The amendments of the Company's Articles of Incorporation to reduce the
minimum number of directors on the Board as well as shorten the term of each
director to one year require the approval of 80% or more of the outstanding
voting stock of the Company.

The election of each nominee for Director requires the affirmative vote of
the holders of the shares representing a plurality of the votes cast in the
election of Directors. Votes that are withheld and Broker Shares that are not
voted in the election of Directors will not be included in determining the
number of votes cast and, therefore, will have no effect on the election of
the Directors.

Actions on all other matters to come before the 2001 Annual Meeting,
including the approval of the appointment of the Company's independent
auditors, require that the votes cast in favor of the action exceed the votes
cast against it. Abstentions and Broker Shares that are not voted are not
considered cast either for or against a matter and, therefore, will have no
effect on the outcome of the other matters to come before the 2001 Annual
Meeting.

Item 1: Amendment of the Company's Articles of Incorporation to Reduce the
Minimum Number of Directors

The Company's Articles of Incorporation currently provide that there be not
less than 10 nor more than 20 directors. There are currently 10 directors.

The Board of Directors proposes to amend the Articles of Incorporation to
reduce the minimum number of directors from 10 to 5 and to have the entire
board of directors elected annually for a one year term of office. The Board
of Directors believes that having a smaller board will be more cost efficient
and more responsive to shareholders. Under the proposal, Section 1 of Article
VI of the Company's Articles of Incorporation would be amended to read:

"Section 1. Number. The business and affairs of the Corporation shall be
managed under the direction of the Board of Directors which, subject to any
right of holders of any series of Preferred Stock then outstanding to elect
additional directors under specified circumstances, shall consist of not less
than 5 nor more than 20 persons. The exact number of directors within the
minimum and maximum limitation specified in the preceding sentence shall be
fixed from time to time solely by the Board of Directors pursuant to a
resolution of a majority of the entire Board of Directors."

The Articles of Incorporation require approval of 80% or more of the
outstanding voting stock of the Company, or a minimum of 8,119,447 shares, for
adoption. The approval of this proposal is contingent upon receiving
shareholder approval of Item 2 below.

THE BOARD OF DIRECTORS RECOMMENDS APPROVAL OF THIS PROPOSAL.

Item 2: Amendment of the Company's Articles of Incorporation to Provide for
One Year Terms of Office

The Company's Articles of Incorporation currently provide that the
directors be divided into three classes of equal numbers of directors (or as
nearly equal as possible), with each class of directors serving for three year
terms.

The Board of Directors proposes to amend the Articles of Incorporation to
have the entire Board of Directors elected annually for a one year term of
office. The Board of Directors believes that electing the directors on an
annual basis is in the best interests of the shareholders. Under the proposal,
Section 2 of Article VI of the Company's Articles of Incorporation would be
amended to read:

"Section 2. Terms. The directors other than those who may be elected by the
holders of any Preferred Stock then outstanding shall consist of one class,
with the term of office expiring at the next Annual Meeting of Shareholders
following such election."

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS APPROVAL OF THIS PROPOSAL.

Item 3: Election of Directors

Pursuant to the Company's Articles of Incorporation in effect as of the date
of this proxy statement, the Board of Directors is classified into three
classes, as nearly equal in number as possible, with three-year terms that will
expire at the Annual Meetings of Shareholders in 2001, 2002 and 2003,
respectively. The terms of three directors will expire at the 2001 Annual
Meeting: Louis M. Brown, Jr., John Wiegand and Mauricio Zambrano ("Class I
Directors").

If the shareholders approve the amendments to the Articles of Incorporation
set forth in Items 1 and 2 above, all of the directors will resign and six
directors will stand for election for a one-year term expiring at the 2002
Annual Meeting of Shareholders as follows:

Director
Name and Age Since Principal Occupation Additional Information
------------ -------- -------------------- ----------------------

Bernard H. Clineburg 1993 Retired Mr. Clineburg served as the
Chairman--Audit President of United Bankshares and
Committee Chairman and Chief Executive Officer
Age 53 of United Bank from April 1998 until
December 1999. He was a Director of
George Mason Bankshares, Inc. and
The George Mason Bank from October
1990 to April 1998.

Louis M. Brown, Jr. 2000 President and Chief Mr. Brown also serves as a director
Age 58 Executive Officer and Chairman of the Board of Micros
since August 2000 Systems, Inc. (a leading provider of
information technology for the
hospitality industry).

Mauricio Zambrano 2000 Vice President, Desarollo Mr. Zambrano serves as a director of
Age 55 Integrado, S.A. de C.V., Cemex, S.A. de C.V. (one of the
Monterrey, Mexico world's leading cement makers).

Woodley A. Allen 1991 President, Allen Management Mr. Allen served as Chief Financial
Chairman of the Board; Services, Oakton, VA Officer of EZ Communications, Inc.
Chairman--Executive (management consulting firm) (publicly traded radio broadcasting
Committee company) from March 1973 to May
Age 54 1992.

Bassam N. Ibrahim 1993 Partner, Burns, Doane, Mr. Ibrahim practiced law with
Chairman--Organization Swecker & Mathis LLP, Popham, Haik, Schnobrich & Kaufman
and Compensation Alexandria, VA (law firm) (law firm) from June 1994 to August
Committee 1996.
Age 39

Arthur C. Kellar 1991 Retired Mr. Kellar served as Chairman of the
Age 79 Board of WE JAC Corporation, the
Company's predecessor, from April
1992 to September 1994. Mr. Kellar
served as Chairman of the Board of
EZ Communications, Inc. (publicly
traded radio broadcasting company)
from June 1992 to April 1997.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THE
DIRECTOR NOMINEES LISTED ABOVE.

If the shareholders do not approve the proposed amendments to the Articles
of Incorporation described in Items 1 and 2 above, three Class I Director
nominees have been nominated for election for a three-year term expiring at the
2004 Annual Meeting.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THE CLASS I
DIRECTOR NOMINEES LISTED BELOW ONLY IF THE PROPOSED AMENDMENTS TO THE ARTICLES
OF INCORPORATION ARE NOT APPROVED BY THE SHAREHOLDERS.

NOMINEES FOR CLASS I DIRECTORS FOR TERMS EXPIRING
AT THE 2004 ANNUAL MEETING

Director
Name and Age Since Principal Occupation Additional Information
------------ -------- -------------------- ----------------------

John T. Weigand 2001 Senior Vice President-- Mr. Wiegand has been Senior Vice
Age 39 Franchise Operations President--Franchise Operations of
of the Company the Company since September 2000.
since September 2000 Mr. Wiegand also served as Vice
President--North American Operations
from June 1998 until September 2000,
and as Director of Field Operations
from August 1996 until June 1998.

Mauricio Zambrano 2000 Vice President, Desarollo Mr. Zambrano serves as a director of
Age 55 Integrado, S.A. de Cemex, S.A. de C.V. (one of the
C.V., Monterrey, Mexico world's leading cement makers).

CLASS II DIRECTORS WHOSE TERMS EXPIRE AT THE 2002 ANNUAL MEETING

Director
Name and Age Since Principal Occupation Additional Information
------------ -------- -------------------- ----------------------

Woodley A. Allen 1991 President, Allen Management Mr. Allen served as Chief Financial
Chairman of the Board, Services, Oakton, VA Officer of EZ Communications, Inc.
Chairman-- (management consulting firm) (publicly traded radio broadcasting
Executive Committee company) from March 1973 to May
Age 54 1992.

CLASS III DIRECTORS WHOSE TERMS EXPIRE AT THE 2003 ANNUAL MEETING

Director
Name and Age Since Principal Occupation Additional Information
------------ -------- -------------------- ----------------------

Lynn E. Caruthers 1991 General Partner, Ms. Caruthers served as Chairperson
Age 49 Caruthers Properties, Ltd., of the Board of WE JAC Corporation,
Arlington, VA (commercial the Company's predecessor, from
real estate developer) September 1994 to February 2000.

Robert R. Falconi 2001 Senior Vice President-- Mr. Falconi was the Chief Financial
Age 47 Finance, Administration & Officer of Intelysis Corporation
Chief Financial Officer (reseller of computer hardware and
of the Company since software), from August 1998 until
September 2000 August 2000, and was Chief Financial
Officer of Planning Systems, Inc.
(underwater technology) from October
1991 until August 1998.

Bernard H. Clineburg 1993 Retired Mr. Clineburg served as the
Chairman--Finance and President of United Bankshares and
Audit Committee Chairman and Chief Executive Officer
Age 53 of United Bank from April 1998 until
December 1999. He was a Director of
George Mason Bankshares, Inc. and
The George Mason Bank from October
1990 to April 1998.

Frederick F. Simmons* 2001 Vice President, General Mr. Simmons was Assistant General
Age 39 Counsel and Secretary Counsel and Assistant Secretary of
of the Company Advantica Restaurant Group, Inc.
since March 5, 2001 from December 1995 until February
28, 2001.

--------
* Mr. Simmons was appointed to replace Everett Casey, who was elected to be a
Class III director at the 2000 Annual Meeting held on March 19, 2001 and who
resigned from the Board in March 2001.

Meetings and Committees of the Board

The Company has three standing Committees of the Board of Directors: (i)
the Executive Committee; (ii) the Finance and Audit Committee; and (iii) the
Organization and Compensation Committee. The Board of Directors does not have
a Nominating Committee; rather, the entire Board of Directors chooses the
director nominees. The Board of Directors of the Company held ten meetings
during the fiscal year ended June 30, 2001. With the exception of Mr. Kellar,
all directors attended at least 75% of the aggregate number of meetings of the
Board of Directors and Committees on which they served.

The Executive Committee has the power and authority of the Board of
Directors and meets several times during the year in months when the Board of
Directors does not meet. Mr. Allen serves as Chairman of the Executive
Committee. Messrs. Clineburg and Ibrahim serve as members. During the fiscal
year ended June 30, 2001, the Executive Committee met 7 times.

The Finance and Audit Committee makes recommendations regarding the
engagement of the Company's independent auditors, reviews the arrangement and
scope of the audit, considers comments made by the independent auditors with
respect to the adequacy of the Company's internal accounting controls, and
reviews non-audit services provided by the firm. Mr. Clineburg serves as
Chairman of the Finance and Audit Committee and Messrs. Kellar and Zambrano
serve as members of the Committee. During the fiscal year ended June 30, 2001,
the Finance and Audit Committee met 2 times.

The Organization and Compensation Committee reviews and approves (or
recommends to the full Board) the annual salary, bonus and other benefits of
senior management of the Company; reviews and makes recommendations to the
Board relating to executive compensation and plans; and establishes, and
periodically reviews, the Company's policy with respect to management
perquisites. Mr. Ibrahim serves as Chairman of the Organization and
Compensation Committee and Ms. Caruthers and Mr. Kellar serve as members of
the Committee. During the fiscal year ended June 30, 2001, the Organization
and Compensation Committee met 2 times.

Compensation of Directors

Directors who are employees receive no additional compensation for serving
as directors. Pursuant to the Precision Auto Care, Inc. 1998 Outside
Directors' Stock Option Plan, each non-employee director who has served as a
director of the Company for at least one year as of the date of each annual
meeting of shareholders is granted an option to purchase 2,500 shares of the
Company's Common Stock, exercisable over the following ten years at an
exercise price of the average of the highest and lowest sale price per share
of Common Stock on NASDAQ on the date of the grant, or, if there shall have
been no such sale so reported on that date, on the last preceding date on
which a sale was so reported. Those directors who have served less than one
year shall receive an option for a prorated portion of 2,500 shares based on
their terms of service as determined by the Organization and Compensation
Committee.

In addition, pursuant to the Precision Auto Care, Inc. 2000 Outside
Directors' Stock Plan, each non-employee director attending a meeting of the
Board of Directors in person receives a grant of Common Stock equal to $1,000
divided by the average of the highest and lowest sale price per share of
Common Stock on NASDAQ on the date of the grant, or, if there shall have been
no such sale so reported on that date, on the last preceding date on which a
sale was so reported.

In January 2001, the Board of Directors suspended the issuance of options
under the 1998 and 2000 Plans, and determined to pay non-employee directors
$1,000 for each meeting attended (with an aggregate maximum of $60,000 per
year), with payment to be deferred, without interest, until the Board
determines that the Company's financial condition permits.

On August 4, 2000, the Board of Directors agreed to pay Mr. Allen the sum
of $50,000 and also granted Mr. Allen an option to purchase 50,000 shares of
the Company's Common Stock at an exercise price of $0.219, the closing price
of the Common Stock on NASDAQ on August 4, 2000. The option expires August 4,
2005. On August 4, 2000, the Board of Directors also granted each of Messrs.
Ibrahim and Clineburg options to purchase 20,000 shares of the Company's
Common Stock on the same terms and conditions as those granted to Mr. Allen.
These options were granted in consideration of the efforts of Messrs. Allen,
Ibrahim and Clineburg in obtaining a loan commitment from Precision Funding,
LLC, which is more particularly described under "Certain Relationships and
Related Transactions."

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The table below sets forth the compensation earned and paid to each Named
Executive Officer (including certain former executive officers of the Company)
who earned $100,000 or more during the periods presented.

Restricted Securities
Name and Principal Other Annual Stock Underlying All Other
Position Year Salary Bonus Compensation Awards Options Compensation(1)
------------------ ---- -------- ------- ------------ ---------- ---------- ---------------

Louis M. Brown, Jr.(2).. 2001 $ 1 -- -- -- -- --
President and
Chief Executive Officer

Charles L. Dunlap....... 2001 $196,930(3) -- -- -- -- $ 433
Former President and 2000 242,507 -- -- -- -- 1,992
Chief Executive Officer 1999 131,538 -- -- $118,750(4) 200,000 1,615

Robert R. Falconi....... 2001 $156,154(5) -- -- -- 250,000 $1,500
Senior Vice President
and
Chief Financial Officer

John T. Wiegand......... 2001 $138,846 -- -- -- 22,500 $2,083
Senior Vice President-- 2000 116,398 -- -- -- -- 1,746
Franchise Operations 1999 85,847 -- -- $ 35,625(6) 10,000 1,288

Jaime Valdes............ 2001 $218,060 -- -- -- -- --
Senior Vice President-- 2000 128,867 $27,360 -- -- -- --
Latin America 1999 120,000 -- -- -- 25,000 --

John N. Tarrant......... 2001 $112,626 -- -- -- 25,000 $1,664
Controller 2000 93,269 -- -- -- -- 1,399
1999 63,462 -- -- -- 12,500 952

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(1) Amounts represent the Company's matching contributions to the 401(k)
Savings Plan and severance payments as indicated below.
(2) Mr. Brown's employment with the Company began August 4, 2000.
(3) Mr. Dunlap's employment with the Company began in October 1998 and was
terminated effective August 4, 2000. Salary includes severance payments.
(4) Mr. Dunlap was awarded a grant of 50,000 shares of restricted stock on
March 31, 1999 valued at $2.375 per share price. As of June 30, 2001,
this grant was worth $25,500 based on a $0.51 per share price. No
dividends will be paid on 37,500 shares.
(5) Mr. Falconi's employment with the Company began September 6, 2000.
(6) Mr. Wiegand was awarded a grant of 15,000 shares of restricted stock on
March 31, 1999 valued at $2.375 per share price. As of June 30, 2001,
this grant was worth $7,650 based on a $0.51 per share price. No
dividends will be paid on 11,250 shares.

OPTION GRANTS IN LAST FISCAL YEAR

The following table presents information concerning stock option grants to
the named executive officers in the last fiscal year.

Potential
Realized Value at
Assumed Annual
% of Total Rates of Stock
Number of Options Price
Securities Granted to Weighted Appreciation for
Underlying Employees Average Option Term(4)
Options in Fiscal Exercise Expiration -----------------
Name Granted(1) Year Price(2) Date(3) 5% 10%
---- ---------- ---------- -------- ---------- -------- --------

Louis M. Brown,
Jr.(5)................. -- -- -- -- -- --
Charles L. Dunlap(6).... -- -- -- -- -- --
Robert R. Falconi(7).... 250,000 36.36% $1.00 09/06/10 $157,224 $398,436
John T. Wiegand......... 35,000 5.09% $1.00 05/31/11 $ 22,011 $ 55,781
Jaime Valdes(8)......... -- -- -- -- -- --
John N. Tarrant......... 25,000 3.64% $1.00 05/31/11 $ 15,722 $ 39,844

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(1) Stock options exercisable into 777,500 shares of Common Stock were
granted to all employees, non-employee directors of the Company and
related parties as a group during the fiscal year ended June 30, 2001.
This includes shares issued on May 31, 2001 following the repurchase of
certain options described in footnote 3 below.
(2) The exercise price is the "fair market value" of the Company's Common
Stock at the date of grant as determined in good faith by the Company's
Board of Directors.
(3) Date shown is expiration date of latest grant. Options generally vest
and become exercisable in annual installments of 33 1/3% of the shares
covered by each grant commencing on the first anniversary of the grant
date, and expire ten years after the grant date. Options to employees
also include an acceleration of vesting provision whereby, to the extent
not previously vested, 25% of the options will vest when the Company's
stock price closes at $4.00 per share, 75% will vest when the stock
price closes at $6.00 per share, and 100% will vest when the stock price
closes at $8.00 per share. On May 31, 2001, the Company repurchased
outstanding options for 144,250 shares from certain employees for two
cents per share and reissued options for 144,250 shares to the same
employees. The new options are fully vested, are exercisable until May
31, 2011 and are priced at $1.00 per share. The repurchased options had
been granted at varying times between November 1995 and October 1999 and
were priced from $2.375 to $10.25.
(4) The dollar amounts under the potential realizable values column use the
5% and 10% rates of appreciation permitted by the SEC, and are not
intended to forecast actual future appreciation in the stock price.
Actual gains, if any, on stock option exercises are dependent on the
future performance of the Company's Common Stock. There can be no
assurance that the amounts reflected in this table will be achieved. The
assumed rates are compounded annually to the full ten-year term of the
options.
(5) Mr. Brown's employment with the Company began August 4, 2000.
(6) Mr. Dunlap's employment with the Company was terminated effective August
4, 2000.
(7) Mr. Falconi's employment with the Company began September 6, 2000.
(8) Mr. Valdes' services with the Company were terminated effective July 23,
2001.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES

The following table presents information concerning stock option exercises
by the named executive officers and the fiscal year-end option values.

Number of Securities Value of the Unexercised
Underlying Unexercised In-the-money Options at
Options at June 30, 2001 June 30, 2001(1)
------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------

Louis M. Brown, Jr.......... -- -- -- --
Charles L. Dunlap........... -- -- -- --
Robert R. Falconi........... 83,333 166,667 -- --
John T. Wiegand............. 22,500 12,500 -- --
Jaime Valdes................ 25,000 -- -- --
John N. Tarrant ............ 15,000 10,000 -- --

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(1) The closing price for the Company's Common Stock as reported by the OTCBB
on June 29, 2001 (the last trading day in the Company's fiscal year), was
$0.51. Value is calculated on the basis of the difference between the
option exercise price and $0.51, multiplied by the number of shares of
Common Stock underlying the option.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth the shares of Common Stock beneficially
owned by (i) each person known by the Company to beneficially own greater than
5% of the Company's outstanding stock, (ii) each director of the Company,
(iii) each executive officer named in the table above labeled Summary
Compensation Table, and (iv) all directors and executive officers of the
Company as a group. For purposes of this table, and as used elsewhere in this
Proxy Statement, the term "beneficial owner" means any person who, directly or
indirectly, has or shares the power to vote, or to direct the voting of a
security or the power to dispose, or to direct the disposition of, a security.
Except as otherwise indicated, the Company believes that each individual owner
listed below exercises sole voting and dispositive power over their shares.
Except as otherwise indicated, (a) the Company believes that each individual
owner listed below exercises sole voting and dispositive power over their
shares; and (b) the information presented is as of the Record Date.

Amount of Percentage of
Beneficial Outstanding
Name of Beneficial Owner Ownership Common Stock
------------------------ ---------- -------------

Avenir Corporation(1)................................ 1,211,941 11.94%
Louis M. Brown, Jr.(2)............................... 1,407,500 13.96%
Mauricio Zambrano(3)................................. 1,524,468 15.12%
Arthur C. Kellar(4).................................. 1,338,103 13.22%
Woodley A. Allen(5).................................. 98,338 *
Charles L. Dunlap(6)................................. 12,500 *
Lynn E. Caruthers(7)................................. 150,719 1.49%
Bernard H. Clineburg(8).............................. 54,847 *
Bassam N. Ibrahim(9)................................. 49,188 *
Robert R. Falconi(10)................................ 292,283 2.88%
Frederick F. Simmons................................. -- --
Jaime Valdes(11)..................................... 49,421 *
John T. Wiegand(12).................................. 42,500 *
John N. Tarrant(13).................................. 15,000 *
All directors and executive officers as a group (18
persons)(14)........................................ 5,246,916 49.94%

--------
* Represents less than 1%.

(1) Based in part on Schedule 13G filed with the SEC on February 14, 2001.
Its business address is 1725 K Street, N.W., Suite 410, Washington, DC
20006.
(2) Mr. Brown is also the President and Chief Executive Officer and a
Director.
(3) Mr. Zambrano is also a Director of the Company. Includes options to
purchase 450 shares that are exercisable within 60 days.
(4) Mr. Kellar is also a Director of the Company. Does not include a
restricted stock award of 3,750 non-voting shares but does include
options to purchase 37,500 shares that are exercisable within 60 days.
(5) Does not include a restricted stock award of 3,750 non-voting shares
but does include options to purchase 72,500 shares that are exercisable
within 60 days.
(6) Mr. Dunlap's employment with the Company was terminated August 4, 2000.
(7) Does not include a restricted stock award of 3,750 non-voting shares
but does include 24,500 shares held by CARFAM Associates and 77,938
shares held by Caruthers Properties, Ltd., limited partnerships in
which Ms. Caruthers holds limited partnership interests and options to
purchase 12,500 shares that Ms. Caruthers may exercise within 60 days.
Also does not include 27,250 shares owned by her husband, beneficial
ownership of which is disclaimed.
(8) Does not include a restricted stock award of 3,750 non-voting shares
but does include options to purchase 32,500 shares that are exercisable
within 60 days.
(9) Does not include a restricted stock award of 3,750 non-voting shares
but does include options to purchase 32,500 shares that are exercisable
within 60 days.
(10) Includes options to purchase 83,333 shares that are exercisable within
60 days.
(11) Mr. Valdes' services with the Company were terminated effective July
23, 2001.
(12) Does not include a restricted stock award of 11,250 shares but does
include options to purchase 22,500 shares that are exercisable within
60 days.
(13) Includes options to purchase 15,000 shares that are exercisable within
60 days.
(14) Includes options to purchase 425,241 shares that are exercisable within
60 days.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers to file reports of ownership
and changes of ownership with the SEC and the Nasdaq Stock Market. The Company
believes that during the period from July 1, 2000 through June 30, 2001, its
directors and executive officers timely complied with all applicable Section
16(a) filing requirements, except as follows: Messrs. Allen, Ibrahim and
Clineburg failed to timely file reports on Form 4 reflecting the issuance of
options approved at the 2000 Annual Meeting of Shareholders held on March 21,
2001; Mr. Falconi failed to timely file 2 reports on Form 4 for the months of
October 2000 and May 2001 reflecting the purchase of shares on the open
market; Mr. Casey failed to timely file a report on Form 4 for the month of
August 2000 reflecting the purchase of shares on the open market; Mr. Kellar
exercised a warrant for 1,000,000 shares in June 2001 but the certificate was
not issued until September 2001 resulting in his failure to timely file a
report on Form 4; James Barger, Vice President--Franchise Development, failed
to timely file a report on Form 3 following his election as an officer in
January 2001; Mr. Simmons failed to timely file a report on Form 3 following
his election as an officer and appointment as director in March 2001
reflecting that he does not own any shares; the following officers--James
Barger, Kevin Bates, Glyn Massingill, David Yakaitis, John Tarrant and John
Wiegand--failed to timely file a report on Form 4 reflecting the reissuance of
options on May 31, 2001 and, except for Mr. Yakaitis, the issuance of
additional options; all officers and directors failed to timely file a report
on Form 5 within 45 days after the end of the 2001 fiscal year.

EMPLOYMENT ARRANGEMENTS

General. Effective August 4, 2000, the Company entered into an employment
agreement with Louis M. Brown, Jr. pursuant to which Mr. Brown agreed to serve
as President and Chief Executive Officer. Under this agreement, Mr. Brown
received a salary of $1.00 for the first year. For the second year of
employment, Mr. Brown's base salary is $0.70 per year plus a stock award of
500,000 shares and a stock option award of 500,000 shares, exercisable at
$0.33 per share, vesting at 33 1/3% per year over three years; thereafter Mr.
Brown will receive a base salary and other compensation as may be determined
by the Organization and Compensation Committee of the Board of Directors.

Mr. Brown replaced Charles L. Dunlap, who resigned on August 4, 2000. In
October 1998, the Company entered into an employment agreement with Mr.
Dunlap, pursuant to which Mr. Dunlap agreed to serve as President and Chief
Executive Officer for a period of three years. The agreement also provided
that Mr. Dunlap was to serve as a member of the Company's Board of Directors.
Mr. Dunlap received a base salary of $200,000 per annum. (This amount was
increased to $250,000 per annum in September 1999.) Under the terms of the
employment agreement, Mr. Dunlap was required to maintain the confidentiality
of proprietary business or technical information he obtained in the course of
his employment with the Company, and he is prohibited from competing with the
Company in the United States for a period of two years from August 4, 2000,
the date of his resignation. In connection with Mr. Dunlap's resignation, the
Company has paid him $110,961 as of the date of this proxy statement. In
addition, the Company has agreed to pay him $10,000 per month from March 2001
through August 2002 and $20,000 per month from September 2002 through November
2002. The Company will make a final payment of $9,039 to Mr. Dunlap on
December 15, 2002. The remaining unvested 37,500 shares of Mr. Dunlap's
Restricted Share award will vest on March 31, 2002 and no shares will be
issued prior to that date unless the following conditions are satisfied: (a)
if the Company's stock price closes at $6.00 per share, 25,000 shares will
become vested; and (b) if the Company's stock price closes at $8.00 per share,
all of the shares will become vested.

In June 1999, the Company entered into an agreement with Jerry L. Little
pursuant to which Mr. Little agreed to serve as Senior Vice President and
Chief Financial Officer. Mr. Little received a base salary of $20,000 per
month. In conjunction with Mr. Little's employment, Mr. Little was granted an
option to purchase 35,000 shares of the Company's Common Stock. The agreement
provided that either Mr. Little or the Company may terminate the agreement by
providing 90 days notice. Mr. Little's employment was terminated on September
6, 2000. As of his date of termination, all of the options had vested as a
result of the achievement of performance goals. The options expire in June
2009.

Revised Employment Agreements. In March 1999, the Company granted stock
options and awards to certain executive officers. As a condition to the grant
of certain options, those executive officers that had entered into employment
agreements previously were asked to terminate these prior agreements and enter
into new employment agreements. In April 1999 and September 1999, the Company
entered into revised agreements with Jaime Valdes and William R. Klumb,
respectively, pursuant to which Mr. Valdes agreed to serve as Senior Vice
President-Latin America and Mr. Klumb as Vice President-Car Wash Division for
a period of three years beginning April 1, 1998 and August 26, 1997,
respectively. Messrs. Valdes and Klumb each received a base salary of $120,000
per annum under these agreements. Under the terms of the agreements, Messrs.
Valdes and Klumb are required to maintain the confidentiality of proprietary
business or technical information they obtain or have obtained in the course
of their employment with the Company, and are prohibited from competing with
the Company in the United States during any time they are performing duties
for the Company and for a period of two years thereafter. Mr. Klumb's
employment was terminated by the Company on November 12, 2000 other than for
cause, and, therefore, Mr. Klumb's non-competition covenant expired as of such
date. Mr. Valdes' services with the Company were terminated effective July 23,
2001. Pursuant to the Separation Agreement with Mr. Valdes, he was paid
$40,000 and he agreed not to compete with the Company for a period of five
years.

REPORT OF THE ORGANIZATION AND COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION

The Organization and Compensation Committee of the Board of Directors, which
is composed of outside directors of the Company, is responsible for developing
and recommending to the Board of Directors the Company's general compensation
policies. The Committee approves the compensation plans for the Company's
executive officers, including the Chief Executive Officer (CEO), and determines
the compensation to be paid to the executive officers. The Organization and
Compensation Committee also is responsible for the granting of stock options
and restricted stock awards to the executive officers and the administration of
the Company's various incentive compensation plans.

The Organization and Compensation Committee has furnished the following
report for fiscal year 2001:

Compensation Philosophy. The Company's philosophy with respect to executive
compensation is reflective of the principle that the compensation of its
executive officers should be competitive with compensation of senior executives
at comparable companies, and that a meaningful portion of the compensation
received should be closely tied to the performance of the Company and, in
certain instances, to the achievement of individual goals. Through this link
between pay and performance, it is the intent of the Company to provide direct
incentives for the Company's financial success and the creation of incremental
shareholder value.

Executive Officer Compensation. The key components of compensation for the
executive officers consist of annual compensation provided by base salary and
annual performance bonuses, and long-term compensation provided by stock
options and restricted stock awards.

None of the executive officers was paid a cash bonus based upon fiscal year
2001 performance. Jaime Valdes, Senior Vice President--Latin America until his
resignation on July 23, 2001, received a cash bonus of $27,360 in October 2000
based upon the performance of the Company's Mexican subsidiary during fiscal
year 2000.

Members of the Committee believe they have a general awareness of pay
practices among companies of roughly comparable size, complexity, and/or
industry focus. In addition, in setting the compensation for the former
President and Chief Executive Officer in 1998, an unrelated third party was
engaged to review compensation for this position at comparable companies. Based
upon the Committee's general knowledge and the commissioned study, other than
the compensation paid to Mr. Brown addressed later in this report, it is
believed that the Company's compensation levels are generally commensurate with
those of similar companies. Other than as indicated above, compensation of the
executive officers is a subjective determination and has not been determined by
reference to any specific criteria or factors related to corporate performance.

Stock Options. Stock options are granted to executive officers, as well as
other employees, based upon the subjective evaluation of employees' general
overall performance and upon their relative rank within the Company. No
specific performance criteria are considered, and there is no fixed formula for
differentiating the number of options granted to an individual or to all
employees in the aggregate. The Company's approach to long-term incentives
provided by stock options has been a flexible one, in which the effort is to
attract and retain able key employees by giving them an opportunity for stock
ownership. A total of 777,500 options were awarded in fiscal year 2001 to all
employees, non-employee directors, officers and related parties as a group.
These options generally vest in three equal installments commencing one year
from the anniversary. Except as noted below, options granted in fiscal year
2001 also include an acceleration of vesting provision whereby, to the extent
not previously vested, 25% of the options will vest when the Company's stock
price closes at $4.00 per share, 75% of the options will vest when the stock
price closes at $6.00 per share, and 100% of the options will vest when the
stock price closes at $8.00 per share.

Report on Repricing of Options/SARs. On May 31, 2001, the Company
repurchased outstanding options for 144,250 shares from certain employees for
two cents per share and reissued options for 144,250 shares to the same
employees. The new options are fully vested, are exercisable until May 31,
2011 and are priced at $1.00 per share. The repurchased options had been
granted at varying times between November 1995 and October 1999 and were
priced from $2.375 to $10.25. Following is information concerning all
repricings of options and SARs held by any executive officer during the period
since the Company's initial public offering in November 1997:

Length of
Original
Securities Market Price Exercise Term
Underlying of Stock at Price at Time Remaining at
Options/SAR Time of of Repricing New Date of
Repriced or Repricing or or Exercise Repricing
Name Date Amended (%) Amendment ($) Amendment ($) Price ($) or Amendment
---- --------- ----------- ------------- ------------- --------- ------------

John T. Wiegand......... 5/31/2001 6,500 $0.65 $ 8.25 $1.00 53 months
5/31/2001 6,000 $0.65 $ 9.75 $1.00 85 months
5/31/2001 10,000 $0.65 $ 2.38 $1.00 94 months
John N. Tarrant......... 5/31/2001 2,500 $0.65 $10.00 $1.00 71 months
5/31/2001 12,500 $0.65 $ 2.38 $1.00 94 months

Restricted Stock Awards. Pursuant to the 1999 Employee Stock Option and
Restricted Stock Plan, in March 1999 certain executive officers including
Charles Dunlap and John Wiegand were granted a restricted stock award for
50,000 shares and 15,000 shares, respectively, of the Company's Common Stock.
Under the terms of the grants, their right, title and interest to the shares
of Common Stock awarded will not vest until the third anniversary of the grant
(i.e., March 2002). No portion of the restricted stock award will vest and no
shares will be issued prior to the third anniversary unless the following
conditions are satisfied: (a) if the Company's stock price closes at $4.00 per
share, 25% of the shares will become vested; (b) if the Company's stock price
closes at $6.00 per share, 75% will become vested; and (c) if the Company's
stock price closes at $8.00 per share, 100% of the shares will become vested.
In September 1999, Mr. Dunlap was issued 12,500 shares and Mr. Wiegand was
issued 3,250 shares of Common Stock under the terms of their restricted stock
awards because the share price of the Common Stock had closed at above $4.00.
The remaining shares covered by the restricted stock awards will be issued to
Mr. Dunlap on the third anniversary of the grant pursuant to his severance
arrangement described under "Employment Arrangements" and to Mr. Wiegand
pursuant to the terms of the restricted stock award.

Compensation of the Current Chief Executive Officer. Louis M. Brown, Jr.,
the current President and Chief Executive Officer, joined the Company on
August 4, 2000. For the first year of employment, Mr. Brown's base salary was
$1.00. For the second year of employment, Mr. Brown's base salary is $0.70 per
year plus a stock award of 500,000 shares and a stock option award of 500,000
shares, exercisable at $0.33 per share, vesting at the rate of 33 1/3% per
year over three years; thereafter, Mr. Brown's base salary and other
compensation will be established by the Organization and Compensation
Committee.

In September 1999, the Board of Directors approved a bonus retention
program whereby certain key executive officers would receive bonuses to be
paid in the event of a sale, merger or change of control of the Company on or
before September 21, 2000, which includes a change in ownership of 50% or
more. Because such a transaction did not occur within this time frame, neither
Mr. Dunlap nor any of the other executive officers is entitled to any
additional compensation under this program.

The Committee believes its approach to compensation for the President and
Chief Executive Officer is consistent with the Company's ongoing effort to
achieve a responsible balance between short-term and long-term performance for
the Company and its shareholders, and to provide compensation incentives for
its senior executives that encourage those results.

Tax Compliance Policy. Section 162(m) of the Internal Revenue Code
generally limits to $1 million the tax deductible compensation paid to a
company's Chief Executive Officer and to each of the four highest-paid
executives employed as executive officers on the last day of the fiscal year.
However, the limitation does not apply to performance-based compensation
provided certain conditions are satisfied. The Committee does not anticipate
that in the foreseeable future any officer of the Company will earn
compensation in excess of $1

million that would not qualify as performance-based compensation. Therefore,
the Committee has not yet determined a policy with respect to Section 162(m).
The Committee intends to review the implications of Section 162(m) when it
becomes more relevant with respect to the Company's executive compensation
policies.

All members of the Organization and Compensation Committee concur in this
report to the shareholders.

The Organization and Compensation Committee

Bassam N. Ibrahim, Chairman
Lynn E. Caruthers
Arthur C. Kellar

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Mr. Kellar, a member of the Organization and Compensation Committee,
controls, along with Desarollo Integrado, S.A. de C.V. (an entity controlled
by Mauricio Zambrano, a member of the Board of Directors), Precision Funding,
LLC. On September 29, 2000, the Company issued senior debentures to Precision
Funding, LLC. Pursuant to the commitment made by Arthur C. Kellar and
Desarollo Integrado, S.A. de C.V. on August 3, 2000, Precision Funding made
available a credit facility of $11.25 million bearing interest at a fixed rate
of 12% per annum with provisions for higher rates in the event of default, and
is to mature on September 1, 2003, if not paid prior to that time.
Substantially all assets of the Company have been pledged as collateral and
the Company may not pay any dividends without the written consent of Precision
Funding. Precision Funding used the facility to purchase the Loan documents by
which a Line of Credit Loan and Acquisition Line of Credit were made available
to the Company by First Union National Bank. The bridge loan that was made on
August 4, 2000 by Arthur C. Kellar and by Desarollo Integrado, S.A. de C.V.
was discharged and deemed advanced under the new credit facility. An
origination fee was paid to Mr. Kellar and Desarollo Integrado, S.A. de C.V.
in the form of a warrant entitling each of them to purchase 1,000,000 shares
of common stock at an exercise price of $0.275 per share, a price above the
August 4, 2000 closing price of $0.219. In June 2001 Mr. Kellar exercised the
warrant and in July 2001, Desarollo Integrado S. A. de C. V. assigned the
warrant to Falcon Solutions, Ltd., an entity controlled by Mr. Zambrano, which
exercised the warrant.

Mr. Ibrahim, Chairman of the Organization and Compensation Committee, is a
partner with the law firm of Burns, Doane, Swecker & Mathis LLP, which firm
provided certain legal services for the Company during the last fiscal year.

SHAREHOLDER RETURN COMPARISON

Set forth below is a line-graph presentation comparing the cumulative
shareholder return on the Company's Common Stock, on an indexed basis, against
the cumulative total returns of the Nasdaq Stock Market (U.S. Index), an index
composed of peer companies named below in footnote(1), the Russell 2000 Index,
the S&P Auto Parts & Equipment Index and the Nasdaq Retail Trade Index since
the Company's initial public offering (November 6, 1997 = 100):

COMPARISON OF 42 MONTH CUMULATIVE TOTAL RETURN*
AMONG PRECISION AUTO CARE, INC., NASDAQ STOCK MARKET, RUSSELL 2000 INDEX,
THE S & P AUTO PARTS & EQUIPMENT INDEX AND A PEER GROUP

[GRAPH APPEARS HERE]

November 6, June 30, June 30, June 30, June 30,
1997 1998 1999 2000 2001
---- ---- ---- ---- ----

PRESICION AUTO CARE, INC 100 109.72 34.03 7.82 6.00
NADAQ STOCK MARKET 100 118.80 171.06 252.06 136.91
RUSSELL 2000 INDEX 100 109.16 102.92 100.01 123.89
S&P AUTO PARTS & EQUIPMENT INDEX 100 152.79 156.20 95.06 116.52
PEER GROUP(1) 100 106.13 108.71 68.37 111.62

* $100 INVESTED ON 11/6/97 IN
STOCK OR ON 10/31/97 IN
INDEX--INCLUDING REINVESTMENT
OF DIVIDENDS.
--------
(1) The peer group index prepared for the purposes of this graph includes the
following automotive companies: Auto Zone, Inc., Genuine Parts Company,
O'Reilly Automotive, Inc., Discount Auto Parts, Inc., Monro Muffler &
Brake, Inc., Pep Boys-Manny, Moe and Jack and Pennzoil/Quaker State
Company.

Item 4: Ratification of Appointment of Independent Auditors

At the Annual Meeting, the shareholders will be asked to ratify the
appointment of Grant Thornton LLP, who have served as the Company's
independent auditors since November 2000, as the Company's independent
auditors for the fiscal year ending June 30, 2002.

Ratification of the appointment of the independent auditors will require
the affirmative vote of holders of shares of Common Stock representing a
majority of the number of votes present in person or represented by proxy at
the Annual Meeting, provided a quorum is present. Representatives of Grant
Thornton LLP are expected to be present at the Annual Meeting with the
opportunity to make a statement if they desire to do so, and such
representatives are expected to be available to respond to appropriate
questions.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT ALL SHAREHOLDERS VOTE
FOR RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT AUDITORS.

AUDIT COMMITTEE REPORT

The Finance and Audit Committee of the Board of Directors (the "Audit
Committee") is composed of three independent directors and operates under a
written charter adopted by the Board of Directors, a copy of which was
attached to the definitive proxy statement filed with the SEC on March 6, 2001
as Appendix A and is incorporated herein by reference. The Audit Committee
reviews audit fees and recommends to the Board of Directors, subject to
shareholder ratification, the selection of the Company's independent
accountants. Management is responsible for the Company's internal controls and
the financial reporting process. The independent accountants are responsible
for performing an independent audit of the Company's consolidated financial
statements in accordance with generally accepted auditing standards and for
issuing a report thereon. The Audit Committee's responsibility is to monitor
and oversee these processes and to report thereon to the Board of Directors.
In this context, the Audit Committee has met and held discussions with
management and Grant Thornton LLP, the Company's independent accountants as of
the fiscal year ended June 30, 2001.

Management represented to the Audit Committee that the Company's
consolidated financial statements were prepared in accordance with generally
accepted accounting principles, and the Audit Committee has reviewed and
discussed the consolidated financial statements with management and Grant
Thornton LLP.

The Audit Committee has discussed with Grant Thornton LLP the matters
required to be discussed by Statement on Auditing Standards No. 61
(Codification of Statements on Accounting Standards), including the scope of
the auditor's responsibilities, significant accounting adjustments and any
disagreements with management.

The Audit Committee also has received the written disclosures and the
letter from Grant Thornton LLP relating to the independence of that firm as
required by Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees), and has discussed with Grant Thornton LLP
that firm's independence from the Company.

The Audit Committee reviews the aggregate fees billed by Grant Thornton LLP
for professional services rendered during the fiscal year ended June 30, 2001.
During the 2001 fiscal year, Grant Thornton LLP billed the following amounts
to the Company:

Audit Fees....................................................... $89,202
Financial Information Systems Design and Implementation Fees..... --
All Other Fees................................................... --
-------
Total 2001 Fiscal Year Fees...................................... $89,202

Based upon the Audit Committee's discussions with management and Grant
Thornton LLP and the Audit Committee's review of the representation of
management and the report of Grant Thornton LLP to the Audit Committee, the
Audit Committee recommended that the Board of Directors include the audited
consolidated financial statements in the Company's Annual Report on Form 10-K
for the year ended June 30, 2001 filed with the Securities and Exchange
Commission.

THE AUDIT COMMITTEE

Bernard H. Clineburg, Chairman
Arthur C. Kellar
Woodley A. Allen
Mauricio Zambrano

September 28, 2001

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On September 29, 2000, the Company issued senior debentures to Precision
Funding, LLC, an entity created, owned, and controlled by Arthur C. Kellar and
Desarollo Integrado, S.A. de C.V. ("Desarollo Integrado"), an entity
controlled by Mr. Zambrano. Messrs. Kellar and Zambrano are members of the
Board of Directors of the Company. Pursuant to the commitment made by Arthur
C. Kellar and Desarollo Integrado on August 3, 2000, Precision Funding made
available a credit facility of $11.25 million bearing interest at a fixed rate
of 12% per annum with provisions for higher rates in the event of default, and
is to mature on September 1, 2003, if not paid prior to that time.
Substantially all assets of the Company have been pledged as collateral and
the Company may not pay any dividends without the written consent of Precision
Funding. Precision Funding used the facility to purchase the Loan documents by
which a Line of Credit Loan and Acquisition Line of Credit were made available
to the Company by First Union National Bank. The bridge loan that was made on
August 4, 2000 by Arthur C. Kellar and by Desarollo Integrado was discharged
and deemed advanced under the new credit facility. Further, $991,000 of
mortgage debt payable to FFCA was repaid in full. An origination fee was paid
to Mr. Kellar and Desarollo Integrado in the form of a warrant entitling each
of them to purchase 1,000,000 shares of common stock at an exercise price of
$0.275 per share, a price above the August 4, 2000 closing price of $0.219. In
June 2001 Mr. Kellar exercised the warrant and in July 2001, Desarollo
Integrado assigned the warrant to Falcon Solutions, Ltd., another entity
controlled by Mr. Zambrano, which exercised the warrant.

On August 31, 2000, the Company sold to Magna National Realty, LLC ("Magna
National") four car washes and one combination car wash/lube center located in
the Columbus, Ohio area for $1,800,000. Magna National is owned by George A.
Bavelis (a director of the Company until his resignation on January 9, 2001),
Ernest S. Malas (who served as a director of the Company from April 2000 until
his resignation on November 7, 2000) and Effie L. Eliopulos (a director of the
Company until her resignation in January 2000). As part of the sale, the
Company also agreed to franchise the sites for five years without royalties so
long as equipment manufactured by Hydro Spray Car Wash Equipment Co., Ltd.
("Hydro Spray"), a subsidiary of the Company, was used in their operations and
to waive royalties on Precision Auto Wash franchises previously granted to
Magna National or its affiliates for five years. In addition, the Company
agreed to install at one of the car washes Hydro Spray equipment having a
value of $125,345. The fairness of the negotiated sales price was determined
at the time of the transaction by Charles L. Dunlap, then the Company's Chief
Executive Officer, and later formally approved by a group of disinterested
directors of the Company pursuant to the Company's conflict of interest
policy.

Bassam N. Ibrahim, a director of the Company, is a partner in Burns, Doane,
Swecker & Mathis LLP, an Alexandria, Virginia law firm that performs legal
services for the Company related to intellectual property protection. Fees
paid to the firm by the Company in the fiscal year ended June 30, 2001 did not
exceed five percent of the firm's gross revenues.

Ernest S. Malas, who resigned as director of the Company on November 7,
2000, served as a consultant to the Company. The Company entered into an
independent contractor agreement with Mr. Malas in November 1997 pursuant to
which Mr. Malas agreed to serve as a senior business development consultant to
the Company for a period of three years. From July 1998 to December 1998, Mr.
Malas served as Senior Vice President of the Company, after which he returned
to his independent contractor status under the terms of the November 1997
agreement. Pursuant to the agreement, Mr. Malas was paid $10,000 per month
plus expenses. The independent contractor agreement expired in November 2000.

Messrs. Klumb and Bavelis, each a director of the Company until their
resignations in January 2001, and Mr. Malas, a director of the Company until
his resignation on November 7, 2000, are directly or indirectly parties to
franchise agreements with the Company. Payments under the franchise agreements
may exceed the sum of $60,000 over the terms of the respective agreements.

The Company is subject to a suit filed in the State of Florida by a former
Precision Tune Auto Care franchisee. The franchisee is alleging breach of
contract and personal slander. In March 2000, a judgment of $841,094 plus
attorney's fees was entered against the Company. In connection with this
matter, Arthur C. Kellar, a director of the Company, provided a letter of
credit to permit the Company to post a bond during the pendency of the appeal.
In exchange for his providing the letter of credit, the Company agreed to
issue Mr. Kellar 25,000 shares of Common Stock pursuant to a letter agreement
dated June 14, 2000.

On October 15, 1998, the Company entered into a subordinated debenture with
Board LLC, a limited liability company organized and funded by 11 directors
serving on the Board as of the time of the transaction, four of whom, Messrs.
Allen, Ibrahim and Kellar and Ms. Caruthers, are current directors or
nominees. The sole purpose of this subordinated debenture was to provide
additional financing to the Company. Under the terms of the agreement, the
Company received $2 million and was to make monthly interest payments at an
annual rate of 14% with the principal to be paid at the end of the loan term
of twelve months. The terms of the subordinated debt call for increases in the
interest rate if the Company defaults in the timely payment of interest on the
subordinated debt. The Company is not permitted to make any payment with
respect to the subordinated debt during the continuance of a default or event
of default under the Bank Facility. Board LLC has approved the waiver of
existing events of default and the extension of the maturity date on such debt
to November 1, 2000 and the interest rate returned to 14% effective August 15,
1999. Subsequent to June 30, 2000, Board LLC extended the maturity date to and
waived all debt covenants with respect to defaults through September 30, 2001.
On February 6, 2001, Board LLC agreed to extend the maturity date to May 1,
2002 and to revise the payment schedule as follows:

. $100,000 was due and payable to the holder on the first of each month
from March 1, 2001 through August 1, 2001;

. $150,000 is due and payable to the holder on the first of each month
from September 1, 2001 through March 1, 2002;

. $200,000 is due and payable to the holder on the first of each month
from April 1, 2002 through May 1, 2002; and

. $125,000 is due and payable to the holder on May 1, 2002, which amount
shall constitute any and all accrued interest on the principal amount.

SHAREHOLDER PROPOSALS AND NOMINATION PROCEDURES

In order for a shareholder proposal to be considered for the 2002 Annual
Meeting of Shareholders, it must be received by the Company at its offices no
later than August 13, 2002. All shareholder proposals should be mailed to the
Company at P. O. Box 5000, Leesburg, VA 20177-0500 and addressed to the
attention of Frederick F. Simmons, Secretary. To be eligible for inclusion in
the proxy material for that meeting, such proposals must conform to the
requirements set forth in Regulation 14A under the Securities Exchange Act of
1934, as amended. In order to be considered at an Annual Meeting, a
shareholder proposal must be presented by the proponents or their
representatives in attendance at the meeting.

For nominations by a shareholder to be properly considered at the Annual
Meeting, the shareholder must notify the Secretary at least 70 and no more
than 90 days before the first anniversary of the prior year's Annual Meeting
unless the Annual Meeting date is advanced by more than 20 days, or delayed by
more than 70 days, in which case the nomination must be delivered not earlier
than the 90th day prior to the Annual Meeting and not later than the close of
business on the later of the 70th day prior to the Annual Meeting or the 10th
day following the day on which public announcement of the Annual Meeting date
is made. Nominations submitted by shareholders must contain the nominee's
qualifications, the nominee's written consent to serve if elected, and other
information required to be disclosed pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended; the name, address and number of
shares owned by the nominating shareholder; and whether the nominating
shareholder is part of a group soliciting or intending to solicit proxies from
shareholders.

OTHER MATTERS

The Board of Directors does not know of any other matters to be presented
at the 2001 Annual Meeting or action to be taken thereat except those set
forth in this Proxy Statement. If, however, any other business properly comes
before the 2001 Annual Meeting, the persons named in the proxy accompanying
this Proxy Statement will have the discretionary authority to vote upon such
business, as well as matters incident to the conduct of the 2001 Annual
Meeting.

UPON THE WRITTEN REQUEST OF ANY RECORD HOLDER OR BENEFICIAL OWNER OF COMMON
STOCK ENTITLED TO VOTE AT THE ANNUAL MEETING OF SHAREHOLDERS, THE COMPANY WILL
PROVIDE WITHOUT CHARGE A COPY OF ITS ANNUAL REPORT ON FORM 10-K, INCLUDING THE
FINANCIAL STATEMENTS AND THE FINANCIAL STATEMENT SCHEDULES, REQUIRED TO BE
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR THE COMPANY'S MOST
RECENT FISCAL YEAR. ADDRESS REQUESTS TO JOHN N. TARRANT, ASSISTANT SECRETARY,
PRECISION AUTO CARE, INC., P. O. BOX 5000, LEESBURG, VIRGINIA 20177-5000.

Please date, sign and mail your
proxy card back as soon as possible!

Annual Meeting of Shareholders
PRECISION AUTO CARE, INC.

November 28, 2001

Please Detach and Mail in the Envelope Provided

A [X] Please mark your
votes as indicated
in this example.

For all, except
For authority withheld
all for nominees
nominees named below

3. a. Election of [_] [_] Nominees for 3. a.:
Directors, and Woodley A. Allen, Louis M. Brown, Jr.,
3. b. Election of Bernard H. Clineburg, Bassam N. Ibrahim,
Class I Directors, Arthur C. Kellar and Mauricio Zambrano
if Amendments to Articles of Incorporation are
not approved by Shareholders: Nominees for 3. b. Class I Directors:
INSTRUCTION: To withhold authority to vote for Louis M. Brown, Jr., John Wiegand and
any such nominee(s), write the name(s) of the nom- Mauricio Zambrano.
inee(s) in the space provided below.

__________________________________

FOR AGAINST ABSTAIN

1. Approval of the amendment to the Articles of
Incorporation to reduce the minimum number of [_] [_] [_]
directors from ten to five.

2. Approval of the amendment to the Articles of
Incorporation to reduce the term of office for [_] [_] [_]
each director from three years to one year.

4. Ratification of the appointment of Grant
Thornton LLP as independent auditors for the [_] [_] [_]
fiscal year ending June 30, 2002.

5. To transact such other business as may
properly come before the meeting or any [_] [_] [_]
adjournments thereof.

PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.

Signature:_________________________________________ Signature_______________________________________ Date__________ , 2001

NOTE: Please sign your name exactly as it appears hereon. If shares are held
jointly, all holders must sign. If you receive more than one proxy,
please sign and return each of them. When signing in fiduciary or
representative capacity (attorney, executor, administrator, trustee,
guardian, officer of corporation, etc.) please give full title as such.
The signer hereby revokes all proxies heretofore given by the signer to
vote at such meeting or any adjournment thereof.

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PRECISION AUTO CARE, INC.

2001 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 28, 2001

The undersigned hereby appoints Louis M. Brown, Jr., Robert R. Falconi
and Frederick F. Simmons and each of them as proxies, each with the power
to appoint his substitute, and hereby authorizes them to represent and
vote, as set forth on the reverse side, all the shares of Common Stock of
Precision Auto Care, Inc., held of record by the undersigned on October 1,
2001, at the 2001 Annual Meeting of Shareholders to be held on November 28,
2001, or any adjournment thereof.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. IF PROPERLY
EXECUTED, IT WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
SHAREHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ALL
NOMINEES IN PROPOSAL 3 AND FOR PROPOSALS 1, 2 and 4. IN THEIR DISCRETION,
THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY
COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.

(Continued and to be signed on the reverse side.)

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