Rent-a-wreck Of America, Inc. Plans To Merge With San Diego Car Rentals, Inc.

OWINGS MILLS, MD (Tuesday, October 11, 2005) - Rent-A-Wreck of America, Inc. (“Rent-A-Wreck”) announced today that it has entered into an agreement to merge with San Diego Car Rentals, Inc. (“Car Rentals”), a Delaware corporation. Following the merger, Rent-A-Wreck shall be the surviving corporation and all shares of Rent-A-Wreck stock will be held by Car Rentals. The closing of the merger is subject to customary conditions of closing, including without limitation, stockholder approval and delivery of a fairness opinion by the financial advisor of Rent-A-Wreck. The closing is anticipated to occur in mid-November 2005. In addition, following the merger, Thomas L. Gruber shall become Rent-A-Wreck’s chief executive officer and sole director.

Upon closing of the merger, holders of Rent-A-Wreck stock are expected to receive $0.36 in cash per share of Rent-A-Wreck Common Stock and $0.86 in cash per share of Rent-A-Wreck Preferred Stock. As of October 6, 2005, Rent-A-Wreck had 4,186,296 shares of Common Stock and 1,084,375 shares of Preferred Stock outstanding.

Rent-A-Wreck will send a stockholder proxy statement containing final merger information in October 2005 to stockholders of record as of October 14, 2005 and contemplates holding the stockholder meeting on or about November 10, 2005.

Thomas L. Gruber is the chief executive officer and sole director of Car Rentals. Mr. Gruber has more than 20 years of senior executive management experience for both public and private companies in addition to in the past being the San Diego, California Rent-A-Wreck franchisee for 9 years.

Kenneth Blum, Sr., Rent-A-Wreck’s Chief Executive Officer, said Friday that “We look forward to Mr. Thomas L. Gruber and San Diego Car Rentals continuing and enhancing our tradition of service and cooperation with our franchisees and through such franchisees, their customers. We are very pleased that Mr. Gruber will be meeting the franchisees and exploring ways to expand on our current footprint.” Mr. Gruber concurred with Mr. Blum and added “I am very excited to be part of the Rent-A-Wreck team again and look forward to building Rent-A-Wreck’s business, reinforcing the excellent customer service our franchisees provide and responding to our franchisee’s and customer’s needs.”

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