SecProbe.io

<DOCUMENT>
<TYPE>LETTER
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>

Mail Stop 0308

									June 13, 2005

Mr. Corey E. Shaker
President and Chief Executive Officer
Hometown Auto Retailers, Inc.
1309 South Main Street
Waterbury, CT 06706

      RE:	Hometown Auto Retailers, Inc.
      Form 10-K for Fiscal Year Ended December 31, 2004
      Filed March 24, 2005
      Form 10-Q for Fiscal Quarter Ended March 31, 2005
      File No. 0-24669

Dear Mr. Shaker:

      We have reviewed your filings and have the following
comments.
Where indicated, we think you should revise your disclosures in
future filings in response to these comments.  If you disagree, we
will consider your explanation as to why our comment is
inapplicable
or a revision is unnecessary.  Please be as detailed as necessary
in
your explanation.  In some of our comments, we may ask you to
provide
us with supplemental information so we may better understand your
disclosure.  After reviewing this information, we may or may not
raise additional comments.

      Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.

**********************************

General

1. Where a comment below requests additional disclosures or other
revisions to be made, these revisions should be included in your
future filings, as applicable.

Form 10-K for Fiscal Year Ended December 31, 2004

Item 7. Management`s Discussion and Analysis of Financial
Condition
and Results of Operations, page 23

2. Please include an overview section in your future filings.  We
assume that this section could include a summarized discussion of
important information such as sales and gross profit for new car
sales, used car sales, parts and service and finance and insurance
for all periods presented, a table of key performance indicators
used
by management, new and used car unit sales information, etc.  Any
tabular or statistical disclosures should be accompanied by a
narrative explaining the most significant aspects of your
performance
at an overview level.  Please refer to SEC Release No. 33-8350 for
guidance and tell us how you intend to revise future filings.

3. Where you identify intermediate causes of changes in your
operating results, also describe the reasons underlying the
intermediate causes.  For example, you indicate that the decrease
in
total revenues from fiscal year 2003 to 2004 is attributable to a
reduction of units sold partially offset by an increase in average
selling price.  While this information is beneficial to the
reader,
you do not explain why unit sales decreased or average selling
price
increased.  A discussion of the relevant factors and trends that
led
to these movements, such as new product lines or changes in
manufacturer promotions, would be beneficial to the reader.  See
SEC
Release No. 33-8350.

4. Your presentation of gross profit percentages and gross profit
fluctuations excluding the impact of fleet sales represent non-
GAAP
measures subject to the disclosure and reconciliation requirements
in
Item 10(e) of Regulation S-K.  While there is no per se
prohibition
against adjusting non-GAAP performance measures to exclude
recurring
type items such as these, you must meet the burden of
demonstrating
the usefulness of any non-GAAP measures which exclude recurring
items.  Thus please disclose the following information in future
filings:
* The manner in which you use the non-GAAP measure to conduct or
evaluate business;
* The economic substance behind your decision to use such a
measure;
* The material limitations associated with use of the non-GAAP
financial measure as compared to the use of the most directly
comparable GAAP financial measure;
* The substantive reasons why you believe the non-GAAP financial
measure provides useful information to investors.
In addition to the above guidance, please ensure that you provide
a
reconciliation, preferably in tabular form, which reconciles the
non-
GAAP measure to your gross margin as calculated in accordance with
GAAP.  Show us what the revised disclosures will look like.  We
may
have further comment.  For further guidance, see Item 10(e) of
Regulation S-K and questions 8 and 9 of the non-GAAP financial
measure FAQ (Release 33-8176).

Liquidity and Capital Resources, page 32

5. Please ensure your discussion and analysis of cash flows is not
merely a recitation of changes evident from the financial
statements.
For example, you mention that the cash flow provided by operating
activities for fiscal year 2004 is attributable to decreases in
accounts receivable offset by increases in accounts payable and
accrued expenses.  Please provide analysis explaining the
underlying
reasons for the fluctuations in these accounts.

Other Indebtedness, page 34

6. Please revise your tabular disclosure of contractual
obligations
to provide appropriate disclosure regarding how you computed your
interest payments.  Show us what the revised disclosure would look
like as of December 31, 2004.

Item 9A. Controls and Procedures, page 37

7. We note that you designed your disclosure controls and
procedures
to provide "only reasonable assurance" of achieving the desired
control objectives.  Therefore, revise your conclusion in future
filings that your disclosure controls and procedures are effective
to
reflect, if true, that the disclosure controls and procedures are
effective at the "reasonable assurance" level.  Please refer to
Part
II.F.4 of Final Rule Release 33-8238 for guidance.

8. Please revise your disclosure in future filings regarding
changes
to internal controls over financial reporting to identify "any
changes," not just "significant" changes, that have materially
affected, or are reasonably likely to materially affect, your
internal controls and procedures over financial reporting.  See
Item
308(c) of Regulation S-K.

Notes to Consolidated Financial Statements

2. Summary of Significant Accounting Policies, page F-7

Interest Expense, page F-10

9. Please tell us how you determined that it was appropriate to
reflect floor plan interest assistance as a direct reduction of
cost
of sales rather than a reduction of the interest costs incurred by
you to sell your products.  Please refer to paragraph 4 of EITF
02-
16.

Segments, page F-12

10. Please tell us in detail how you determined that the company
has
only one SFAS 131 reportable segment.  Tell us specifically each
component of the company that has been identified as an operating
segment as defined in paragraph 10 of SFAS 131.  Also tell us your
basis for aggregating any identified operating segments.  Based on
your disclosure on page 38 it appears that you manage the business
through three regional vice presidents.  On page nine you indicate
that manufacturers require each dealership to submit a financial
statement of operations on a monthly and annual basis.  In this
regard, we would assume that discrete financial information is
available and reported to the chief operating decision maker for
each
dealership and regional operation for purposes of resource
allocation
and assessing performance.  Notwithstanding the preceding, please
provide the disclosures required by paragraph 26 of SFAS 131.

11. Please disclose the types of expenses that you include in the
cost of sales line items and the types of expenses that you
include
in the selling, general and administrative expenses line items.
In
doing so, please disclose specifically whether you include inbound
freight charges, purchasing and receiving costs, inspection costs,
internal transfer costs, and the other costs of your distribution
network in cost of sales.  If you currently exclude a significant
portion of these costs from cost of sales, please provide
cautionary
disclosure in MD&A that your gross margins may not be comparable
to
others, since some entities include the costs related to their
distribution network in cost of sales and others like you exclude
all
or a portion of them from gross margin, including them instead in
a
line item such as selling, general and administrative expenses.
To
the extent the excluded costs are material to your operating
results,
quantify these amounts in MD&A.  If you determine that these
amounts
are immaterial for disclosure, please provide us with your
qualitative and quantitative assessment of materiality for all
periods presented.

12. Please disclose your accounting policy for free services and
products offered to customers, including the statement of
operations
line in which these costs are included, or tell us why no such
disclosure is necessary.

13. On page 15 you describe certain incentive programs, such as
customer rebates, offered by automobile manufacturers.  Due to
these
incentive programs, it appears that EITF 03-10 would have an
impact
on your company.  Please tell us if you have adopted EITF 03-10.
If
so, please explain to us in detail how the adoption of EITF 03-10
impacted your accounting for vendor consideration that is a
reimbursement for honoring the vendor`s sales incentives offered
directly to customers.  In addition, please quantify the impact
the
adoption of EITF 03-10 had on your reported results for each
period
presented.  If you have not adopted this standard, please explain
to
us why it does not pertain to your company.
14. We note that you include the changes in your floor plan notes
payable as an operating activity on the statement of cash flows.
Please tell us how this operating activities classification is
consistent with paragraphs 21-24 of SFAS 95 and why financing
activities classification is not more appropriate.

7. Long-term Debt and Capital Lease Obligations, page F-18

15. Please disclose the significant debt covenants under each of
your
financing arrangements.  In each case of covenant default,
disclose
the nature of the covenant.

10. Capital Structure and Per Share Data, page F-20

16. We note that you disclose the per-share impact of certain
material and/or infrequently occurring items, such as the tax
benefit
resulting from the reduction of your valuation allowance and the
gain
on sale of your Chrysler/Jeep franchise.  Please tell us why you
believe you are permitted to include these non-GAAP measures in
your
filing considering question 11 of the non-GAAP financial measure
FAQ.
If you believe inclusion of these measures in your filing is
appropriate, please explain how these measures are used by
management
and in what way they provide meaningful information to investors.
Also ensure you provide a reconciliation of the measures to the
GAAP
EPS figures.

13. Operating Leases, page F-25

17. Please disclose a general description of your leasing
arrangements, including the existence of renewal or purchase
options
and escalation clauses.  See paragraph 16d. of SFAS 13.

18. Please tell us how you account for the consumer price index
clause in certain of your operating leases that requires an
increase
to the base rent effective January 1, 2009 as discussed on page
36.
If, as we assume, CPI increases are taken into account in
computing
your minimum lease payments and the minimum lease payments are
recognized on a straight-line basis over the minimum lease term,
the
note should so state.  If our assumption is incorrect, please tell
us
how your accounting complies with SFAS 13 and FTB 88-1.

14. Commitments and Contingencies, page F-26

19. We note that you guarantee the debts of certain third parties.
As required by paragraph 13b. of FIN 45, please disclose the
maximum
potential amount of undiscounted future payments you may be
required
to make under the guarantees.

20. Please clarify whether any of the warranties you offer are
separately priced extended warranty contracts required to be
accounted for under FTB 90-1.  If so, disclose and tell us your
accounting policy relating to the recognition of revenue on these
extended warranty contracts.  Please also quantify the warranty
revenue recognized on these contracts for the periods presented.

**********************************

      As appropriate, please respond to these comments within 10
business days or tell us when you will provide us with a response.
Please furnish a cover letter that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review.  Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.

      We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings to be certain that the
filings include all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed decision.  Since the company and
its management are in possession of all facts relating to a
company`s
disclosure, they are responsible for the accuracy and adequacy of
the
disclosures they have made.

      In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:

* the company is responsible for the adequacy and accuracy of the
disclosure in the filings;

* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filings; and

* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

      In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filings or
in
response to our comments on your filings.

      If you have any questions regarding these comments, please
direct them to Staff Accountant Andrew Blume at (202) 551-3254.
Any
other questions regarding disclosure issues may be directed to me
at
(202) 942-2905.

								Sincerely,

									George F. Ohsiek, Jr.
									Branch Chief

Mr. Corey E. Shaker
President and Chief Executive Officer
Hometown Auto Retailers, Inc.
June 13, 2005
Page 1

</TEXT>
</DOCUMENT>