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                                      LOGO

           1309 South Main Street, Waterbury, CT 06706 (203) 756-1300

                                  July 29, 2005

Mr. George F. Ohsiek, Jr. Branch Chief
The United States Securities and Exchange Commission
100 F Street, N.E.
Washington, DC  20549

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. Ohsiek:

      This will respond to the staff's letter of comments dated July 20, 2005.
For ease of reference, the comments in the letter are reproduced below with our
response shown in boldface immediately below the comment.

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

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

Segments, page F-12
-------------------

1.    We have reviewed your response to comment 10 in our letter dated June 13,
      2005, noting that it appears you have identified each of your dealerships,
      as well as your free-standing service center, as an operating segment
      under paragraph 10 of SFAS 131. Please substantiate your claim that each
      of your operating segments has similar economic characteristics. Begin by
      telling us the measure of profit or loss (e.g., operating income as a
      percentage of sales) you use to evaluate the performance of your operating
      segments. For each of the last five fiscal years, please provide us with
      that quantitative performance measure for each of your operating segments
      and demonstrate how that information supports the similarity of the
      economic characteristics of your operating segments. In addition, please
      tell us how you intend to present your segment information going forward
      considering your pending Exchange Agreement with Shaker Auto Group.
      Notwithstanding the preceding, please provide the disclosures required by

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      paragraph 26 of SFAS 131 including the number of operating segments you
      have identified.

      HOMETOWN'S DEALERSHIPS HAVE SIMILAR ECONOMIC CHARACTERISTICS. EITF
      ABSTRACT TOPIC D - 101 PROVIDES INTERPRETATIVE GUIDANCE IN ASSESSING
      WHETHER THE DEALERSHIPS HAVE SIMILAR ECONOMIC CHARACTERISTICS FOR PURPOSES
      OF AGGREGATION.

      IT STATES, "EVALUATING WHETHER TWO COMPONENTS HAVE SIMILAR ECONOMIC
      CHARACTERISTICS IS A MATTER OF JUDGMENT THAT DEPENDS ON SPECIFIC FACTS AND
      CIRCUMSTANCES. THAT ASSESSMENT SHOULD BE MORE QUALITATIVE THAN
      QUANTITATIVE.

      IN DETERMINING WHETHER THE COMPONENTS OF AN OPERATING SEGMENT HAVE SIMILAR
      ECONOMIC CHARACTERISTICS, FOOTNOTE 20 TO PARAGRAPH 30 OF STATEMENT 142
      STATES THAT THE GUIDANCE IN PARAGRAPH 17 OF STATEMENT 131 SHOULD BE
      CONSIDERED. THE BOARD INTENDED THAT ALL OF THE FACTORS IN PARAGRAPH 17 OF
      STATEMENT 131 BE CONSIDERED IN MAKING THAT DETERMINATION. HOWEVER, THE
      BOARD DID NOT INTEND THAT EVERY FACTOR MUST BE MET IN ORDER FOR TWO
      COMPONENTS TO BE CONSIDERED ECONOMICALLY SIMILAR. IN ADDITION, THE BOARD
      DID NOT INTEND THAT THE DETERMINATION OF WHETHER TWO COMPONENTS ARE
      ECONOMICALLY SIMILAR BE LIMITED TO CONSIDERATION OF THE FACTORS DESCRIBED
      IN PARAGRAPH 17 OF STATEMENT 131. IN DETERMINING WHETHER COMPONENTS SHOULD
      BE COMBINED INTO ONE REPORTING UNIT BASED ON THEIR ECONOMIC SIMILARITIES,
      FACTORS THAT SHOULD BE CONSIDERED IN ADDITION TO THOSE IN PARAGRAPH 17
      INCLUDE BUT ARE NOT LIMITED TO:

      o     THE MANNER IN WHICH AN ENTITY OPERATES ITS BUSINESS AND THE NATURE
            OF THOSE OPERATIONS.

      o     WHETHER GOODWILL IS RECOVERABLE FROM THE SEPARATE OPERATIONS OF EACH
            COMPONENT BUSINESS OR FROM TWO OR MORE COMPONENT BUSINESSES WORKING
            IN CONCERT (WHICH MIGHT BE THE CASE IF THE COMPONENTS ARE
            ECONOMICALLY INTERDEPENDENT).

      o     THE EXTENT TO WHICH THE COMPONENT BUSINESSES SHARE ASSETS AND OTHER
            RESOURCES, AS MIGHT BE EVIDENCED BY EXTENSIVE TRANSFER PRICING
            MECHANISMS.

      o     WHETHER THE COMPONENTS SUPPORT AND BENEFIT FROM COMMON RESEARCH AND
            DEVELOPMENT PROJECTS.

      THE FACT THAT A COMPONENT EXTENSIVELY SHARES ASSETS AND OTHER RESOURCES
      WITH OTHER COMPONENTS OF THE OPERATING SEGMENT MAY BE AN INDICATION THAT
      THE COMPONENT EITHER IS NOT A BUSINESS OR MAY BE ECONOMICALLY SIMILAR TO
      THOSE OTHER COMPONENTS."

      A REVIEW OF THESE FOUR CRITERIA FOLLOWS:

      THE MANNER IN WHICH AN ENTITY OPERATES ITS BUSINESS AND THE NATURE OF
      THOSE OPERATIONS.

      OTHER THAN SIZE AND LOCATION, ALL OF HOMETOWN'S DEALERSHIPS ARE
      ESSENTIALLY THE SAME. THE STAND-ALONE SERVICE CENTER'S OPERATIONS ARE

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      INSIGNIFICANT TO HOMETOWN'S OPERATIONS, GENERATING 1% OF HOMETOWN'S GROSS
      PROFIT AND LESS THAN 1/2 OF 1% OF ITS REVENUES.

      WHETHER GOODWILL IS RECOVERABLE FROM THE SEPARATE OPERATIONS OF EACH
      COMPONENT BUSINESS OR FROM TWO OR MORE COMPONENT BUSINESSES WORKING IN
      CONCERT (WHICH MIGHT BE THE CASE IF THE COMPONENTS ARE ECONOMICALLY
      INTERDEPENDENT).

      THE DEALERSHIPS ARE ECONOMICALLY INTERDEPENDENT FOR A VARIETY OF
      FUNCTIONS, EXCEPT SALES, AS FOLLOWS:

      (I)   CENTRALIZED PURCHASING OF USED CARS IN AN ECONOMICAL AND EFFICIENT
            MANNER THROUGH HOMETOWN'S USED CAR PURCHASING MANAGER.

      (II)  CENTRALIZED MANAGEMENT OF HUMAN RESOURCES, DATA PROCESSING, LEGAL,
            PUBLIC RELATIONS, FINANCIAL REPORTING AND CORPORATE ACCOUNTING.

      (III) CHIEF EXECUTIVE OFFICER WHO IS THE CHIEF DECISION MAKER OF HOMETOWN.

      THE EXTENT TO WHICH THE COMPONENT BUSINESSES SHARE ASSETS AND OTHER
      RESOURCES, AS MIGHT BE EVIDENCED BY EXTENSIVE TRANSFER PRICING MECHANISMS.

      THERE IS SHARING OF BOTH ASSETS AND RESOURCES. USED VEHICLE INVENTORY IS
      TRANSFERRED AT COST TO DIFFERENT LOCATIONS BASED ON THE NEEDS OF EACH
      LOCATION. NEW VEHICLE INVENTORY IS ALSO TRANSFERRED AT COST TO SIMILAR
      BRANDED DEALERSHIPS BASED ON NEED. OTHER RESOURCES ARE ALSO SHARED SUCH AS
      USED VEHICLE PURCHASING, DATA PROCESSING AND HUMAN RESOURCES, WHICH ARE
      CENTRALLY MANAGED.

      WHETHER THE COMPONENTS SUPPORT AND BENEFIT FROM COMMON RESEARCH AND
      DEVELOPMENT PROJECTS.

      RESEARCH AND DEVELOPMENT IS NOT A SIGNIFICANT PART OF HOMETOWN'S
      OPERATIONS; HOWEVER, TO THE EXTENT TRENDS ARE IDENTIFIED, ANALYZED AND
      INTERPRETED, THE EVALUATION WOULD BENEFIT AND BE APPLICABLE TO ALL
      DEALERSHIPS OPERATIONS.

      IN ADDITION, PARAGRAPH 17 OF SFAS 131 STATES; "OPERATING SEGMENTS OFTEN
      EXHIBIT SIMILAR LONG-TERM FINANCIAL PERFORMANCE IF THEY HAVE SIMILAR
      ECONOMIC CHARACTERISTICS. FOR EXAMPLE, SIMILAR LONG-TERM AVERAGE GROSS
      MARGINS FOR TWO OPERATING SEGMENTS WOULD BE EXPECTED IF THEIR ECONOMIC
      CHARACTERISTICS WERE SIMILAR."

      ATTACHED IS AN EXHIBIT TO THIS QUESTION #1, WHICH SHOWS GROSS PROFIT,
      OPERATING PROFIT AND PRE-TAX PROFIT ALL AS A PERCENTAGE OF SALES BY
      DEALERSHIP FOR EACH OF THE LAST FIVE YEARS. (ALSO INCLUDED IS CORPORATE
      AND ELIMINATIONS WHICH ARE INCLUDED TO AGREE TO THE FINANCIAL STATEMENTS.)
      ALL GROSS PROFIT PERCENTAGES (EXCEPT AUTO CARE WHICH IS THE STAND-ALONE
      SERVICE FACILITY WHOSE OPERATING RESULTS ARE NOT MATERIAL TO THE TOTAL
      COMPANY) ARE SIMILAR BY DEALERSHIP, REFLECTING THE SIMILARITY OF EACH OF
      THE DEALERSHIP OPERATIONS.

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      OPERATING PROFIT PERCENTAGES AND PRE-TAX PROFIT PERCENTAGES ARE SIMILAR
      BUT REFLECT DIFFERENCES ASSOCIATED WITH THE STRENGTH AND WEAKNESSES OF THE
      DEALERSHIP MANAGEMENT AND LOCATION.

      THE DEALERSHIPS EXHIBIT SIMILAR ECONOMIC CHARACTERISTICS. THEY ARE ALL
      SIMILARLY SENSITIVE TO CERTAIN CHANGES IN ECONOMIC CONDITIONS. WHEN
      INTEREST RATES ARE HIGH NEW CAR SALES WILL DROP AND SERVICE REVENUES WILL
      INCREASE BECAUSE MORE PEOPLE WILL HOLD ONTO THEIR CARS LONGER BEFORE
      BUYING A NEW ONE. SIMILARLY, WHEN RATES DROP NEW CAR SALES SURGE. THIS WAS
      SEEN MOST RECENTLY WHEN THE DEALERSHIPS FIRST BEGAN TO OFFER 0.0%
      FINANCING. NEW CARS SALES SKYROCKETED ACROSS ALL LOCATIONS. AS GAS PRICES
      INCREASE, SALES OF SUV'S DECREASE AT ALL LOCATIONS. WHEN UNEMPLOYMENT IS
      HIGH, CAR SALES TEND TO DECREASE. HOMETOWN BELIEVES THE DEALERSHIPS HAVE
      SIMILAR ECONOMIC CHARACTERISTICS AND IT IS APPROPRIATE FOR THE ASSESSMENT
      TO BE MORE QUALITATIVE THAN QUANTITATIVE. IT WOULD NOT BE APPROPRIATE TO
      SHOW EACH DEALERSHIP AS A SEGMENT. IT IS ALSO COMMON INDUSTRY PRACTICE TO
      REPORT IN THIS WAY.

      IN ADDITION PARAGRAPH 24 STATES, "THERE MAY BE A PRACTICAL LIMIT TO THE
      NUMBER OF REPORTABLE SEGMENTS THAT AN ENTERPRISE SEPARATELY DISCLOSES
      BEYOND WHICH SEGMENT INFORMATION MAY BECOME OVERLY DETAILED. ALTHOUGH NO
      PRECISE LIMIT HAS BEEN DETERMINED, AS THE NUMBER OF SEGMENTS THAT ARE
      REPORTABLE IN ACCORDANCE WITH PARAGRAPHS 18-23 INCREASES ABOVE 10, THE
      ENTERPRISE SHOULD CONSIDER WHETHER A PRACTICAL LIMIT HAS BEEN REACHED."

      ALTHOUGH HOMETOWN WOULD NOT HAVE 10 SEGMENTS AS IT HAS 8 DEALERSHIPS, IT
      WOULD BE REPORTING EACH DEALERSHIP AS A SEGMENT, IN EFFECT PROVIDING
      RELATIVELY INSIGNIFICANT DETAILS OF ITS OPERATIONS TO INVESTORS THAT WOULD
      NOT BE BENEFICIAL TO THE READER.

      PARAGRAPH 73 FURTHER STATES, "THE BOARD BELIEVES THAT SEPARATE REPORTING
      OF SEGMENT INFORMATION WILL NOT ADD SIGNIFICANTLY TO AN INVESTOR'S
      UNDERSTANDING OF AN ENTERPRISE IF ITS OPERATING SEGMENTS HAVE
      CHARACTERISTICS SO SIMILAR THAT THEY CAN BE EXPECTED TO HAVE ESSENTIALLY
      THE SAME FUTURE PROSPECTS. THE BOARD CONCLUDED THAT ALTHOUGH INFORMATION
      ABOUT EACH SEGMENT MAY BE AVAILABLE, IN THOSE CIRCUMSTANCES THE BENEFIT
      WOULD BE INSUFFICIENT TO JUSTIFY ITS DISCLOSURE. FOR EXAMPLE, A RETAIL
      CHAIN MAY HAVE 10 STORES THAT INDIVIDUALLY MEET THE DEFINITION OF AN
      OPERATING SEGMENT, BUT EACH STORE MAY BE ESSENTIALLY THE SAME AS THE
      OTHERS."

      HOMETOWN'S OPERATIONS ARE DEALERSHIPS WHOSE OPERATIONS ARE ESSENTIALLY THE
      SAME AS PREVIOUSLY DISCUSSED IN HOMETOWN'S JULY 7, 2005 RESPONSE LETTER TO
      QUESTION #10. HOMETOWN DOES NOT BELIEVE REPORTING EACH DEALERSHIP AS A
      SEGMENT WOULD PROVIDE ANY BENEFIT TO AN INVESTOR.

      IN ADDITION, IT IS COMMON INDUSTRY PRACTICE TO REPORT AS A SINGLE SEGMENT.
      REVIEW OF THE 2004 10-K'S OF THE INDUSTRY LEADERS, INCLUDING ASBURY
      AUTOMOTIVE GROUP, INC.; UNITED AUTO GROUP, INC.; AUTONATION, INC. AND
      LITHIA MOTORS, INC., SHOW THEY ALL REPORT AS A SINGLE SEGMENT. LITHIA

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      MOTORS, INC. IN THEIR 2004 10-K WRITES, "BASED UPON DEFINITIONS CONTAINED
      WITHIN SFAS NO. 131 "DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND
      RELATED INFORMATION," WE HAVE DETERMINED THAT WE OPERATE IN ONE SEGMENT,
      AUTOMOTIVE RETAILING." UNITED AUTO GROUP WRITES IN THEIR 2004 FORM 10-K,
      "THE COMPANY OPERATES IN ONE REPORTABLE SEGMENT. THE REPORTABLE SEGMENT IS
      AN AGGREGATION OF THREE OPERATING SEGMENTS; EASTERN U.S., WESTERN U.S. AND
      INTERNATIONAL. SUCH AGGREGATION IS BASED ON THE COMPANY'S BELIEF THAT EACH
      OPERATING SEGMENT, (I) HAS SIMILAR ECONOMIC CHARACTERISTICS (EACH IS A
      COLLECTION OF AUTOMOBILE DEALERSHIPS), (II) OFFERS SIMILAR PRODUCTS AND
      SERVICES (EACH SELLS NEW AND USED VEHICLES, SERVICE, PARTS AND THIRD-PARTY
      FINANCE AND INSURANCE PRODUCTS), (III) HAS SIMILAR TARGET MARKETS AND
      CUSTOMERS (GENERALLY INDIVIDUALS) AND (IV) HAS SIMILAR DISTRIBUTION AND
      MARKETING PRACTICES (ALL DISTRIBUTE PRODUCTS AND SERVICES THROUGH
      DEALERSHIP FACILITIES THAT MARKET TO CUSTOMERS IN SIMILAR FASHIONS)."
      ASBURY AUTOMOTIVE GROUP WRITES IN THEIR 2004 FORM 10-K, "WE FOLLOW THE
      PROVISIONS OF SFAS NO. 131, "DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE
      AND RELATED INFORMATION." BASED UPON DEFINITIONS CONTAINED IN SFAS NO.
      131, WE HAVE DETERMINED THAT WE OPERATE IN ONE SEGMENT AND HAVE NO
      INTERNATIONAL OPERATIONS. OUR OPERATING BUSINESSES (DEALERSHIPS) DELIVER
      THE SAME PRODUCTS AND SERVICES TO A COMMON CUSTOMER GROUP. OUR CUSTOMERS
      ARE GENERALLY INDIVIDUALS. OUR BUSINESSES GENERALLY FOLLOW THE SAME
      MANAGEMENT AND MARKETING STRATEGIES, AND EACH OPERATE IN A SIMILAR
      REGULATORY ENVIRONMENT. WE EVALUATE PERFORMANCE AND ALLOCATE RESOURCES
      BASED ON THE OPERATING RESULTS OF OUR BUSINESSES."

      SUBSEQUENT TO THE EFFECTIVE DATE OF THE PENDING EXCHANGE AGREEMENT WITH
      THE SHAKER AUTO GROUP, THE HISTORICAL OPERATIONS OF THE NEW ENGLAND
      SUBSIDIARIES (AS DEFINED IN THE EXCHANGE AGREEMENT) WILL BE TREATED AS
      DISCONTINUED OPERATIONS FOR FINANCIAL REPORTING PURPOSES PER THE CRITERIA
      IN PARAGRAPHS 41 - 43 OF SFAS NO. 144 "ACCOUNTING FOR THE IMPAIRMENT OR
      DISPOSAL OF LONG-LIVED ASSETS".

      PARAGRAPH 41 STATES, "FOR PURPOSES OF THIS STATEMENT, A COMPONENT OF AN
      ENTITY COMPRISES OPERATIONS AND CASH FLOWS THAT CAN BE CLEARLY
      DISTINGUISHED, OPERATIONALLY AND FOR FINANCIAL REPORTING PURPOSES, FROM
      THE REST OF THE ENTITY. A COMPONENT OF AN ENTITY MAY BE A REPORTABLE
      SEGMENT OR AN OPERATING SEGMENT (AS THOSE TERMS ARE DEFINED IN PARAGRAPH
      10 OF STATEMENT 131), A REPORTING UNIT (AS THAT TERM IS DEFINED IN
      STATEMENT 142), A SUBSIDIARY, OR AN ASSET GROUP (AS THAT TERM IS DEFINED
      IN PARAGRAPH 4)."

      THE OPERATIONS AND CASH FLOWS OF THE NEW ENGLAND SUBSIDIARIES CAN BE
      CLEARLY DISTINGUISHED FROM THOSE OF THE REMAINING HOMETOWN ENTITY
      OPERATIONALLY AND FOR FINANCIAL REPORTING PURPOSES.

      PARAGRAPH 42 STATES, "THE RESULTS OF OPERATIONS OF A COMPONENT OF AN
      ENTITY THAT EITHER HAS BEEN DISPOSED OF OR IS CLASSIFIED AS HELD FOR SALE
      SHALL BE REPORTED IN DISCONTINUED OPERATIONS IN ACCORDANCE WITH PARAGRAPH
      43 IF BOTH OF THE FOLLOWING CONDITIONS ARE MET: (A) THE OPERATIONS AND

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      CASH FLOWS OF THE COMPONENT HAVE BEEN (OR WILL BE) ELIMINATED FROM THE
      ONGOING OPERATIONS OF THE ENTITY AS A RESULT OF THE DISPOSAL TRANSACTION
      AND (B) THE ENTITY WILL NOT HAVE ANY SIGNIFICANT CONTINUING INVOLVEMENT IN
      THE OPERATIONS OF THE COMPONENT AFTER THE DISPOSAL TRANSACTION."

      IN THIS SITUATION BOTH CRITERIA (A) AND (B) ARE CLEARLY MET. THE
      OPERATIONS AND CASH FLOWS OF THE NEW ENGLAND SUBSIDIARIES WILL NO LONGER
      BE A PART OF THE HOMETOWN OPERATIONS AND CASH FLOW AND THERE WILL BE NO
      SIGNIFICANT CONTINUING INVOLVEMENT IN THE OPERATIONS OF THE NEW ENGLAND
      SUBSIDIARIES BY HOMETOWN AFTER THE DISPOSAL TRANSACTION.

      PARAGRAPH 43 CONTINUES, "IN A PERIOD IN WHICH A COMPONENT OF AN ENTITY
      EITHER HAS BEEN DISPOSED OF OR IS CLASSIFIED AS HELD FOR SALE, THE INCOME
      STATEMENT OF A BUSINESS ENTERPRISE FOR CURRENT AND PRIOR PERIODS SHALL
      REPORT THE RESULTS OF OPERATIONS OF THE COMPONENT, INCLUDING ANY GAIN OR
      LOSS RECOGNIZED IN ACCORDANCE WITH PARAGRAPH 37, IN DISCONTINUED
      OPERATIONS. THE RESULTS OF OPERATIONS OF A COMPONENT CLASSIFIED AS HELD
      FOR SALE SHALL BE REPORTED IN DISCONTINUED OPERATIONS IN THE PERIOD(S) IN
      WHICH THEY OCCUR. THE RESULTS OF DISCONTINUED OPERATIONS, LESS APPLICABLE
      INCOME TAXES (BENEFIT), SHALL BE REPORTED AS A SEPARATE COMPONENT OF
      INCOME BEFORE EXTRAORDINARY ITEMS AND THE CUMULATIVE EFFECT OF ACCOUNTING
      CHANGES (IF APPLICABLE)."

      THE