Exterminator 2 became a textbook example of low-budget exploitation filmmaking collapsing under its own production problems. The picture began shooting in New York with an intended budget of approximately $1.5 million, but according to filmmaker William Sachs, the production had already spent nearly $3 million after filming only about 40 minutes. The studio, Cannon Group, eventually halted the New York shoot and moved the remainder of the production to Los Angeles. Sachs, who had been involved as a co-producer, described the logistical absurdity of having the film's garbage truck shipped from New York because New York trucks were built from heavy metal while Los Angeles vehicles commonly used lighter fiberglass bodies. To disguise the relocation, the crew scattered garbage through Los Angeles streets and repainted curbs so they could pass as New York locations. Scenes that were supposed to connect seamlessly were therefore filmed on opposite coasts, with the continuity held together by artifice and hurried post-production rather than a coherent production plan.
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