UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON D.C. 20549
                                   FORM 10-KSB

[X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2002

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________


                           COMMISSION FILE NO. 0-14819


                          RENT-A-WRECK OF AMERICA, INC.
                 (NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)


           DELAWARE                                               95-3926056
(State or other Jurisdiction of                               (I.R.S. Employer
 Incorporation or Organization)                              Identification No.)


10324 South Dolfield Road, Owings Mills, MD                          21117
 (Address of Principal Executive Offices)                         (Zip Code)

Issuer's telephone number: (410) 581-5755

      Securities registered under Section 12(b) of the Exchange Act: None

         Securities registered under Section 12(g) of the Exchange Act:

                          Common Stock, par value $0.01

     Check  whether  the Issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]

     Check if no  disclosure  of  delinquent  filers in  response to Item 405 of
Regulation S-B is contained in this form,  and no disclosure  will be contained,
to the best of  registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. [X]

     State issuer's revenues for its most recent fiscal year. $6,969,268

     Aggregate market value of voting stock held by nonaffiliates of registrant,
     based upon the average of the high and low price of the Common Stock on the
     Nasdaq SmallCap Market,  was  approximately  $4.5 million on June 25, 2002.
     Shares of Common Stock held by each officer and director and by each person
     who owns 10% or more of the outstanding  Common Stock have been excluded in
     that such persons may be deemed to be  affiliates.  This  determination  of
     affiliate status is not necessarily conclusive.

     4,186,296  shares of common stock and 1,084,375  shares of preferred  stock
     were outstanding as of June 25, 2002.

     Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
<PAGE>
                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----
PART I

Item 1.  Description of Business............................................   3
Item 2.  Description of Property............................................   9
Item 3.  Legal Proceedings..................................................   9
Item 4.  Submission of Matters to a Vote of Security Holders................  10

Part II

Item 5.  Market for the Common Equity and Related Stockholder Matters.......  10
Item 6.  Management's Discussion and Analysis of Financial Condition and
           Results of Operations............................................  14
Item 7.  Financial Statements...............................................  21
Item 8.  Changes in and Disagreements with Accountants on Accounting and
           Financial Disclosure.............................................  50

Part III

Item 9.  Directors and Executive Officers, Promoters and Control
           Persons; Compliance with Section 16(a) of the
           Exchange Act.....................................................  50
Item 10. Executive Compensation.............................................  52
Item 11. Security Ownership of Certain Beneficial Owners and Management.....  54
Item 12. Certain Relationships and Related Transactions.....................  56
Item 13. Exhibits and Reports on Form 8-K...................................  56

                                       2
<PAGE>
                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

General

     Rent-A-Wreck of America,  Inc. (the "Company") was incorporated in Delaware
on October 12, 1983. The Company conducts its operations  primarily  through its
wholly-owned  subsidiary,  Bundy  American  Corporation  ("Bundy"),  and Bundy's
wholly-owned  subsidiary Priceless  Rent-A-Car,  Inc.  ("Priceless").  Bundy was
incorporated  in  California  on April 22, 1977 and  redomesticated  in Maryland
effective  March 29, 1996.  Priceless was  incorporated in Maryland on September
30,  1999.  The  Company  markets  and  administers  the   Rent-A-Wreck(R)   and
PRICELE$$(R)  vehicle  rental  franchise  programs  and  related  services.  The
Company's  franchisees,  in  aggregate,  operate one of the largest used vehicle
rental fleets in the nation,  offering rentals of cars, trucks and vans at rates
that  management  believes are generally less than those charged by national new
car  rental  companies.  On March 1,  1997,  the  Company  formed a  subsidiary,
Consolidated American Rental Insurance Company, Ltd ("CAR Insurance"),  to offer
automobile  liability and physical  damage  reinsurance to its  franchisees.  On
October 5, 2001, the Company formed a new  subsidiary,  Priceless  Rent-A-Car of
Maryland,  Inc. ("Rental  Operations"),  to rent vehicles to the general public.
The Company also has franchisees in Europe.  Reference to the "Company" includes
Rent-A-Wreck of America,  Inc. and its subsidiaries unless the context otherwise
requires.

THE FRANCHISE PROGRAM

     The Company sells to qualified  persons the right to operate a Rent-A-Wreck
or PRICELE$$  franchise,  or both,  for renting and leasing used motor  vehicles
(automobiles,  vans and  trucks) to the  general  public.  The  franchisees  who
participate in the PRICELE$$ used vehicle rental franchise  program are required
by the Company to meet higher standards than the Rent-A-Wreck  program,  such as
utilizing vehicles that are less than three years old. As of March 31, 2002, 156
of the Company's 648 franchisees were  participating  in the Priceless  program.
The Company  believes the  PRICELE$$  name appeals to a different  clientele and
therefore   compliments  the  Rent-A-Wreck  program.  The  Company  offers  each
franchisee  geographic  territory  rights  in which  the  Company  will not open
another  franchise.  Franchisees  purchase  the  right  to  use  certain  of the
Company's  resources,  experience and knowledge in connection with the operation
of the  business  for a  specified  period of time,  typically  ten  years.  The
franchisee  utilizes the Company's systems,  methods,  specifications,  standard
operating  procedures,  guidance,  and trade and service marks. When the Company
sells a franchise,  it charges an initial franchise fee relating to the start-up
services performed by the Company.  The Company may finance the initial fee over
a period  not to  exceed  twelve  months  based on the  creditworthiness  of the
franchisee.  Additionally,  franchisees  are required to pay the Company monthly

                                       3
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royalties and contribute to the national  advertising fund. These franchise fees
vary according to the franchisees' fleet size or gross revenues.

     The Company  believes the  Rent-A-Wreck  name is unique and enjoys national
recognition.  Ongoing  marketing  programs  further  promote  recognition of the
Rent-A-Wreck  and  PRICELE$$  names in both  domestic and foreign  markets.  The
Company  develops and executes  advertising  and  marketing  programs  that have
included  radio and  television  commercials,  direct mail,  print  advertising,
promotional   items  and  sponsorship  at  sporting  events.   Public  relations
activities  conducted  on the  franchisees'  behalf  include a  franchise  award
announcement,  a grand  opening press release and  anniversary  press  releases.
Assistance  in  planning  and  implementing  local  promotional   activities  is
available to franchisees.  The Public  Relations  Department of the Company also
publishes  the  "Rent-A-Wreck  Reporter",  which is  distributed  internally  to
franchisees and externally to trade and consumer media and referral sources such
as insurance  adjusters,  automotive  repair shops,  travel agents and corporate
travel managers.

     CAR  Insurance,  which is  domiciled  in Bermuda  and a  subsidiary  of the
Company,  offers automobile  liability and physical damage  reinsurance  through
American   International  Group  ("AIG")  for  the  vehicles  belonging  to  its
franchisees.

     CAR Insurance has an agreement with AIG whereby CAR Insurance's coverage is
subject to a per loss limit of $100,000 per person and  $300,000  per  accident.
Under the  contract,  AIG also  provides an aggregate  stop loss  protection  of
$1,300,000,  thus capping CAR Insurance's  exposure to loss. In carrying out the
program,  the Company  utilizes  Crawford & Co.  ("Crawford") as the Third Party
Administrator,  Rental Industry Services  ("Rise") as the insurance broker,  and
Willis Corroon as a consultant  for this program.  On March 1, 2002, the Company
replaced Rise with Demetriou  Insurance Services  ("Demetriou") as the insurance
broker. The focus of growth for CAR Insurance has been in those states where the
Company's insurance advisor believes the driver's (not the owner's) insurance is
deemed  to be  primarily  responsible  for any  losses.  As of March  31,  2002,
approximately  93 of the  Company's  franchisees  were insuring a total of 1,864
vehicles under this program.  Franchisees apply for this insurance coverage with
Demetriou.  Demetriou processes the franchisees'  applications and, if approved,
the franchisee is required to pay premiums in advance on a monthly basis.  Hertz
Claim Management  Corporation  ("Hertz") was the Third Party Administrator prior
to March 1, 2001 and are responsible for processing all claims and assisting the
Company on the appropriate  reserves for all known claims that occurred prior to
March 1, 2001. Crawford,  our current Third Party Administrator,  is responsible
for all claims that have  occurred  after March 1, 2001.

     On March 1, 1999, the Company added a program to offer  insurance  coverage
to all of its  franchisees  who do business in those states where the  Company's
insurance advisor,  Rise,  believes the owner's (not the driver's)  insurance is

                                       4
<PAGE>
deemed to be primarily  responsible for any losses. In those states, this is the
only program that the Company  offers to its  franchisees.  In carrying out this
program,  the Company  utilizes Rise as the insurance  broker,  and  franchisees
apply for this insurance  coverage with Rise. The insurance broker processes the
franchisees'  applications  and, if approved,  the franchisee is required to pay
premiums in advance on a monthly  basis.  The  Company  bills and  collects  the
premiums, which are forwarded to the insurance broker. The Company received fees
equal to $23,489 from the  insurance  broker for this program  through  March 1,
2002.  The Company  believes it has no  exposure to loss from  insurance  claims
under this  program.  As of March 31, 2002,  approximately  30 of the  Company's
franchisees were insuring a total of 660 vehicles under this program.

     Priceless  operates a  wheelchair  van rental  program,  on a limited  test
basis, in Maryland.  The Company  markets this program  primarily in communities
catering to disabled  individuals.  There are 13  vehicles  currently  operating
under this program.

     During the year ended March 31, 2002,  the Company  operated its own stores
for renting  vehicles to the public in Owings  Mills and Hunt  Valley,  Maryland
under the PRICELE$$  brand name.  In April 2002,  the Company  consolidated  its
Rental Operations to its Owings Mills location and closed the Hunt Valley store.

     The Company has arranged a program whereby  franchisees may finance vehicle
purchases  over a 24-30 month  period.  The program is  available  to  qualified
applicants  who  maintain  a level  of  creditworthiness  that the  Company  has
assessed  in  its  discretion  on  a  case-by-case   basis.   The   franchisees'
qualification  is based on their credit  history  with the  Company,  as well as
their credit standing as reported by national  credit  bureaus.  The franchisees
are  responsible  for  purchasing the vehicles with funds loaned by the Company,
and the  Company's  loan is secured by the vehicles.  As of March 31, 2002,  the
Company was financing 13 vehicles for 2 of its franchisees in an amount equal to
$51,886.

     The Company is  committed to educating  and training its  franchisees.  The
Company  conducts  Rent-A-Wreck  School at its headquarters in Maryland every 45
days. All new franchisees are required to attend. School is also available at no
charge to current  franchisees  and their staff.  During an  intensive  five-day
period,  attendees learn all aspects of the Rent-A-Wreck and PRICELE$$ programs.
This includes vehicle acquisition,  maintenance and sales, telephone techniques,
counter procedures,  rental operations,  promotion,  publicity,  advertising and
sales  approaches,  relevant aspects of insurance,  accounting and other general
business  skills.  The Company also employs  field  service  staff who have many
years of experience in the car rental  industry and whose  responsibility  is to
provide continuous advice via personal visits and a toll-free telephone number.

     Additionally,  the Company  holds and strongly  encourages  franchisees  to
attend its regional  meetings which are held in the eastern and western  regions

                                       5
<PAGE>
of the United  States.  The  Company  utilizes  these  meetings  to present  new
programs to franchisees and to provide continued training and advice.

     The Company's National Franchisee Advisory Council, which consists of seven
members,  meets quarterly.  Six of the members are elected by the franchisees in
their region. The seventh member is a franchisee  appointed by the Company.  The
Council is a forum through which  franchisees can express  opinions and concerns
to the Company.  The Council also provides  suggestions  as to how the Company's
National  Advertising  Fund is  allocated.  Advertising  monies  paid  into  the
National Advertising Fund are expended by the Company on the franchisees' behalf
after consultation with the National Franchisee  Advisory Council.  Based on the
Council's  recommendations,  the  Company  has  expended  amounts  on  different
programs such as advertising on Westwood One Radio, and sponsoring a race car to
further promote the Company's national exposure.

     The Company markets its franchise  programs  primarily by attending various
trade shows and by conducting an ongoing  direct mailing  campaign.  The Company
employs  four  full-time  salespeople  at  its  corporate  headquarters,  and in
addition, utilizes the services of two independent franchise brokers.

     During the  fiscal  year  ended  March 31,  2002,  68 new  franchises  were
granted,  29 existing franchise  locations were transferred to new ownership and
89 franchises were terminated by the Company. The majority of these terminations
resulted  from  breaches  of  the  franchise  agreement.  This  resulted  in 615
franchised  locations  throughout the United States, and 33 franchised locations
in Europe at March 31, 2002 compared to 641 franchised  locations throughout the
United States, and 28 franchised locations in Europe at March 31, 2001.

EMPLOYEES

     As of March 31,  2002,  the Company  employed 35 people,  consisting  of 14
full-time  employees and 2 part-time  employees  engaged in franchise  sales and
service,  5  full-time  employees  and 1  part-time  employee  engaged in Rental
Operations,  and 11 full-time  employees  and 2 part-time  employees  engaged in
administrative  activities.  In addition,  the Company retains the services of 2
franchise  brokers  who market and sell the  Company's  franchises.  None of the
employees  is covered  by a  collective  bargaining  agreement,  and  management
believes that its relations with its employees are good.

COMPETITION

     The Company pioneered the concept of used car rentals to the public. Unlike
the  traditional  airport  rental  companies,  Rent-A-Wreck  developed its niche
serving the "neighborhood" rental market. The Company emphasizes convenience and
service  and  offers  rentals  of used  cars,  trucks and vans at rates that are
typically lower than those charged by new car rental companies.

                                       6
<PAGE>
     Although most franchisees  service some business and leisure travelers from
outside the  community,  the Company's  customers  generally are people from the
local community.  The Company's  franchisees  generally serve customers  needing
vehicles for insurance and service  replacement,  commercial,  short-term moving
and general use.

     Rent-A-Wreck  franchisee  fleets  usually  consist  of a  variety  of  used
vehicles  although some locations rent new cars as well. The  franchisees  offer
customers various vehicles according to local demand. Trucks, passenger vans and
cargo  vans  are  available  at many  locations.  This  allows  franchisees  the
flexibility to offer an appropriate range of vehicles for their areas.

     Significant  competition exists in the local markets.  Large companies like
U-Save compete  nationwide.  Dozens of regional and local independent  companies
also  compete  with the Company in various  areas.  In most major  urban  areas,
companies such as Hertz, Avis, National,  Enterprise and Budget operate city and
suburban offices, as well as operating in airport terminals.

     During the early 1990's,  many of the new car rental  companies were owned,
wholly  or  partially,  by  automobile   manufacturers  who  sold  their  rental
subsidiaries  cars at discounted  prices and guaranteed to repurchase cars after
four to nine months in rental service. This enabled the rental companies to pass
along their savings to retail customers in the form of lower rental prices. Over
the last few years,  the rental  companies  have been  returning to  independent
ownership,  the new car discounts  and buybacks  have been reduced,  and new car
retail rental prices have often risen,  although  Hertz has been  re-acquired by
Ford. Because the Company's  franchisees  generally attempt to provide discounts
off the retail prices charged by the large new car rental companies, the Company
believes that the increase in prices  charged by such  companies has enabled the
Company's franchisees to compete more effectively and profitably.

GOVERNMENT REGULATIONS

     The  offering  and sale of  franchises  is  subject  to  federal  and state
regulation and regulations by foreign governments.  The Federal Trade Commission
("FTC")  has  adopted   regulations   requiring  full  pre-sale   disclosure  to
prospective franchisees of certain information,  including information about the
franchisor,  its existing franchises, the rights and obligations of franchisees,
and termination,  cancellation and renewal of franchises. Disclosure is required
to be made prior to the sale in the form of an offering circular. Many states in
which the Company sells or may sell franchises may require pre-sale registration
of the Company and/or the Company's offering circular and franchise agreement to
be used in selling  franchises from or in the state.  The Company must apply for
renewal with many of these states  annually.  Many states also regulate  various

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aspects  of  the  franchisor-franchisee   relationship,   including  regulations
regarding awarding, renewing and terminating franchise relationships.

     Compliance  with  the  laws of the  state  from or in  which  the sale of a
franchise is to be made, in addition to the Federal regulations, may be required
because FTC  franchising  regulations  will not preempt  state or local laws and
regulations  which  are  consistent  with  Federal  regulations,  or  which,  if
inconsistent,  would provide  protection to prospective  franchisees equal to or
greater than that imposed by the Federal franchising regulations.

     In June 2001, the Company received  authorization to sell franchises in all
50 states under its  "Rent-A-Wreck" and "PRICELE$$" trade and service marks. The
Company  has   registered   its   "Rent-A-Wreck"   trade  and  service  mark  in
approximately 57 foreign countries and its "PRICELE$$" trade and service mark in
approximately 4 foreign countries.

TRADEMARKS

     The  Company  believes  that  name  recognition  of its  primary  trademark
"Rent-A-Wreck"  is important to its franchise  program.  A trademark may be held
for an  indefinite  duration,  but it may be lost  or its  value  diminished  if
adequate  steps to police its use are not taken.  The Company  believes that its
efforts  to police  the use of its  trademarks  are  adequate.  The  Company  is
actively promoting its existing "PRICELE$$" trademark. The Company believes this
trademark will provide additional sales opportunities for its franchisees due to
new target customers of "PRICELE$$" rental fleets.

INSURANCE REGULATIONS

     GOVERNMENT  REGULATION  RELATING  TO  INSURANCE  PROGRAM.  As  part  of the
insurance  program,  the  Company  utilizes  CAR  Insurance,  its  wholly  owned
subsidiary  domiciled in Bermuda.  Insurance companies such as CAR Insurance are
subject  to the laws and  regulations  of the  jurisdictions  in which  they are
chartered and do business.  Such laws and regulations  generally are designed to
protect the interests of policyholders rather than the interests of shareholders
of the Company. In general,  insurance  regulatory agencies have broad authority
over  insurers'  capital  and  surplus  levels,  dividend  payments,   financial
disclosure,  reserve requirements,  investment parameters and premium rates. The
regulation of CAR Insurance and its insurance program  involving AIG,  Crawford,
and the financing of such insurance  program could have a material effect on the
Company's business, financial condition and results of operations.

     The Company's  insurance program offered through CAR Insurance is conducted
via "fronting"  arrangements with AIG. Because some states currently restrict or
limit such  arrangements,  the ability of the Company to expand the program into
those states is also limited. In addition, the National Association of Insurance
Commissioners  ("NAIC")  has  adopted a model  act  concerning  such  "fronting"

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arrangements. The model act requires reporting and prior approval of reinsurance
transactions  relating to these  arrangements  and limits the amount of premiums
that can be written under certain circumstances. No determination can be made as
to whether,  or in what form,  such act may  ultimately be adopted by any state,
and the Company is therefore unable to predict whether the model act will affect
its operations or relationships  with insurers.  Some states currently  regulate
third party  administration  and premium financing  arrangements,  such as those
used by the  Company.  Any or all of these  regulations  could  have a  material
effect on the program being offered by the Company.

     State  regulation  requires  licensing  of persons  soliciting  the sale of
insurance  within  that  state.  In certain  states,  licenses  are  obtained by
individual  agents rather than a corporate  entity.  Due to the Company's recent
development of the  reinsurance  program and limited  experience  with its other
insurance  programs,  there can be no assurance that its activities  will not be
deemed to be in violation of licensing or other  insurance laws or  regulations.
Such  violations  could subject the Company to  significant  fines and penalties
which could have a material adverse effect on its business,  financial condition
and results of operations.

ITEM 2. DESCRIPTION OF PROPERTY

     The Company currently leases from an affiliate,  KA Real Estate Associates,
LLC, ("KA")  approximately  9,100 square feet of executive office space at 10324
South Dolfield Road,  Owings Mills, MD 21117.  This lease will expire in October
2006 (see note 8 to the Company's consolidated financial statements and Item 12,
Certain Relationships and Related Party Transactions).  In addition, from August
8, 2001 to April 8, 2002,  the Company  leased  space in Hunt  Valley  under the
terms of a  month-to-month  operating  lease with R.F. Inc. to operate a Company
store.  The Company  paid $3,500 for the year ended March 31,  2002,  under this
agreement.

     Management  believes that the facilities leased by the Company are adequate
for the Company's current and foreseeable future operations.

ITEM 3. LEGAL PROCEEDINGS

     The  Company  is party  to  routine  legal  proceedings  incidental  to its
business from time to time.  Certain claims,  suits and complaints  arise in the
ordinary course of business and may be filed against the Company. Based on facts
now known to the Company,  management  believes all such matters are  adequately
provided  for,  covered by insurance  or, if not so covered or provided for, are
without  merit,  or involve  such amounts  that would not  materially  adversely
affect the  consolidated  results of  operations  or  financial  position of the
Company.

     In April,  2001,  the Company and one of its  subsidiaries,  Bundy American
Corporation,  Inc., were impleaded into a personal injury lawsuit, pending since
1992,  involving  injuries to a pedestrian  claiming to have been  involved in a
motor vehicle accident with an auto owned and rented by an independent  licensee
of Rent A Wreck.  The plaintiff seeks damages  totaling $9 million.  The Company
believes it has several meritorious defenses and believes the claims against the
Company are without  merit.  The Company is  vigorously  defending  the lawsuit,
which  has a  tentative  trial  date of  July  22,  2002,  subject  to  possible
adjournment.  The Company  intends to move for  dismissal  of the lawsuit at the
appropriate time(s) and/or, if necessary, try the case to conclusion, and pursue
any appeals as may be necessary to sustain its position.

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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matters  were  submitted  to a vote of security  holders  during the 4th
quarter of the fiscal year ended March 31, 2002.

PART II. OTHER INFORMATION

ITEM 5. MARKET FOR THE COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The Company's common stock,  $.01 par value,  trades on the Nasdaq SmallCap
Market under the symbol RAWA.

     The range of high and low bid quotations  for the quarterly  periods of the
current and prior fiscal years was as follows:

          Year Ended
        March 31, 2002           High*     Low*
        --------------           -----     ----

     First Fiscal Quarter        $1.60    $1.58
     Second Fiscal Quarter        1.71     1.68
     Third Fiscal Quarter         1.76     1.73
     Fourth Fiscal Quarter        1.65     1.62

          Year Ended
        March 31, 2001           High*     Low*
        --------------           -----     ----

     First Fiscal Quarter        $1.89    $1.79
     Second Fiscal Quarter        1.54     1.46
     Third Fiscal Quarter         1.71     1.63
     Fourth Fiscal Quarter        1.76     1.70

* Bid  quotations as reported by Nasdaq  reflect  inter-dealer  prices,  without
retail  mark-up,   mark-down,   or  commission  and  may  not  represent  actual
transactions.

     The Company has never paid any cash  dividends on its common stock,  and it
doesn't  anticipate  paying  dividends  on its common  stock in the  foreseeable
future.

     The Company had 1,084,375 shares of preferred stock outstanding as of March
31, 2002. This stock has a cumulative quarterly dividend of two cents per share.
Based  on the  current  number  of  outstanding  preferred  shares,  the  annual
aggregate  dividend is $86,750.  The terms of the  outstanding  preferred  stock
provide that the Company may not declare or pay dividends, whether in cash or in
property,  on the common stock unless the full dividends on the preferred  stock
for all past dividend  periods and the current dividend period have been paid or
declared  and a sum set  aside  for  payment  thereof.  The  preferred  stock is
convertible into common on a  share-for-share  basis.  There is no public market
for the preferred stock.

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     The number of  stockholders  of record of the Company's  common stock as of
June 10, 2002 was 170. This figure does not include  individual  participants in
securities  position  listings  of  registered  clearing  agencies.  The Company
estimates that the number of beneficial  stockholders was approximately 1,000 as
of June 10,  2002.  Trading  activity  with respect to the Common Stock has been
limited,  and the Company believes that the volume of transactions should not of
itself be deemed to constitute an "established  public trading market". A public
trading market having the  characteristics  of depth,  liquidity and orderliness
depends upon the  existence of market  makers as well as the presence of willing
buyers and sellers, which are circumstances over which the Company does not have
control.

SELECTED FINANCIAL DATA

     Set forth below is selected financial data with respect to the consolidated
statements of earnings of the Company and its  subsidiaries for each of the five
years in the period ended March 31, 2002 and with respect to the balance  sheets
thereof at March 31 in each of those years.

     The selected  financial  data has been derived from the  Company's  audited
consolidated  financial  statements and should be read in  conjunction  with the
audited  financial  statements  and related  notes  thereto and other  financial
information  appearing  elsewhere  herein.  The selected  financial  data is not
required by Form 10-KSB and has been  included  herein to provide an overview of
the Company's operations.

                                       11
<PAGE>
<TABLE>
<CAPTION>
                                                 Year ended March 31,
                                   -----------------------------------------------
                                     1998      1999      2000      2001      2002
                                   -------   -------   -------   -------   -------
                                          (in thousands except per share
                                             and number of franchises)
<S>                                <C>       <C>       <C>       <C>       <C>
FRANCHISEES' RESULTS (UNAUDITED)

Franchisees' Revenue (1)           $40,018   $45,358   $51,707   $56,630   $54,037

Number of Franchises                   558       652       675       669       648
 (outstanding at year-end)

COMPANY'S RESULTS OF OPERATIONS

Total Revenue                      $ 4,677   $ 5,601   $ 6,282   $ 6,846   $ 6,969

Operating expenses                   3,983     4,564     5,279     6,501     6,059

Income before income
  taxes                            $   756   $ 1,113   $ 1,101   $   487   $ 1,050

Net income                             548       858       821       263       677

Earnings per common share

 Basic                             $   .10   $   .18   $   .19   $   .04   $   .14
 Weighted average common
  shares                             4,267     4,086     3,808     4,066     4,310

 Diluted                           $   .09   $   .15   $   .14   $   .04   $   .12
 Weighted average common
  shares plus convertible
   preferred stock, options
    and warrants                     5,915     5,611     5,902     4,356     5,395

EBITDA (2)                             888     1,313     1,922     1,934     1,361

COMPANY'S BALANCE SHEET DATA

Working Capital                    $ 1,527   $ 1,531   $ 1,240   $ 1,940   $ 1,896

Total assets                         3,664     3,886     3,980     4,374     5,089

Long-term obligations                   --        --        --        35       463
Shareholders' Equity                 2,028     2,041     1,836     2,863     3,089
</TABLE>

(1)  The franchisees'  revenue data have been derived from unaudited license fee
     reports provided by franchisees.

(2)  "EBITDA" is earnings before interest expense,  depreciation,  amortization,
     taxes and  repurchase  of options.  EDITDA should not be  interpreted  as a
     measure of operating results, cash flow provided by operating activities, a
     measure  of  liquidity,  or as an  alternative  to any  generally  accepted
     accounting  principle  measure of  performance.  The  Company is  reporting
     EBITDA  because it is a widely  used  financial  measure  of the  potential
     capacity of a company to incur and service  debt.  Rent-A-Wreck's  reported
     EBITDA may not be  comparable  to similarly  titled  measures used by other
     companies.

                                       12
<PAGE>
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Year ended March 31, 2002 as compared to year ended March 31, 2001:

     The Company operates in three principal segments:  Vehicle Rental Franchise
Programs  (Franchising),  Insurance  Coverage  (Insurance)  and  Vehicle  Rental
Operations (Rental Operations). For the year ended March 31, 2002, the Company's
Franchising  segment  comprised 76% of consolidated  net revenues (81% in 2001)
and 147% of consolidated  operating income (157% in 2001). The Company generated
operating income from its Insurance  segment of  approximately  $104,183 for the
fiscal year ended March 31,  2002,  compared to an  operating  income of $20,854
from that segment for the fiscal year ended March 31, 2001.

     Net 2002 revenues from  Franchising,  which includes  initial license fees,
continuing license fees, and advertising fees,  decreased by $237,142 (4%). This
decrease  occurred  due to a $8,545 (1%)  decrease in initial  license  fees,  a
$155,587 (5%) decrease in continuing license fees and a $73,010 (7%) decrease in
advertising  fees.  For the year ended  March 31,  2002,  the  Company  executed
confessions of judgment from 17 franchisees  totaling $503,481 for past due fees
which had not  previously  been  recorded as revenues  since the Company did not
believe  collectibility  was probable at that time.  The total  balance due from
confessions of judgment was $418,059 as of March 31, 2002. If the confessions of
judgment had not impacted the continuing  license fees and advertising fees, the
result  would  have been  decreases  of  $410,028  (12%) and  $133,870  (13%) in
continuing license fees and advertising fees, respectively.

     Revenues from insurance premiums increased by $31,634 (3%) mainly due to an
increase in premium rates to our franchise customers.  Insurance premium revenue
is recognized ratably over the life of the policies.

     Vehicle rental operations revenues increased by $344,943 (532%) due to more
Company-owned cars being added to the Rental Operations fleet.

     Other revenue decreased by $16,512 (11%) in 2002 over 2001 due primarily to
a decrease in the sale of promotional materials.

     Effective  June 30, 1993,  the Company  issued  options (the  "Options") to
K.A.B.,  Inc. ("KAB"), a company owned by management,  for the purchase of up to
2,250,000 shares of the Company's common stock. During the years ended March 31,
2000 and 2001,  the Company  entered into an agreement to repurchase  500,000 of
the  options  for  $625,000  and  to  repurchase  957,721  of  the  options  for
$1,234,560,  respectively.  As of March 31, 2001,  all of these options had been
exercised or repurchased.

     If the repurchase of options had not impacted the consolidated statement of
operations for the year ended March 31, 2001, operating expenses would have been
$5,266,850 instead of $6,501,410.

                                       13
<PAGE>
     Excluding the expense  associated  with the  repurchase of options in 2001,
total operating  expenses increased by $792,575 (15%) in fiscal 2002 compared to
the prior year.  Salary  expense  increased by $314,481  (32%),  which  resulted
primarily from additional  hiring for the Company's Rental Operations and hiring
of a subrogation  expert in connection  with the  Company's  Insurance  segment.
Advertising  and promotion  expenses  decreased by $28,580 (2%),  which resulted
primarily from a decrease in national advertising expenses.  Sales and marketing
expenses  increased by $165,367 (53%), which resulted primarily from an increase
in reserves  for bad debt  expense.  Direct  expenses for the  Company's  Rental
Operations increased by $236,163 (369%), due to the opening of the Company-owned
stores.  General and administrative  expenses increased by $195,984 (16%), which
resulted  primarily from an increase in professional  fees. In 2002, the Company
expanded its Rental  Operations  at  Company-owned  stores.  Based upon a recent
investigation,  the Company  suspects that all revenues were not recorded due to
inadequate  management by a former  employee.  Management  does not believe that
these amounts are material.  The Company further reserved an additional  $39,000
for bad  debt  expense  due to  uncertainty  of  collectibility  of its  stores'
accounts  receivable.  The Company  installed new management and implemented new
internal controls to improve the efficiency of these Rental Operations.

     Insurance  underwriting expenses decreased by $192,967 (17%) in paid losses
and  loss  reserves  for  unsettled   claims  due  to  the  Company's   improved
underwriting and subrogation efforts.

     Depreciation and amortization expense increased by $102,127 (58%) which was
primarily  due to  additional  depreciation  associated  with  the  purchase  of
additional   vehicles  for  the  Company's  Rental   Operations  and  additional
investment in computer software and hardware.

     Excluding the repurchase of options,  the Company realized operating income
of $909,843,  before taxes and interest, in 2002 compared to operating income of
$1,579,495 in 2001,  reflecting a decrease of $669,652.  This decrease  resulted
primarily  from an increase  in the  Company's  Rental  Operations  expenses,  a
decrease in continuing  license fees and  advertising  fees,  and an increase in
reserves  for bad debt  expense,  partially  offset by an increase in  insurance
premiums as well as a decrease in underwriting expenses. Net income was $676,726
in 2002 compared to $1,021,041,  excluding the  repurchase of options,  in 2001,
reflecting a decrease of $344,315  (34%),  basic earnings per share were $.14 in
2002 compared to $.25 in 2001, and diluted earnings per share were $.12 and $.19
in 2002 and 2001, respectively.

     Net interest  income  increased by $5,210 (3%). This increase was primarily
due to interest in connection with confessions of judgment referred to above.

     Income tax expense for the year ended March 31, 2002  increased by $149,427
(67%)  from 2001.  This  increase  was  primarily  due to an income tax  benefit
associated with the Company's repurchase of options and the exercise of warrants
and options in 2001.

LIQUIDITY AND CAPITAL RESOURCES

     At March 31, 2002, the Company had working  capital of $1,896,309  compared
to  $1,940,176 at March 31, 2001.  This  decrease of $43,867 in working  capital
stems  from an  increase  in  financing  and  reserve  accruals  related  to the
insurance  operations  coupled with the borrowings to finance the acquisition of
vehicles for the Company store and payments  made for income  taxes,  buyback of
preferred and common stock as well as preferred stock dividends partially offset
by an  increase  in  receivables  and  prepaid  expenses.  In fiscal  2002,  the
Company's allowance for doubtful accounts was $1,197,513 compared to $854,423 in
the prior year. The Company wrote off $125,198 and $26,159 of doubtful  accounts

                                       14
<PAGE>
during  fiscal  2002 and 2001,  respectively.  The  Company  generally  requires
officers and  directors of  franchisees  to provide  personal  guarantees of the
franchisee's obligations under the franchise agreement. The Company's collection
effort is designed to increase  liquidity  through improved cash flow;  however,
there  can be no  assurance  that  the  Company  will  be  successful  in  these
collection efforts.

     In October 2001, the Company finalized a line of credit for $1,500,000 with
Merrill Lynch. The purpose of this line of credit is to provide additional funds
for  purchasing  vehicles in  connection  with the Company's  Rental  Operations
($500,000),  and to provide  security for the reinsurance  arrangement with AIG.
This line of credit provides  security for a $1,000,000  letter of credit issued
to American  International Group ("AIG").  This letter of credit is secured by a
certificate of deposit of $600,000 held by Merrill Lynch.  In addition,  Merrill
Lynch has a first lien on all the Company's  assets. In the year ended March 31,
2002,  the  Company  borrowed  $455,568  from its line of credit for  purchasing
additional vehicles for its Rental Operations.

     The vehicle  financing  payable  contains  restrictive  covenants  covering
ratios relating to minimum tangible net worth and a fixed charge coverage ratio,
as well as other customary covenants,  representations and warranties and events
of default.  As of March 31, 2002,  the Company was not in  compliance  with the
fixed charge coverage ratio and obtained a waiver of its noncompliance  from the
lender.

     In November 1999, the Company moved to a new location, which is owned by KA
Real Estate Associates,  LLC, ("KA") a related party to KAB. The Company entered
into an  operating  lease  with KA which  requires  monthly  payments  of $9,700
through October 2006.

     Property and equipment  increased by $952,187  (90%) from March 31, 2001 to
March 31,  2002.  This  increase  occurred  primarily  due to an  additional  67
vehicles in connection  with the Company's  Rental  Operations and an additional
investment in computer software and hardware.

     Cash provided by operations was $603,220,  resulting from net income before
depreciation plus the decrease in prepaid income tax expense and the increase in
insurance loss reserves,  partially offset by the increase in accounts and notes
receivable and prepaid expenses and the decrease in accounts payable and accrued
expenses.  Prepaid  income tax  decreased  due to the income tax expense for the
year ended March 31 , 2002.  Accounts and notes receivable  increased  primarily
due to the  confessions  of  judgment  from 17  franchisees  for past due  fees.
Prepaid expenses increased  primarily due to additional  promotional  materials.
Insurance  loss  reserves  increased  primarily  due to an increase in unsettled
claims associated with the CAR Insurance  program.  Accounts payable and accrued
expenses decreased  primarily due to a decrease in accrued national  advertising
expenses.

     Cash used in  investing  activities  of $714,047  related  primarily to the
acquisition of vehicles, computer software and hardware, offset by a decrease in
restricted  cash due to additional  national  advertising  expenses and proceeds
from the sale of 21 vehicles.

     Cash  provided  by  financing  activities  was  $4,637,  resulting  from an
increase in vehicle  financing  payable in connection with the Company's Vehicle
Rental Operations, offset by the buyback of common stock and preferred stock and
the payment of preferred dividends.

     From  time to  time,  the  Company  has  repurchased  its  securities  from
affiliates  and  non-affiliates.  Between  June  1995 and  September  2000,  the
Company's  Board of  Directors  authorized  the  repurchase  and  retirement  of

                                       15
<PAGE>
3,519,075  shares of common  stock,  convertible  cumulative  series A preferred
stock,  options or warrants.  From the  inception of this buyback  program,  the
Company has  repurchased  and retired  3,287,621  shares.  As of March 31, 2002,
there  were  231,454  shares  remaining  authorized  for future  repurchase  and
retirement.

     The  Company's  2002 results were  impacted by the reduced  travel  demands
arising,  in  part,  from  the  September  11,  2001  events  and  the  economic
uncertainties  which  have  reduced  travel.  Even  today the  travel  market is
changing.  While the  Company is  hopeful  that it will  fully  recover,  recent
revenue for the first few months of fiscal 2003 has been less than  expected and
below historic levels. If such results  continue,  the Company's revenue and net
income could be lower in fiscal 2003 than they were in fiscal 2002.

     The  Company  believes  it has  sufficient  working  capital to support its
business plan through fiscal 2003.

IMPORTANT FACTORS

     The  statements  regarding  anticipated  future  performance of the Company
contained in this report are forward-looking  statements which are made pursuant
to the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. These  forward-looking  statements  involve risks and  uncertainties  that
could  cause  the  Company's  actual  results  to  differ  materially  from  the
forward-looking  statements.  Factors  which could cause or  contribute  to such
differences include, but are not limited to, the Company's limited experience in
the reinsurance  business and the potential for negative claims experience,  the
effects of  government  regulation  on the  Company's  franchise  and  insurance
programs  including  maintaining  properly  registered  franchise  documents and
making any required  alterations  in the Company's  franchise  program to comply
with changes in the laws,  competitive pressures from other motor vehicle rental
companies which have greater marketing and financial resources than the Company,
protection  of the  Company's  trademarks,  and the  dependence on the Company's
relationships with its franchisees. These risks and uncertainties are more fully
described  elsewhere  in,  "Item 6 -  Management's  Discussion  and  Analysis of
Financial  Condition  and  Results  of  Operations  -  Important  Factors".  All
forward-looking  statements  should be  considered  in light of these  risks and
uncertainties.

     LIMITED  INSURANCE  HISTORY AND  EXPERIENCE;  POTENTIAL FOR NEGATIVE CLAIMS
EXPERIENCE. The Company's reinsurance business exposes its assets to significant
liability  for claims and losses  under the  program.  There can be no assurance
that the premiums  collected will be adequate to cover the liabilities  incurred
or that the  Company's  reserves  will be  sufficient.  Because of the Company's
limited  experience  with  insurance  risks and the  inherent  uncertainties  in
estimating the ultimate costs of claims, reserves are particularly uncertain and
losses and  adjustment  expenses may deviate  substantially  from  expectations.
Furthermore,  the timing, frequency and extent of liabilities under this program
cannot  be  predicted   accurately  because  the  conditions  and  events  which
established  the  Company's  loss  expectancies  may not  recur  in the  future.

                                       16
<PAGE>
Unexpected  losses  associated  with this program could have a material  adverse
effect on the Company's business,  financial condition and results of operations
as a result of the need to make  payments in excess of the  Company's  reserves.
Additionally,  if the Company expands the program as anticipated,  the effect of
such losses and/or reserves could be compounded.

     DEPENDENCE  ON  FRANCHISEES;  CREDIT  RISKS.  The  Company's  revenues  are
substantially  dependent on fees paid by its  franchisees.  These fees fluctuate
based on the franchisees'  performance.  Franchisees are independent contractors
who  operate  their  businesses  independently  of the  Company.  Any failure of
franchisees to operate their businesses,  or inability of the Company to collect
fees owed by franchisees,  could have a material adverse effect on the Company's
business, financial condition and results of operations.

     DEPENDENCE ON TRADEMARKS. The Company's success depends in significant part
on its ability to maintain  and protect  its primary  trademarks  involving  the
"Rent-A-Wreck"   and  "PRICELE$$"  names.  The  Company's  revenues  are  almost
exclusively  derived from the goodwill  associated  with the names.  Significant
negative  publicity  related  to  either of the  names or the  inability  of the
Company to pursue infringements and maintain its proprietary rights could have a
material  adverse  effect on the  Company's  business,  financial  condition and
results of operations.

     INTENSE  COMPETITION.  The vehicle rental industry in which the Company and
its franchisees  operate is characterized by intense  competition,  particularly
with respect to price and service,  from  national,  regional and local  vehicle
rental companies.  Many of these competitors,  particularly national competitors
and those with  relationships  with vehicle  manufacturers,  have  substantially
greater resources than the Company.  In addition,  competition  exists from many
smaller, independent operations in local markets. Any failure by the Company and
its  franchisees  to offer  services  and prices that  compete  favorably in the
marketplace  would have a material  adverse  effect on the  Company's  business,
financial condition and results of operations.

     COMPLIANCE  WITH  GOVERNMENTAL  REGULATIONS.  The Company's  operations are
subject to numerous federal,  state,  local and foreign laws,  including federal
and state laws governing the offer and sale of franchises  and the  relationship
with  franchisees.  Several  states' laws require the Company to renew its state
franchise registration annually. If the Company does not maintain required state
registrations, it must terminate franchise sales activity in those states. While
the  Company  has  suspended  franchise  sales  activity  in the past until such
registrations  were properly renewed,  the Company believes that it is currently
in material  compliance with such laws.  Changes in franchise laws could require
the Company to make material  alterations  to its core  business.  Additionally,
failure to comply  with  franchise  or other laws could  subject  the Company to
significant  fines  and  penalties  and have a  material  adverse  effect on the
Company's business, financial condition and results of operations.

                                       17
<PAGE>
     During the past several years, a number of states have interpreted existing
laws as  requiring  out-of-state  companies  which  generate  income by granting
franchises  in the state to file  returns and pay taxes in the state.  Following
this trend, other states have adopted laws specifically designed to impose taxes
on  out-of-state   companies  granting  franchises  in  the  state.  While  many
companies, along with many tax practitioners and commentators,  contend that the
application  of such laws violates the federal  constitution,  the United States
Supreme Court has not yet ruled on the issue  directly.  If the  application  of
these  laws is  constitutional,  if the  laws  apply  to the  activities  of the
Company,  or  if  the  states'   interpretation  of  existing  laws  is  applied
retroactively,  any resulting  taxes and  associated  interest and penalties for
which the  Company  may be liable  could have a material  adverse  effect on the
Company.

     RISKS OF INTERNATIONAL  OPERATIONS.  During the fiscal year ended March 31,
2002, approximately 1% of the Company's revenues were derived from international
operations. The Company's international operations are subject to certain risks,
including adverse  developments in foreign political and economic  environments,
varying government  regulations,  including regulations regarding the protection
of  trademarks  and  the  offer  and  sale  of  franchises,   foreign   currency
fluctuations and potential adverse tax  consequences.  There can be no assurance
that any of these factors,  especially if the Company is successful in expanding
its  international  presence,  will not have a  material  adverse  effect on the
Company's business, financial condition and results of operations.

     Developments  in any  of  these  areas,  which  are  more  fully  described
elsewhere in "Item 1 - Description of Business" which is incorporated  into this
section by  reference,  could cause the Company's  results to differ  materially
from results that have been or may be projected by or on behalf of the Company.

     The Company  cautions that the foregoing  list of important  factors is not
exclusive.  The  Company  does  not  undertake  to  update  any  forward-looking
statement that may be made from time-to-time by or on behalf of the Company.

                                       18
<PAGE>
ITEM 7. FINANCIAL STATEMENTS

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SUPPORTING SCHEDULES

                                                                            Page
                                                                            ----

Report of Independent Certified Public Accountants..........................  22

Financial Statements:

  Consolidated Balance Sheet as of March 31, 2002...........................  23

  Consolidated Statements of Earnings for the Years Ended
   March 31, 2001 and 2002..................................................  25

  Consolidated Statements of Shareholders' Equity for the Years
   Ended March 31, 2001 and 2002............................................  26

  Consolidated Statements of Cash Flows for the Years Ended
   March 31, 2001 and 2002..................................................  27

  Notes to Consolidated Financial Statements................................  28

  Supporting Schedules:

   Schedule II - Valuation and Qualifying Accounts..........................  57

    Schedules  other than those listed above have been omitted  because they are
either not required,  inapplicable,  or the required  information is included in
the Consolidated Financial Statements or notes thereto.

                                       19
<PAGE>
               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



Board of Directors
Rent-A-Wreck of America, Inc.

We have audited the accompanying  consolidated  balance sheet of Rent-A-Wreck of
America,  Inc. (a Delaware  corporation)  and subsidiaries as of March 31, 2002,
and the related  consolidated  statements of earnings,  shareholders' equity and
cash  flows  for the  years  ended  March 31,  2002 and  2001.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.  We believe our audits  provide a reasonable
basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the consolidated  financial position of Rent-A-Wreck of
America,  Inc.  and  subsidiaries,  as of March 31, 2002,  and the  consolidated
results  of their  operations  and their  consolidated  cash flows for the years
ended March 31, 2002 and 2001 in conformity with accounting principles generally
accepted in the United States of America.

We have also audited Schedule II for the years ended March 31, 2002 and 2001. In
our opinion,  this schedule,  when considered in relation to the basic financial
statements taken as a whole,  presents  fairly,  in all material  respects,  the
information therein.


/s/ Grant Thornton LLP


Baltimore, Maryland
June 25, 2002

                                       20
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                 MARCH 31, 2002

                                     ASSETS

CURRENT ASSETS:
  Cash and Cash Equivalents .................................       $   447,991
  Restricted Cash ...........................................           600,000
  Accounts Receivable, net of allowance
    for doubtful accounts of $1,014,333:
      Continuing License Fees and
        Advertising Fees ....................................           389,417
      Current Portion of Notes Receivable ...................           525,158
      Current Portion of Direct Financing
        Leases ..............................................            22,163
      Insurance Premiums Receivable .........................            78,100
      Vehicle Rental Operation ..............................            92,413
      Other .................................................           203,931
  Prepaid Expenses and Other ................................           199,370
  Prepaid Income Tax Expense ................................           373,647
  Deferred Taxes ............................................           501,216
                                                                    -----------

    TOTAL CURRENT ASSETS ....................................         3,433,406
                                                                    -----------


PROPERTY AND EQUIPMENT:
  Furniture .................................................            99,676
  Computer Hardware and Software ............................           564,169
  Machinery and Equipment ...................................            71,288
  Leasehold Improvements ....................................            28,417
  Vehicles ..................................................         1,242,149
                                                                    -----------
                                                                      2,005,699
  Less:  Accumulated Depreciation and
         Amortization .......................................          (578,793)
                                                                    -----------

    NET PROPERTY AND EQUIPMENT ..............................         1,426,906
                                                                    -----------

OTHER ASSETS:
  Intangible Assets, net of accumulated
    amortization of $175,584 ................................           175,976
  Long-term Portion of Notes and Direct Financing Lease
    Receivables, net of allowance of $183,180 ...............            52,804
                                                                    -----------

                                                                        228,780
                                                                    -----------

    TOTAL ASSETS ............................................       $ 5,089,092
                                                                    ===========

    The accompanying notes are an integral part of this financial statement.

                                       21
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                 MARCH 31, 2002

                      LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts Payable and Accrued Expenses ..........................   $  793,497
  Dividends Payable ..............................................       21,687
  Current Portion of Vehicle Financing Payable ...................      100,008
  Insurance Loss Reserves ........................................      621,905
                                                                     ----------

    TOTAL CURRENT LIABILITIES ....................................    1,537,097
                                                                     ----------
LONG-TERM LIABILITIES:

  Vehicle Financing Payable, net of current portion ..............      355,560
  Deferred Tax Liability .........................................      107,813
                                                                     ----------

    TOTAL LONG-TERM LIABILITIES ..................................      463,373
                                                                     ----------

    TOTAL LIABILITIES ............................................    2,000,470
                                                                     ----------

COMMITMENTS AND CONTINGENCIES ....................................           --

SHAREHOLDERS' EQUITY:

  Convertible Cumulative Series A Preferred Stock,
    $.01 par value; authorized 10,000,000 shares;
    issued and outstanding 1,084,375 shares
    (aggregate liquidation preference $867,500) ..................       10,844
  Common Stock, $.01 par value; authorized
    25,000,000 shares; issued and
    outstanding 4,205,296 shares .................................       42,053
  Additional Paid-In Capital .....................................    1,906,773
  Retained Earnings ..............................................    1,128,952
                                                                     ----------

    TOTAL SHAREHOLDERS' EQUITY ...................................    3,088,622
                                                                     ----------

    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ...................   $5,089,092
                                                                     ==========

    The accompanying notes are an integral part of this financial statement.

                                       22
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF EARNINGS
                   FOR THE YEARS ENDED MARCH 31, 2001 AND 2002

                                                        2001           2002
                                                    -----------    -----------
REVENUES:
  Initial License Fees ..........................   $ 1,019,451    $ 1,010,906
  Continuing License Fees .......................     3,397,818      3,242,231
  Advertising Fees ..............................     1,006,522        933,512
  Insurance Premiums ............................     1,205,181      1,236,815
  Vehicle Rental Operations .....................        64,856        409,799
  Other .........................................       152,517        136,005
                                                    -----------    -----------
                                                      6,846,345      6,969,268
                                                    -----------    -----------
EXPENSES:
  Salaries, Consulting Fees, and
    Employee Benefits ...........................       995,086      1,309,567
  Advertising and Promotion .....................     1,458,038      1,429,458
  Insurance Underwriting Expenses ...............     1,101,077        908,110
  Sales and Marketing ...........................       311,128        476,495
  Direct Expenses - Rental Operations ...........         6,396        242,559
  Repurchase of Previously Granted Options ......     1,234,560             --
  General and Administrative ....................     1,217,925      1,413,909
  Depreciation and Amortization .................       177,200        279,327
                                                    -----------    -----------
                                                      6,501,410      6,059,425
                                                    -----------    -----------

      OPERATING INCOME ..........................       344,935        909,843

OTHER INCOME (EXPENSE)
  Interest Income ...............................       167,113        172,323
  Interest Expense ..............................       (25,403)       (32,390)
                                                    -----------    -----------
                                                        141,710        139,933
                                                    -----------    -----------

      INCOME BEFORE INCOME TAX EXPENSE ..........       486,645      1,049,776

INCOME TAX EXPENSE ..............................       223,623        373,050
                                                    -----------    -----------

      NET INCOME ................................   $   263,022    $   676,726

DIVIDENDS ON CONVERTIBLE CUMULATIVE
 PREFERRED STOCK ................................       (88,400)       (87,987)
                                                    -----------    -----------
NET INCOME AFTER DIVIDENDS ON
  CONVERTIBLE CUMULATIVE PREFERRED STOCK ........   $   174,622    $   588,739
                                                    ===========    ===========
EARNINGS PER SHARE

  Basic .........................................   $       .04    $       .14
                                                    ===========    ===========
Weighted average common shares - basic ..........     4,065,680      4,310,019
                                                    ===========    ===========
  Diluted .......................................   $       .04    $       .12
                                                    ===========    ===========
Weighted average common shares - diluted ........     4,355,823      5,395,362
                                                    ===========    ===========

   The accompanying notes are an integral part of these financial statements.

                                       23
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                   FOR THE YEARS ENDED MARCH 31, 2001 AND 2002

<TABLE>
<CAPTION>
                                        Preferred Stock             Common Stock          Additional
                                    -----------------------    -----------------------      Paid-in       Retained
                                       Shares       Amount        Shares       Amount       Capital       Earnings         Total
                                    -----------    --------    -----------    --------    -----------    -----------    -----------
<S>                                 <C>            <C>         <C>            <C>         <C>            <C>            <C>
Balance, April 1, 2000 ...........    1,105,000      11,050      3,568,217      35,682      1,423,181        365,591      1,835,504

  Retirement of common stock .....           --          --       (110,000)     (1,100)      (192,894)            --       (193,994)

  Exercise of stock options,
    warrants, and related tax
    benefit ......................           --          --        927,279       9,273      1,037,422             --      1,046,695

  Preferred dividends paid
    ($.08 per share) .............           --          --             --          --             --        (88,400)       (88,400)

  Net income .....................           --          --             --          --             --        263,022        263,022
                                    -----------    --------    -----------    --------    -----------    -----------    -----------

Balance, March 31, 2001 ..........    1,105,000      11,050      4,385,496      43,855      2,267,709        540,213      2,862,827

  Retirement of common stock .....           --          --       (180,200)     (1,802)      (325,049)            --       (326,851)

  Retirement of preferred stock ..      (20,625)       (206)            --          --        (35,887)            --        (36,093)

  Preferred dividends paid
    ($.08 per share) .............           --          --             --          --             --        (87,987)       (87,987)

  Net income .....................           --          --             --          --             --        676,726        676,726
                                    -----------    --------    -----------    --------    -----------    -----------    -----------

Balance, March 31, 2002 ..........    1,084,375    $ 10,844      4,205,296    $ 42,053    $ 1,906,773    $ 1,128,952    $ 3,088,622
                                    ===========    ========    ===========    ========    ===========    ===========    ===========
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       24
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                   FOR THE YEARS ENDED MARCH 31, 2001 AND 2002

<TABLE>
<CAPTION>
                                                                    2001           2002
                                                                -----------    -----------
<S>                                                             <C>            <C>
Increase (decrease) in cash and cash equivalents

Cash flows from operating activities:
  Net Income ................................................   $   263,022    $   676,726
  Adjustments to reconcile net income to net cash provided
    by (used in) operating activities:
      Depreciation and amortization .........................       177,200        279,327
      Deferred income taxes .................................       262,391        (86,934)
      Tax benefit for exercise of stock options
        and warrants ........................................       149,829             --
      Loss (gain) on disposal of property and equipment .....       (13,782)         8,528
      Provision for doubtful accounts .......................        22,170        343,090
Changes in assets and liabilities:
      Accounts and notes receivable .........................       129,910       (696,163)
      Prepaid expenses and other ............................        18,234        (33,559)
      Prepaid income taxes ..................................      (524,155)       150,508
      Accounts payable and accrued
        expenses ............................................      (416,250)      (149,881)
      Income taxes payable ..................................      (338,550)            --
      Insurance loss reserves ...............................       131,252        111,578
                                                                -----------    -----------

      Net cash (used in) provided by operating activities ...      (138,729)       603,220
                                                                -----------    -----------
Cash flows from investing activities:
  (Increase) decrease in restricted cash ....................      (146,547)       292,061
  Proceeds from sale of property and equipment ..............        54,620        190,294
  Acquisition of property and equipment .....................      (510,182)    (1,191,804)
  Additions to intangible assets ............................       (21,261)        (4,598)
                                                                -----------    -----------

      Net cash used in investing activities .................      (623,370)      (714,047)
                                                                -----------    -----------

Cash flows from financing activities:
  Increase in vehicle financing payable .....................            --        455,568
  Net proceeds from exercise of stock options and warrants ..       896,866             --
  Repurchase and retirement of common stock .................      (193,994)      (326,851)
  Repurchase and retirement of preferred stock ..............            --        (36,093)
  Preferred dividends paid ..................................       (88,400)       (87,987)
                                                                -----------    -----------

      Net cash provided by financing activities .............       614,472          4,637
                                                                -----------    -----------

      Net decrease in cash and cash equivalents .............      (147,627)      (106,190)

Cash and cash equivalents at beginning of year ..............       701,808        554,181
                                                                -----------    -----------

Cash and cash equivalents at end of year ....................   $   554,181    $   447,991
                                                                ===========    ===========
Supplemental disclosure of cash flow information:
  Interest paid .............................................   $    25,403    $    32,390
  Income taxes paid .........................................   $   673,709    $   353,339
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       25
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2002


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION AND NATURE OF BUSINESS

     The consolidated financial statements presented herein include the accounts
of  Rent-A-Wreck  of  America,   Inc.  ("RAWA,   Inc.")  and  its  wholly  owned
subsidiaries, Rent-A-Wreck One Way, Inc,. ("RAW One Way"), Consolidated American
Rental Insurance Company,  Ltd ("CAR Insurance") and Bundy American  Corporation
("Bundy"), and Bundy's subsidiaries, Rent-A-Wreck Leasing, Inc. ("RAW Leasing"),
and  Priceless  Rent-A-Car,  Inc.  ("Priceless"),  and  Priceless's  subsidiary,
Priceless Rent-A-Car of Maryland, Inc. ("Rental Operations").

     All of the above  entities are  collectively  referred to as the  "Company"
unless the context  provides or requires  otherwise.  All material  intercompany
balances and transactions have been eliminated.

     The Company markets and administers the Rent-A-Wreck and PRICELE$$  vehicle
rental  franchise  programs  throughout  the United  States,  as well as various
foreign countries.  The Company also provides insurance coverage on the vehicles
of some of its  franchisees.  The Company's  operations  are subject to numerous
federal,  state,  local and  foreign  laws,  including  federal  and state  laws
governing the offer and sale of franchises and relationship with franchisees.

RESTRICTED CASH

     Restricted cash includes a deposit of $600,000  securing a letter of credit
issued by Merrill Lynch in connection with the Company's CAR Insurance program.

ACCOUNTS AND NOTES RECEIVABLE

     Substantially  all  receivables  derived  from  franchises  granted  by the
Company  are  personally   guaranteed  by  the  officers  or  directors  of  the
franchisees.  Initial  license fees are collected upon execution of the contract
or financed,  generally  over a twelve-month  period with interest.  The Company
maintains  an  allowance   for  doubtful   accounts   based  upon  the  expected
collectibility of all accounts receivable,  which takes into consideration prior
account loss experience and creditworthiness of the franchisees.

                                       26
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-CONTINUED
                                 MARCH 31, 2002


PROPERTY AND EQUIPMENT

     Depreciation  and  amortization  are provided for in amounts  sufficient to
relate the cost of depreciable assets to operations over their estimated service
lives,  utilizing  primarily the  straight-line  method for financial  statement
purposes.  Accelerated  methods of depreciation  and  amortization  are used for
income  tax  purposes.   The  estimated   service  lives  used  in   determining
depreciation for financial reporting are as follows:

     Furniture                                           3 years
     Computer Hardware and Software                    3-5 years
     Machinery and Equipment                             5 years
     Leasehold Improvements                            3-7 years
     Vehicles                                            2 years

INTANGIBLE ASSETS

     Intangible  assets  include the value of trademarks  which are amortized on
the  straight-line  method to operations  over periods ranging from ten to forty
years. The  recoverability  of carrying values of intangible assets is evaluated
on  a  recurring  basis.  The  primary  indicators  are  current  or  forecasted
profitability  of the related  business.  There have been no  adjustments to the
carrying values of intangible assets resulting from these evaluations.

INSURANCE RESERVES

     The Company recognizes a liability for re-insured auto claims at the time a
claim is reported to the Company by the third party  administrator.  The initial
claim  reserve is  established  based on  information  relating  to the  nature,
severity  and the cost of  similar  claims.  The  Company  provides  for  claims
incurred, but not reported,  based on the Company's past claims experience.  The
liability recorded may be more or less than the actual amount of the claims when
they are submitted and paid. Changes in the liability are charged or credited to
operations as the estimates are revised.

                                       27
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-CONTINUED
                                 MARCH 31, 2002


INCOME TAXES

     Income tax  liabilities  and assets are  recognized  for the  deferred  tax
consequences of temporary  differences or carry-forwards that will result in net
taxable income or deductible amounts in future periods.  Deferred tax expense or
benefit  is the result of changes  in the net asset or  liability  for  deferred
taxes.

REVENUE RECOGNITION

     INITIAL LICENSE, ADVERTISING AND CONTINUING LICENSE FEES

     Revenues are composed primarily of initial license fees, continuing license
fees, and advertising fees. Franchisees have certain rights to use the Company's
trademarked  names,  "Rent-A-Wreck" and "PRICELE$$",  in a specified  geographic
territory.  Although the franchisee has continuing  access to the use of certain
of the Company's resources, experience and knowledge, the Company recognizes the
initial  license fee as revenue upon  completion of an initial  orientation  and
training course since this represents  substantially all of the initial services
required  to be  rendered  by  the  Company  in  accordance  with  the  specific
provisions  of  SFAS  No.  45  "Accounting  for  Franchise  Fee  Revenue".  Many
franchisees  have had prior  business  experience;  consequently,  they  require
little  assistance in  commencing  business.  There is no obligation  beyond the
initial training as related to the initial license fee.  Continuing  license and
advertising fees are recognized as revenues on a monthly basis over the contract
year based primarily on franchisees' reported gross revenues or fleet size.

     DIRECT FINANCING LEASES

     The Company  offers,  on a selective  basis to qualified  franchisees,  the
opportunity to finance vehicles for their rental fleets under a direct financing
program.  The  Company  recognizes  the  related  interest,   documentation  and
administrative  revenues  as they are  received.  The Company  accounts  for the
financing of the vehicles with the franchisees as direct  financing  leases (see
Note 3).

     VEHICLE RENTAL OPERATIONS

     The Company rents vehicles to the general  public.  Revenues are recognized
over the term of the rental.

                                       28
<PAGE>
                  RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2002


     INSURANCE PREMIUMS

     Insurance premiums are recognized ratably over the term of the coverage.

ADVERTISING

     Advertising   costs  are  expensed  as  incurred  and  are   classified  as
advertising and promotion expenses.

STOCK-BASED COMPENSATION

     The Company accounts for stock-based employee compensation  arrangements in
accordance  with  Accounting  Principles  Board Opinion No. 25,  "Accounting for
Stock  Issued to  Employees"  and complies  with the  disclosure  provisions  of
Statements  of Financial  Accounting  Standards No. 123,  "Accounting  for Stock
Based  Compensation"  (SFAS No. 123).  Compensation  costs for stock options are
measured as the  excess,  if any, of the quoted  market  price of the  Company's
stock at the date of grant  over the  amount to be paid to  acquire  the  stock.
Compensation  cost for stock awards is recorded based on the quoted market value
of the Company's stock at the time of grant.

EARNINGS PER COMMON SHARE

     Basic  earnings per share amounts have been  computed  based on the average
number of common shares  outstanding.  Diluted  earnings per share  reflects the
increase in average common shares outstanding that would result from the assumed
exercise of  outstanding  options and warrants and the  conversion  of preferred
stock,   calculated   using  the  treasury   stock   method,   unless  they  are
anti-dilutive.

STATEMENT OF CASH FLOWS

     For purposes of the  statement  of cash flows,  the Company  considers  all
highly liquid financial instruments purchased with a maturity of three months or
less to be cash equivalents.

ESTIMATES

     In preparing financial statements in conformity with accounting  principles
generally  accepted in the United  States of America,  management is required to

                                       29
<PAGE>
                  RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2002


ESTIMATES-CONTINUED

make estimates and  assumptions  that affect the reported  amounts of assets and
liabilities,  the  disclosure  of  contingent  assets and reported  revenues and
expenses. Actual results could differ from those estimates.

RECLASSIFICATIONS

     Certain  prior year amounts have been  reclassified  to conform to the 2002
presentation.

2.   CAPTIVE INSURANCE COMPANY

     In March  1997,  Rent-A-Wreck  of  America,  Inc.  formed  a wholly  owned,
Bermuda-based  captive  insurance   subsidiary,   Consolidated  American  Rental
Insurance Company,  LTD ("CAR Insurance"),  to provide automobile  liability and
physical damage insurance for vehicles owned by participating  franchisees.  The
Company's  insurance  operations are subject to the laws and  regulations in the
jurisdictions   in  which  they  are   chartered   and  do  business.   American
International   Group  ("AIG")  supports  the  operations  and  provides  policy
fronting, excess insurance coverage, and an aggregate stop loss protection above
$1,300,000.  CAR Insurance  reinsures AIG's coverage subject to a per loss limit
of $100,000 per person and $300,000 per accident.

     As  security  for the  reinsurance  arrangement  with AIG,  the Company has
obtained a letter of credit from  Merrill  Lynch for  $1,000,000  as part of its
line of credit arrangement. This letter of credit is secured by a certificate of
deposit of $600,000,  and a first lien on all the Company's assets.  Funds drawn
against  the  letter of credit  bear an  interest  rate of 2.9% plus the  30-day
Dealer  Commercial  Paper Rate published in the Wall Street Journal,  based upon
actual days elapsed over a 360-day year.  The  effective  rate at March 31, 2002
was 4.85%.  As of March  2002,  no amounts  have been drawn  under the letter of
credit.

                                       30
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2002


3.   VEHICLE FINANCING PAYABLE

     The Company recently opened two stores under its trademark,  PRICELE$$,  in
conjunction with its Rental Operations segment.  These stores are located in the
state of Maryland. In October 2001, the Company obtained a line of credit in the
amount of $500,000,  which is part of the $1,500,000 line of credit with Merrill
Lynch, to purchase  vehicles.  This line of credit  ($1,500,000) is secured by a
certificate  of deposit of $600,000 held by Merrill  Lynch,  and a first lien on
all the  Company's  assets.  For the year  ended  March 31,  2002,  the  Company
borrowed $455,568 from this line of credit  ($500,000),  which is payable over a
5-year term in equal monthly principal payments of $8,334 starting January 2002.
This line of credit  ($500,000)  bears an interest rate of 2.75% plus the 30-day
Dealer  Commercial  Paper Rate published in the Wall Street Journal,  based upon
actual days elapsed over a 360-day year.  The  effective  rate at March 31, 2002
was 4.7%.

     Aggregate  maturities of the vehicle  financing  payable over the next five
years are as follows:

                   2003                      $100,008
                   2004                       100,008
                   2005                       100,008
                   2006                       100,008
                   2007                        55,536

The vehicle financing  payable contains  restrictive  covenants  covering ratios
relating to minimum  tangible net worth and a fixed charge  coverage  ratio,  as
well as other customary covenants,  representations and warranties and events of
default.  As of March 31, 2002, the Company was not in compliance with the fixed
charge  coverage  ratio  and  obtained  a waiver of its  noncompliance  from the
lender.

                                       31
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2002


4.   DIRECT FINANCING LEASES

     The components of the Company's net investment in direct  financing  leases
as of March 31, 2002 are as follows:


Total Minimum Lease Payments to be Received ........   $60,461
  Less Amounts Representing
    Administration Costs Included in
    Total Minimum Lease Payments ...................     1,204
                                                       -------

Minimum Lease Payment Receivable ...................    59,257

  Less Allowance for Uncollectibles ................    15,200
                                                       -------

Net Minimum Lease Payments Receivable ..............    44,057

  Less Unearned Income .............................     8,575
                                                       -------

Net Investment in Direct Financing Leases ..........   $35,482
                                                       =======

  Current Portion ..................................   $22,163
  Non-Current Portion ..............................    13,319
                                                       -------

Net Investment in Direct Financing Leases ..........   $35,482
                                                       =======

     The total minimum lease payments  receivable in succeeding fiscal years are
as follows:

     2003 .........................  $34,319
     2004..........................   21,060
     2005..........................    5,082
                                     -------
       Total                         $60,461
                                     =======

                                       32
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2002


5.   ACCOUNTS PAYABLE AND ACCRUED EXPENSES

     Accounts payable and accrued expenses consist of the following at March 31,
2002:

Accounts Payable.........................      $  198,735
Payroll..................................          46,068
Commissions and Royalties................         102,624
Professional Fees........................         186,201
Other....................................         259,869
                                               ----------
                                               $  793,497
                                               ==========

                                       33
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2002

6.   EARNINGS PER SHARE

     A reconciliation of the numerators and denominators used in the computation
of basic and diluted  earnings  per share for the years ended March 31, 2001 and
2002 is as follows:

                                   2001         2002
                                ----------   ----------
BASIC EPS COMPUTATION

Numerator:
 Net income applicable to
  common shares                 $  174,622   $  588,739

Denominator:
 Weighted average common
  shares                         4,065,680    4,310,019
                                ----------   ----------

Basic EPS                       $      .04   $      .14
                                ==========   ==========
DILUTED EPS COMPUTATION

Numerator:
 Net income applicable to
  common shares                 $  174,622   $  588,739
 Dividends on convertible
  preferred stock                       --       87,987
                                ----------   ----------
                                   174,622      676,726
                                ----------   ----------
Denominator
 Weighted average common
  shares                         4,065,680    4,310,019
 Weighted average convertible
  preferred stock                       --    1,084,375
 Weighted average options
  and warrants                     290,143          968
                                ----------   ----------
                                 4,355,823    5,395,362

Diluted EPS                     $      .04   $      .12
                                ==========   ==========

Preferred  shares  convertible  into  1,105,000  shares  of  common  stock  were
outstanding  during  fiscal  2001 but were not  included in the  computation  of
diluted  EPS because the effect of doing so is  antidilutive.  Stock  options to
purchase 10,000 shares of common stock were  outstanding  during fiscal 2002 but
were not included in the  computation of diluted EPS because the effect of doing
so is antidilutive.

                                       34
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2002


7.   INCOME TAXES

     The  provision for income taxes for the years ended March 31, 2001 and 2002
consists of the following:

                                                    2001         2002
                                                 ---------    ---------
Currently payable
  State and other income taxes ...............   $  36,170    $  87,560
  Federal income taxes .......................     (74,937)     372,424
                                                 ---------    ---------
      Total currently payable
        (receivable) .........................     (38,767)     459,984

  Deferred ...................................     262,390      (86,934)
                                                 ---------    ---------

        Total ................................   $ 223,623    $ 373,050
                                                 =========    =========

     The  Company's  provision  for income taxes  differs  from the  anticipated
United States federal statutory rate. Differences between the statutory rate and
the Company's provision are as follows:

                                                 2001       2002
                                                -----      -----
Federal taxes at statutory rate ......          34.0%      34.0%
State taxes, net .....................            6.4        2.8
Non-deductible expense ...............            2.5        1.4
Other ................................            3.1       (2.7)
                                                -----      -----
    Total ............................           46.0%      35.5%
                                                =====      =====

                                       35
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2002


7.   INCOME TAXES-CONTINUED

     The   significant   components  of  the  deferred   income  tax  asset  and
(liability), stated by source of the difference between financial accounting and
tax bases as of March 31, 2002, are as follows:


Deferred tax assets:
  Reserve for doubtful accounts .........   $ 474,215
  Other .................................      27,001
                                            ---------
                                              501,216
Deferred tax liabilities:
  Depreciation and amortization .........    (107,813)
                                            ---------
Net deferred tax asset ..................   $ 393,403
                                            =========

                                       36
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2002


8.   COMMITMENTS AND CONTINGENCIES

     LEASE COMMITMENTS

     On November  19, 1999,  the Company  moved its  corporate  offices to a new
location,  which is owned by KA Real Estate  Associates,  LLC,  ("KA") a related
party. The operating lease, which expires on October 31, 2006, has the following
minimum annual lease payments:

         March 31,
         ---------
         2003.....................  $121,670
         2004.....................   125,320
         2005.....................   129,080
         2006.....................    76,598
                                    --------
           Total..................  $452,668
                                    ========

     Total rent expense for the years ended March 31, 2001 and 2002 was $114,087
and $118,126, respectively, of which $114,087 and $118,126, respectively, all of
which was to a related party (see Note 8).

     LITIGATION

     The  Company  is party  to  routine  legal  proceedings  incidental  to its
business from time to time.  Certain claims,  suits and complaints  arise in the
ordinary course of business and may be filed against the Company. Based on facts
now known to the Company,  management  believes all such matters are  adequately
provided  for,  covered by insurance  or, if not so covered or provided for, are
without  merit,  or involve such amounts that would not have a material  adverse
affect the  consolidated  results of  operations  or  financial  position of the
Company.

     In April,  2001,  the Company and one of its  subsidiaries,  Bundy American
Corporation,  Inc., were impleaded into a personal injury lawsuit, pending since
1992,  involving  injuries to a pedestrian  claiming to have been  involved in a
motor vehicle accident with an auto owned and rented by an independent  licensee
of Rent A Wreck.  The plaintiff seeks damages  totaling $9 million.  The Company
believes it has several meritorious defenses and believes the claims against the
Company are without  merit.  The Company is  vigorously  defending  the lawsuit,
which  has a  tentative  trial  date of  July  22,  2002,  subject  to  possible
adjournment.  The Company  intends to move for  dismissal  of the lawsuit at the
appropriate time(s) and/or, if necessary, try the case to conclusion, and pursue
any appeals as may be necessary to sustain its position.

                                       37
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2002


9.   RELATED PARTY TRANSACTIONS

     The Company entered into a Management  Agreement with K.A.B., Inc. ("KAB"),
a management consulting group controlled by and affiliated with Kenneth L. Blum,
Sr.,  Chairman  of the Board of  Directors  and Chief  Executive  Officer of the
Company. As a part of this agreement,  KAB provides direct overall management of
the  Company's  operations.  Total annual fees paid to KAB under the  management
agreement for each of the years ended March 31, 2001 and 2002 were $300,000.  On
January 19, 2000, the Company's Board of Directors reached an agreement with KAB
to  extend  the  term of its  Management  Agreement  with the  Company  for five
additional years through June 30, 2008 on its present terms. In fiscal 2000, the
Board also  authorized  the  repurchase  of,  and the  Company  entered  into an
agreement  to  repurchase,  500,000  options,  originally  issued  to  KAB,  for
$625,000. On September 21, 2000, the Company's Board of Directors authorized the
repurchase  of, and the Company  entered  into an agreement  to  repurchase,  an
additional  957,721 options  originally  issued to KAB and later  transferred to
Kenneth L. Blum, Jr. and Robin Cohn,  for  $1,234,560.  Robin Cohn  subsequently
transferred  her options to her husband,  Alan Cohn. On September 25, 2000,  the
remaining  617,279  options for the Company's  common stock,  which were held by
Kenneth L. Blum, Jr. and Alan Cohn, were exercised at $1.00 per share.

     On November 1, 1999, the Company  entered into a lease agreement with KA, a
related  party of KAB, to lease  approximately  9,100  square feet of  executive
office space,  which  expires on October 31, 2006.  The Company paid KA $118,126
and $114,087 for the years ended March 31, 2002 and 2001, respectively.

     On  January  19,  2000,  the  Board of  Directors  authorized  expenditures
totaling $250,000 for the development by American Business  Information Systems,
Inc.  ("ABIS") of a  centralized  software  reporting  package to be used by the
Company's  franchisees.  Through  March 31, 2002,  the Company paid  $218,848 to
ABIS, a related party of KAB,  under this  arrangement.  Through March 31, 2001,
$177,255 had been paid to ABIS.

     The Company has retained Richter Investment Corp. ("Richter"), an affiliate
of William  L.  Richter  (a  director  of the  Company),  to serve as  exclusive
financial advisor for the Company. For its role as financial advisor,  Richter's
fees will be based upon  transactions  completed,  as defined in the  agreement.
Richter received $47,912 for its role in connection with the exercise of options
for the year ended March 31, 2001.

                                       38
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2002


9.   RELATED PARTY TRANSACTIONS-CONTINUED


     Effective  April 1, 1999,  Richter  receives  an annual  consulting  fee of
$30,000.  In the opinion of  management,  the terms of the Company's  agreements
with  Richter,  KAB and ABIS taken as a whole are at least as  favorable  to the
Company as could be obtained from third parties.

10.  COMMON STOCK, STOCK OPTION PLANS AND COMMON STOCK WARRANTS

     COMMON STOCK

     In the year ended  March 31,  2001,  the  Company  repurchased  and retired
110,000  shares of its  common  stock at a cost of  $193,994.  In the year ended
March 31, 2002, the Company repurchased and retired 180,200 shares of its common
stock at a cost of $326,851.

     OPTIONS

     Options and warrants to acquire  shares of the  Company's  common stock are
granted at a value not less than 100% of the fair market value of the underlying
stock on the date of issuance.

     The Company issued stock options to acquire  2,250,000 shares of its common
stock to KAB in conjunction with its management agreement. During the year ended
March 31,  1996,  KAB transferred  (a) 483,333  and 604,167  vested and unvested
options,  respectively, to each of Kenneth L. Blum Jr., the Company's president,
and Mr.  Blum's  sister,  Robin Cohn;  (b) 20,000 and 25,000 vested and unvested
options,  respectively, to Richter, and (c)13,333 and 16,667 vested and unvested
options,  respectively,  to William L. Richter.  During the year ended March 31,
2000, Robin Cohn transferred 1,087,500 options to Alan Cohn, Ms. Cohn's husband.
In  April  1996,  the  Company  approved  the  extension  of the term of the KAB
Management Agreement for five years expiring June 30, 2003, the extension of the
options originally  granted to KAB by five years (with a corresponding  delay in
the fixed  vesting  date until July 1,  2002),  and the  addition  of a cashless
exercise  feature.  The  unvested  options were  subject to an  acceleration  of
exercisability upon achievement of certain financial stock targets. Such targets
were achieved  during the year ended March 31, 1999,  and at March 31, 1999, all

                                       39
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2002


10.  COMMON STOCK, STOCK OPTION PLANS AND COMMON STOCK WARRANTS - CONTINUED

options were fully vested. On January 19, 2000, the Board of Directors  approved
the extension of the term of the KAB Management Agreement for an additional five
years expiring June 30, 2008.  The Board also  authorized the repurchase of, and
the Company  entered  into an agreement to  repurchase,  500,000  options for an
aggregate price of $625,000.

     On July 24,  2000,  William L.  Richter,  Richter and Kenneth L. Blum,  Jr.
exercised 30,000,  45,000, and 100,000 options,  respectively.  On September 21,
2000, the Board  authorized  the repurchase of, and the Company  entered into an
agreement  to  repurchase,  449,449  options from Mr.  Kenneth L. Blum,  Jr. and
508,272  options  from  Alan  Cohn for an  aggregate  price of  $1,234,560.  The
repurchase has been included in the  consolidated  statement of earnings for the
year ended March 31, 2001. On September 21, 2000,  Kenneth L. Blum and Alan Cohn
exercised  their remaining  617,279 options at $1.00 per share,  and the Company
received $617,279.

     On November 2, 2000,  the  Company's  Stock Option Plan was approved by the
Company's  shareholders  pursuant to which the Board of Directors of the Company
may grant  stock  options to provide  incentives  to  outside  directors  of the
Company.  Accordingly,  in November 2000,  the Board  authorized and the Company
granted to Alan  Aufzien and Thomas  Volpe,  the  Company's  outside  directors,
options to purchase  30,000 and 5,000  shares,  respectively,  of the  Company's
common stock at $1.64,  the then current market price,  solely in their capacity
as directors. On November 20, 2001, the Company granted to both Alan Aufzien and
Thomas Volpe options to purchase  10,000  shares of the  Company's  common stock
(5,000 each) at $1.75. The Company is planning to grant each of Alan Aufzien and
Thomas Volpe options to purchase  5,000 shares of the Company's  common stock on
an annual basis. The fair value of each option grant is estimated on the date of
grant,  using  the  Black-Scholes  options  pricing  model  with  the  following
weighted-average  assumptions used for grants issued in 2002 and 2001: risk-free
interest  rate  of  4.3%  and  6.4% in 2002  and  2001,  respectively;  expected
volatility of 61.0% and 48.5% in 2002 and 2001, respectively; and expected lives
of 5 and 7 years in 2002 and 2001, respectively.

                                       40
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2002


10.  COMMON STOCK, STOCK OPTION PLANS AND COMMON STOCK WARRANTS - CONTINUED

     The following  table  summarizes  option activity for the years ended March
31, 2001 and 2002:

                                                        2001          2002
                                                      Weighted      Weighted
                                                       Average       Average
                            2001          2002        Exercise      Exercise
                           Shares        Shares         Price         Price
                         ----------    ----------    ----------    ----------
Options outstanding at
  beginning of year       1,750,000        35,000       $1.06         $1.64
Options exercised          (792,279)           --        1.01            --
Options granted              35,000        10,000        1.64          1.75
Options repurchased        (957,721)           --        1.11            --
Options expired                  --            --          --            --
                         ----------    ----------
Options outstanding
  and exercisable at
  end of year                35,000        45,000       $1.64         $1.66

Option price range for
  exercised shares            $1.64 to $1.75

Weighted-average fair
  value of options
  granted during
  the year                     $.98         $1.00

     The following table summarizes options outstanding at March 31, 2002:

                                                        Weighted Average
  Number          Exercise       Weighted Average          Remaining
Outstanding        Price          Exercise Price        Contractual Life
-----------        -----          --------------        ----------------

  45,000       $1.64 to $1.75         $1.66                   8.60

                                       41
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2002


10.  COMMON STOCK, STOCK OPTION PLANS AND COMMON STOCK WARRANTS - CONTINUED

The  following  table  presents  the pro forma net income and earnings per share
that would have been recorded had compensation cost been recognized based on the
fair value at the grant date on a straight-line basis over the vesting period of
the grant as required by SFAS No. 123.

                                       2001         2002
                                     --------     --------
Net income applicable to common
  and common equivalent shares
    As reported                      $174,622     $588,739
    Pro forma                        $153,568     $578,739

Net earnings per share

  Basic:
    As reported                      $    .04     $    .14
    Pro forma                        $    .04     $    .13


  Diluted:
    As reported                      $    .04     $    .12
    Pro forma                        $    .04     $    .12

     The  Black-Scholes   option  valuation  model  was  developed  for  use  in
estimating  the fair value of traded  options that have no vesting  restrictions
and are fully  transferable.  In addition,  option  valuation models require the
input of highly  subjective  assumptions  including  the  expected  stock  price
volatility.  Because the Company's  employee stock options have  characteristics
significantly  different  from  those of normal  publicly  traded  options,  and

                                       42
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2002


10.  COMMON STOCK, STOCK OPTION PLANS AND COMMON STOCK WARRANTS - CONTINUED

because changes in the subjective  input  assumptions can materially  affect the
fair  value  estimate,  in  management's  opinion,  the  existing  models do not
necessarily  provide a  reliable  single  measure of the fair value of its stock
options.

     WARRANTS

     Warrants for 30,000 shares of the  Company's  common stock  exercisable  at
$.80 per share were  issued to  Richter  in  connection  with  previous  private
placement transactions for which Richter acted as agent. Richter assigned 12,000
of these warrants to William L. Richter and 4,000 warrants to Richter employees.
On February 11, 1999,  Richter exercised 14,000 of these warrants and William L.
Richter exercised 12,000 of these warrants. On March 1, 1999, the Company bought
back a total of  2,500 of these  warrants  from  Richter  employees  at $.50 per
warrant,  and the remaining 1,500 of these warrants  expired.  On July 24, 2001,
William L. Richter  exercised  54,000  warrants,  and Richter  exercised  81,000
warrants.

     A summary of changes in  outstanding  warrants for the year ended March 31,
2001 is as follows:

                                     Number of      Exercise Price
                                      Warrants       per Warrant
                                     ---------       -----------

   Outstanding, beginning of year..    135,000      $1.00 - $1.15
   Issued..........................         --      $  --
   Exercised.......................   (135,000)     $1.00 - $1.15
   Bought Back.....................         --      $  --
   Canceled........................         --      $  --
                                     ---------

   Outstanding, end of year........         --
                                     =========

     As of March 31, 2002, there were no outstanding warrants.

                                       43
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2002

11.  PREFERRED STOCK

     The terms of the  outstanding  preferred stock provide that the Company may
not  declare or pay  dividends,  whether in cash or in  property,  on the common
stock unless all dividends on the preferred stock for all past dividend  periods
and the current  dividend  period shall have been paid or declared and a sum set
aside for payment thereof.  So long as no fewer than 500,000 shares of preferred
stock remain  outstanding,  holders of preferred  stock,  voting as a class, are
entitled  to elect up to four  members of the  Company's  seven-member  Board of
Directors  and  are  also  entitled  to vote as a  class  on  other  significant
corporate  actions.  Pursuant to the terms of a voting  trust,  Richter  holds a
proxy to vote  approximately  97% of the preferred stock,  and, by virtue of his
control over  Richter,  William L. Richter can be deemed to have voting  control
over such  shares.  The  holders  of the  Series A  Preferred  are  entitled  to
cumulative  dividends  at an annual rate of eight cents per share.  The Series A
Preferred is convertible, at the option of the holder, into common shares on the
basis of one share of common  for each share of Series A  Preferred.  During the
year ended March 31, 2002, the Company  repurchased and retired 20,625 shares of
preferred stock for $36,093 reducing outstanding preferred shares from 1,105,000
to 1,084,375.  At March 31, 2002,  unpaid declared  preferred  dividends totaled
$21,687.

12.  OTHER REVENUES

     Components  of other  revenues  for the years ended March 31, 2001 and 2002
were as follows:

                                2001       2002
                              --------   --------
Promotional materials .....   $126,938   $105,477
Other .....................     25,579     30,528
                              --------   --------
                              $152,517   $136,005
                              ========   ========

13.  CONCENTRATIONS OF CREDIT RISK - CASH

     The Company  maintains its cash balances in financial  institutions,  which
balances  at times may exceed  federally  insured  limits.  The  Company has not
experienced any losses in such accounts,  and management believes the Company is
not exposed to significant credit risk therefrom.

                                       44
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2002


14.  GEOGRAPHIC AND INDUSTRY SEGMENTS

     The Company currently operates in three principal segments:  Vehicle Rental
Franchise Programs, Insurance Coverage, and Vehicle Rental Operations. Corporate
costs are allocated to each segment's operations and are included in the measure
of each segment's  profit or loss. The  geographic  data include  revenues based
upon customer locations and assets based on physical locations.

     The Company's foreign  operations are presently  conducted by CAR Insurance
in Bermuda (see note 2).

     Information by geographic area and industry segment is as follows:

                                                     2001           2002
                                                 -----------    -----------
Net revenues from external customers
 Vehicle Rental Franchises-Rent A Wreck-(U.S.)   $ 5,102,119    $ 4,699,860
 Vehicle Rental Franchises-Priceless-(U.S.)          472,639        619,614
 Vehicle Rental Operations-(U.S.)                     64,856        409,799
 Corporate-(U.S.)                                      1,550          1,800
 Insurance-(U.S.)                                  1,205,181      1,238,195
 Insurance-(Bermuda)                                      --             --
                                                 -----------    -----------
                                                 $ 6,846,345    $ 6,969,268
                                                 ===========    ===========
Segment operating income
 Vehicle Rental Franchises-Rent A Wreck-(U.S.)   $ 1,015,220    $ 1,466,371
 Vehicle Rental Franchises-Priceless-(U.S.)         (473,701)      (126,305)
 Vehicle Rental Operations-(U.S.)                   (133,654)      (461,788)
 Corporate-(U.S.)                                    (83,784)       (72,618)
 Insurance-(U.S.)                                     20,854        104,183
 Insurance-(Bermuda)                                      --             --
                                                 -----------    -----------
                                                 $   344,935    $   909,843
                                                 ===========    ===========
Segment assets
 Vehicle Rental Franchises-Rent A Wreck-(U.S.)   $ 2,351,100    $ 2,210,736
 Vehicle Rental Franchises-Priceless-(U.S.)          574,373        619,476
 Vehicle Rental Operations-(U.S.)                                   891,693
 Corporate-(U.S.)                                    384,141        431,074
 Insurance-(U.S.)                                  1,055,877        927,774
 Insurance-(Bermuda)                                   8,242          8,339
                                                 -----------    -----------
                                                 $ 4,373,733    $ 5,089,092
                                                 ===========    ===========

                                       45
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2002

14.  GEOGRAPHIC AND INDUSTRY SEGMENTS-CONTINUED

                                                      2001         2002
                                                   ----------   ----------
Expenditures for segment assets
 Vehicle Rental Franchises-Rent A Wreck-(U.S.)     $       --   $       --
 Vehicle Rental Franchises-Priceless-(U.S.)                --           --
 Vehicle Rental Operations-(U.S.)                     240,075    1,081,804
 Corporate-(U.S.)                                     270,107      110,000
 Insurance-(U.S.)                                          --           --
 Insurance-(Bermuda)                                       --           --
                                                   ----------   ----------
                                                   $  510,182   $1,191,804
                                                   ==========   ==========
Depreciation and amortization
 Vehicle Rental Franchises-Rent A Wreck-(U.S.)     $   17,997   $   18,133
 Vehicle Rental Franchise-Priceless-(U.S.)              2,738        4,681
 Vehicle Rental Operations-(U.S.)                      44,590      180,180
 Corporate-(U.S.)                                     111,875       76,333
 Insurance-(U.S.)                                          --           --
 Insurance-(Bermuda)                                       --           --
                                                   ----------   ----------
                                                   $  177,200   $  279,327
                                                   ==========   ==========
Interest income
 Vehicle Rental Franchises-Rent A Wreck-(U.S.) $       85,800   $  124,078
 Vehicle Rental Franchises-Priceless-(U.S.)             8,037       18,345
 Vehicle Rental Operations-(U.S.)                          --           --
 Corporate-(U.S.)                                       8,357        3,903
 Insurance-(U.S.)                                      64,575       25,997
 Insurance-(Bermuda)                                      344           --
                                                   ----------   ----------
                                                   $  167,113   $  172,323
                                                   ==========   ==========
Interest expense
 Vehicle Rental Franchises-Rent A Wreck-(U.S.)     $       15   $       --
 Vehicle Rental Franchise-Priceless-(U.S.)                 11           --
 Vehicle Rental Operations-(U.S.)                          --       10,681
 Corporate-(U.S.)                                          --           --
 Insurance-(U.S.)                                      25,377       21,709
 Insurance- (Bermuda)                                      --           --
                                                   ----------   ----------
                                                   $   25,403   $   32,390
                                                   ==========   ==========

                                       46
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2002


14.  GEOGRAPHIC AND INDUSTRY SEGMENTS-CONTINUED

                                                     2001       2002
                                                   --------   --------
Income taxes
 Vehicle Rental Franchises-Rent A Wreck-(U.S.)     $206,913   $315,723
 Vehicle Rental Franchises-Priceless-(U.S.)              --      3,189
 Vehicle Rental Operations-(U.S.)                        --         --
 Corporate-(U.S.)                                        --         --
 Insurance-(U.S.)                                    16,710     54,138
 Insurance-(Bermuda)                                     --         --
                                                   --------   --------
                                                   $223,623   $373,050
                                                   ========   ========

                                       47
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2002


ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

Not Applicable.

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
        SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Under the securities  laws of the United States,  the Company's  directors,
its executive  officers,  and any persons holding more than 10% of the Company's
common  stock are required to report their  initial  ownership of the  Company's
common stock and any subsequent  changes in that ownership to the Securities and
Exchange Commission. Specific due dates for these reports have been established,
and the Company is required to disclose any failure to file by these dates.  The
Company believes that all of these filing requirements were satisfied during the
fiscal year ended March 31, 2002. In making these  disclosures,  the Company has
relied solely on  representations  of its  directors and executive  officers and
copies of the reports that they have filed with the Commission.

Class I Directors:

     Kenneth L. Blum, Sr., 75. Kenneth L. Blum, Sr. has served as Chairman and a
Director of the Company since June 1993, has been the Company's  Chief Executive
Officer since  December  1993,  and was its President  from June 1993 to October
1994.  Since 1990,  Mr. Blum has been a  management  consultant  to a variety of
companies,  including American Business Information Systems, Inc., a high-volume
laser printing  company.  Mr. Blum is a director of Avesis  Incorporated,  which
markets and administers discount benefit programs. Mr. Blum is the father of the
Company's  President,  Kenneth L. Blum,  Jr. Mr. Blum controls  K.A.B.,  Inc., a
Florida corporation ("KAB"),  which has a Management Agreement with the Company.
See "Certain Transactions."

     Kenneth L. Blum,  Jr.,  38, has served as  Secretary  of the Company  since
March 1994, as Vice President from May 1994 to October 1994, as President  since
October 1994,  and as director since October 1998. Mr. Blum is also President of
American  Business  Information  Systems,  Inc., a  high-volume  laser  printing
company  and  computer  service  bureau.  Mr.  Blum is the son of the  Company's
Chairman and Chief Executive Officer.

                                       48
<PAGE>
             RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2002


ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
        SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE-CONTINUED

Class II Directors:

     William L. Richter,  59, has been a director of the Company since  November
1989 and  previously  served as a director  from 1983 to 1985.  Mr.  Richter was
Co-Chairman  of the Company  from  November  1989 to June 1993 and has been Vice
Chairman  since June 1993.  For the past thirteen  years,  Mr.  Richter has been
President of Richter, an asset management and merchant banking firm. Mr. Richter
has been a Senior Managing Director of Cerberus Capital Management, L.P. (or its
predecessor  organization)  since its  founding in late 1992.  Mr.  Richter is a
Director and Co-Chairman of Avesis  Incorporated,  which markets and administers
discount benefit programs.

     Alan L. Aufzien, 72, has served as a Director of the Company since November
1989. Mr. Aufzien has also been a partner in the Norall Organization,  a private
investment company, since 1987. Since 1983, he has also been the president and a
director of New York Harbour Associates,  Inc. (a real estate development firm).
From 1986 to 1996,  Mr.  Aufzien  was the  Chairman  of  Meadowlands  Basketball
Association  (New  Jersey  Nets)  and  currently  serves as a  director  of that
organization.  Mr.  Aufzien is also a director of First Real Estate Trust of New
Jersey.

     Thomas J. Volpe,  66, has served as a Director  of the  Company  since July
2000. Until his retirement in February 2001, Mr. Volpe served as the Senior Vice
President of Financial Operations at The Interpublic Group of Companies, Inc. He
served in this  capacity  from March 1986 through  February  2001.  Prior to his
employment at The Interpublic Group of Companies,  Mr. Volpe was employed at the
Colgate  Palmolive  Company as the Vice  President and  Treasurer.  He currently
serves as Director of Industry  Leaders Fund,  where he serves as an independent
trustee for a mutual fund, and American Technical Ceramics.

     All directors hold office for one-year  terms,  until their  successors are
duly elected at the next annual meeting and qualified.

                                       49
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2002


ITEM 10. EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE

     The following table and related notes set forth  information  regarding the
compensation  awarded to,  earned by or paid to the  Company's  Chief  Executive
Officer for services rendered to the Company during the fiscal years ended March
31,  2000,  2001 and 2002.  No other  executive  officer  who was  serving as an
executive  officer during fiscal 2001 received salary and bonus which aggregated
at least  $100,000 for services  rendered to the Company  during the fiscal year
ended March 31, 2001.

                                                       LONG-TERM COMPENSATION
                                 ANNUAL COMPENSATION          AWARDS
                                 -------------------   ---------------------
                                                       SECURITIES UNDERLYING
NAME AND PRINCIPAL POSITION      YEAR     SALARY(1)       OPTIONS/SARS(#)
---------------------------      ----     ---------       ---------------
Kenneth L. Blum, Sr., CEO        2002     $ 300,000             --(2)
                                 2001       300,000             --(2)
                                 2000       300,000             --(2)

(1) Mr. Blum became Chief  Executive  Officer of the Company in connection  with
the Management  Agreement between the Company and KAB,  effective June 30, 1993.
Mr. Blum does not receive  cash  compensation  directly  from the  Company.  KAB
receives cash compensation  pursuant to the Management Agreement of $300,000 per
year plus expense reimbursements ($14,579 in the year ended March 31, 2002). The
amounts indicated in the table represent  compensation  received by KAB pursuant
to the  Management  Agreement.  Mr.  Blum is the sole  stockholder  of KAB.  See
"Certain Transactions - Management Agreement with KAB and Related Transactions -
Management Agreement."

(2) During the year ended March 31, 1994, KAB received  options for the purchase
of  2,250,000  shares  of the  Company's  common  stock in  connection  with the
Management Agreement.  During the year ended March 31, 1996, KAB transferred the
options to certain  related  parties.  During the year ended March 31, 1995, the
Board of Directors  approved  the vesting of  1,000,000  of these  options at an
exercise  price of $1.00 per share.  Effective July 20, 1995, the exercise price
of the  balance of the options  was set by the Board of  Directors  at $1.15 per
share,  with  vesting,  subject to  continued  employment,  on July 1, 2002,  or
earlier  subject to  satisfaction  of  performance  targets.  As a result of the
Company's  financial  performance  for the fiscal year ended March 31, 1999, the
Company met the performance targets, and the balance of the options became fully
vested as of March 31, 1999. As described in Note 9 to the Financial Statements,
these options have been exercised.

                                       50
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2002


ITEM 10. EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE-CONTINUED

See  "Certain   Transactions  -  Management   Agreement  with  KAB  and  Related
Transactions - Stock Option Grant."

OPTION/SAR GRANTS IN LAST FISCAL YEAR

     No stock options or SARs were granted to the executive officer named in the
Summary  Compensation  Table  during the last fiscal  year.  See Item 12 Certain
Relationships and Related Transactions,  under the caption "Certain Transactions
- Management Agreement with KAB and Related Transactions - Stock Option Grant."

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES

     No  executive  officer  named in the  Summary  Compensation  Table  held or
exercised  options  at the end of the last  fiscal  year.  See  Item 12  Certain
Relationships and Related Transactions,  under the caption "Certain Transactions
- Management Agreement with KAB and Related Transactions - Stock Option Grant."

COMPENSATION OF DIRECTORS

     Currently,  directors  of the  Company  who also serve as  officers  of the
Company and outside  directors  receive no cash  compensation in connection with
the services they render as directors.  (Officers, however, receive compensation
in their capacity as officers as described above).  Directors are reimbursed for
expenses incurred in connection with their board service.  On March 3, 1999, the
Company's  Board of Directors  approved  that the Company pay William L. Richter
consulting  fees of $30,000 per year beginning April 1, 1999. The fees have been
assigned to Richter. The Board authorized the issuance of 5,000 options per year
to Mr.  Alan  Aufzien  and Mr.  Thomas J. Volpe,  outside  directors,  for their
participation on the Company's Board of Directors.

                                       51
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2002


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     As of June 10, 2002,  the persons and entities  identified in the following
table,  including  all  directors,  executive  officers and persons known to the
Company  to  own  more  than  5%  of  the  Company's  voting  securities,  owned
beneficially,  within the meaning of  Securities  and Exchange  Commission  Rule
13d-3,  the  shares  of  voting  securities  reflected  in such  table.  All the
outstanding  shares of Series A Preferred  are  immediately  convertible  at the
option of the holder into common stock, on a  share-for-share  basis.  Except as
otherwise  specified,  the named beneficial owner has sole investment and voting
power with respect to such shares.

<TABLE>
<CAPTION>
                                                                                            TOTAL (1)
                                                                                      ----------------------
                                                                     SHARES            PERCENT      PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER      TITLE OF CLASS       BENEFICIALLY OWNED     OF CLASS     OF COMMON
------------------------------------      --------------       ------------------     --------     ---------
<S>                                       <C>                  <C>                    <C>          <C>
Kenneth L. Blum, Sr. (6)                       --                        --                --            --
10324 S. Dolfield Road
Owings Mills, MD 21117

David Schwartz                               Common                 400,000               9.5           9.5
Bundy Rent-A-Wreck
12333 W. Pico Blvd.
Los Angeles, California 90064

William L. Richter(3)(4)                     Common                 992,706 (3)          23.6 (3)      23.6
c/o Richter Investment Corp.                Preferred(3)          1,050,000 (3)          96.8          38.2 (4)
450 Park Avenue
New York, NY 10022

Alan L. Aufzien(5)                           Common                  67,500 (5)           1.6           1.6
P.O. Box 2369                               Preferred(4)             34,375 (5)           3.2           1.9
Secaucus, NJ 07094

Thomas J. Volpe (8)                          Common                  10,000 (8)             *             *
1271 Avenue of Americas
New York, NY 10020

Kenneth L. Blum, Jr.(6)                      Common                 530,718 (6)          12.6          12.6
10324 S. Dolfield Road
Owings Mills, MD 21117

Alan Cohn (7)                                Common                 456,395 (7)          10.8          10.8
c/o Rent-A-Wreck of America, Inc.
10324 S. Dolfield Road
Owings Mills, MD  21117

Robert M. Temko                              Common                 278,400               6.6           6.6
39 Hidden Valley Drive
Newark, Delaware 19711

All Directors and Executive Officers
as a Group including the Directors           Common               1,600,924 (3)(5)(6)    38.0          38.0 (4)
Named Above (4 persons)                     Preferred (2)(3)      1,050,000 (3)(4)       96.8          49.7
</TABLE>

* Less than 1%.

                                       52
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2002


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
         MANAGEMENT-CONTINUED

FOOTNOTES

(1) Based on 4,205,296  common  shares and 1,084,375  Series A Preferred  Shares
outstanding   and  45,000  options  for  shares  of  common  stock   exercisable
immediately  on the date of this table,  June 10, 2002.
(2) Holders of Series A Preferred,  voting as a class,  are entitled to elect up
to four members of a seven member  Board of Directors  and are also  entitled to
vote as a class on other significant corporate actions. Pursuant to the terms of
proxies  granted to  Richter,  95.0% of the Series A  Preferred  may be voted by
Richter as of the date of this table.  The proxies are effective until such time
that fewer than 500,000  shares of Series A Preferred  remain  outstanding.  See
note 4 below.
(3) Includes  178,750  shares of Series A Preferred  held by Mr.  Richter.  Also
includes  1,200  shares of Common  Stock held by  spouse's  IRA.  Also  includes
550,000  shares of Series A Preferred and 617,975 shares of Common Stock held by
Richter.  Also includes an additional 321,250 shares of Series A Preferred as to
which Richter holds voting  authority via proxy (see note 2 above).  Mr. Richter
holds a controlling  interest in Richter.  Mr. Richter and Richter have the same
address.
(4)  Excludes  321,250  shares of Series A Preferred as to which  Richter  holds
voting  authority via proxy (see note 2 and 3 above)  because  Richter would not
have voting or  investment  control of the  converted  Common  Stock issued upon
conversion of such shares of Series A Preferred.
(5) 34,375 shares of Series A Preferred, held by a partnership controlled by Mr.
Aufzien, are subject to a voting proxy granted to Richter.  Also includes 35,000
options for shares of common stock exercisable immediately.
(6) Mr. Blum, Sr. is the father of Kenneth L. Blum, Jr. and Robin Cohn; see note
7 below. Mr. Blum disclaims beneficial ownership of shares held by Mr. Blum, Jr.
and Ms. Cohn.
(7) All shares held jointly with spouse. See note 6 above.
(8) Includes 10,000 options for shares of common stock exercisable immediately.

                                       53
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2002


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Reference  is made to footnote 8 of the  Company's  consolidated  financial
statements, included herein, for the description of such information.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)  The following documents are filed as part of this report:

     1.   The  financial  statements,  notes  thereto and Report of  Independent
          Public  Accountants  listed  in the  Index to  Consolidated  Financial
          Statements set forth in Item 7.

     2.   The Exhibits  listed in the Exhibit  Index  following  the  Signatures
          page, which is incorporated herein by this reference.

(b)  No  reports on Form 8-K were  filed  during the last  quarter of the period
     covered by this report.

                                       54
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
                  SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS
                       YEARS ENDED MARCH 31, 2001 and 2002

<TABLE>
<CAPTION>
                                                            ADDITIONS
                                                   -------------------------
                                    BALANCE AT     CHARGED TO     CHARGED TO                       BALANCE
                                     BEGINNING     COSTS AND        OTHER                           AT END
DESCRIPTION                          OF PERIOD      EXPENSES       ACCOUNTS      DEDUCTIONS       OF PERIOD
-----------                         ----------     ----------     ---------      ----------       ----------
<S>                                 <C>            <C>            <C>            <C>              <C>
MARCH 31, 2001

Allowance for doubtful accounts     $  832,253     $   48,329     $      --      $   26,159 (1)   $  854,423
                                    ==========     ==========     =========      ==========       ==========

MARCH 31, 2002

Allowance for doubtful accounts     $  854,423     $  468,288     $      --      $  125,198 (1)   $1,197,513
                                    ==========     ==========     =========      ==========       ==========
</TABLE>

(1)  Accounts written off

                                       55
<PAGE>
                                   SIGNATURES

     In accordance  with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized:


Rent-A-Wreck of America, Inc.
Registrant

By:                                  Date:

/s/ Mitra Ghahramanlou               June 28, 2002
---------------------------          -------------
Mitra Ghahramanlou
Chief Accounting Officer

     In  accordance  with the Exchange Act, this report has been signed below by
the following  persons on behalf of the  Registrant and in the capacities and on
the dates indicated:

Signature and Title                  Date
-------------------                  ----

/s/ Kenneth L. Blum, Sr.             June 28, 2002
---------------------------          -------------
Kenneth L. Blum, Sr.
Chairman of the Board
and Director (Principal
Executive Officer)


/s/ Mitra Ghahramanlou               June 28, 2002
---------------------------          -------------
Mitra Ghahramanlou
Chief Accounting Officer
(Principal Financial and
Accounting Officer)


/s/ Kenneth L. Blum, Jr.             June 28, 2002
---------------------------          -------------
Kenneth L. Blum, Jr.
President and Director


/s/ William L. Richter               June 28, 2002
---------------------------          -------------
William L. Richter
Vice Chairman of the Board
and Director


/s/ Alan Aufzien                     June 28, 2002
---------------------------          -------------
Alan Aufzien, Director


/s/ Thomas J. Volpe                  June 28, 2002
---------------------------          -------------
Thomas J. Volpe, Director

                                       56
<PAGE>

                          RENT-A-WRECK OF AMERICA, INC.
                                  EXHIBIT INDEX
                                   FORM 10-KSB
                                 FOR FISCAL YEAR
                              ENDED MARCH 31, 2002

                                                   Incorporated
Exhibit No.    Exhibit                             by Reference from
-----------    -------                             -----------------

3.1            Certificate of                      Form 10-K for the
               Incorporation                       Fiscal year ended
                                                   March 31, 1997.

3.2            Bylaws,                             Form 10-K for the fiscal
               as amended                          year ended March 31,
                                                   1986, in which the
                                                   Bylaws, are incorporated
                                                   by reference and amendments
                                                   to Bylaws are filed therein.

9              Voting Trust                        Form 10-K for the fiscal
               Agreement                           year ended March 31, 1990
                                                   is incorporated by
                                                   reference.

10.1           Option Plan                         Form 10-K for the fiscal
                                                   year ended March 31, 1993
                                                   is incorporated
                                                   by reference.

10.2           Management Agreement -              Form 8-K, dated June 30,
               K.A.B., Inc. Related                1993 and is incorporated
               party dated June 30,                by reference.
               1993

10.2.1         Amendment to Management             Form 10-K for the fiscal
               Agreement with K.A.B.,              year ended March 31,
               Inc., Related party                 1997.
               dated March 27, 1996


                                       57
<PAGE>
10.3           Stock Option Grant to               Form 8-K, dated June 30,
               K.A.B., Inc. dated                  1993 and is incorporated
               June 30, 1993                       by reference. Amendment filed
                                                   on Form 10-K for the fiscal
                                                   year ended March 31, 1997.

10.3.1         Amendment to Stock                  Form 10-K for the fiscal
               Option Grant to                     year ended  March 31,
               K.A.B., Inc. dated                  1997.
               July 20, 1995

10.4           Registration Rights                 Form 8-K, dated June 30,
               Agreement dated June                1993 and is incorporated
               30, 1993, among K.A.B.,             by reference.
               Inc., Kenneth L. Blum,
               Jr., Alan S. Cohn and
               the Company

10.5           Warrant Agreement -                 Form 8-K, dated June 30,
               Richter & Co., Inc.                 1993 and is incorporated
                                                   by reference.

10.6           Software Development                Form 10-KSB for the
               and Computer Usage                  fiscal year ended
               Agreement effective                 March 31, 1995.
               January 1, 1995 between
               National Computer
               Services, Inc. and
               the Company.

10.7           Financial Advisory                  Form 10-KSB for the
               Agreement between                   fiscal year ended
               the Company and                     March 31, 1995.
               Richter & Co., Inc.
               dated March 20, 1995.

10.9           Rent-A-Wreck Franchise              Form 10-KSB for the
               Agreement -standard                 fiscal year ended
               form as of                          March 31, 2001.
               July 21, 2000

                                       58
<PAGE>
10.9.1         Priceless Franchise                 Form 10-KSB for the
               Agreement standard                  fiscal year ended
               form as of                          March 31, 2001.
               July 21, 2000.


10.10          Facultative                         Form 10-KSB for the
               Reinsurance Agreement               fiscal year ended
               dated March 1, 1997                 March 31, 1998.
               between National
               Union Fire Insurance
               Company of Pittsburg,
               PA. and Consolidated
               American Rental
               Insurance Company,
               LTD.

10.11          Standby or Performance              Form 10-KSB for the
               Letter of Credit                    fiscal year ended
               Application and                     March 31, 1998.
               Agreement dated June 3,
               1997 between Rent-A-Wreck
               Of America, Inc. and The
               Chase Manhattan Bank


10.11.1        First Amendment dated               Form 10-KSB for the
               June 1, 1998 to the                 fiscal year ended
               Standby or Performance              March 31, 1998.
               Letter of Credit
               Application and
               Agreement dated June 3,
               1997 between Rent-A-Wreck
               Of America, Inc. and The
               Chase Manhattan Bank

10.12          Borrowing Base Agreement,           Form 10-KSB for the
               dated March 29, 2000, between       fiscal year ended
               Bank of America and                 March 31, 2000.
               Rent-A-Wreck of America, Inc.,
               Rent-A-Wreck One Way, Inc.,
               Bundy American Corporation,
               Rent-A-Wreck Leasing, Inc.
               and PRICELESS
               Rent-A-Car, Inc.


                                       59
<PAGE>
10.13          Loan Agreement, dated March         Form 10-KSB for the
               29, 2000, between Bank of           fiscal year ended
               America, N.A.  and Rent-A-Wreck     March 31, 2000.
               of America, Inc., Rent-A-Wreck
               One Way, Inc., Bundy American
               Corporation, Rent-A-Wreck
               Leasing, Inc., PRICELESS
               Rent-A-Car, Inc. and
               Consolidated American
               Rental Insurance Company

10.14          Promissory Note, dated              Form 10-KSB for the
               March 29, 2000, between             fiscal year ended
               Bank of America, N.A. and           March 31, 2000.
               Rent-A-Wreck of America, Inc.,
               Rent-A-Wreck One Way, Inc.,
               Bundy American Corporation,
               Rent-A-Wreck Leasing, Inc.,
               PRICELESS Rent-A-Car, Inc.
               and Consolidated American
               Rental Insurance Company

10.15          Security Agreement, dated           Form 10-KSB for the
               March 29, 2000, between             fiscal year ended
               Bank of America, N.A.               March 31, 2000.
               and Bundy American
               Corporation

10.16          Security Agreement, dated           Form 10-KSB for the
               March 29, 2000, between             fiscal year ended
               Bank of America, N.A.               March 31, 2000.
               and PRICELESS Rent-A-Car,
               Inc.

10.17          Security Agreement,                 Form 10-KSB for the
               dated March 29, 2000,               fiscal year ended
               between Bank of America,            March 31, 2000.
               N.A. and Rent-A-Wreck One
               Way, Inc.

10.18          Security Agreement, dated           Form 10-KSB for the
               March 29, 2000, between             fiscal year ended
               Bank of America, N.A.               March 31, 2000.
               and Rent-A-Wreck Leasing,
               Inc.

10.19          Security Agreement, dated           Form 10-KSB for the
               March 29, 2000, between             fiscal year ended
               Bank of America, N.A. and           March 31, 2000.
               Rent-A-Wreck of America, Inc.

                                       60
<PAGE>
10.20          Application and Agreement           Form 10-KSB for the
               for Standby Letter of Credit        fiscal year ended
               between Consolidated American       March 31, 2000.
               Rental Insurance Company,
               Ltd. and National Union
               Fire Insurance Company

10.21          Financing Statement between         Form 10-KSB for the
               Bank of America, N.A. and           fiscal year ended
               Rent-A-Wreck of America, Inc.       March 31, 2000.

10.22          Financing Statement between         Form 10-KSB for the
               Bank of America, N.A. and           fiscal year ended
               Rent-A-Wreck One Way, Inc.          March 31, 2000.

10.23          Financing Statement between         Form 10-KSB for the
               Bank of America, N.A. and           fiscal year ended
               Bundy American Corporation          March 31, 2000.

10.24          Financing Statement between         Form 10-KSB for the
               Bank of America, N.A. and           fiscal year ended
               Rent-A-Wreck Leasing, Inc.          March 31, 2000.

10.25          Financing Statement between         Form 10-KSB for the
               Bank of America, N.A. and           fiscal year ended
               PRICELESS Rent-A-Car, Inc.          March 31, 2000.

10.26          Borrowing Base Certificate          Form 10-KSB for the
                                                   fiscal year ended
                                                   March 31, 2000.

10.27          Pledge and Assignment of            Form 10-KSB for the
               Deposits between Bank of            fiscal year ended
               America, N.A. and                   March 31, 2000.
               Consolidated American Rental
               Insurance Company, LTD

10.28          Irrevocable Line of Credit          Form 10-KSB for the
               from Consolidated American          fiscal year ended
               Rental Insurance Company,           March 31, 2000.
               Ltd. to AIG Management, Inc.

                                       61
<PAGE>
10.29          Bank of America Statement           Form 10-KSB for the
               of Commissions, Fees and            fiscal year ended
               Charges dated 03/30/00              March 31, 2000.
               to Consolidated American
               Rental Insurance Company,
               Ltd.

10.30          Bank of America Irrevocable         Form 10-KSB for the
               Standby Letter of Credit            fiscal year ended
               to Consolidated American            March 31, 2000.
               Rental Insurance Company, Ltd.

10.31          Certificate of Corporate            Form 10-KSB for the
               Resolutions of Rent-A-Wreck         fiscal year ended
               of America, Inc.                    March 31, 2000.

10.32          Certificate of Corporate            Form 10-KSB for the
               Resolutions of Rent-Wreck           fiscal year ended
               Leasing, Inc.                       March 31, 2000.

10.33          Certificate of Corporate            Form 10-KSB for the
               Resolutions of Bundy                fiscal year ended
               American Corporation, Inc.          March 31, 2000.

10.34          Certificate of Corporate            Form 10-KSB for the
               Resolutions of Rent-A-Wreck         fiscal year ended
               One Way, Inc.                       March 31, 2000.

10.35          Certificate of Corporate            Form 10-KSB for the
               Resolutions of PRICELESS            fiscal year ended
               Rent-A-Car, Inc.                    March 31, 2000.

10.36          Certificate of Corporate            Form 10-KSB for the
               Resolutions of Consolidated         fiscal year ended
               American Rental Insurance           March 31, 2000.
               Company, LTD

10.37          Lease Agreement, dated              Form 10-KSB for the
               June 3, 1999, between KA            fiscal year ended
               Real Estate Associates, LLC         March 31, 2000.
               and Rent-A-Wreck, Inc.
               with Confirmatory Addendum
               to Lease, dated September
               16, 1999, between KA Real
               Estate Associates, LLC
               and Rent-A-Wreck of America,
               Inc.

                                       62
<PAGE>
10.38          Financial Advising Agreement,       Form 10-KSB for the
               dated November 6, 1999, between     fiscal year ended
               Richter Investment Corp. and        March 31, 2000.
               Rent-A-Wreck of America, Inc.

10.39          Loan Agreement, dated June 19,      Exhibit 10.4 to Form
               2001, between Merrill Lynch         10-QSB for quarter
               and Rent-A-Wreck of America, Inc.   ended September 30, 2001


10.40          Unconditional Guaranty, dated       Exhibit 10.1 to Form
               June 19, 2001, between Merrill      10-QSB for quarter
               Lynch and Bundy American            ended September 30, 2001


10.41          Unconditional Guaranty, dated       Exhibit 10.2 to Form
               June 19, 2001, between Merrill      10-QSB for quarter
               Lynch and Rent-A-Wreck Leasing      ended September 30, 2001


10.42          Unconditional Guaranty, dated       Exhibit 10.3 to Form
               June 19, 2001, between Merrill      10-QSB for quarter
               Lynch and Priceless                 ended September 30, 2001
               Rent-A-Car, Inc.

10.43          WMCA Loan Agreement, dated          Exhibit 10.5 to Form
               June 19, 2001, between Merrill      10-QSB for quarter
               Lynch and Bundy American            ended September 30, 2001

10.44          WMCA Loan Agreement, dated          Exhibit 10.6 to Form
               June 19, 2001, between Merrill      10-QSB for quarter
               Lynch and Priceless                 ended September 30, 2001
               Rent-A-Car, Inc.

10.45          WMCA Loan Agreement, dated          Exhibit 10.7 to Form
               June 19, 2001, between Merrill      10-QSB for quarter
               Lynch and Rent-A-Wreck              ended September 30, 2001
               Leasing, Inc.

10.46          Letter of Credit Amendment,         Exhibit 10.8 to Form
               dated September 19, 2001 for        10-QSB for quarter
               Rent-A-Wreck of America, Inc.       ended September 30, 2001
               on behalf of Consolidated
               American Rental Insurance
               Company, Ltd.

10.47          Irrevocable Letter of Credit,       Exhibit 10.9 to Form
               dated July 30, 2001 for             10-QSB for quarter
               Rent-A-Wreck of America, Inc.       ended September 30, 2001
               on behalf of Consolidated
               American Rental Insurance
               Company, Ltd.

                                       63
<PAGE>
10.48          Security Agreement, dated           Filed herewith
               June 19, 2001, between Merrill
               Lynch and Bundy America
               Corporation

10.49          Security Agreement, dated           Filed herewith
               June 19, 2001, between Merrill
               Lynch and Rent-A-Wreck
               Leasing, Inc.

10.50          Security Agreement, dated           Filed herewith
               June 19, 2001, between Merrill
               Lynch and Priceless
               Rent-A-Car, Inc.

10.51          Financial Assets Security           Filed herewith
               Agreement, dated June 19, 2001
               between Merrill Lynch and
               Rent-A-Wreck of America, Inc.

10.52          Merrill Lynch Irrevocable           Filed herewith
               Standby Letter of Credit
               to Consolidated American
               Rental Insurance Company, Ltd.

10.53          Merrill Lynch Letter of Credit      Filed herewith
               Supplement to Rent-A-Wreck
               of America, Inc.

10.54          Reducing Revolver-Loan and          Filed herewith
               Security Agreement dated
               June 19, 2001, between
               Merrill Lynch and
               Rent-A-Wreck of America, Inc.

10.55          Letter Agreement dated              Filed herewith
               March 7, 2002, between
               Demetriou Insurance Services
               and Rent-A-Wreck of America, Inc.

10.56          Waiver dated June 27, 2002          Filed herewith
               between Merrill Lynch and
               Rent-A-Wreck of America, Inc.

21             List of Subsidiaries                Filed herewith.

                                       64