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, 2001

[ ] 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. $6,846,345

     4,385,496 shares of common stock were outstanding as of June 8, 2001.

     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  $4.6 million on June 8, 2001. 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.

     The following  documents are  incorporated  by reference and made a part of
the Form 10-KSB:

                                      None

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

                                                                            Page
                                                                            ----
PART I

Item 1. Description of Business.............................................  1

Item 2. Description of Property.............................................  7

Item 3. Legal Proceedings...................................................  7

Item 4. Submission of Matters to a Vote of Security Holders.................  7

Part II

Item 5. Market for the Common Equity and Related Stockholder Matters........  8

Item 6. Management's Discussion and Analysis of Financial Condition
        and Results of Operations........................................... 10

Item 7. Financial Statements................................................ 18

Item 8. Changes in and Disagreements with Accountants on Accounting
        and Financial Disclosure............................................ 45

Part III

Item 9. Directors and Executive Officers, Promoters and Control Persons;
         Compliance with Section 16(a) of the Exchange Act.................. 45

Item 10. Executive Compensation............................................. 47

Item 11. Security Ownership of Certain Beneficial Owners and Management..... 49

Item 12. Certain Relationships and Related Transactions..................... 51

Item 13. Exhibits and Reports on Form 8-K................................... 51
<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
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.  The
Company also formed a new subsidiary,  Consolidated  American  Rental  Insurance
Company,  Ltd ("CAR  Insurance") on March 1, 1997 to offer automobile  liability
and  physical  damage  reinsurance  to its  franchisees.  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, 2001, 158
of the Company's 669 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  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 royalties and
contribute to the national  advertising  fund.  These fees vary according to the
Company's  franchisees'  fleet size or gross revenues.

                                       1
<PAGE>
     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,  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 Hertz Claim Management  Corporation  ("Hertz") 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, 2001,  the Company  replaced  Hertz with Crawford & Co.  ("Crawford")  as the
Third  Party  Administrator.  The focus of growth for CAR  Insurance  will be 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, 2001, approximately 92 of the Company's franchisees were insuring a
total of 2,416 vehicles under this program. Franchisees apply for this insurance
coverage  with Rise.  Rise  processes  the  franchisees'  applications  and,  if
approved,  the  franchisee  is required to pay  premiums in advance on a monthly
basis.  Hertz is responsible for processing all claims and assisting the Company
on the  appropriate  reserves  for all known claims  occurred  prior to March 1,
2001, and Crawford is responsible  for all claims  occurred after March 1, 2001.

     On March 1,  1999,  the  Company  added a new  program  to offer  insurance
coverage to all of its  franchisees  who do business in those  states  where the
Company's insurance advisor believes the owner's (not the driver's) insurance is
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
new program,  the Company utilizes Rise as the insurance broker, and franchisees
apply for this insurance  coverage with Rise.  Rise  processes the  franchisees'
applications  and, if approved,  the  franchisee  is required to pay premiums in

                                       2
<PAGE>
advance on a monthly basis.  The Company bills and collects the premiums,  which
are forwarded to Rise, and receives fees from Rise for this program. The Company
believes it has no exposure to loss from insurance claims under this program. As
of March 31, 2001, approximately 28 of the Company's franchisees were insuring a
total of 518 vehicles under this program.

     Priceless  operates a  wheelchair  van rental  program,  on a limited  test
basis, in Maryland and Florida.  The Company  markets this program  primarily in
communities catering to disabled individuals.  There are nine vehicles currently
operating  under this  program.  On March 1, 2001,  the Company  started its own
store for renting vehicles to the public.  The store is located at the Company's
corporate  office in Owings  Mills,  Maryland and operates  under the  PRICELE$$
brand name.

     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, 2001,  the
Company was financing 13 vehicles for 2 of its franchisees.

     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 convention once a year, and regional  meetings which are held twice a
year in eastern and western regions 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

                                       3
<PAGE>
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  two  full-time  and  one   part-time   salespeople   at  its  corporate
headquarters,  and  in  addition,  utilizes  the  services  of  two  independent
franchise brokers located throughout the United States.

     During the  fiscal  year  ended  March 31,  2001,  74 new  franchises  were
granted,  22 existing franchise  locations were transferred to new ownership and
80 franchises were terminated by the Company. The majority of these terminations
resulted from breach of the franchise agreement.  This resulted in approximately
641 franchised  locations throughout the United States, as well as 28 franchised
locations in Europe at March 31, 2001 compared to  approximately  652 franchised
locations  throughout the United States,  as well as 23 franchised  locations in
Europe and Asia at March 31, 2000.

EMPLOYEES

     As of March 31,  2001,  the Company  employed 28 people,  consisting  of 13
full-time  employees and 5 part-time  employees  engaged in franchise  sales and
service  and  8  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.

     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.

                                       4
<PAGE>
     Rent-A-Wreck  franchisee  fleets  usually  consist  of a  variety  of  used
vehicles although some locations rent new cars as well. The franchisees offer to
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 systems 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  recently  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
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 its Federal  regulations,  or which,  if
inconsistent,  would provide  protection to prospective  franchisees equal to or
greater than that imposed by the Federal franchising regulations.

                                       5
<PAGE>
     As of June 2001, the Company is currently  authorized to sell franchises in
all 50 states under its  "Rent-A-Wreck" and "PRICELE$$" trade and service marks.
The  Company  has  registered  its  "Rent-A-Wreck"  trade  and  service  mark in
approximately 53 foreign countries and its "PRICELE$$" 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"
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.

                                       6
<PAGE>
     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).

     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 December 2000, the Company and certain employees were named in a lawsuit
seeking declaratory and injunctive relief,  rescission,  and monetary damages in
the sum of $5 million. This lawsuit alleges similar claims to a lawsuit that was
previously  dismissed,  and the Company  believes the claims are without  merit.
They will be vigorously defended.

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, 2001.

                                       7
<PAGE>
                                    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, 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

             Year Ended
           March 31, 2000                    High*            Low*
           --------------                    -----            ----
         First Fiscal Quarter                $1.71           $1.47
         Second Fiscal Quarter                1.95            1.84
         Third Fiscal Quarter                 2.00            1.93
         Fourth Fiscal Quarter                2.27            2.08

----------
*    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, nor does
it anticipate  paying  dividends on its common stock in the foreseeable  future.
The Company has preferred stock issued with 1,105,000  shares  outstanding as of
March 31, 2001. 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 $88,400.  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.

     The number of  stockholders  of record of the Company's  common stock as of
June 15, 2001 was 168. 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 15,  2001.  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.

                                       8
<PAGE>
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, 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.

<TABLE>
<CAPTION>
                                                         Year ended March 31,
                                         -------------------------------------------------------
                                           1997        1998        1999        2000        2001
                                         -------     -------     -------     -------     -------
                                                    (in thousands except per share
                                                       and number of franchises)
<S>                                      <C>         <C>         <C>         <C>         <C>
FRANCHISEES' RESULTS (UNAUDITED)

Franchisees' Revenue (1)                 $34,661     $40,018     $45,358     $51,707     $56,630

Number of Franchises                         477         558         652         675         669
 (outstanding at year-end)

COMPANY'S RESULTS OF OPERATIONS

Total Revenue                            $ 3,785     $ 4,677     $ 5,601     $ 6,282     $ 6,846

Operating expenses                         3,252       3,983       4,564       5,279       6,501

Income before income
  taxes                                  $   600     $   756     $ 1,113     $ 1,101     $   487

Net income                                   537         548         858         821         263

Earnings per common share

 Basic                                   $   .10     $   .10     $   .18     $   .19     $   .04
 Weighted average common shares            4,102       4,267       4,086       3,808       4,066

 Diluted                                 $   .09     $   .09     $   .15     $   .14     $   .04
 Weighted average common shares plus
  convertible preferred stock, options
  and warrants                             6,083       5,915       5,611       5,902       4,356

EBITDA (2)                                   721         888       1,313       1,922       1,934

COMPANY'S BALANCE SHEET DATA

Working Capital                          $ 1,191     $ 1,527     $ 1,531     $ 1,240     $ 1,940

Total assets                               2,594       3,664       3,886       3,980       4,374

Long-term obligations                         30          --          --          --          --
Shareholders' Equity                       1,755       2,028       2,041       1,836       2,863
</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.

                                       9
<PAGE>
ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Year ended March 31, 2001 as compared to year ended March 31, 2000:

     The Company  operates in two principal  segments:  Vehicle Rental Franchise
Programs (franchising) and Insurance Coverage (insurance).  Franchising consists
of operations under the  Rent-A-Wreck  and Priceless lines of business.  For the
year ended March 31,  2001,  the  Company's  principal  operations  franchising,
comprised 79% of  consolidated  net revenues (82% in 2000).  The majority of the
Company's  operating income for the fiscal year ended March 31, 2000, and all of
the  Company's  operating  income for the fiscal  year ended March 31, 2001 came
from  franchising.  The Company  generated  operating  income from its insurance
segment of  approximately  $240,640  for the fiscal year ended  March 31,  2000,
compared to an operating income of $20,854 from that segment for the fiscal year
ended March 31, 2001.

     Revenue from franchising  operations,  which includes initial license fees,
continuing  license fees,  and  advertising  fees,  increased by $260,267  (5%).
Although the Company sold 74 new  locations in 2001 compared to 75 new locations
in 2000,  initial  license  fees  decreased  by  $70,552  (6%),  which  resulted
primarily  from a decrease in average  price per sale in 2001  compared to 2000.
Price  per sale is a  function  of the  population  of the  exclusive  territory
granted to a new franchisee. The timing of closings of new franchise sales, each
of which is for a  relatively  large  amount and the  completion  of the initial
services  required to be  completed  by the  Company,  varies,  contributing  to
periodic increases or decreases in reported results. Management does not believe
these  short-term  variations are indicative of longer-term  trends.  Continuing
license fees  increased by $295,423  (10%),  and  advertising  fees increased by
$35,396 (4%) due to the fleet growth at existing  franchises  and the  Company's
dedication of more resources to its collection efforts.

     Revenues from insurance  premiums increased by $332,959 (38%) due to higher
participation  by the  Company's  franchisees  in  the  CAR  Insurance  program.
Insurance premium revenue is recognized ratably over the life of the policies.

     Vehicle rental  operations  increased by $30,161 (87%) due primarily to the
wheelchair van program.

     Other  revenue  decreased by $58,936 (30%) due primarily to a one-time gain
from  litigation  against a former  franchisee,  which the  Company  resolved in
August 1999. The Company was awarded $101,045, which it collected in April 2000,
in connection  with the litigation of the award.  $49,750 was allocated to other
revenue,  while the  remaining  amount of $51,295 was allocated to license fees,
advertising fees and interest income.

     Total  operating  expenses  increased  by  $1,221,903  (23%) in fiscal 2001
compared to the prior year.  Salary expense  increased by $24,096 (3%) primarily
as a result of new hires in response to the growth of the Company's  franchising
operations.  Advertising and promotion expenses increased by $80,273 (6%), which
resulted primarily from an increase in national  advertising  expense to promote
the Company.  Sales and marketing  expenses  decreased by $222,992 (38%),  which

                                       10
<PAGE>
resulted primarily from a decrease in bad debt expense due to the Company's more
aggressive collection efforts.  General and administrative expenses increased by
$194,994  (19%),  which  resulted  primarily  from an  increase  in legal  fees,
collection fees and rent expense.

     Insurance  underwriting  expenses  increased  by  $530,112  (93%) due to an
increase in paid losses and loss reserves for reported claims in connection with
higher participation by the Company's  franchisees in its CAR Insurance program,
offset by a decrease in loss reserves for unreported claims.

     Effective  June 30, 1993,  the Company  issued  options (the  "Options") to
K.A.B., Inc. ("KAB"), a company owned by an affiliate, 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 have been
exercised or repurchased.

     Depreciation  and amortization  expense  increased by $5,860 (3%) in fiscal
2001  compared  to  the  prior  year.  This  increase  resulted  primarily  from
additional  depreciation  associated with the purchase of additional vehicles in
the wheelchair van rental program and computer software and hardware.

     The  Company  realized  operating  income  of  $344,935,  before  taxes and
interest, in 2001 compared to operating income of $1,002,387 in 2000, reflecting
a decrease of $657,452.  This  decrease  resulted  primarily  from the Company's
repurchase of options to buy 957,721  shares of the  Company's  common stock for
$1,234,560 and a decrease in underwriting  profit in the Company's CAR Insurance
program,  offset by a  decrease  in sales  and  marketing  expenses  due to more
successful collection efforts, an increase in continuing license fees due to the
addition  of new  franchises  and fleet  growth at existing  franchises.  If the
repurchase of options in both fiscal years ended March 31, 2001 and 2000 had not
impacted the  Consolidated  Statements of Earnings for the Years Ended March 31,
2001 and 2000  (in  which  case  there  would  have  been no  corresponding  tax
benefit), operating income would have been $1,579,494 and $1,627,387 in 2001 and
2000,  respectively,  instead of $344,935 and $1,002,387.  Net income would have
been  $1,021,041  and  $1,204,379  in 2001 and 2000,  respectively,  instead  of
$263,022 in 2001 and $820,629 in 2000.  Basic earnings per share would have been
$.25 and $.29 in 2001 and 2000  instead of $.04 and $.19,  and diluted  earnings
per share  would  have been $.19 and $.20 in 2001 and 2000  instead  of $.04 and
$.14.

     The Company  incurred an expense of $1,234,560  and $625,000 for repurchase
of options in 2001 and 2000, respectively,  when it implemented such repurchases
as part of the stock buyback  program it initiated in 1995.  Including the total
of 1,457,721  options  repurchased  in 2001 and 2000,  and 110,000 common shares
bought in 2001 and 2000, the Company has to date repurchased more than 3 million
shares or potential  shares.  The Company  repurchased KAB's options for several

                                       11
<PAGE>
reasons.  First, by repurchasing  these options,  the Company was able to retire
these  options,  thereby  reducing  fully-diluted  shares  outstanding.  Second,
because the difference  between market price and strike price represents taxable
ordinary  income  to  the  holders  when  they  are  exercised,  options  are  a
substantial  and potentially  depressing  overhang on the market because holders
generally need to sell exercised  options promptly to pay income taxes generated
by exercise.  Directly repurchasing options reduced this overhang.  Furthermore,
by using a portion of net income,  supplemented  by the tax  deduction an option
repurchase  generates,  to finance the  repurchase of a portion of  management's
options, the aggregate number of options and warrants outstanding was able to be
virtually  eliminated  while  hopefully  enhancing the value of all  outstanding
shares by increasing prospective diluted earnings per share.

     Net interest income increased by $43,291 (44%). This increase was primarily
due to interest earned on the increased cash deposits which are held in interest
bearing accounts.

     Income tax expense for the year ended March 31, 2001  decreased  by $56,554
(20%) from 2000. This decrease was primarily due to lower taxable income for the
year ended March 31, 2001 compared to the prior year.

LIQUIDITY AND CAPITAL RESOURCES

     At March 31, 2001, the Company had working  capital of $1,940,176  compared
to $1,239,523 at March 31, 2000.  This increase of $700,653  resulted  primarily
from net cash profit earned during the year and cash received in connection with
the  exercise  of options  and  warrants,  partially  offset by cash paid by the
Company to repurchase 957,721 options and 110,000 shares of its common stock, as
well as the payment of preferred stock dividends.  In fiscal 2001, the Company's
allowance for doubtful  accounts was $854,423  compared to $832,253 in the prior
year. The Company wrote off $32,462 of doubtful  accounts during fiscal 2001 and
$68,279  during the prior year.  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 efforts.

     Cash and cash  equivalents  decreased  by  $147,627  (21%).  This  decrease
resulted primarily from the Company's  repurchase of 957,721 options,  offset by
the  exercise of 927,279  options and  warrants.  Restricted  cash  increased by
$146,547 (20%) from an increase in the national  advertising  funds.  Restricted
cash  includes  (1) a deposit of $600,000  as security  for the letter of credit
with Bank of America backing the insurance program described below and (2) funds
being held on behalf of the Company's  franchisees  in the national  advertising
fund to be spent on various advertising programs.

                                       12
<PAGE>
     In March 2000, the Company obtained a $1,000,000 letter of credit with Bank
of America  in  connection  with the  Company's  CAR  Insurance  subsidiary  and
replaced  its  letters of credit with The Chase  Manhattan  Bank and the Bank of
Butterfield.  This letter of credit is part of the agreement between the Company
and Bank of America as  security  for the  letter of credit  issued to  American
International Group ("AIG") by Bank of America. This letter of credit is secured
by a certificate  of deposit of $600,000 held by Bank of America plus 50% of all
the Company's  eligible accounts  receivable.  Funds drawn against the letter of
credit bear  interest at Bank of America's  prime  commercial  lending rate plus
1.5% (which  prime rate was 7.00% on June 14,  2001).  For the years ended March
31, 2001 and 2000, AIG did not draw any funds from the letter of credit.

     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 $182,342  (21%) from March 31, 2000 to
March 31, 2001. This increase occurred primarily due to additional investment in
computer software and hardware, leasehold improvements and vehicles. The Company
purchased six vehicles in connection  with the  wheelchair van program and three
vehicles for the Company's Priceless store.

     Cash used in operations was $138,729,  resulting primarily from an increase
in prepaid income tax expense, a decrease in accounts payable, accrued expenses,
and income taxes  payable,  offset by net income  before  depreciation  plus the
decrease in accounts and notes receivable,  prepaid expenses, and an increase in
insurance  loss  reserves.  Accounts  payable  and  accrued  expenses  decreased
primarily from compensation  expense in connection with the Company's repurchase
of 500,000  options for  $625,000  during the fiscal year ended March 31,  2000,
which the  Company  paid in April and May 2000.  Accounts  and notes  receivable
decreased  primarily  due to  funds  received  from AIG in  connection  with the
reinsurance program and funds recovered from settlement of a lawsuit.  Insurance
loss  reserves  increased  primarily  due to an increase in the number of claims
associated with the increased participation in the CAR insurance program. Income
taxes payable decreased due to taxes paid for the year ended March 31, 2001.

     Cash used in  investing  activities  of $623,370  related  primarily  to an
increase in restricted cash in connection with the national  advertising  funds,
the  acquisition  of  property  and  equipment  and the  costs  associated  with
obtaining  trademarks,  partially  offset by the proceeds from the sale of three
vehicles.

     Cash provided in financing  activities during the year ended March 31, 2001
was  $614,472,  resulting  from net  proceeds  from the  exercise of options and
warrants,  offset by the payment of preferred  dividends  and buybacks of common
stock.

                                       13
<PAGE>
     In 1995 and 1996,  the Company  approved the repurchase of up to a total of
500,000 shares of the Company's  outstanding common or preferred stock. On April
23, 1998,  the Company  approved the  repurchase of up to an additional  500,000
shares of the Company's outstanding common or preferred stock. On March 3, 1999,
the Company  approved the  repurchase  of an  additional  119,075  shares of the
Company's outstanding common or preferred stock. During the year ended March 31,
1996, the Company repurchased and retired 89,375 shares of its common stock at a
cost of $117,907 and also bought back 116,400 shares of its preferred stock at a
cost of $118,562.  During the year ended March 31, 1997, the Company repurchased
and  retired  67,625  shares of its common  stock at a cost of $85,301  and also
bought back 66,500  shares of its preferred  stock at a cost of $66,749.  During
the year ended March 31,  1998,  the  Company  repurchased  and retired  117,575
shares of its common  stock at a cost of  $121,509  and also  bought back 20,625
shares of its preferred stock at a cost of $25,781.  During the year ended March
31, 1999, the Company repurchased and retired 311,600 shares of its common stock
at a cost of $358,674.  The Company also  repurchased and retired 226,875 shares
of its  preferred  stock at a cost of  $363,001  and also  bought  back  102,500
warrants at a cost of $11,250. As of March 31, 1999, the Company had repurchased
and retired a total of 1,119,075 shares under this program,  which was the total
number of shares  authorized  for repurchase at that time. In November 1999, the
Board of Directors authorized the repurchase of, and the Company repurchased and
retired  400,000  shares of its common stock at a cost of  $790,000.  In January
2000, the Company's Board of Directors  authorized the repurchase and retirement
of up to 1 million  shares  of common  stock,  convertible  cumulative  series A
preferred stock, options or warrants.  The Board also authorized the repurchase,
and the Company  entered into an agreement to  repurchase,  500,000  options for
$625,000  under this program.  The obligation to purchase these options was paid
in April and May of 2000. In September  2000,  the Company's  Board of Directors
authorized  the  repurchase of up to 1 million shares of its common or preferred
stock,  including  options for its common stock.  The Board also  authorized the
repurchase,  and the Company  entered into an agreement to  repurchase,  957,721
options for  $1,234,560  under this program.  The  obligation to purchase  these
options was paid in September  2000. In December  2000,  the Company bought back
and retired 60,000 shares of its common stock at a cost of $100,222. In February
2001, the Company bought back and retired 50,000 shares of its common stock at a
cost of $93,772.  Since the inception of this plan in 1995, the Company's  Board
of Directors has authorized the repurchase and retirement of 3,519,075 shares of
common  stock,  convertible  cumulative  series A  preferred  stock,  options or
warrants,  and the Company  has  repurchased  and  retired a total of  3,086,796
shares.

     The  Company  believes  it has  sufficient  working  capital to support its
business plan through fiscal 2002.

                                       14
<PAGE>
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.
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

                                       15
<PAGE>
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.

     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,
2001, 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,

                                       16
<PAGE>
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.

                                       17
<PAGE>
ITEM 7. FINANCIAL STATEMENTS

       INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SUPPORTING SCHEDULES

                                                                            Page
                                                                            ----

Report of Independent Certified Public Accountants.........................   19

Financial Statements:

Consolidated Balance Sheet as of March 31, 2001............................   20

Consolidated Statements of Earnings for the Years Ended March 31, 2000
 and 2001..................................................................   22

Consolidated Statements of Shareholders' Equity for the Years Ended
 March 31, 2000 and 2001...................................................   23

Consolidated Statements of Cash Flows for the Years Ended March 31, 2000
 and 2001..................................................................   24

Notes to Consolidated Financial Statements.................................   25

Supporting Schedules:

Schedule II - Valuation and Qualifying Accounts............................   52

     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.

                                       18
<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, 2001,
and the related  consolidated  statements of earnings,  shareholders' equity and
cash  flows  for the  years  ended  March 31,  2001 and  2000.  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, 2001,  and the  consolidated
results  of their  operations  and their  consolidated  cash flows for the years
ended March 31, 2001 and 2000 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, 2001 and 2000. In
our opinion,  this  schedule  presents  fairly,  in all material  respects,  the
information required to be set forth therein.


/s/ Grant Thornton LLP

Baltimore, Maryland
June 22, 2001

                                       19
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                 MARCH 31, 2001


                                     ASSETS

CURRENT ASSETS:
  Cash and Cash Equivalents ......................................  $   554,181
  Restricted Cash ................................................      892,061
  Accounts Receivable, net of allowance
   for doubtful accounts of $854,423:
    Continuing License Fees and Advertising Fees .................      417,513
    Current Portion of Notes Receivable ..........................      415,829
    Current Portion of Direct Financing Leases ...................       15,321
    Insurance Premiums Receivable ................................        5,384
    Other ........................................................       83,330
  Prepaid Expenses and Other .....................................      165,811
  Prepaid Income Tax Expense .....................................      524,155
  Deferred Taxes .................................................      341,983
                                                                    -----------

        TOTAL CURRENT ASSETS .....................................    3,415,568
                                                                    -----------
PROPERTY AND EQUIPMENT:
  Furniture ......................................................       95,837
  Computer Hardware and Software .................................      470,153
  Machinery and Equipment ........................................       65,644
  Leasehold Improvements .........................................       23,767
  Vehicles .......................................................      398,111
                                                                    -----------
                                                                      1,053,512
  Less: Accumulated Depreciation and Amortization ................     (363,075)
                                                                    -----------

        NET PROPERTY AND EQUIPMENT ...............................      690,437
                                                                    -----------
OTHER ASSETS:
  Intangible Assets, net of accumulated amortization
   of $152,770....................................................      194,192
  Long-term Portion of Notes and Direct Financing Lease
   Receivables....................................................       73,536
                                                                    -----------

                                                                        267,728
                                                                    -----------

        TOTAL ASSETS .............................................  $ 4,373,733
                                                                    ===========

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

                                       20
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                 MARCH 31, 2001


                      LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts Payable and Accrued Expenses ............................  $  942,965
  Dividends Payable ................................................      22,100
  Insurance Loss Reserves ..........................................     510,327
                                                                      ----------

        TOTAL CURRENT LIABILITIES ..................................   1,475,392
                                                                      ----------
LONG-TERM LIABILITIES:
  Deferred Tax Liability ...........................................      35,514
                                                                      ----------

        TOTAL LONG-TERM LIABILITIES ................................      35,514
                                                                      ----------

        TOTAL LIABILITIES ..........................................   1,510,906
                                                                      ----------

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

SHAREHOLDERS' EQUITY:
  Convertible Cumulative Series A Preferred Stock, $.01 par value;
   authorized 10,000,000 shares; issued and outstanding 1,105,000
   shares (aggregate liquidation preference $884,000)...............      11,050
  Common Stock, $.01 par value; authorized 25,000,000 shares;
   issued and outstanding 4,385,496 shares..........................      43,855
  Additional Paid-In Capital .......................................   2,267,709
  Retained Earnings ................................................     540,213
                                                                      ----------

        TOTAL SHAREHOLDERS' EQUITY .................................   2,862,827
                                                                      ----------

        TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY .................  $4,373,733
                                                                      ==========

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

                                       21
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF EARNINGS
                   FOR THE YEARS ENDED MARCH 31, 2000 AND 2001

<TABLE>
<CAPTION>
                                                                  2000                  2001
                                                              -----------           -----------
<S>                                                           <C>                   <C>
REVENUES:
  Initial License Fees ...................................    $ 1,090,003           $ 1,019,451
  Continuing License Fees ................................      3,102,395             3,397,818
  Advertising Fees .......................................        971,126             1,006,522
  Insurance Premiums .....................................        887,311             1,220,270
  Vehicle Rental Operations ..............................         34,615                64,776
  Other ..................................................        196,444               137,508
                                                              -----------           -----------
                                                                6,281,894             6,846,345
                                                              -----------           -----------
EXPENSES:
  Salaries, Consulting Fees, and Employee Benefits........        932,990               957,086
  Advertising and Promotion ..............................      1,377,000             1,457,273
  Insurance Underwriting Expenses ........................        570,965             1,101,077
  Sales and Marketing ....................................        579,281               356,289
  Repurchase of Previously Granted Options ...............        625,000             1,234,560
  General and Administrative .............................      1,022,931             1,217,925
  Depreciation and  Amortization .........................        171,340               177,200
                                                              -----------           -----------
                                                                5,279,507             6,501,410
                                                              -----------           -----------

        OPERATING INCOME .................................      1,002,387               344,935

OTHER INCOME (EXPENSE)
  Interest Income ........................................        122,919               167,113
  Interest Expense .......................................        (24,500)              (25,403)
                                                              -----------           -----------
                                                                   98,419               141,710
                                                              -----------           -----------

        INCOME BEFORE INCOME TAX EXPENSE .................      1,100,806               486,645

INCOME TAX EXPENSE .......................................        280,177               223,623
                                                              -----------           -----------

        NET INCOME .......................................    $   820,629           $   263,022

DIVIDENDS ON CONVERTIBLE CUMULATIVE PREFERRED STOCK.......        (89,500)              (88,400)
                                                              -----------           -----------

NET INCOME AFTER DIVIDENDS ON CONVERTIBLE CUMULATIVE
 PREFERRED STOCK .........................................    $   731,129           $   174,622
                                                              ===========           ===========

EARNINGS PER SHARE
  Basic ..................................................    $       .19           $       .04
                                                              ===========           ===========
  Weighted average common shares .........................      3,808,147             4,065,680
                                                              ===========           ===========
  Diluted ................................................    $       .14           $       .04
                                                              ===========           ===========
  Weighted average common shares plus convertible
   preferred stock, options and warrants .................      5,901,617             4,355,823
                                                              ===========           ===========
</TABLE>
   The accompanying notes are an integral part of these financial statements.

                                       22
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                   FOR THE YEARS ENDED MARCH 31, 2000 AND 2001


<TABLE>
<CAPTION>
                                                                                                       (Accumulated
                                                Preferred Stock           Common Stock      Additional    Deficit)
                                            ---------------------   ---------------------    Paid-in      Retained
                                              Shares      Amount      Shares      Amount     Capital      Earnings       Total
                                            ----------   --------   ----------   --------  -----------    ---------   -----------
<S>                                         <C>          <C>        <C>          <C>         <C>            <C>          <C>
Balance, April 1, 1999 ...................   1,139,125   $11,391    3,934,092   $39,341    $2,209,181    $(218,623)   $2,041,290
  Retirement of common stock .............          --        --     (400,000)   (4,000)     (786,000)          --      (790,000)
  Conversion of preferred stock to
   common stock ..........................     (34,125)     (341)      34,125       341            --           --            --
  Preferred dividends paid ($.08 per
   share).................................          --        --           --        --            --      (89,500)      (89,500)
  Preferred dividend arrearages paid......          --        --           --        --            --     (146,915)     (146,915)
  Net income .............................          --        --           --        --            --      820,629       820,629
                                            ----------   -------   ----------   -------    ----------    ---------    ----------
Balance, March 31, 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
                                            ==========   =======   ==========   =======    ==========    =========    ==========
</TABLE>

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

                                       23
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                   FOR THE YEARS ENDED MARCH 31, 2000 AND 2001


<TABLE>
<CAPTION>
                                                                            2000               2001
                                                                        -----------        -----------
<S>                                                                     <C>              <C>
Increase (decrease) in cash and cash equivalents

Cash flows from operating activities:
  Net Income ........................................................   $   820,629        $   263,022
  Adjustments to reconcile net income
    to net cash provided by (used in) operating activities:
    Depreciation and amortization ...................................       171,340            177,200
    Deferred income taxes ...........................................      (369,832)           262,391
    Tax benefit for exercise of stock options
      and warrants ..................................................            --            149,829
    Loss (gain) on disposal of property and equipment ...............         1,757            (13,782)
    Provision for doubtful accounts .................................       173,775             22,170
  Changes in assets and liabilities:
    Accounts and notes receivable ...................................       124,777            129,910
    Prepaid expenses and other ......................................       (17,624)            18,234
    Prepaid income taxes ............................................            --           (524,155)
    Accounts payable and accrued
      expenses ......................................................       649,027           (416,250)
    Income taxes payable ............................................       156,888           (338,550)
    Insurance loss reserves .........................................        13,053            131,252
                                                                        -----------        -----------

        Net cash provided by (used in) operating activities..........     1,723,790           (138,729)
                                                                        -----------        -----------
Cash flows from investing activities:
  Increase in restricted cash .......................................       (26,971)          (146,547)
  Proceeds from sale of property and equipment ......................        43,000             54,620
  Acquisition of property and equipment .............................      (252,071)          (510,182)
  Additions to intangible assets ....................................       (56,635)           (21,261)
                                                                        -----------        -----------

        Net cash used in investing activities .......................      (292,677)          (623,370)
                                                                        -----------        -----------
Cash flows from financing activities:
  Decrease in insurance financing payable ...........................      (564,684)                --
  Net proceeds from exercise of stock options and warrants ..........            --            896,866
  Repurchase and retirement of common stock .........................      (790,000)          (193,994)
  Preferred dividends paid ..........................................      (236,415)           (88,400)
                                                                        -----------        -----------

        Net cash (used in) provided by financing activities..........    (1,591,099)           614,472
                                                                        -----------        -----------

        Net decrease in cash and cash equivalents ...................      (159,986)          (147,627)

Cash and cash equivalents at beginning of year ......................       861,794            701,808
                                                                        -----------        -----------

Cash and cash equivalents at end of year ............................   $   701,808        $   554,181
                                                                        ===========        ===========
Supplemental disclosure of cash flow information:
  Interest paid .....................................................   $    24,500        $    25,403
  Income taxes paid .................................................   $   481,669        $   673,709
</TABLE>

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

                                       24
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2001

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").

     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  being  held in Bank of
America  securing the letter of credit with Bank of America and $292,061 held on
behalf of the Company's franchisees in the national advertising fund to be spent
on various advertising programs.

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.

                                       25
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-CONTINUED
                                 MARCH 31, 2001

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                                    5   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.

                                       26
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-CONTINUED
                                 MARCH 31, 2001

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  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.

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).

INSURANCE PREMIUMS

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

                                       27
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2001

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"  (SFAB 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
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.

                                       28
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2001

NEWLY ISSUED ACCOUNTING STANDARDS

     In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative  Instruments and Hedging  Activities."  The statement
requires companies to recognize all derivatives as either assets or liabilities,
with the instruments  measured at fair value. The accounting for changes in fair
value and gains or losses  depends on the intended use of the derivative and its
resulting  designation.  The statement was originally effective for fiscal years
beginning  after  June  15,  1999.  In July  1999,  FASB  issued  SFAS  No.  138
"Accounting for Certain Derivative  Investments and Certain Hedging  Activities"
delayed implementation of this standard for one year, to June 30, 2000 and added
certain   other  related   accounting   and   financial   statement   disclosure
prescriptions.  The Company  will adopt SFAS 133 in the first  quarter of fiscal
2002.  The Company  does not expect the  adoption of SFAS Nos.  133 and 138 will
have a material effect on its consolidated financial statements.

RECLASSIFICATIONS

     Certain  prior year amounts have been  reclassified  to conform to the 2001
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 of
$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 with Bank of America  ("BOA") for  $1,000,000.  This
letter of credit is secured by a certificate  of deposit held by Bank of America
($600,000) plus 50% of the Company's eligible accounts  receivable.  Funds drawn
against the letter of credit bear interest at BOA's prime  commercial  rate plus
1.5%. As of March 31, 2001, no amounts have been drawn under the line of credit.

                                       29
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2001

3.   DIRECT FINANCING LEASES

     The components of the Company's net investment in direct  financing  leases
as of March 31, 2001 are as follows:


Total Minimum Lease Payments to be Received .....................      $55,332
  Less Amounts Representing
    Administration Costs Included in
    Total Minimum Lease Payments ................................        3,181
                                                                       -------

Minimum Lease Payment Receivable ................................       52,151
  Less Allowance for Uncollectibles .............................       15,215
                                                                       -------

Net Minimum Lease Payments Receivable ...........................       36,936
  Less Unearned Income ..........................................        5,046
                                                                       -------

Net Investment in Direct Financing Leases .......................      $31,890
                                                                       =======

  Current Portion ...............................................      $15,321
  Non-Current Portion ...........................................       16,569
                                                                       -------

Net Investment in Direct Financing Leases .......................      $31,890
                                                                       =======

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

     2002........................................................      $33,786
     2003........................................................       17,928
     2004........................................................        3,618
                                                                       -------
          Total .................................................      $55,332
                                                                       =======

                                       30
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2001

4.   ACCOUNTS PAYABLE AND ACCRUED EXPENSES

     Accounts payable and accrued expenses consist of the following at March 31,
2001:

Accounts Payable................................................     $  134,290
National Advertising Fund.......................................        292,061
Payroll.........................................................         57,872
Commissions and Royalties.......................................        144,585
Professional Fees...............................................         78,163
Other...........................................................        235,994
                                                                     ----------
                                                                     $  942,965
                                                                     ==========

                                       31
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2001

5.   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, 2000 and
2001 is as follows:

                                                          2000         2001
                                                       ----------   ----------
BASIC EPS COMPUTATION

Numerator:
 Net income applicable to common shares ............   $  731,129   $  174,622

Denominator:
 Weighted average common shares ....................    3,808,147    4,065,680
                                                       ----------   ----------

Basic EPS ..........................................   $      .19   $      .04
                                                       ==========   ==========

DILUTED EPS COMPUTATION

Numerator:
 Net income applicable to common shares ............   $  731,129   $  174,622
 Dividends on convertible preferred stock ..........       89,500           --
                                                       ----------   ----------
                                                          820,629      174,622
                                                       ----------   ----------

Denominator
 Weighted average common shares ....................    3,808,147    4,065,680
 Weighted average convertible preferred stock ......    1,122,993           --
 Weighted average options and warrants .............      970,477      290,143
                                                       ----------   ----------
                                                        5,901,617    4,355,823

Diluted EPS ........................................   $      .14   $      .04
                                                       ==========   ==========


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.

                                       32
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2001

6.   INCOME TAXES

     The  provision for income taxes for the years ended March 31, 2000 and 2001
consists of the following:

                                                            2000         2001
                                                         ---------    ---------
Currently payable
  State and other income taxes .......................   $  79,659    $  36,170
  Federal income taxes ...............................     570,350      (74,937)
                                                         ---------    ---------
      Total currently payable
        (receivable) .................................     650,009      (38,767)

  Deferred ...........................................    (369,832)     262,390
                                                         ---------    ---------

        Total ........................................   $ 280,177    $ 223,623
                                                         =========    =========

     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:

                                                           2000         2001
                                                          -----        -----
Federal taxes at statutory rate ......................     34.0%        34.0%
Reduction in valuation allowance .....................     (9.2)          --
State taxes, net .....................................      4.8          6.4
Non-deductible expense ...............................       --          2.5
Other ................................................     (4.1)         3.1
                                                          -----        -----
     Total ...........................................     25.5%        46.0%
                                                          =====        =====

                                       33
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2001

6.   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, 2001, are as follows:


Deferred tax assets:
  Reserve for doubtful accounts ...................................   $ 338,352
  Other ...........................................................       3,631
                                                                      ---------
                                                                        341,983
Deferred tax liabilities:
  Fixed assets ....................................................     (35,514)
                                                                      ---------
Net deferred tax asset before
  valuation allowance .............................................     306,469

Valuation allowance ...............................................          --
                                                                      ---------
Net deferred tax asset ............................................   $ 306,469
                                                                      =========

                                       34
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2001

7.   COMMITMENTS AND CONTINGENCIES

LEASE COMMITMENTS

     The Company's  corporate offices were occupied under the terms of operating
leases from both related and non-related  parties,  the longest of which expired
in November 1999. 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,
              2002..........................  $118,126
              2003..........................   121,670
              2004..........................   125,320
              2005..........................   129,080
              Thereafter....................    76,598
                                              --------
                   Total....................  $570,794
                                              ========

     Total rent  expense for the years ended March 31, 2000 and 2001 was $85,824
and $114,087,  respectively, of which $45,670 and $114,087, respectively, 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 on the  consolidated  results of operations or financial  position of the
Company.

     In December 2000, the Company and certain employees were named in a lawsuit
seeking declaratory and injunctive relief,  rescission,  and monetary damages in
the sum of $5 million. This lawsuit alleges similar claims to a lawsuit that was
previously  dismissed,  and the Company  believes the claims are without  merit.
They will be vigorously defended.

                                       35
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2001

8.   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, 2000 and 2001 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.  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,  for which the
Company received $617,279.

     Through  November 19, 1999,  the Company  leased a portion of its corporate
offices  under the  terms of a  month-to-month  operating  lease  with  American
Business Information  Systems,  Inc. (ABIS), a related party of KAB. The Company
paid $4,951 for the year ended March 31, 2000, to ABIS under this agreement.  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 $114,087 for the
year ended March 31, 2001.

     On  January  19,  2000,  the  Board of  Directors  authorized  expenditures
totaling  $250,000  for  the  development  by  ABIS  of a  centralized  software
reporting  package to be used by the  Company's  franchisees.  The Company  paid
$4,940 and $177,255  for the years ended March 31, 2000 and 2001,  respectively,
to ABIS under this arrangement.

     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

                                       36
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2001

8.   RELATED PARTY TRANSACTIONS-CONTINUED

of 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.

     Through  March 31, 1999,  Richter  provided  ongoing  financial  management
services to the Company at no charge.  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.

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

COMMON STOCK

     In November 1999, the Company repurchased and retired 400,000 shares of its
common  stock at a cost of  $790,000.  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.

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
options  were fully  vested.  On January 19,  2000,  the Board

                                       37
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2001

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

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.  The  repurchase  has been
included in the consolidated  statement of earnings for the year ended March 31,
2000.

     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.

     There were no stock options granted during fiscal year 2000. 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 current
market price, solely in their capacity as directors.  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
2001:  risk-free  interest  rate of 6.4%;  expected  volatility  of  48.5%;  and
expected lives of 7 years.

                                       38
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2001

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

     The following  table  summarizes  option activity for the years ended March
31, 2000 and 2001:

<TABLE>
<CAPTION>
                                                                                     2000          2001
                                                                                   Weighted      Weighted
                                                                                    Average       Average
                                                      2000            2001         Exercise      Exercise
                                                     Shares          Shares         Price         Price
                                                     ------          ------         -----         -----
<S>                                                <C>             <C>              <C>          <C>
Options outstanding at beginning of year .......   2,250,000       1,750,000        $1.08        $1.06
Options exercised ..............................          --        (792,279)          --         1.01
Options granted ................................          --          35,000           --         1.64
Options repurchased ............................    (500,000)       (957,721)        1.15         1.11
Options expired ................................          --              --           --           --
Options outstanding at end of year .............   1,750,000          35,000        $1.06        $1.64
Option price range for exercised shares ........          --     $1.00 to $1.15
Weighted-average fair value of options,
 granted during the year........................          --           $.98
</TABLE>

At March 31, 2000 and 2001, 1,750,000 and 35,000 options were exercisable.

     The following table summarizes options outstanding at March 31, 2001:

                                                         Weighted Average
       Number        Exercise      Weighted Average         Remaining
     Outstanding      Price        Exercise Price        Contractual Life
     -----------      -----        --------------        ----------------
       35,000         $1.64            $1.64                   9.64

                                       39
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2001

9.   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.

                                                               2000       2001
                                                             --------   --------
Net income applicable to common
 and common equivalent shares
  As reported ..........................................     $731,129   $174,622
  Pro forma ............................................     $664,166   $153,568

Net earnings per share

 Basic:
  As reported ..........................................     $    .19   $    .04
  Pro forma ............................................     $    .17   $    .04

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

     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
because

                                       40
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2001

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

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 ........................         --
                                                   =========

                                       41
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2001

10.  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.  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  95% 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, 2000,  34,125 shares of preferred  stock were  converted to
common  stock  reducing  the  outstanding  preferred  shares from  1,139,125  to
1,105,000.  During the year ended March 31, 2000, the Company declared preferred
dividends totaling $89,500, plus $146,915 (100%) of dividend arrearages,  and at
March 31, 2001, unpaid declared preferred dividends totaled $22,100.

11.  OTHER REVENUES

     Components  of other  revenues  for the years ended March 31, 2000 and 2001
were as follows:

                                          2000       2001
                                        --------   --------
Promotional materials.................  $128,141   $126,938
Litigation settlement.................    49,750         --
Other.................................    18,553     10,570
                                        --------   --------
                                        $196,444   $137,508
                                        ========   ========

12.  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.

                                       42
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2001

13.  GEOGRAPHIC AND INDUSTRY SEGMENTS

     The Company currently  operates in two principal  segments:  Vehicle Rental
Franchise Programs and Insurance Coverage. 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:

                                                         2000           2001
                                                     -----------    -----------
Net revenues from external customers
 Vehicle Rental Franchises-Rent A Wreck-(U.S.) ...   $ 4,879,638    $ 5,102,119
 Vehicle Rental Franchises-Priceless-(U.S.) ......       495,214        537,495
 Corporate-(U.S.) ................................        21,202          1,550
 Insurance-(U.S.) ................................       885,840      1,205,181
 Insurance-(Bermuda) .............................            --             --
                                                     -----------    -----------
                                                     $ 6,281,894    $ 6,846,345
                                                     ===========    ===========

Segment operating income
 Vehicle Rental Franchises-Rent A Wreck-(U.S.) ...   $ 1,206,238    $ 1,015,220
 Vehicle Rental Franchises-Priceless-(U.S.) ......      (349,253)      (607,355)
 Corporate-(U.S.) ................................       (95,238)       (83,784)
 Insurance-(U.S.) ................................       240,640         20,854
 Insurance-(Bermuda) .............................            --             --
                                                     -----------    -----------
                                                     $ 1,002,387    $   344,935
                                                     ===========    ===========

Segment assets
 Vehicle Rental Franchises-Rent A Wreck-(U.S.) ...   $ 2,264,794    $ 2,351,100
 Vehicle Rental Franchises-Priceless-(U.S.) ......       388,517        574,373
 Corporate-(U.S.) ................................       256,127        384,141
 Insurance-(U.S.) ................................     1,062,789      1,055,877
 Insurance-(Bermuda) .............................         7,898          8,242
                                                     -----------    -----------
                                                     $ 3,980,125    $ 4,373,733
                                                     ===========    ===========

Expenditures for segment assets
 Vehicle Rental Franchises-Rent A Wreck-(U.S.) ...   $        --    $        --
 Vehicle Rental Franchises-Priceless-(U.S.) ......       187,605        240,075
 Corporate-(U.S.) ................................        64,466        270,107
 Insurance-(U.S.) ................................            --             --
 Insurance-(Bermuda) .............................            --             --
                                                     -----------    -----------
                                                     $   252,071    $   510,182
                                                     ===========    ===========

                                       43
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                 MARCH 31, 2001

13.  GEOGRAPHIC AND INDUSTRY SEGMENTS-CONTINUED

                                                              2000       2001
                                                            --------   --------
Depreciation and amortization
 Vehicle Rental Franchises-Rent A Wreck-(U.S.) ............ $  17,701   $ 17,997
 Vehicle Rental Franchise-Priceless-(U.S.) ................   51,480     45,528
 Corporate-(U.S.) .........................................  102,159    113,675
 Insurance-(U.S.) .........................................       --         --
 Insurance-(Bermuda) ......................................       --         --
                                                            --------   --------
                                                            $171,340   $177,200
                                                            ========   ========
Interest income
 Vehicle Rental Franchises-Rent A Wreck-(U.S.) ............ $ 52,057   $ 85,800
 Vehicle Rental Franchises-Priceless-(U.S.) ...............    6,132      8,037
 Corporate-(U.S.) .........................................   20,732      8,357
 Insurance-(U.S.) .........................................       --     64,575
 Insurance-(Bermuda) ......................................   43,998        344
                                                            --------   --------
                                                            $122,919   $167,113
                                                            ========   ========
Interest expense
 Vehicle Rental Franchises-Rent A Wreck-(U.S.) ............ $    396   $     15
 Vehicle rental Franchise-Priceless-(U.S.) ................       17         11
 Corporate-(U.S.) .........................................        1         --
 Insurance-(U.S.) .........................................   24,086     25,377
 Insurance- (Bermuda) .....................................       --         --
                                                            --------   --------
                                                            $ 24,500   $ 25,403
                                                            ========   ========
Income taxes
 Vehicle Rental Franchises-Rent A Wreck-(U.S.) ............ $280,177   $206,913
 Vehicle rental Franchises-Priceless-(U.S.) ...............       --         --
 Corporate-(U.S.) .........................................       --         --
 Insurance-(U.S.) .........................................       --     16,710
 Insurance-(Bermuda) ......................................       --         --
                                                            --------   --------
                                                            $280,177   $223,623
                                                            ========   ========

                                       44
<PAGE>
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, 2001. 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., 74. 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.,  37, 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.

                                       45
<PAGE>
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
        SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE-CONTINUED

CLASS II DIRECTORS:

     William L. Richter,  58, 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  eleven  years,  Mr.  Richter  has been
President of Richter and its wholly  owned  subsidiary,  Richter & Co.,  Inc., a
registered broker-dealer until November 1999, and merchant banking firm. Richter
& Co.,  Inc. was merged into its parent on December 31,  1999.  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, 71, 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,  65, 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.  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
Alliance Atlantic  Communication  Inc.,  American Technical Ceramics and Paragon
Trade Brands.

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

                                       46
<PAGE>
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,  1999,  2000 and 2001.  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.

                                     Annual        Long-term Compensation Awards
                                  Compensation     -----------------------------
                                 ----------------    Securities Underlying
Name and Principal Position      Year    Salary(1)        Options/SARs(#)
---------------------------      ----    ---------        ---------------
Kenneth L. Blum, Sr., CEO        2001    $300,000             -- (2)
                                 2000     300,000             -- (2)
                                 1999     262,500             -- (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 ($250,000 per year prior to January 1, 1999)
     plus expense reimbursements ($10,014 in the year ended March 31, 2001). 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

                                       47
<PAGE>
ITEM 10. EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE-CONTINUED

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.  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.

                                       48
<PAGE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     As of June 8, 2001,  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                 465,000              10.5           10.5
Bundy Rent-A-Wreck
12333 W. Pico Blvd.
Los Angeles, California 90064

William L. Richter(3)(4)                        Common                 992,706(3)           22.5(3)        22.5
c/o Richter Investment Corp.                  Preferred(3)           1,050,000(3)           95.0           37.0(4)
450 Park Avenue
New York, NY 100022

Alan L. Aufzien(5)                              Common                  62,500               1.4            1.4
P.O. Box 2369                                 Preferred(4)              34,375               3.1            1.8
Secaucus, NJ 07094

Thomas J. Volpe (8)                             Common                   5,000                **             **
1271 Avenue of Americas
New York, NY 10020

Kenneth L. Blum, Jr.(6)                         Common                 530,718              12.0           12.0
10324 S. Dolfield Road
Owings Mills, MD 21117

Alan Cohn (6)(7)                                Common                 456,395              10.3           10.3
c/o Rent-A-Wreck of America, Inc.
10324 S. Dolfield Road
Owings Mills, MD  21117

Robert M. Temko                                 Common                 269,100               6.1            6.1
39 Hidden Valley Drive
Newark, Delaware 19711

All Directors and Executive Officers
 as a Group including the Directors             Common               1,590,924(3)(5)(6)     36.0           36.0(4)
 Named Above (4 persons)                      Preferred(2)(3)        1,050,000(3)(4)        95.0           47.8
</TABLE>

----------
*    Represents percentage ownership of common stock based upon shares of Common
     Stock  owned or deemed  owned due to  presently  exercisable  warrants  and
     options and after such person's  conversion of Series A Preferred.  ** Less
     than 1%.

                                       49
<PAGE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT -
         CONTINUED

FOOTNOTES

(1)  Based on 4,385,496  common shares and 1,105,000  Series A Preferred  Shares
     outstanding  and  35,000  options  for shares of common  stock  exercisable
     immediately on the date of this table, June 8, 2001.

(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 less 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)  Includes  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 30,000 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)  Includes 127,167 shares held jointly with spouse. See note 6 above.

(8)  Includes 5,000 options for shares of common stock exercisable immediately.

                                       50
<PAGE>
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.

                                       51
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
                  SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS
                       YEARS ENDED MARCH 31, 2000 and 2001

<TABLE>
<CAPTION>
                                                                              Additions
                                                                        --------------------
                                                           Balance at   Charged to   Charged                     Balance
                                                           Beginning    Costs and    to Other                    at End
Description                                                of Period    Expenses     Accounts   Deductions      of Period
-----------                                                ---------    ----------   --------   ----------      ---------
<S>                                                        <C>          <C>          <C>        <C>             <C>
MARCH 31, 2000

Allowance for doubtful accounts ........................   $  655,418   $  245,114   $     --   $   68,279(1)   $832,253
                                                           ==========   ==========   ========   ==========      ========

Valuation allowance on net deferred tax assets .........   $ 100,730    $       --   $     --   $  100,730(2)   $     --
                                                           ==========   ==========   ========   ==========      ========
MARCH 31, 2001

Allowance for doubtful accounts ........................   $  832,253   $   48,329   $     --   $   26,159(1)   $854,423
                                                           ==========   ==========   ========   ==========      ========
</TABLE>

----------
(1)  Accounts written off
(2)  Reduction in the valuation  allowance based on evaluation of realization of
     net deferred tax assets.

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

                                       52
<PAGE>
                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934,  Rent-A-Wreck of America, Inc. has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized:


Rent-A-Wreck of America, Inc.
Registrant

By: /s/ Mitra Ghahramanlou                                   Date: July 13, 2001
    --------------------------
    Mitra Ghahramanlou
    Chief Accounting Officer

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, 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.                                           July 13, 2001
-------------------------------
Kenneth L. Blum, Sr.
Chairman of the Board
and Director (Principal
Executive Officer)


/s/ Mitra Ghahramanlou                                             July 13, 2001
-------------------------------
Mitra Ghahramanlou
Chief Accounting Officer
(Principal Financial and
Accounting Officer)


/s/ Kenneth L. Blum, Jr.                                           July 13, 2001
-------------------------------
Kenneth L. Blum, Jr.
President and Director


/s/ William L. Richter                                             July 13, 2001
-------------------------------
William L. Richter
Vice Chairman of the Board
and Director


/s/ Alan Aufzien                                                   July 13, 2001
-------------------------------
Alan Aufzien, Director


/s/ Thomas J. Volpe                                                July 13, 2001
-------------------------------
Thomas J. Volpe, Director

                                       53
<PAGE>
                          RENT-A-WRECK OF AMERICA, INC.
                                  EXHIBIT INDEX
                                   FORM 10-KSB
                                 FOR FISCAL YEAR
                              ENDED MARCH 31, 2001

                                                  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
               as amended                         for the fiscal
                                                  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
<PAGE>
                                                  Incorporated
Exhibit No.    Exhibit                            by Reference from
-----------    -------                            -----------------
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             Filed herewith
               Agreement -standard
               form as of
               July 21, 2000
<PAGE>
                                                  Incorporated
Exhibit No.    Exhibit                            by Reference from
-----------    -------                            -----------------
10.9.1         Priceless Franchise                Filed herewith
               Agreement standard
               form as of
               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.
<PAGE>
                                                  Incorporated
Exhibit No.    Exhibit                            by Reference from
-----------    -------                            -----------------
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.
<PAGE>
                                                  Incorporated
Exhibit No.    Exhibit                            by Reference from
-----------    -------                            -----------------
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.
<PAGE>
                                                  Incorporated
Exhibit No.    Exhibit                            by Reference from
-----------    -------                            -----------------
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.

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.

21             List of Subsidiaries               Filed herewith.

----------
* Management contract or compensatory plan or arrangement.