United States Securities and Exchange Commission

                             Washington, D.C. 20549

                                   FORM 10-QSB

(Mark One)
       [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
           EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 2002

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

           For the transition period from ____________ to ____________

                         Commission File Number 0-14819

                          RENT-A-WRECK OF AMERICA, INC.
      (Exact name of small business issuer as specified in its Charter)


             Delaware                                            95-3926056
  (State or other jurisdiction                                (I.R.S. Employer
of 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


     Check whether the issuer (1) has 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 [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

     State the number of shares  outstanding  of each of the issuer's  shares of
common stock,  as of the latest  practicable  date:  4,186,296  shares of common
stock as of August 12, 2002.

     Transitional Small Business Disclosure Format (Check One): Yes [ ] No [X]
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES

                           FORM 10-QSB - JUNE 30, 2002

                                      INDEX

PART I. FINANCIAL INFORMATION                                               Page
                                                                            ----
Item 1. Financial Statements

        Consolidated Balance Sheets as of
          March 31, 2002 and June 30, 2002 (Unaudited)                       2-3

        Consolidated Statements of Earnings for the Three Months
          ended June 30, 2001 and 2002 (Unaudited)                             4

        Consolidated Statements of Cash Flows for the Three Months
          ended June 30, 2001 and 2002 (Unaudited)                             5

        Notes to Consolidated Financial Statements (Unaudited)              6-12

Item 2. Management's Discussion and Analysis or Plan of Operation          13-15

PART II. OTHER INFORMATION

Item 2. Changes in Securities and Use of Proceeds                             19

Item 3. Defaults Upon Senior Securities                                       19

Item 4. Submission of Matters to a Vote of Security Holders                   19

Item 5. Disclosure                                                            19

Item 6. Exhibits and Reports on Form 8-K                                      20

Item 7. Financial Statements and Exhibits                                     20

        Signatures                                                            22

                                       1
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS

                                                       March 31,     June 30,
                                                         2002          2002
                                                      -----------   -----------
                                                                    (Unaudited)
CURRENT ASSETS:
  Cash and Cash Equivalents .......................   $   447,991   $   345,978
  Restricted Cash .................................       600,000       600,000
  Accounts Receivable, net of allowance
    for doubtful accounts of $1,014,333 and
      $1,195,950 at March 31, 2002 and
        June 30, 2002, respectively:
          Continuing License Fees and
          Advertising Fees ........................       389,417       361,117
        Current Portion of Notes Receivable .......       525,158       583,151
        Current Portion of Direct Financing
          Leases ..................................        22,163        25,674
          Insurance Premiums Receivable ...........        78,100         7,630
          Vehicle Rental Operation ................        92,413       100,520
          Other ...................................       203,931       196,173
  Prepaid Expenses and Other ......................       199,370       209,909
  Prepaid Income Tax Expense ......................       373,647       383,990
  Deferred Tax ....................................       501,216       571,320
                                                      -----------   -----------

    TOTAL CURRENT ASSETS ..........................     3,433,406     3,385,462
                                                      -----------   -----------
PROPERTY AND EQUIPMENT:
  Furniture .......................................        99,676        90,430
  Computer Hardware and Software ..................       564,169       606,022
  Machinery and Equipment .........................        71,288        54,756
  Leasehold Improvements ..........................        28,417        28,417
  Vehicles ........................................     1,242,149     1,000,902
                                                      -----------   -----------
                                                        2,005,699     1,780,527
  Less:  Accumulated Depreciation and
         Amortization .............................      (578,793)     (579,043)
                                                      -----------   -----------

    NET PROPERTY AND EQUIPMENT ....................     1,426,906     1,201,484
                                                      -----------   -----------
OTHER ASSETS:
  Intangible Assets, net of accumulated
    amortization of $175,584 and $181,308 at March
    31, 2002 and June 30, 2002, respectively ......       175,976       170,519
  Long-term Portion of Notes and Direct Financing
    Lease Receivables, net of allowance of $183,180
      and $88,929 at March 31, 2002 and June 30,
      2002, respectively ..........................        52,804       151,270
                                                      -----------   -----------

                                                          228,780       321,789
                                                      -----------   -----------

    TOTAL ASSETS ..................................   $ 5,089,092   $ 4,908,735
                                                      ===========   ===========

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

                                       2
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                      LIABILITIES AND SHAREHOLDERS' EQUITY

                                                         March 31,    June 30,
                                                           2002         2002
                                                        ----------   ----------
                                                                     (Unaudited)
CURRENT LIABILITIES:
  Accounts Payable and Accrued Expenses .............   $  793,497   $  557,750
  Dividends Payable .................................       21,687       21,687
  Current Portion of Vehicle Financing Payable ......      100,008      100,008
  Insurance Loss Reserves ...........................      621,905      705,779
                                                        ----------   ----------

    TOTAL CURRENT LIABILITIES .......................    1,537,097    1,385,224
                                                        ----------   ----------

LONG-TERM LIABILITIES:

  Vehicle Financing Payable, net of current portion .      355,560      330,558
  Deferred Tax Liability ............................      107,813      107,813
                                                        ----------   ----------

    TOTAL LONG-TERM LIABILITIES .....................      463,373      438,371
                                                        ----------   ----------

    TOTAL LIABILITIES ...............................    2,000,470    1,823,595
                                                        ----------   ----------

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

SHAREHOLDERS' EQUITY:

  Convertible Cumulative Series A Preferred Stock,
    $.01 par value; authorized 10,000,000 shares;
    issued and outstanding 1,084,375 shares at
    March 31, 2002 and at June 30, 2002 (aggregate
    liquidation preference $867,500 at March 31,
    2002 and June 30, 2002) .........................       10,844       10,844
  Common Stock, $.01 par value; authorized
    25,000,000 shares; issued and outstanding
    4,205,296 and 4,186,296 shares at March 31,
    2002 and June 30, 2002, respectively ............       42,053       41,863
  Additional Paid-In Capital ........................    1,906,773    1,874,167
  Retained Earnings .................................    1,128,952    1,158,266
                                                        ----------   ----------

    TOTAL SHAREHOLDERS' EQUITY ......................    3,088,622    3,085,140
                                                        ----------   ----------

    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ......   $5,089,092   $4,908,735
                                                        ==========   ==========

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

                                       3
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF EARNINGS
                                   (UNAUDITED)

                                                    Three Months Ended June 30,
                                                   ----------------------------
                                                      2001             2002
                                                   -----------      -----------
REVENUES:
  Initial License Fees .......................     $   504,501      $   431,000
  Continuing License Fees ....................         879,535          634,565
  Advertising Fees ...........................         235,699          188,445
  Insurance Premiums .........................         344,022          303,244
  Vehicle Rental Operations ..................          52,730          120,487
  Other ......................................          31,398           30,796
                                                   -----------      -----------
                                                     2,047,885        1,708,537
                                                   -----------      -----------
EXPENSES:
  Salaries, Consulting Fees and
    Employee Benefits ........................         271,354          375,989
  Advertising and Promotion ..................         301,754          249,359
  Sales and Marketing ........................         227,774          241,944
  Direct Expenses - Rental Operations ........          23,150           53,941
  Insurance Underwriting Expenses ............         237,075          293,392
  General and Administrative Expenses ........         318,828          350,881
  Depreciation & Amortization ................          45,987           74,077
                                                   -----------      -----------
                                                     1,425,922        1,639,583
                                                   -----------      -----------
      OPERATING INCOME .......................         621,963           68,954

OTHER INCOME (EXPENSE)
  Interest Income ............................          33,995           19,347
  Interest Expense ...........................          (6,197)          (5,238)
                                                   -----------      -----------
                                                        27,798           14,109
                                                   -----------      -----------

      INCOME BEFORE INCOME TAX EXPENSE .......         649,761           83,063
                                                   -----------      -----------

INCOME TAX EXPENSE ...........................         250,808           32,061
                                                   -----------      -----------

      NET INCOME .............................     $   398,953      $    51,002

DIVIDENDS ON CONVERTIBLE CUMULATIVE
  PREFERRED STOCK ............................          22,100           21,687
                                                   -----------      -----------

NET INCOME APPLICABLE TO COMMON
  AND COMMON EQUIVALENT SHARES ...............     $   376,853      $    29,315
                                                   -----------      -----------

EARNINGS PER COMMON SHARE
  Basic ......................................     $       .09      $       .01
                                                   -----------      -----------

Weighted average common shares ...............       4,385,496        4,196,527
                                                   ===========      ===========

  Diluted ....................................     $       .07      $       .01
                                                   -----------      -----------
Weighted average common shares
 plus options and warrants ...................       5,490,496        5,281,971
                                                   ===========      ===========

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

                                       4
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                Three Months Ended June 30,
                                                                --------------------------
                                                                    2001           2002
                                                                -----------    -----------
<S>                                                             <C>            <C>
Increase (decrease) in cash and cash equivalents

Cash flows from operating activities:
  Net income ................................................   $   398,953    $    51,002
  Adjustments to reconcile net income
    to net cash (used in) provided by operating activities:
      Depreciation and amortization .........................        45,987         74,077
      Deferred income taxes .................................       (17,331)            --
      (Gain) loss on disposal of property and equipment .....           (95)        12,548
      Provision for doubtful accounts .......................        44,876         87,366
  Changes in assets and liabilities:
      Accounts and notes receivable .........................      (424,727)      (148,915)
      Prepaid expenses and other ............................       (10,072)       (10,539)
      Prepaid income tax ....................................       258,434        (10,343)
      Deferred tax ..........................................            --        (70,104)
      Accounts payable and accrued
        expenses ............................................        85,066       (235,747)
      Insurance loss reserves ...............................       (22,584)        83,874
                                                                -----------    -----------

      Net cash provided by (used in) operating activities ...       358,507       (166,781)
                                                                -----------    -----------

Cash flows from investing activities:
  Increase (decrease) in restricted cash ....................        27,567             --
  Proceeds from sale of property and equipment ..............         6,200        233,160
  Acquisition of property and equipment and intangible assets      (353,816)       (88,906)
                                                                -----------    -----------

      Net cash (used in) provided by investing activities ...      (320,049)       144,254
                                                                -----------    -----------
Cash flow from financing activities:
  Decrease in vehicle financing payable .....................            --        (25,002)
  Increase in insurance financing payable ...................       439,181             --
  Repurchase and retirement of common stock .................            --        (32,797)
  Preferred dividends paid ..................................       (22,100)       (21,687)
                                                                -----------    -----------

      Net cash provided by (used in) financing activities ...       417,081        (79,486)
                                                                -----------    -----------
      Net increase (decrease) in cash and cash
         equivalents ........................................       455,539       (102,013)

Cash and cash equivalents at beginning of period ............       554,181        447,991
                                                                -----------    -----------

Cash and cash equivalents at end of period ..................   $ 1,009,720    $   345,978
                                                                -----------    -----------

Supplemental disclosure of cash flow information:
  Interest paid .............................................   $     6,197    $     5,238
  Taxes paid ................................................   $     9,705    $   114,477
</TABLE>

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

                                       5
<PAGE>
            RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            JUNE 30, 2002

1.   CONSOLIDATED FINANCIAL STATEMENTS

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

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

     The  consolidated  balance sheet as of June 30, 2002, and the  consolidated
statements of earnings and cash flows for the three-month periods ended June 30,
2001 and 2002 have been prepared by the Company without audit. In the opinion of
management,  all adjustments  which are necessary to present a fair statement of
the results of operations  for the interim  periods have been made, and all such
adjustments are of a normal recurring nature.  Certain  information and footnote
disclosures  normally  included in financial  statements  prepared in accordance
with  accounting  principles  generally  accepted in the United States have been
condensed or omitted.  These financial  statements should be read in conjunction
with the financial  statements and notes thereto included in the Company's March
31, 2002 Form 10-KSB  filed with the  Securities  and Exchange  Commission.  The
interim  results of  operations  for the three month periods ended June 30, 2001
and 2002 are not necessarily indicative of operating results for the full fiscal
year.

2.   PREFERRED STOCK

     During the three month  period ended June 30,  2002,  the Company  declared
dividends on the Preferred Stock totaling  $21,687 which are expected to be paid
during the second quarter of the Company's 2003 fiscal year.

                                       6
<PAGE>
3.   EARNINGS PER SHARE

     A  reconciliation  of  the  numerators  and  denominators  utilized  in the
computation of basic and diluted earnings per share for the three-month  periods
ended June 30, 2001 and 2002 is as follows:

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

Numerator:
 Net income applicable to common shares ..........     $  376,853     $   29,315

Denominator:
 Weighted average common shares ..................      4,385,496      4,196,527
                                                       ----------     ----------

Basic EPS ........................................     $      .09     $      .01
                                                       ==========     ==========

DILUTED EPS COMPUTATION

Numerator:
 Net income applicable to common shares ..........     $  376,853     $   29,315
 Dividends on convertible preferred stock ........         22,100         21,687
                                                       ----------     ----------
                                                          398,953         51,002
                                                       ----------     ----------

Denominator
 Weighted average common shares ..................      4,385,496      4,196,527
 Weighted average convertible preferred stock ....      1,105,000      1,084,375
 Weighted average options and warrants ...........             --          1,069
                                                       ----------     ----------
                                                        5,490,496      5,281,971
                                                       ----------     ----------

Diluted EPS ......................................     $      .07     $      .01
                                                       ==========     ==========

For the three month  period  ended June 30,  2001,  options for the  purchase of
35,000 shares of common stock were excluded from the  calculation of diluted EPS
as their effect would have been  antidilutive.  For the three month period ended
June 30, 2002,  options for the  purchase of 10,000  shares of common stock were
excluded  from the  calculation  of diluted EPS as their  effect would have been
antidilutive.

                                       7
<PAGE>
4.   GEOGRAPHIC AND INDUSTRY SEGMENTS

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

     The Company's foreign  operations are presently  conducted by CAR Insurance
in Bermuda.

     Information by geographic area and industry segment is as follows:

                                                         Three Months Ended
                                                              June 30,
                                                     --------------------------
                                                            2001           2002
                                                     -----------    -----------
Net revenues from external customers
 Vehicle Rental Franchises-Rent-A-Wreck-(U.S.)       $ 1,397,399    $ 1,068,628
 Vehicle Rental Franchises-Pricele$$-(U.S.)              253,734        215,253
 Vehicle Rental Operations-(U.S.)                         52,731        120,487
 Corporate-(U.S.)                                             --            925
 Insurance-(U.S.)                                        344,021        303,244
 Insurance-(Bermuda)                                          --             --
                                                     -----------    -----------
                                                     $ 2,047,885    $ 1,708,537
                                                     -----------    -----------

Segment operating income
 Vehicle Rental Franchises-Rent-A-Wreck-(U.S.)       $   510,576    $   252,718
 Vehicle Rental Franchises-Pricele$$-(U.S.)               86,059         27,095
 Vehicle Rental Operations-(U.S.)                        (48,486)      (100,004)
 Corporate-(U.S.)                                        (15,607)       (22,201)
 Insurance-(U.S.)                                         89,421        (88,654)
 Insurance-(Bermuda)                                          --             --
                                                     -----------    -----------
                                                     $   621,963    $    68,954
                                                     ===========    ===========

Segment assets
 Vehicle Rental Franchises-Rent-A-Wreck-(U.S.)       $ 2,187,294    $ 2,324,018
 Vehicle Rental Franchises-Pricele$$-(U.S.)              457,203        265,140
 Vehicle Rental Operations-(U.S.)                        614,064      1,027,892
 Corporate-(U.S.)                                        529,923        390,898
 Insurance-(U.S.)                                      1,455,523        892,444
 Insurance-(Bermuda)                                       8,242          8,343
                                                     -----------    -----------
                                                     $ 5,252,249    $ 4,908,735
                                                     ===========    ===========

                                       8
<PAGE>
4.   GEOGRAPHIC AND INDUSTRY SEGMENTS-CONTINUED

                                                         Three Months Ended
                                                              June 30,
                                                     --------------------------
                                                        2001           2002
                                                     -----------    -----------

Expenditures for segment assets
 Vehicle Rental Franchises-Rent-A-Wreck-(U.S.)       $        --    $        --
 Vehicle Rental Franchises-Pricele$$-(U.S.)                   --             --
 Vehicle Rental Operations-(U.S.)                        303,581         39,593
 Corporate-(U.S.)                                         50,235         49,313
 Insurance-(U.S.)                                             --             --
 Insurance-(Bermuda)                                          --             --
                                                     -----------    -----------
                                                     $   353,816    $    88,906
                                                     ===========    ===========

Depreciation and amortization
 Vehicle Rental Franchises-Rent-A-Wreck-(U.S.)       $     4,528    $     4,540
 Vehicle Rental Franchises-Pricele$$-(U.S.)                1,016          1,184
 Vehicle Rental Operations-(U.S.)                         19,602         51,341
 Corporate-(U.S.)                                         20,841         17,012
 Insurance-(U.S.)                                             --             --
 Insurance-(Bermuda)                                          --             --
                                                     -----------    -----------
                                                     $    45,987    $    74,077
                                                     ===========    ===========

Interest income
 Vehicle Rental Franchises-Rent-A-Wreck-(U.S.)       $    19,555    $    12,769
 Vehicle Rental Franchises-Pricele$$-(U.S.)                1,890          1,939
 Vehicle Rental Operations-(U.S.)                             --             --
 Corporate-(U.S.)                                          1,534          1,587
 Insurance-(U.S.)                                         11,016          3,048
 Insurance-(Bermuda)                                          --              4
                                                     -----------    -----------
                                                     $    33,995    $    19,347
                                                     ===========    ===========

Interest expense
 Vehicle Rental Franchises-Rent-A-Wreck-(U.S.)       $        --    $        --
 Vehicle Rental Franchises-Pricele$$-(U.S.)                   --             --
 Vehicle Rental Operations-(U.S.)                             --          5,238
 Corporate-(U.S.)                                             --             --
 Insurance-(U.S.)                                          6,197             --
 Insurance-(Bermuda)                                         --             --
                                                     -----------    -----------
                                                     $     6,197    $     5,238
                                                     ===========    ===========

Income taxes
 Vehicle Rental Franchises-Rent-A-Wreck-(U.S.)       $   198,010    $    20,854
 Vehicle Rental Franchises-Pricele$$-(U.S.)               33,948         11,207
 Vehicle Rental Operations-(U.S.)                             --             --
 Corporate-(U.S.)                                             --             --
 Insurance-(U.S.)                                         18,850             --
 Insurance-(Bermuda)                                          --             --
                                                     -----------    -----------
                                                     $   250,808    $    32,061
                                                     ===========    ===========

                                      9
<PAGE>
5.   LITIGATION

     Rent-A-Wreck  of America,  Inc.  (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 effect on the consolidated  results of operations or
financial position of the Company.

     In April,  2001,  the Company and one of its  subsidiaries,  Bundy American
Corporation,  Inc., were impleaded into a personal injury lawsuit, pending since
1992,  involving  injuries to a pedestrian  claiming to have been  involved in a
motor vehicle accident with an auto owned and rented by an independent  licensee
of the Company.  The plaintiff seeks damages  totaling $9 million.  The Company
believes it has several meritorious defenses and believes the claims against the
Company are without merit. The Company is vigorously  defending the lawsuit, and
expects  to file a summary  judgment  motion in the near  future.  The  Company
intends to move for dismissal of the lawsuit and/or, if necessary,  try the case
to  conclusion,  and  pursue  any  appeals as may be  necessary  to sustain  its
position. No trial date has been scheduled.

     On  May  14,  2001,  a  Carney,   Maryland  franchisee  of  Bundy  American
Corporation  filed  an  action  in  Baltimore  City  Superior  Court,  Case  No.
24-C-01-002408,  alleging it suffered  $400,000  in contract  damages  caused by
Bundy when the franchisee lost a competitive bid for auto rental business let by
the Baltimore City Police  Department.  Plaintiff also named as co-defendant the
Bundy franchisee that won the bid. Bundy filed a counterclaim  against Plaintiff
in the amount of  approximately  $70,000 for  abandoning  another of Plaintiff's
Bundy franchises. The case is in the discovery process. Trial by jury is set for
November 18, 2002.

     To date none of the  discovery  supports  Plaintiff's  claim,  either as to
liability  or as to  amount.  Plaintiff  has  offered  to  settle  the claim for
$350,000.  Bundy's  outside trial counsel has advised  against a settlement that
would have Bundy pay Plaintiff any monies at all.  Counsel  advises that it will
defend  on legal  and  factual  grounds,  and that it  believes  that the  Bundy
counterclaim is on solid legal and factual footing.

6.   SUBSEQUENT EVENTS

     On August 12, 2002, the Board of Directors of the Company discussed whether
the Company should  terminate the registration of its common stock under Section
12 of the Securities  Exchange Act of 1934 (the "1934 Act"). The Board discussed
the advantages of maintaining its Section 12  registration  and its quotation on
the Nasdaq  Small Cap market,  including  the limited  liquidity it provided for
shareholders. The Board also evaluated the cost of maintaining the Company as an
SEC registrant,  including the increased accounting,  legal and Nasdaq Small Cap
fees  and the  costs  of  personnel  who  spend a  considerable  amount  of time
complying with the securities laws and preparing the periodic reports. The Board
was informed of the limited benefits of the Nasdaq quotation, including the fact
that the Nasdaq Small Cap market for the Company's shares since 1985 has not had
the depth and liquidity to provide for a full market for all shares.

     The Company has also been informed that it presently qualifies to terminate
its  registration  under  the  1934 Act in  accordance  with  SEC  rules.  After
reviewing all these matters,  the Board decided  unanimously  that it was in the
best interests of the Company and its  shareholders  to authorize the Company to
terminate its registration  under the 1934 Act by filing a Form 15 with the SEC.
This form is expected to be filed on August 30, 2002, which will have the effect
of deregistering the common stock of the Company,  delisting the common stock on
the  Nasdaq  Small  Cap  market,  and  immediately   terminating  the  Company's
obligation to file Forms 10-KSB, 10-QSB and 8-K.

                                       10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2002 COMPARED TO JUNE 30, 2001

     The Company operates in three principal segments:  Vehicle Rental Franchise
Programs  (Franchising),  Insurance  Coverage  (Insurance)  and  Vehicle  Rental
Operations  (Rental  Operations).  For the  quarter  ended  June 30,  2002,  the
Company's Franchising segment comprised 75% of consolidated net revenues (81% in
2001) and 408% of consolidated operating income (96% in 2001).

     For the quarter  ended June 30,  2002,  initial  license  fees,  continuing
license fees and advertising  fees decreased by $365,725 (23%).  Initial license
fees decreased by $73,501 (15%),  continuing  license fees decreased by $244,970
(28%),  and advertising fees decreased by $47,254 (20%). The decrease in initial
license fees,  continuing  license fees and advertising fees resulted  partially
from reduced travel demands  arising,  in part,  from September 11th and general
economic  uncertainties  which have reduced travel.  In addition,  a substantial
number of franchisees  have not been paying the full royalties  which they would
normally be expected to remit,  and the Company has been less successful than it
had been in the past in making collections.

     Revenues from insurance  premiums decreased by $40,778 (13%) due to a lower
number of vehicles in the Company's CAR Insurance program.  This lower number is
a  direct   consequence  of  the  lower  number  of  vehicles  in  participating
franchisees' fleets due to reduced travel demands.

     Vehicle rental operations  revenues increased by $67,757 (128%) due to more
Company-owned cars being added to the Rental Operations fleet.

     Total operating expenses for the three segments increased by $213,661 (15%)
compared to the prior period.  Salary  expense for three  segments  increased by
$104,635  (39%),  which  resulted  primarily  from  additional  hiring  for  the
Company's  Rental  Operations  and hiring of a subrogation  expert in connection
with  the  Company's  Insurance  segment.  Advertising  and  promotion  expenses
decreased by $52,395 (17%), which resulted primarily from a decrease in national
advertising  expense.  Sales and marketing  expenses  increased by $14,170 (6%),
which  resulted  primarily  from an increase in reserves for bad debt expense of
$42,566 partially offset by a decrease in marketing expense. Direct expenses for
the Company's Rental  Operations  increased by $30,791 (133%),  primarily due to
the increase in the number of the Company-owned vehicles. Insurance underwriting
expenses  increased by $56,317  (24%) due to an increase in paid losses and loss
reserves for unsettled  claims.  General and  administrative  expenses for three
segments  increased by $32,053 (10%), which resulted primarily from increases in
collection and legal expenses.

     The  Company  realized  operating  income  of  $68,954,  before  taxes  and
interest,  for the three-month  period ended June 30, 2002 compared to operating
income of $621,963 for the same period in the prior year,  reflecting a decrease
of  $553,009  (89%).  This  decrease  resulted  primarily  from  a  decrease  in
continuing  license  fees,  a decrease in initial  license  fees,  a decrease in
insurance  premiums  as well as an  increase  in  underwriting  expenses  and an
increase in the Company's Rental Operations expenses.

                                       11
<PAGE>
     Net interest income decreased by $14,648 (43%). This decrease was primarily
due to lower interest rates earned on smaller  average cash deposits,  which are
held in interest bearing accounts.

     Income tax  expense  for the  quarter  ended  June 30,  2002  decreased  by
$218,747  (87%)  compared to the  three-month  period ended June 30, 2001 due to
lower pre-tax earnings.

LIQUIDITY AND CAPITAL RESOURCES

     At June 30, 2002, the Company had working capital of $2,000,238 compared to
$1,896,309 at March 31, 2002. This increase of $103,929 in working capital stems
from a decrease in accounts  payable  and  accrued  expenses  and an increase in
receivables  and  prepaid  expenses  partially  offset by an increase in reserve
accruals  related to the  insurance  and payments made for the buyback of common
stock as well as preferred  stock  dividends.  At June 30, 2002,  the  Company's
allowance for doubtful  accounts was $1,284,879  compared to $1,197,513 at March
31,  2002 and  $899,299  at June 30,  2001.  The  Company  wrote off  $17,980 of
doubtful accounts during the three months ended June 30, 2002.

     In October 2001,  the Company  entered into a line of credit for $1,500,000
with Merrill Lynch. The purpose of this line of credit is to provide  additional
funds for purchasing vehicles in connection with the Company's Rental Operations
($500,000),  and to provide  security for the reinsurance  arrangement with AIG.
This line of credit provides  security for a $1,000,000  letter of credit issued
to American  International Group ("AIG").  This letter of credit is secured by a
certificate of deposit of $600,000 held by Merrill Lynch.  In addition,  Merrill
Lynch  has a first  lien on all the  Company's  assets.  At June 30,  2002,  the
Company  owed a  balance  of  $430,566  on its  line of  credit  for  purchasing
additional vehicles for its Rental Operations.

     The vehicle  financing  payable  contains  restrictive  covenants  covering
ratios relating to minimum tangible net worth and a fixed charge coverage ratio,
as well as other customary covenants,  representations and warranties and events
of default.  On June 30, 2002, the Company was not in compliance  with the fixed
charge coverage ratio and obtained a waiver of its noncompliance from the lender
for a period not to extend beyond September 30, 2002.

     The Company  rents its office  facilities  under the terms of an  operating
lease with a related party.  The monthly office  facilities lease commitment was
$10,014 at June 30, 2002.

     Property and equipment  decreased by $225,172  (11%) from March 31, 2002 to
June 30, 2002. This decrease  occurred  primarily due to the sale of 23 vehicles
in connection with the Company's  store partially  offset by the purchase of one
vehicle in connection with the wheelchair van program and additional  investment
in the continued  development of a centralized  software reporting package to be
utilized by the Company's franchisees with American Business Information Systems
("ABIS"), a related party entity, and the purchase of computer hardware.

     Pursuant to  authorization  of the Board of  Directors on January 19, 2000,
the Company hired ABIS to develop a centralized software reporting package to be
used by the franchisees. Through June 30, 2002, the Company had paid $240,288 to
ABIS. The centralized  software  reporting  package is currently being tested at
the Company's store in Maryland,  and management  expects it will be Beta tested
with a limited number of franchisees in three to six months.

     Cash used in operations was $166,781, resulting from a decrease in accounts
payable and accrued expenses,  an increase in accounts and notes receivable,  an
increase in prepaid  expenses and an increase in prepaid  income tax,  partially
offset by an increase in insurance loss reserves.  Accounts  payable and accrued
expenses decreased  primarily from a decrease in national  advertising  expense.
Accounts and notes receivable  increased primarily due to an increase in initial
license  fees  financed by the Company  for the sale of  additional  franchises.
Prepaid expenses increased primarily due to additional promotional materials and
payment of fees in  connection  with the  Company's  line of credit with Merrill
Lynch.  Prepaid income tax increased  primarily due to additional  payments made
for the Company's  earnings for the fiscal year ended March 31, 2002.  Insurance
loss  reserves  increased  primarily  due to an  increase  in  unsettled  claims
associated with the CAR insurance program.

     Cash  provided by investing  activities  of $144,254  related  primarily to
proceeds from the sale of 23 vehicles,  reduced by additional  computer software
and hardware.

     Cash used in  financing  activities  during the same  period  was  $79,486,
resulting from a decrease in vehicle  financing  payable in connection  with the
Rental  Operations,  the buyback of common stock and by the payment of preferred
dividends.  The  Company's  stock-buyback  program may have to be  curtailed  if
operating results and cash flow generation do not improve.

RECLASSIFICATION

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

                                       12
<PAGE>
FORWARD LOOKING STATEMENTS

     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 under the caption,  "Item 6 - Management's  Discussion and Analysis of
Financial  Condition  and  Results of  Operations  -  Important  Factors" in the
Company's Annual Report on Form 10-KSB for the fiscal year ended March 31, 2002.
All forward-looking  statements should be considered in light of these risks and
uncertainties.

                                       13
<PAGE>
                            SELECTED FINANCIAL DATA

     Set  forth  below  are  selected   financial   data  with  respect  to  the
consolidated  statements of earnings of the Company and its subsidiaries for the
fiscal  quarters  ended June 30,  2002 and 2001 and with  respect to the balance
sheets thereof at June 30 in each of those years.

     The selected financial data have been derived from the Company's  unaudited
consolidated  financial  statements and should be read in  conjunction  with the
financial  statements and related notes thereto and other financial  information
appearing elsewhere herein.

                                                  Three Months ended June 30,
                                               ---------------------------------
                                                        2001        2002
                                                        ----        ----
                                                (in thousands except per share
                                               amounts and number of franchises)
                                                          (Unaudited)
FRANCHISEES' RESULTS

Franchisees' revenue (1)                              $14,659      $10,576
Number of franchised locations                            677          642

RESULTS OF OPERATIONS

Total revenue                                         $ 2,048      $ 1,708
Total expense                                           1,426        1,640
Income before income taxes                                650           83
Net income                                                399           51
Earnings per common share

 Basic                                                $   .09      $   .01
 Weighted average common shares                         4,385        4,196

 Diluted                                              $   .07      $   .01
 Weighted average common shares plus
   convertible preferred stock, and
   options and warrants                                 5,490        5,282


EBITDA (2)                                                702          162

BALANCE SHEET DATA

Working capital                                       $ 2,024      $ 2,000
Total assets                                          $ 5,252      $ 4,908
Shareholders' Equity                                  $ 3,240      $ 3,085

----------
(1)  The  franchisees'  revenue data have been derived  from  unaudited  reports
     provided by franchisees in paying license fees.

(2)  "EBITDA" is earnings before interest expense,  depreciation,  amortization,
     taxes and  repurchase  of options.  EBITDA 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.

                                       14
<PAGE>
PART II. OTHER INFORMATION

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

        None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

        None.

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

        None.

ITEM 5. DISCLOSURE

     On August 12, 2002, the Board of Directors of Rent-A-Wreck of America, Inc.
(the "Company")  discussed whether the Company should terminate the registration
of its common stock under Section 12 of the Securities Exchange Act of 1934 (the
"1934 Act").  The Board  discussed the advantages of maintaining  its Section 12
registration  and its  quotation on the Nasdaq Small Cap market,  including  the
limited  liquidity it provided for  shareholders.  The Board also  evaluated the
cost of maintaining  the Company as an SEC  registrant,  including the increased
accounting, legal and Nasdaq Small Cap fees and the costs of personnel who spend
a considerable  amount of time complying with the securities  laws and preparing
the  periodic  reports.  The Board was  informed of the limited  benefits of the
Nasdaq  quotation,  including  the fact that the Nasdaq Small Cap market for the
Company's shares since 1985 has not had the depth and liquidity to provide for a
full market for all shares.

     The Company has also been informed that it presently qualifies to terminate
its  registration  under  the  1934 Act in  accordance  with  SEC  rules.  After
reviewing all these matters,  the Board decided  unanimously  that it was in the
best interests of the Company and its  shareholders  to authorize the Company to
terminate its registration  under the 1934 Act by filing a Form 15 with the SEC.
This form is expected to be filed on August 30, 2002, which will have the effect
of deregistering the common stock of the Company,  delisting the common stock on
the  Nasdaq  Small  Cap  market,  and  immediately   terminating  the  Company's
obligation to file Forms 10-KSB, 10-QSB and 8-K.

                                       15
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K


     (a) Exhibits:  See the Exhibit Index  following the Signatures page of this
report, which is incorporated herein by reference.

     (b) Reports on Form 8-K: The  Registrant  filed no Current  Reports on Form
8-K during the period covered by this report.

ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS

     (c) Exhibits:

     See Exhibit Index  following the  Signatures  page,  which is  incorporated
herein by reference.

                                       16
<PAGE>
                                   SIGNATURES

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.

Rent-A-Wreck of America, Inc.
(Registrant)

By:                                                         Date:

/s/ Kenneth L. Blum, Sr.                                    August 19, 2002
-----------------------------                               --------------------
Kenneth L. Blum, Sr.
Chief Financial Officer


/s/ Kenneth L. Blum, Sr.                                    August 19, 2002
-----------------------------                               --------------------
Kenneth L. Blum, Sr.
CEO and Chairman of the Board

                                       17
<PAGE>

                          RENT-A-WRECK OF AMERICA, INC.
                               (THE "REGISTRANT")
                          (COMMISSION FILE NO. 0-14819)

                                  EXHIBIT INDEX
                                       TO
                          FORM 10-QSB QUARTERLY REPORT
                       FOR THE QUARTER ENDED JUNE 30, 2002


99.1      Certification of Chief Executive Officer               Filed herewith.
          Pursuant to 18 U.S.C. Section 1350, as
          Adopted Pursuant to Section 906 of the
          Sarbanes-Oxley Act of 2002

99.2      Certification of Chief Financial Officer               Filed herewith.
          Pursuant to 18 U.S.C. Section 1350, as
          Adopted Pursuant to Section 906 of the
          Sarbanes-Oxley Act of 2002

                                       18