U.S. 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 December 31, 1999

[ ] 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 of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)


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


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


            11460 Cronridge Drive, Suite 120, Owings Mills, MD 21117
            --------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)

     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  classes of
common equity, as of the latest practicable date: 3,553,217 shares as of January
20, 2000.

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

                       FORM 10-QSB - DECEMBER 31, 1999

                                      INDEX


PART I. FINANCIAL INFORMATION                                              Page
                                                                           ----

ITEM 1. FINANCIAL STATEMENTS

        Consolidated Balance Sheets as of March 31, 1999 and
          December 31, 1999 (Unaudited)                                     2-3

        Consolidated Statements of Earnings for the Three Months
          and Nine Months ended December 31, 1998 and 1999 (Unaudited)       4

        Consolidated Statements of Cash Flows for the Three Months
          and Nine Months ended December 31, 1998 and 1999 (Unaudited)       5

        Notes to Consolidated Financial Statements (Unaudited)              6-9

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION          10-13

PART II. OTHER INFORMATION

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS                            15

ITEM 3. DEFAULTS UPON SENIOR SECURITIES                                      15

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                  15

ITEM 5. OTHER INFORMATION                                                    16

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                     16

        Signatures                                                           17

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

                                     ASSETS

                                                       March 31,    December 31,
                                                         1999           1999
                                                       ---------    ------------
                                                                    (Unaudited)
CURRENT ASSETS:
 Cash and Cash Equivalents ........................  $  861,794     $  698,785
 Restricted Cash ..................................     718,543        727,044
 Accounts Receivable, net of allowance for
  doubtful accounts of $655,418 and $841,115
  at March 31, 1999 and December 31, 1999,
  respectively:
   Continuing License Fees and Advertising Fees ...     336,242        414,432
   Current Portion of Notes Receivable ............     388,812        432,040
   Current Portion of Direct Financing Leases .....       7,850         14,578
   Insurance Premiums Receivable ..................     635,532         86,981
   Other ..........................................      61,081         71,858
 Prepaid Expenses .................................     166,421        150,633
 Deferred Tax Assets ..............................     199,028        278,058
                                                     ----------     ----------

   TOTAL CURRENT ASSETS ...........................   3,375,303      2,874,409
                                                     ----------     ----------
PROPERTY AND EQUIPMENT:
 Furniture ........................................      93,505         95,129
 Computer Hardware and Software ...................     370,012        390,255
 Machinery and Equipment ..........................      82,650         89,589
 Leasehold Improvements ...........................      37,896         52,894
 Vehicles .........................................      90,507        169,348
                                                     ----------     ----------
                                                        674,570        797,215

 Less: Accumulated Depreciation and Amortization ..    (388,887)      (473,444)
                                                     ----------     ----------

NET PROPERTY AND EQUIPMENT ........................     285,683        323,771
                                                     ----------     ----------
OTHER ASSETS:
 Intangible Assets, net of accumulated amortization
  of $126,192 and $141,802 at March 31, 1999 and
  December 31, 1999, respectively .................     192,872        193,424
 Long-term Portion of Notes and Direct
   Financing Lease Receivables ....................      32,088         33,612
                                                     ----------     ----------
                                                        224,960        227,036
                                                     ----------     ----------
   TOTAL ASSETS ...................................  $3,885,946     $3,425,216
                                                     ==========     ==========

   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,    December 31,
                                                         1999           1999
                                                       ---------    ------------
                                                                    (Unaudited)
CURRENT LIABILITIES:
 Accounts Payable and Accrued Expenses .............  $  709,506    $  671,080
 Dividends Payable .................................      22,782        22,400
 Insurance Financing Payable .......................     564,684       117,660
 Insurance Loss Reserves ...........................     366,022       517,466
 Income Taxes Payable ..............................     181,662       238,142
                                                      ----------    ----------

   TOTAL CURRENT LIABILITIES .......................   1,844,656     1,566,748
                                                      ----------    ----------

   TOTAL LIABILITIES ...............................   1,844,656     1,566,748
                                                      ----------    ----------
COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
 Convertible  Cumulative Series A Preferred
  Stock, $.01 par value;  authorized 10,000,000
  shares; issued and outstanding 1,139,125 and
  1,120,000 shares at March 31, 1999 and at
  December 31, 1999 (aggregate liquidation
  preference $911,300 at March 31, 1999 and
  $896,000 at December 31, 1999) ...................      11,391        11,200
 Common Stock, $.01 par value; authorized
   25,000,000 shares; issued and outstanding
   3,934,092 shares at March 31, 1999 and
   3,553,217 shares at December 31, 1999 ...........      39,340        35,532
 Additional Paid-In Capital ........................   2,209,182     1,423,682
 (Accumulated Deficit) Retained Earnings ...........    (218,623)      388,054
                                                      ----------    ----------

   TOTAL SHAREHOLDERS' EQUITY ......................   2,041,290     1,858,468
                                                      ----------    ----------
   TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ......  $3,885,946    $3,425,216
                                                      ==========    ==========

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)

<TABLE>
<CAPTION>
                                              Three Months Ended              Nine Months Ended
                                                 December 31,                    December 31,
                                          --------------------------      --------------------------
                                              1998           1999             1998           1999
                                          -----------    -----------      -----------    -----------
<S>                                      <C>            <C>             <C>            <C>
REVENUES:
 Initial License Fees .................  $   228,250     $   152,002      $   907,301     $   876,003
 Advertising Fees .....................      217,073         221,159          667,813         733,798
 Continuing License Fees ..............      647,829         702,519        2,021,895       2,311,676
 Insurance premiums ...................      202,357         230,818          565,374         634,069
 Other ................................       48,921          48,878          133,920         145,032
                                         -----------     -----------      -----------     -----------
                                           1,344,430       1,355,376        4,296,303       4,700,578
                                         -----------     -----------      -----------     -----------
EXPENSES:
 Salaries, Consulting Fees and
   Employee Benefits ..................      210,812         204,643          635,805         689,325
 Sales and Marketing Expenses .........      163,752         110,168          532,713         423,805
 Advertising and Promotion ............      303,040         323,366          947,518       1,037,131
 Underwriting Expenses ................      174,432         180,635          464,478         505,713
 General and Administrative Expenses...      228,325         309,349          683,301         788,865
 Depreciation & Amortization ..........       35,045          35,052          105,179         100,167
                                         -----------     -----------      -----------     -----------
                                           1,115,406       1,163,213        3,368,994       3,545,006
                                         -----------     -----------      -----------     -----------

  OPERATING INCOME.....................      229,024         192,163          927,309       1,155,572

OTHER INCOME (EXPENSE)
 Interest Income ......................       26,746          26,767           70,083          78,685
 Interest Expense .....................       (6,339)         (6,694)         (17,647)        (20,021)
                                         -----------     -----------      -----------     -----------
                                              20,407          20,073           52,436          58,664
                                         -----------     -----------      -----------     -----------

  INCOME BEFORE INCOME TAX EXPENSE.....      249,431         212,236          979,745       1,214,236
                                         -----------     -----------      -----------     -----------
INCOME TAX EXPENSE ....................       73,422          56,741          302,224         393,243
                                         -----------     -----------      -----------     -----------

  NET INCOME...........................  $   176,009     $   155,495      $   677,521     $   820,993

DIVIDENDS ON CONVERTIBLE CUMULATIVE
 PREFERRED STOCK ......................       27,320          22,400           81,960          67,400
                                         -----------     -----------      -----------     -----------
NET INCOME APPLICABLE TO COMMON
 AND COMMON EQUIVALENT SHARES .........  $   148,689     $   133,095      $   595,561     $   753,593
                                         -----------     -----------      -----------     -----------
EARNINGS PER COMMON SHARE
 Basic ................................  $       .04     $       .04      $       .15     $       .20
                                         -----------     -----------      -----------     -----------
Weighted average common shares ........    4,078,781       3,783,652        4,106,907       3,889,015
                                         ===========     ===========      ===========     ===========
 Diluted ..............................  $       .03     $       .03      $       .12     $       .14
                                         -----------     -----------      -----------     -----------
Weighted average common shares
 plus options and warrants ............    5,737,934       5,962,235        5,596,642       5,987,134
                                         ===========     ===========      ===========     ===========
</TABLE>
   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)

                                                         Nine Months Ended
                                                            December 31,
                                                     --------------------------
                                                         1998          1999
                                                     -----------    -----------
Increase (decrease) in cash and cash equivalents
Cash flows from operating activities:
 Net income .....................................    $   677,521    $   820,993
 Adjustments to reconcile net income to net
  cash provided by operating activities:
   Depreciation and amortization ................        105,179        100,167
   Gain on disposal of property and equipment ...         (1,577)            --
   Deferred income taxes ........................             --        (79,030)
   Provision for doubtful accounts ..............        126,730        185,697
 Changes in assets and liabilities:
   Accounts and notes receivable ................        239,359        222,407
   Prepaid expenses .............................        (15,595)        15,788
   Accounts payable and accrued expenses ........         60,860        (38,808)
   Income taxes payable .........................        (12,040)        56,480
   Insurance loss reserves ......................         84,979        151,444
                                                     -----------    -----------
     Net cash provided by operating
      activities ................................      1,265,416      1,435,138
                                                     -----------    -----------
Cash flows from investing activities:
 (Increase) decrease in restricted cash .........       (348,126)        (8,501)
 Proceeds from sale of property and equipment ...         42,386             --
 Acquisition of property and equipment ..........       (183,272)      (121,763)
 Additions to intangible assets .................         (6,694)       (16,162)
                                                     -----------    -----------

     Net cash used in investing activities ......       (495,706)      (146,426)
                                                     -----------    -----------
Cash flow from financing activities:
  Decrease in insurance financing payable .......       (429,760)      (447,024)
  Issuance of common stock ......................         16,000             --
  Retirement of warrants ........................        (10,000)            --
  Retirement of common stock ....................       (198,588)      (790,000)
  Preferred dividends paid ......................       (126,262)      (214,697)
                                                     -----------    -----------

      Net cash used in financing activities .....       (748,610)    (1,451,721)
                                                     -----------    -----------
      Net increase (decrease) in cash and
         cash equivalents .......................         21,100       (163,009)

Cash and cash equivalents at beginning
 of period ......................................      1,215,615        861,794
                                                     -----------    -----------
Cash and cash equivalents at end of period ......    $ 1,236,715    $   698,785
                                                     ===========    ===========
Supplemental disclosure of cash flow information:
 Interest paid ..................................    $    17,947         20,021
 Taxes paid .....................................    $   367,758    $   419,433

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
                            DECEMBER 31, 1999

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") which was formed on September 30,
1999.

     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  December  31,  1999,  and  the
consolidated statements of earnings and cash flows for the three and nine- month
periods  ended  December  31,  1998 and 1999 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 generally accepted accounting  principles
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, 1999 audited financial statements. The results of operations
for the interim periods are not necessarily indicative of the results for a full
year.

2. PREFERRED STOCK

     On May 7, 1999,  the Company  paid 100% of  remaining  dividend  arrearages
($146,915) on the Company's  Convertible  Cumulative Series A Preferred Stock. A
quarterly preferred dividend of $22,600 was declared for the first quarter ended
June  30,  1999  and it was paid on  August  11,  1999.  For the  quarter  ended
September 30, 1999, the Company declared  preferred  dividends  totaling $22,400
which were paid on November 11, 1999.  For the quarter ended  December 31, 1999,
the Company  declared  dividends  totaling $22,400 which are expected to be paid
during the fourth quarter of the Company's 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  and
nine-month periods ended December 31, 1998 and 1999 is as follows:

                                 Three Months Ended         Nine Months Ended
                                     December 31,              December 31,
                                  1998         1999         1998         1999
                               ----------   ----------   ----------   ----------
BASIC EPS COMPUTATION

 Net income applicable to
  common and common
  equivalent shares            $  148,689   $  133,095   $  595,561   $  753,593
 Weighted average common
   shares                       4,078,781    3,783,652    4,106,907    3,889,015
                               ----------   ----------   ----------   ----------

Basic EPS                      $      .04   $      .04   $      .15   $      .20
                               ==========   ==========   ==========   ==========

DILUTED EPS COMPUTATION

 Net income applicable to
  common and common
  equivalent shares            $  148,689   $  133,095   $  595,561   $  753,593
 Dividends on convertible
preferred stock                    27,320       22,400       81,960       67,400
                               ----------   ----------   ----------   ----------
                                  176,009      155,495      677,521      820,993
                               ----------   ----------   ----------   ----------

 Weighted average common
  shares                        4,078,781    3,783,652    4,106,907    3,889,015
 Weighted average convertible
  preferred stock               1,366,000    1,120,000    1,366,000    1,127,475
 Weighted average options
  and warrants                    293,153    1,058,583      123,735      970,644
                               ----------   ----------   ----------   ----------
                                5,737,934    5,962,235    5,596,642    5,987,134
                               ----------   ----------   ----------   ----------

Diluted EPS                    $      .03   $      .03   $      .12   $      .14
                               ==========   ==========   ==========   ==========

                                        7
<PAGE>
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.

     Information by geographic area and industry segment is as follows:

                                                             Nine Months
                                                          Ended December 31,
                                                         1998            1999
                                                      ----------      ----------
Net revenues from external customers
 Vehicle Rental Franchises-United States              $3,730,929      $4,066,509
 Insurance-United States                                 565,374         634,069
 Insurance-Bermuda                                            --              --
                                                      ----------      ----------
                                                      $4,296,303      $4,700,578
                                                      ==========      ==========
Segment income before taxes
 Vehicle Rental Franchises-United States              $  920,894      $1,114,400
 Insurance-United States                                  37,801          76,213
 Insurance-Bermuda                                        21,050          23,623
                                                      ----------      ----------
                                                      $  979,745      $1,214,236
                                                      ==========      ==========
Segment assets
 Vehicle Rental Franchises-United States              $2,958,500      $2,309,611
 Insurance-United States                                 114,654         448,348
 Insurance-Bermuda                                       653,669         667,257
                                                      ----------      ----------
                                                      $3,726,823      $3,425,216
                                                      ==========      ==========
Expenditures for segment assets
 Vehicle Rental Franchises-United States              $  183,272      $  121,763
 Insurance-United States                                      --              --
 Insurance-Bermuda                                            --              --
                                                      ----------      ----------
                                                      $  183,272      $  121,763
                                                      ==========      ==========
Depreciation and amortization
 Vehicle Rental Franchises-United States              $  105,179      $  100,167
 Insurance-United States                                      --              --
 Insurance-Bermuda                                            --              --
                                                      ----------      ----------
                                                      $  105,179      $  100,167
                                                      ==========      ==========
Interest income
 Vehicle Rental Franchises-United States              $   45,596      $   48,798
 Insurance-United States                                   3,437           6,264
 Insurance-Bermuda                                        21,050          23,623
                                                      ----------      ----------
                                                      $   70,083      $   78,685
                                                      ==========      ==========

                                        8
<PAGE>
GEOGRAPHIC AND INDUSTRY SEGMENTS - CONTINUED

                                                             Nine Months
                                                          Ended December 31,
                                                      --------------------------
                                                         1998            1999
                                                      ----------      ----------
Interest expense
 Vehicle Rental Franchises-United States              $      181      $      398
 Insurance-United States                                  17,466          19,623
 Insurance-Bermuda                                            --              --
                                                      ----------      ----------
                                                      $   17,647      $   20,021
                                                      ==========      ==========

Income taxes
 Vehicle Rental Franchises-United States              $  302,224      $  393,243
 Insurance-United States                                      --              --
 Insurance-Bermuda                                            --              --
                                                      ----------      ----------
                                                      $  302,224      $  393,243
                                                      ==========      ==========

4. LITIGATION

     The Company is party to 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 August  1999,  the Company  settled a pending  lawsuit  against a former
franchisee.  As a result of the settlement  agreement,  the Company  anticipates
receiving  $100,000  in release of its claims  which will  result in $100,000 of
additional  income.  To date  the  Company  has  not  recorded  any  gain as the
settlement  is being  finalized  and the  $100,000  has not been  released  from
escrow.

                                        9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

RESULTS OF OPERATIONS

THREE MONTHS ENDED DECEMBER 31, 1999 COMPARED TO DECEMBER 31, 1998

     Revenue from franchising  operations,  which includes initial license fees,
continuing  license  fees and  advertising  fees,  decreased  by  $17,472  (2%).
Continuing  license  fees  increased  by  $54,690  (8%),  and  advertising  fees
increased by $4,086 (2%). These increases  resulted  primarily from fleet growth
at existing  franchises.  Initial license fees decreased by $76,248 (33%) due to
the sale of fewer new franchises. The timing of closings of new franchise sales,
each of which is for a relatively large amount of revenue, varies over the year,
contributing to periodic increases or decreases in reported results.  Management
does not believe  these short- term  variations  are  indicative  of longer term
trends.

     Revenues from insurance  premiums  increased by $28,461 (14%) due to higher
participation  by the  Company's  franchisees  in the  Company's  CAR  Insurance
program.

     Total  operating  expenses  increased by $47,807 (4%) compared to the prior
period.  Sales and marketing expenses decreased by $53,584 (33%), which resulted
primarily  from a decrease  in  commission  expense due to the sale of fewer new
franchises and a decrease in funds spent on the Company's  annual  convention of
franchisees. Advertising and promotion expenses increased by $20,326 (7%), which
resulted primarily from an increase in national advertising  expense.  Insurance
underwriting expenses increased by $6,203 (4%) due to an increase in paid losses
and loss reserves for future claims in connection with higher  participation  of
the  Company's   franchisees   in  its  CAR  Insurance   program.   General  and
administrative  expenses  increased by $81,024 (35%),  which resulted  primarily
from the Company's moving expense to the new location ($41,000),  an increase in
the annual  management  fee earned by K.A.B.,  an affiliate,  payment of monthly
consulting fees to Richter Investment Corporation, an affiliate, and an increase
in legal and other professional fees.

     The  Company  realized  operating  income  of  $192,163,  before  taxes and
interest,  for the  three-month  period  ended  December  31,  1999  compared to
operating income of $229,024 for the same period in the prior year, reflecting a
decrease of $36,861 (16%). This decrease resulted primarily from the decrease in
initial  license  fees  due to the  sale of fewer  new  franchises  and from the
increase in general and administrative expenses referred to above.

     Income tax expense  for the  three-month  period  ended  December  31, 1999
decreased by $16,681 (23%) compared to the three-month period ended December 31,
1998 due to lower  pre-tax  earnings,  partially  offset by a  reduction  in the
deferred tax asset valuation allowance. The valuation allowance has been reduced
in light of favorable  earnings and expected  future earnings and is re-assessed
quarterly.

YEAR TO DATE RESULTS OF OPERATIONS COMPARED TO SAME PERIOD IN PRIOR YEAR

     Net revenues  increased by $404,275  (9%) for the  nine-month  period ended
December  31,  1999 as  compared  to the same  period  in the prior  year.  This
increase occurred due to a $289,781(14%)  increase in continuing license fees, a
$65,985  (10%)increase  in  advertising  fees,  and a $68,695 (12%)  increase in
premium income associated with the new reinsurance program partially offset by a

                                       10
<PAGE>
reduction  in initial  license  fees.  The  reasons for these  fluctuations  are
consistent with those for the three-month period documented above.

     Total operating expenses increased by $176,012 (5%) in this period compared
to the same period in the prior year.  Salary expense  increased by $53,520 (8%)
primarily as a result of  additional  employees in response to the growth of the
Company.  Sales and  marketing  expenses  decreased  by  $108,908  (20%),  which
resulted  primarily  from  the  repurchase  of  a  territory  from  an  existing
franchisee  in the  quarter  ended  September  30,  1998,  the cost of which was
charged to sales and  marketing  expense  because the Company was able to resell
the  territory  to a  new  franchisee  for a  greater  amount.  Advertising  and
promotion  expenses  increased by $89,613 (9%), which resulted primarily from an
increase in national  advertising  expense to promote the Company.  Underwriting
expenses  increased  by $41,235  (9%) due to an increase in paid losses and loss
reserves  for future  claims in  connection  with  higher  participation  by the
Company's franchisees. General and administrative expenses increased by $105,564
(15%),  which resulted  primarily from the expense related to the Company's move
to a new  location,  an  increase  in the  management  fee  earned by K.A.B,  an
affiliate,  and  payment  of  monthly  consulting  fees  to  Richter  Investment
Corporation,  an affiliate.  Depreciation and amortization  expense decreased by
$5,012  (5%)  due  to  disposal  of  assets  and  older  assets  becoming  fully
depreciated offset by additional investment in property and equipment.

     The Company  realized  operating  income of  $1,155,572,  before  taxes and
interest,  for the  nine-month  period  ended  December  31, 1999 as compared to
operating income of $927,309 for 1998, reflecting an increase of $228,263 (25%).
This increase  resulted  primarily from the increase in continuing  license fees
and insurance premiums.

     Income tax  expense  for the  nine-month  period  ended  December  31, 1999
increased by $91,019 (30%) compared to the nine-month  period ended December 30,
1999 due to higher pre-tax earnings.

LIQUIDITY AND CAPITAL RESOURCES

     At  December  31,  1999,  the Company  had  working  capital of  $1,307,661
compared to  $1,530,647 at March 31, 1999.  This  decrease of $222,986  resulted
primarily  from the buyback of 400,000  shares of Common Stock and the payoff of
all dividend  arrearages on the  Company's  Preferred  Stock,  offset by the net
profit earned during the nine-month period ended December 31, 1999.

     The Company has a $1,000,000 letter of credit with The Chase Manhattan Bank
("Chase") in connection with the Company's CAR Insurance subsidiary. This letter
of credit is part of the reinsurance agreement with American International Group
("AIG") to secure  payment of claims.  Funds drawn  against the letter of credit
bear interest at 3% plus Chase's prime commercial lending rate (which prime rate
was 8.50% on January 20, 2000). For the quarter ended December 31, 1999, AIG has
not drawn any funds from the letter of credit.  This letter of credit is secured
by a pledge of all of the Company's assets.

     On November 19, 1999, the Company relocated its corporate headquarters to a
location  owned by KA Real Estate  Associates,  Inc., an affiliate,  and entered
into  a  seven-year   operating  lease.  The  monthly  office  facilities  lease
commitment is $9,289 for approximately 9,100 square feet at December 31, 1999.

                                       11
<PAGE>
     Property and equipment  increased by $122,645  (18%) from March 31, 1999 to
December 31, 1999. This increase  occurred  primarily due to the purchase of two
vehicles for the Company's  wheelchair van program and an additional  investment
in computer software and hardware.

     Cash provided by operations was  $1,435,138,  resulting  primarily from net
income before  depreciation  plus the decrease in accounts and notes  receivable
and the increase in insurance  loss reserves and income taxes payable  partially
offset by the increase in prepaid  expenses and the decrease in accounts payable
and accrued expenses.  Accounts and notes receivable  decreased primarily due to
funds received from AIG in connection  with the  reinsurance  program.  Accounts
payable and accrued  expenses  decreased  primarily due to  commissions  payable
related to the sale of fewer new franchises.  Insurance loss reserves  increased
primarily due to the higher participation by the Company's  franchisees.  Income
taxes payable  increased  primarily due to higher  pre-tax  earnings,  offset by
estimated income taxes paid for the year ended March 31, 2000.

     Cash used in  investing  activities  of $146,426  related  primarily to the
investment  in  connection  with  leasehold  improvements  to the new  building,
acquisition  of  computer  software,  hardware,  annual  costs  associated  with
renewing  trademarks  and an increase in  restricted  cash due to the  Company's
additional  liability  to the  national  advertising  fund due to an increase in
advertising fees.

     Cash used in financing  activities  during the same period was  $1,451,721,
resulting  from the  retirement of 400,000 shares of common stock, a decrease in
insurance financing payable and the payment of preferred dividends.

     The  Company  believes  it has  sufficient  working  capital to support its
business plan through fiscal 2000.

IMPACT OF INFLATION

     Inflation  has had no  material  impact  on the  operations  and  financial
condition of the Company.

     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  of 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

                                       12
<PAGE>
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, 1999.
All forward-looking  statements should be considered in light of these risks and
uncertainties.

YEAR 2000 ISSUE

     The Year 2000 issue is a result of computer  programs  being  written using
two digits rather than four to define the applicable year.

     Most of the information  the Company  receives in the ordinary course is in
written form and entered by the Company into its computer records.  For example,
reports  from  franchisees  and others  are  prepared  in  written  form and not
received electronically.  The Company has orally confirmed with key vendors that
they either have addressed or expect to address all significant Year 2000 issues
on a timely basis.

                                       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 December 31, 1998 and 1999 and with respect to the balance
sheets thereof at December 31 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             Nine Months
                                     Ended December 31,       Ended December 31,
                                     ------------------       ------------------
                                      1998        1999        1998         1999
                                      ----        ----        ----         ----
                                       (in thousands except per share amounts
                                               and number of franchises)
                                                      (Unaudited)
FRANCHISEES' RESULTS (UNAUDITED)

Franchisees' Revenue (1)             $10,797     $11,709     $33,698     $38,528
Number of Franchises                     623         667         623         667

RESULTS OF OPERATIONS

Total Revenue                        $ 1,344     $ 1,355     $ 4,296     $ 4,701
Costs and expenses                     1,115       1,163       3,369       3,545
Income before income taxes               249         212         980       1,214
Net income                               176         155         678         821

Earnings per share
 Basic                               $   .04     $   .04     $   .15     $   .20

Weighted average common shares         4,079       3,784       4,107       3,889
 Diluted                             $   .03     $   .03     $   .12     $   .14

Weighted average common shares         5,738       5,962       5,597       5,987

                                                                  December 31,
                                                               -----------------
                                                                1998       1999
                                                               ------     ------
                                                                  (Unaudited)
BALANCE SHEET DATA

Working capital                                                $1,843     $1,308
Total assets                                                   $3,727     $3,425
Shareholders' equity                                           $2,387     $1,858

(1)  The  franchisees'  revenue data have been derived  from  unaudited  reports
     provided by franchisees  submitted when paying license fees and advertising
     fees to the Company.

                                       14
<PAGE>
SUBSEQUENT EVENTS

     On February  9, 2000,  the Board of  Directors  reached an  agreement  with
K.A.B., Inc. 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 500,000  options at $1.25 per option,  representing
half of the total  new  buyback  authorization.  These  options  are all held by
Kenneth L.  Blum,  Jr.,  the  Company's  President/COO  and by Robin  Cohn,  are
exercisable at $1.15 per share,  and expire June 30, 2003.  Although it does not
believe  it will be so  constrained,  the  Company  could  be  constrained  from
purchasing some or all of the 500,000 options by covenants of its bank agreement
pursuant to which the Company finances its Bermuda-based reinsurance subsidiary.
Consequently,  the sellers have agreed that the transaction will close,  without
interest,  only at such  time or times  as the  Company  can make the  purchases
without  restrictions.  The Company  presently  believes at least a  substantial
portion of the  options  may be  purchasable  once its  audited  results for the
current fiscal year, which ends March 31, 2000, are known, with any balance most
likely closing once unaudited  results for the quarter ending June 30, 2000, are
known.

                           PART II. OTHER INFORMATION

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

     On April 29, 1999, a shareholder  converted 9,125 shares of preferred stock
to common stock. On September 28, 1999, a shareholder converted 10,000 shares of
preferred stock to common stock. See also Item 5 below.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     None.

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

     On November 19, 1999, approximately 95% of the outstanding shares of Series
A Preferred Stock consented to the corporation's authorization of the repurchase
of up to 400,000 shares of the Company's Common Stock.

     (a) The 1999  Annual  Meeting of  Stockholders  of the  Company was held on
November 3, 1999.

     (b) The  following  persons were elected as directors of the Company at the
Annual Meeting for a one-year term:

                                                          Withheld     Broker
                                                   For    Authority   Non-Votes
                                                   ---    ---------   ---------
Class I directors
  (elected by holders
  of common stock):    Kenneth L. Blum, Sr.     2,775,362    7,499        --
                       Kenneth L. Blum, Jr.     2,775,362    7,499        --

Class II directors
  (elected by holders
  of preferred stock): Alan L. Aufzien          1,116,250       --        --
                       William L. Richter       1,116,250       --        --

                                       15
<PAGE>
ITEM 5. OTHER INFORMATION

     During the quarter  ended June 30,  1999,  a  shareholder  converted  9,125
shares of preferred stock to common stock reducing total  outstanding  preferred
shares from  1,139,125 to 1,130,000  and  increasing  total  outstanding  common
shares from 3,934,092 to 3,943,217. During the quarter ended September 30, 1999,
a  shareholder  converted  10,000  shares of  preferred  stock to  common  stock
reducing  total  outstanding  preferred  shares from  1,130,000 to 1,120,000 and
increasing  total  outstanding  common shares from  3,943,217 to  3,953,217.  On
November 23, 1999,  the Company  bought back 400,000  shares of its common stock
reducing total outstanding common shares from 3,953,217 to 3,553,217.

ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K

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

     (b) No  reports on Form 8-K were filed  during the  quarter  for which this
report is filed.

                                       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: /s/Mitra Ghahramanlou              Date: February 9, 2000
    -----------------------------
    Mitra Ghahramanlou
    Chief Accounting Officer


    /s/Kenneth L. Blum, Sr.                  February 9, 2000
    -----------------------------
    Kenneth L. Blum, Sr.
    CEO and Chairman of the Board

                                       17
<PAGE>
                                  EXHIBIT INDEX
                                       TO
                          RENT-A-WRECK of AMERICA, INC.
               FORM 10-QSB FOR THE QUARTER ENDED DECEMBER 31, 1999


EXHIBIT NO.          DESCRIPTION
-----------          -----------

   27                Financial Data Schedule                     Filed herewith.