United States Securities and Exchange Commission

                             Washington, D.C. 20549

                                   FORM 10-QSB
(Mark One)
         [X]      QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                           SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 2000

         [ ]      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 Drive, Owings Mills, MD                         21117
--------------------------------------------                      ----------
  (Address of Principal Executive Offices)                        (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)

                      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: 4,495,496 shares as of October
26, 2000.

           Transitional Small Business Disclosure Format (Check One):
                               Yes [ ]   No [X]
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
                        FORM 10-QSB - SEPTEMBER 30, 2000

                                      INDEX


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

        Consolidated Balance Sheets as of March 31, 2000 and
          September 30, 2000 (Unaudited)                                     3-4

        Consolidated Statements of Operations for
          the Three and Six Month Periods ended September 30, 1999
          and 2000 (Unaudited)                                                 5

        Consolidated Statements of Cash Flows for the Six Months
          ended September 30, 1999 and 2000 (Unaudited)                        6

        Notes to Consolidated Financial Statements (Unaudited)              7-10

Item 2. Management's Discussion and Analysis or Plan of Operation          11-15

PART II. OTHER INFORMATION

Item 1. Legal Proceedings                                                    16

Item 2. Changes in Securities and Use of Proceeds                            16

Item 5. Other Information                                                    16

Item 6. Exhibits and Reports on Form 8-K                                     16

Signatures                                                                   17

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

                                     ASSETS

<TABLE>
<CAPTION>
                                                                   March 31,       September 30,
                                                                     2000               2000
                                                                  -----------       -----------
                                                                                    (Unaudited)
<S>                                                               <C>               <C>
CURRENT ASSETS:
  Cash and Cash Equivalents ..................................    $   701,808       $   647,181
  Restricted Cash ............................................        745,514           938,173
  Accounts Receivable, net of allowance for doubtful
   accounts of $829,253 and $835,606 at March 31, 2000
   and September 30, 2000, respectively:
     Continuing License Fees and Advertising Fees.............        365,462           443,860
     Current Portion of Notes Receivable .....................        416,002           521,175
     Current Portion of Direct Financing Leases...............          5,406             7,248
     Insurance Premiums Receivable ...........................             --            26,288
     Other ...................................................        305,685            69,696
  Prepaid Expenses and Other .................................        184,045           190,656
  Income Taxes Recoverable ...................................             --           683,097
  Deferred Taxes .............................................        614,541           373,541
                                                                  -----------       -----------

    TOTAL CURRENT ASSETS .....................................      3,338,463         3,900,915
                                                                  -----------       -----------
PROPERTY AND EQUIPMENT:
  Furniture ..................................................         99,399           103,458
  Computer Hardware and Software .............................        431,918           557,186
  Machinery and Equipment ....................................         98,172            98,577
  Leasehold Improvements .....................................         54,321            54,321
  Vehicles ...................................................        187,360           284,860
                                                                  -----------       -----------
                                                                      871,170         1,098,402
  Less:  Accumulated Depreciation and
         Amortization ........................................       (493,612)         (549,051)
                                                                  -----------       -----------

    NET PROPERTY AND EQUIPMENT ...............................        377,558           549,351
                                                                  -----------       -----------
OTHER ASSETS:
  Intangible Assets, net of accumulated amortization
   of $132,035 and $142,156 at March 31, 2000 and
   September 30, 2000, respectively ..........................        193,666           193,652
  Long-term Portion of Notes and Direct Financing Lease
   Receivables, net of allowance of $3,000 and $15,863
   at March 31, 2000 and September 30, 2000, respectively.....         70,438            56,346
                                                                  -----------       -----------
                                                                      264,104           249,998
                                                                  -----------       -----------
    TOTAL ASSETS .............................................    $ 3,980,125       $ 4,700,264
                                                                  ===========       ===========
</TABLE>

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

                                       3
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                      LIABILITIES AND SHAREHOLDERS' EQUITY


                                                       March 31,   September 30,
                                                          2000          2000
                                                       ----------   ------------
                                                                    (Unaudited)
CURRENT LIABILITIES:
  Accounts Payable and Accrued Expenses ..........    $1,359,215    $  981,710
  Dividends Payable ..............................        22,100        22,100
  Insurance Financing Payable ....................            --       297,226
  Insurance Loss Reserves ........................       379,075       508,145
  Income Taxes Payable ...........................       338,550            --
                                                      ----------    ----------

    TOTAL CURRENT LIABILITIES ....................     2,098,940     1,809,181
                                                      ----------    ----------
LONG-TERM LIABILITIES:
  Deferred Tax Liability .........................        45,681        45,681
                                                      ----------    ----------
    TOTAL LONG-TERM LIABILITIES ..................        45,681        45,681
                                                      ----------    ----------
    TOTAL LIABILITIES ............................     2,144,621     1,854,862
                                                      ----------    ----------

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

SHAREHOLDERS' EQUITY:
  Convertible Cumulative Series A Preferred Stock,
   $.01 par value; authorized 10,000,000 shares;
   issued and outstanding 1,105,000 shares at
   March 31, 2000 and at September 30, 2000
   (aggregate liquidation preference $884,000
   at March 31, 2000 and September 30, 2000)......        11,050        11,050
  Common Stock, $.01 par value; authorized
   25,000,000 shares; issued and outstanding
   3,568,217 shares at March 31, 2000 and
   4,495,496 shares at September 30, 2000 ........        35,682        44,955
  Additional Paid-In Capital .....................     1,423,181     2,310,776
  Retained Earnings ..............................       365,591       478,621
                                                      ----------    ----------

    TOTAL SHAREHOLDERS' EQUITY ...................     1,835,504     2,845,402
                                                      ----------    ----------

    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ...    $3,980,125    $4,700,264
                                                      ==========    ==========

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

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

<TABLE>
<CAPTION>
                                                        Three Months                    Six Months
                                                    Ended September 30,             Ended September 30,
                                                ---------------------------     ---------------------------
                                                    1999            2000            1999           2000
                                                -----------     -----------     -----------     -----------
<S>                                             <C>             <C>             <C>             <C>
REVENUES:
  Initial License Fees .....................    $   362,000     $   422,952     $   724,001     $   791,452
  Continuing License Fees ..................        929,852       1,009,025       1,609,157       1,824,419
  Advertising Fees .........................        291,855         304,645         512,639         546,123
  Insurance Premiums .......................        227,402         322,880         403,251         580,249
  Other ....................................         54,932          45,488          96,154          92,424
                                                -----------     -----------     -----------     -----------
                                                  1,866,041       2,104,990       3,345,202       3,834,667
                                                -----------     -----------     -----------     -----------
EXPENSES:
  Salaries, Consulting Fees and
    Employee Benefits ......................        230,745         211,678         469,682         466,143
  Advertising and Promotion ................        391,746         386,518         713,765         752,676
  Sales and Marketing Expenses .............        135,273         106,128         313,637         200,187
  General and Administrative Expenses.......        252,655         306,999         494,516         567,301
  Repurchase of Options ....................             --       1,234,560              --       1,234,560
  Underwriting Expenses ....................        180,124         303,654         325,078         589,744
  Depreciation & Amortization ..............         32,980          51,760          65,115          80,086
                                                -----------     -----------     -----------     -----------
                                                  1,223,523       2,601,297       2,381,793       3,890,697
                                                -----------     -----------     -----------     -----------
      OPERATING INCOME (LOSS) ..............        642,518        (496,307)        963,409         (56,030)

OTHER INCOME (EXPENSE)
  Interest Income ..........................         27,506          39,305          51,899          81,937
  Interest Expense .........................         (6,694)         (6,927)        (13,308)        (13,854)
                                                -----------     -----------     -----------     -----------
                                                     20,812          32,378          38,591          68,083
                                                -----------     -----------     -----------     -----------
      INCOME (LOSS) BEFORE INCOME
        TAX EXPENSE ........................        663,330        (463,929)      1,002,000          12,053

INCOME TAX (EXPENSE) BENEFIT ...............       (230,863)        328,427        (336,502)        145,177
                                                -----------     -----------     -----------     -----------
      NET INCOME (LOSS) ....................    $   432,467     $  (135,502)    $   665,498     $   157,230

DIVIDENDS ON CONVERTIBLE CUMULATIVE
  PREFERRED STOCK ..........................         22,400          22,100          45,000          44,200
                                                -----------     -----------     -----------     -----------
NET INCOME (LOSS) APPLICABLE TO COMMON
  AND COMMON EQUIVALENT SHARES .............    $   410,067     $  (157,602)    $   620,498     $   113,030
                                                -----------     -----------     -----------     -----------
EARNINGS (LOSS) PER COMMON SHARE
  Basic ....................................    $       .11     $      (.04)    $       .16     $       .03
                                                -----------     -----------     -----------     -----------
Weighted average common shares .............      3,943,543       3,824,186       3,941,985       3,696,901
                                                ===========     ===========     ===========     ===========

  Diluted ..................................    $       .07     $      (.04)    $       .11     $       .03
                                                -----------     -----------     -----------     -----------
Weighted average common shares plus
 convertible preferred stock, options
 and warrants...............................      6,106,494       3,824,186       5,999,891       5,411,681
                                                ===========     ===========     ===========     ===========
</TABLE>

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

                                       5
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                  Six Months Ended September 30,
                                                                  ------------------------------
                                                                     1999              2000
                                                                  -----------       -----------
<S>                                                               <C>               <C>
Increase (decrease) in cash and cash equivalents

Cash flows from operating activities:
  Net income .................................................    $   665,498       $   157,230
  Adjustments to reconcile net income
   to net cash provided by operating activities:
      Depreciation and amortization ..........................         65,115            80,086
      Deferred income taxes ..................................        (53,847)          241,000
      Gain on disposal of property and equipment .............             --            (7,944)
      Provision for doubtful accounts ........................        101,641            19,216
  Changes in assets and liabilities:
      Accounts and notes receivable ..........................        291,421            19,164
      Prepaid expenses and other .............................          9,280            (6,611)
      Income taxes recoverable ...............................             --          (683,097)
      Accounts payable and accrued
        expenses .............................................         73,835          (377,505)
      Income taxes payable ...................................         59,652          (338,550)
      Insurance loss reserves ................................         81,584           129,070
                                                                  -----------       -----------

      Net cash provided by (used in) operating activities.....       1,294,179          (767,941)
                                                                   -----------       -----------

Cash flows from investing activities:
  (Increase) in restricted cash ..............................        (80,842)         (192,659)
  Proceeds from sale of property and equipment ...............             --            32,575
  Acquisition of property and equipment ......................        (57,554)         (266,387)
  Additions to intangible assets .............................         (9,988)          (10,107)
                                                                  -----------       -----------

      Net cash used in investing activities ..................       (148,384)         (436,578)
                                                                  -----------       -----------
Cash flow from financing activities:
  (Decrease) increase in insurance financing payable .........       (270,534)          297,226
  Net proceeds from exercise of stock options and warrants....             --           896,866
  Preferred dividends paid ...................................       (192,297)          (44,200)
                                                                  -----------       -----------

      Net cash (used in) provided by financing activities.....       (462,831)        1,149,892
                                                                  -----------       -----------
      Net increase (decrease) in cash and cash
         equivalents .........................................        682,964           (54,627)

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

Cash and cash equivalents at end of period ...................    $ 1,544,758       $   647,181
                                                                  -----------       -----------
Supplemental disclosure of cash flow information:
  Interest paid ..............................................    $    13,308       $    13,854
  Taxes paid .................................................    $   337,755       $   634,629
</TABLE>

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

                                       6
<PAGE>
                 RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2000


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").

     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  September  30,  2000,  and  the
consolidated  statements of operations for the three and six month periods ended
September  30,  1999 and 2000 and  statements  of cash  flows  for the six month
periods  ended  September  30,  1999 and 2000 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 of America 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, 2000 Form 10-KSB and the Company's
June 30, 2000 Form 10-QSB filed with the  Securities  and  Exchange  Commission,
Washington,  D.C.  20549.  The results of operations for the three and six month
periods ended September 30, 1999 and 2000 are not necessarily  indicative of the
results for a full year.

2. REPURCHASE OF STOCK OPTIONS

     On September 21, 2000, the Board of Directors authorized the repurchase of,
and the Company entered into an agreement to repurchase,  957,721 options,  held
by affiliates,  for an aggregate  price of  $1,234,560.  The repurchase has been
included in the consolidated statement of operations for the three and six month
periods ended September 30, 2000.

                                       7
<PAGE>
3. INCOME TAXES

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

     The tax provision  for the three and six month periods ended  September 30,
2000  differs  from  that  anticipated  under  statutory  rates as a result of a
permanent  difference allowing the Company a deduction for compensation  expense
as a result of the exercise of options and warrants.

4. PREFERRED STOCK

     A  quarterly  preferred  dividend  of $22,100  was  declared  for the first
quarter ended June 30, 2000 and it was paid on August 11, 2000.  For the quarter
ended September 30, 2000, the Company declared  dividends on the Preferred Stock
totaling  $22,100  which are expected to be paid during the third quarter of the
Company's fiscal year.

5.EARNINGS PER SHARE

     A  reconciliation  of  the  numerators  and  denominators  utilized  in the
computation of basic and diluted  earnings per share for the three and six month
periods ended September 30, 1999 and 2000 is as follows:

<TABLE>
<CAPTION>
                                         Three Months                   Six Months
                                     Ended September 30,            Ended September 30,
                                 ---------------------------     ------------------------
                                    1999            2000            1999          2000
                                 -----------     -----------     ----------    ----------
<S>                              <C>             <C>             <C>           <C>
BASIC EPS COMPUTATION
 Net income (Loss) applicable
  to common and common
   equivalent shares ........    $   410,067     $  (157,602)    $  620,498    $  113,030

 Weighted average common
  shares ....................      3,943,543       3,824,186      3,941,985     3,696,901
                                 -----------     -----------     ----------    ----------

Basic EPS ...................    $       .11     $      (.04)    $      .16    $      .03
                                 ===========     ===========     ==========    ==========
DILUTED EPS COMPUTATION
 Net income (Loss) applicable
  to common and common
   equivalent shares ........    $   410,067     $  (157,602)    $  620,498    $  113,030
 Dividends on convertible
  preferred stock ...........         22,400          22,100         45,000        44,200
                                 -----------     -----------     ----------    ----------
                                     432,467        (135,502)       665,498       157,230
                                 -----------     -----------     ----------    ----------
 Weighted average common
  shares ....................      3,943,543       3,824,186      3,941,985     3,696,901
 Weighted average convertible
  preferred stock ...........      1,129,674              --      1,131,232     1,105,000
 Weighted average options
  and warrants ..............      1,033,277              --        926,674       609,780
                                 -----------     -----------     ----------    ----------
                                   6,106,494       3,824,186      5,999,891     5,411,681
                                 -----------     -----------     ----------    ----------

Diluted EPS .................    $       .07            (.04)    $      .11           .03
                                 ===========     ===========     ==========    ==========
</TABLE>

     The incremental  shares from assumed  conversions of preferred stock, which
amount to  1,105,000  for the three  months  ended  September  30,  2000 are not
included in  computing  the diluted per share  amounts  since  inclusion of such
shares would be anti-dilutive.

                                       8
<PAGE>
GEOGRAPHIC AND INDUSTRY SEGMENTS

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

                                                     Six Months     Six Months
                                                        Ended         Ended
                                                    September 30,  September 30,
                                                         1999          2000
                                                         ----          ----
Net revenues from external customers
 Vehicle Rental Franchises-Rent-A-Wreck-(U.S.)..    $ 2,667,061     $ 2,998,051
 Vehicle Rental Franchises-Pricele$$-(U.S.) ....        257,601         258,659
 Corporate-(U.S.) ..............................         18,890           1,550
 Insurance-(U.S.) ..............................        401,650         576,407
 Insurance-(Bermuda) ...........................             --              --
                                                    -----------     -----------
                                                    $ 3,345,202     $ 3,834,667
Segment operating income (loss)
 Vehicle Rental Franchises-Rent-A-Wreck-(U.S.)..    $   966,327     $   354,566
 Vehicle Rental Franchises-Pricele$$-(U.S.) ....         54,068         (62,436)
 Corporate-(U.S.) ..............................        (38,542)        (42,919)
 Insurance-(U.S.) ..............................        (18,444)       (305,241)
 Insurance-(Bermuda) ...........................             --              --
                                                    -----------     -----------
                                                    $   963,409     $   (56,030)
                                                    ===========     ===========
Expenditures for segment assets
 Vehicle Rental Franchises-Rent-A-Wreck-(U.S.)..    $        --     $        --
 Vehicle Rental Franchises-Pricele$$-(U.S.) ....             --          94,464
 Corporate-(U.S.) ..............................         57,554         171,923
 Insurance-(U.S.) ..............................             --              --
 Insurance-(Bermuda) ...........................             --              --
                                                    -----------     -----------
                                                    $    57,554     $   266,387
                                                    ===========     ===========
Depreciation and amortization
 Vehicle Rental Franchises-Rent-A-Wreck-(U.S.)..    $     8,142     $     8,944
 Vehicle Rental Franchise-Pricele$$-(U.S.) .....          2,648          21,197
 Corporate-(U.S.) ..............................         54,325          49,945
 Insurance-(U.S.) ..............................             --              --
 Insurance-(Bermuda) ...........................             --              --
                                                    -----------     -----------
                                                    $    65,115     $    80,086
                                                    ===========     ===========

                                       9
<PAGE>
                                                     Six Months     Six Months
                                                        Ended         Ended
                                                    September 30,  September 30,
                                                        1999           2000
                                                        ----           ----
Interest income
 Vehicle Rental Franchises-Rent-A-Wreck-(U.S.)..    $    17,635     $    36,675
 Vehicle Rental Franchises-Pricele$$-(U.S.) ....          1,982           4,314
 Corporate-(U.S.) ..............................         11,336           5,612
 Insurance-(U.S.) ..............................             --          35,336
 Insurance-(Bermuda) ...........................         20,946              --
                                                    -----------     -----------
                                                    $    51,899     $    81,937
                                                    ===========     ===========
Interest expense
 Vehicle Rental Franchises-Rent-A-Wreck-(U.S.)..    $       377     $        --
 Vehicle Rental Franchise-Pricele$$-(U.S.) .....             --              12
 Corporate-(U.S.) ..............................              1              --
 Insurance-(U.S.) ..............................         12,930          13,842
 Insurance- (Bermuda) ..........................             --              --
                                                    -----------     -----------
                                                    $    13,308     $    13,854
                                                    ===========     ===========
Income taxes
 Vehicle Rental Franchises-Rent-A-Wreck-(U.S.)..    $   314,867     $  (145,177)
 Vehicle Rental Franchises-Pricele$$-(U.S.) ....         21,635              --
 Corporate-(U.S.) ..............................             --              --
 Insurance-(U.S.) ..............................             --              --
 Insurance-(Bermuda) ...........................             --              --
                                                    -----------     -----------
                                                    $   336,502     $  (145,177)
                                                    ===========     ===========

                                                         Year       Six Months
                                                        Ended         Ended
                                                    September 30,  September 30,
                                                         1999          2000
                                                         ----          ----
Segment assets
 Vehicle Rental Franchises-Rent-A-Wreck-(U.S.)..    $ 2,264,794     $ 2,543,899
 Vehicle Rental Franchises-Pricele$$-(U.S.) ....        388,517         390,066
 Corporate-(U.S.) ..............................        256,127         506,325
 Insurance-(U.S.) ..............................      1,062,789       1,252,076
 Insurance-(Bermuda) ...........................          7,898           7,898
                                                    -----------     -----------
                                                    $ 3,980,125     $ 4,700,264
                                                    ===========     ===========

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

RESULTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1999

     The Company  operates in two principal  segments:  Vehicle Rental Franchise
Programs (franchising) and Insurance Coverage (insurance).  Franchising consists
of operations under the  Rent-A-Wreck  and Priceless lines of business.  For the
quarter  ended  September  30, 2000,  franchising  operations  comprised  85% of
consolidated  net  revenues  (87% in 1999)  and 521% of  consolidated  operating
income (106% in 1999).

     Revenue from franchising  operations,  which includes initial license fees,
continuing  license fees and  advertising  fees,  increased  by $152,915  (10%).
Initial  license  fees  increased  by $60,952  (17%),  continuing  license  fees
increased by $79,173 (9%), and advertising fees increased by $12,790 (4%). These
increases  resulted  primarily  from the  addition of new  franchises  and fleet
growth at existing  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 $95,478 (42%) due to higher
participation  by the Company's  franchisees  and fleet growth at  participating
franchises in the Company's CAR Insurance program.

     Total operating  expenses for both segments  increased by $1,377,774 (113%)
compared to the prior period.  Sales and marketing expenses decreased by $29,145
(22%),  which resulted primarily from a reduction in bad debt expense due to the
Company's  collection  efforts.  General and  administrative  expenses  for both
segments  increased by $54,344 (22%),  which  resulted  primarily from increased
rent  expense at the  Company's  new  headquarters  location  and an increase in
collection expense.

     Insurance  underwriting  expenses  increased  by  $123,530  (69%) due to an
increase in paid losses and loss  reserves for  unsettled  claims in  connection
with higher  participation  by the  Company's  franchisees  in its CAR Insurance
program.

     On September 21, 2000, the Company  entered into an agreement to repurchase
957,721 options for $1,234,560. These options were held by related parties.

     Depreciation and amortization expense increased by $18,780 (57%), which was
primarily  due to  additional  depreciation  associated  with  the  purchase  of
vehicles  in the  wheelchair  van  rental  program  and  computer  software  and
hardware.

                                       11
<PAGE>
     The Company  realized  an  operating  loss of  $496,307,  before  taxes and
interest,  for the  three-month  period  ended  September  30, 2000  compared to
operating income of $642,518 for the same period in the prior year, reflecting a
decrease  of  $1,138,825  (177%).  This  decrease  resulted  primarily  from the
Company's repurchase of 957,721 options for $1,234,560, offset by an increase in
initial  license  fees and  continuing  license  fees due to the addition of new
franchises,  fleet  growth at existing  franchises  and the  Company's  improved
collection  efforts and  collection  of  previously  reserved  accounts.  If the
repurchase of options had not impacted the consolidated  statement of operations
for the three months ended  September 30, 2000 (in which case it also would have
produced no partially  offsetting  reduction in income tax  expense),  operating
income  would  have  been  $738,253  in 2000  instead  of an  operating  loss of
$496,307,  which would have been an increase  versus 1999 of $95,735 (15%).  Net
income  would  have  been  $515,023  instead  of a net loss of  $135,502,  basic
earnings per share would have been $.13 instead of ($.04),  and diluted earnings
per share would have been $.10 instead of ($.04).

     Income tax expense for the quarter ended  September  30, 2000  decreased by
$559,290  (242%)  compared to the  three-month  period ended September 30, 1999,
resulting in an income tax benefit of $328,427  primarily  due to the income tax
benefit  associated  with the Company's  repurchase  of 957,721  options and the
exercise of warrants and options for 927,279 shares of common stock.

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

     Net revenues  increased by $489,465  (15%) for the  six-month  period ended
September 30, 2000 compared to the same period in the prior year.  This increase
occurred due to a $67,451 (9%) increase in initial license fees, a $215,262(13%)
increase in continuing license fees, a $33,484 (7%)increase in advertising fees,
and a  $176,998  (44%)  increase  in  premium  income  associated  with  the new
reinsurance program.  These increases occurred for the same reasons as those for
the three-month period documented above.

     Total  operating  expenses  increased  by  $1,508,904  (63%) in this period
compared  to the same  period  in the  prior  year.  Advertising  and  promotion
expenses increased by $38,911 (5%), which resulted primarily from an increase in
national  advertising  expense  to  promote  the  Company.  Sales and  marketing
expenses  decreased by $113,450 (36%), which resulted primarily from a reduction
in bad  debt  expense  due to the  Company's  collection  efforts.  Underwriting
expenses  increased by $264,666 (81%) due to an increase in paid losses and loss
reserves for unsettled  claims in connection  with higher  participation  by the
Company's franchisees.  General and administrative expenses increased by $72,785
(15%), which resulted primarily from increased rent expense at the Company's new
headquarters location and an increase in collection expense.

                                       12
<PAGE>
     Depreciation and amortization  expense increased by $14,971 (23%) which was
primarily  due to  additional  depreciation  associated  with  the  purchase  of
vehicles and additional investment in computer software and hardware.

     The  Company  realized  an  operating  loss of  $56,030,  before  taxes and
interest,  for the  six-month  period  ended  September  30, 2000 as compared to
operating  income of $963,409 for the six month period ended September 30, 1999,
reflecting a decrease of $1,019,439  (106%).  This decrease  resulted  primarily
from the Company's  repurchase of 957,721 options for  $1,234,560,  offset by an
increase in initial license fees and continuing license fees due to the addition
of new  franchises,  fleet  growth  at  existing  franchises  and the  Company's
improved collection efforts and collection of previously  reserved accounts.  If
the  repurchase  of options  had not  impacted  the  Consolidated  Statement  of
Earnings  for the six months  ended  September  30,  2000 (in which case it also
would have  produced no partially  offsetting  reduction in income tax expense),
operating income would have been $1,178,530 in 2000 instead of an operating loss
of $56,030, which would have been an increase versus 1999 of $215,121 (22%). Net
income would have been $807,276  instead of $157,230,  basic  earnings per share
would have been $.21 instead of $.03, and diluted  earnings per share would have
been $.15 instead of $.03.

     Income tax  expense  for the  six-month  period  ended  September  30, 2000
decreased by $481,679  (143%)  compared to the six-month  period ended September
30, 1999  resulting  in an income tax benefit of $145,177  due to the income tax
benefit  associated  with the Company's  repurchase  of 957,721  options and the
exercise of warrants and options for 927,279 shares of common stock.

LIQUIDITY AND CAPITAL RESOURCES

     At  September  30,  2000,  the Company had  working  capital of  $2,091,734
compared to  $1,239,523 at March 31, 2000.  This  increase of $852,211  resulted
primarily  from the tax  benefit  realized by the  Company  associated  with the
repurchase of options and the exercise of warrants and stock options.

     In March 2000, the Company obtained a $1,000,000 letter of credit from Bank
of America in  connection  with the  Company's  CAR  Insurance  subsidiary,  and
replaced  its  letters of credit with The Chase  Manhattan  Bank and the Bank of
Butterfield.  This letter of credit is part of the agreement between the Company
and Bank of America as  security  for the  letter of credit  issued to  American
International Group ("AIG") by Bank of America. This letter of credit is secured
by a certificate  of deposit of $600,000 held by Bank of America plus 50% of all
the Company's  eligible accounts  receivable.  Funds drawn against the letter of
credit bear  interest at Bank of America's  prime  commercial  lending rate plus
1.5% (which  prime rate was 9.50% on October 26,  2000).  For the quarter  ended
September 30, 2000, AIG has not drawn any funds from the letter of credit.

     The Company  rents its office  facilities  under the terms of an  operating
lease with a related party.  The monthly office  facilities lease commitment was
$9,290 at September 30, 2000.

                                       13
<PAGE>
     Property and equipment  increased by $227,232  (26%) from March 31, 2000 to
September  30, 2000.  This  increase  occurred  primarily due to the purchase of
vehicles and computer  software and hardware,  partially offset by the sale of a
vehicle in connection with the wheelchair van program.

     Cash used in  operations  for the six months ended  September  30, 2000 was
$767,941,  resulting from the decrease in accounts payable and accrued expenses,
a decrease  in income  taxes  payable  (which  resulted in an increase in income
taxes  recoverable),  an increase in prepaid  expenses,  partially offset by net
income before  depreciation  plus the decrease in accounts and notes  receivable
and the  increase  in  insurance  loss  reserves.  Accounts  payable and accrued
expenses  decreased  primarily  due to  payment  being  made  for the  Company's
repurchase  of 500,000  options for $625,000  during the fiscal year ended March
31, 2000. The net change in the tax liability (which is now a recoverable income
tax refund) is a result of taxes  currently  payable or  recoverable,  offset by
taxes paid for the year ended  March 31,  2001.  Accounts  and notes  receivable
decreased  primarily  due to  funds  received  from AIG in  connection  with the
reinsurance  program and funds recovered from  settlement of a lawsuit.  Prepaid
expense increased primarily due to additional promotional  materials.  Insurance
loss  reserves  increased  primarily  due to an  increase  in  unsettled  claims
associated with the increase in participation in the CAR Insurance program.

     Cash used in  investing  activities  of $436,578  related  primarily to the
acquisition  of vehicles and  computer  software,  hardware,  and an increase in
restricted  cash  due to the  Company's  additional  liability  to the  national
advertising fund related to an increase in advertising fees, partially offset by
the proceeds from the sale of one vehicle.

     Cash  provided  by  financing   activities   during  the  same  period  was
$1,149,892,  resulting  from an  increase  in  insurance  financing  payable  in
connection  with the CAR  Insurance  program and net proceeds  from  exercise of
options and warrants, offset by the payment of preferred dividends.

     The  Company  believes  it has  sufficient  working  capital to support its
business plan through fiscal 2001 and for the foreseeable future.

RECLASSIFICATION

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

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
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, 2000.
All forward-looking  statements should be considered in light of these risks and
uncertainties.

                                       14
<PAGE>
                             SELECTED FINANCIAL DATA

     Set  forth  below  are  selected   financial   data  with  respect  to  the
consolidated  statements of operations of the Company and its  subsidiaries  for
the six month periods ended  September 30, 1999 and 2000 and with respect to the
balance sheets at September 30, 1999 and 2000.

     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.

<TABLE>
<CAPTION>
                                       Three Months Ended          Six Months Ended
                                          September 30,              September 30,
                                        1999         2000          1999         2000
                                      -------      --------       -------      -------
                                (in thousands except per share and number of franchises)
                                                   (Unaudited)

<S>                                   <C>          <C>            <C>          <C>
FRANCHISEES' RESULTS (UNAUDITED)

Franchisees' Revenue (1)              $15,498      $ 16,817       $26,819      $30,407

Number of Franchised locations            655           669           655          669

COMPANY'S RESULTS OF OPERATIONS

Total Revenue                         $ 1,866      $  2,105       $ 3,345      $ 3,835

Operating expenses                      1,224         2,601         2,382        3,891

Income before income taxes            $   663      $   (464)      $ 1,002      $    12

Net income                                432          (136)          665          157

Earnings per common share

Basic                                 $   .11      $   (.04)      $   .16      $   .03
Weighted average common shares          3,944         3,824         3,942        3,697

Diluted                               $   .07      $   (.04)      $   .11      $   .03
Weighted average common
 shares plus convertible
  preferred stock, options
   and warrants                         6,106         3,824         6,000        5,412

EBITDA (2)                                703           839         1,080        1,351
</TABLE>

                                                                 September 30,
                                                                1999       2000
                                                               ------     ------
                                                                  (Unaudited)
BALANCE SHEET DATA
Working capital                                                $1,978     $2,092
Total assets                                                   $4,304     $4,700
Shareholders' equity                                           $2,515     $2,845

     (1) The franchisees'  revenue data have been derived from unaudited reports
provided by franchisees for use in calculating 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.

                                       15
<PAGE>
                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     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.

ITEM 2. CHANGES IN SECURITIES

     On July 24, 2000,  175,000  options and 135,000  warrants were exercised at
$1.00 and $1.15 by affiliates for 310,000  shares of common stock.  On September
22, 2000,  617,279  options were  exercised for 617,279  shares of common stock.
These  transactions were exempt under Rule 701 and Section 4(2). See also Item 5
below.

ITEM 5. OTHER INFORMATION

     During the quarter ended  September 30, 2000,  927,279 options and warrants
were exercised for 927,279 shares of the Company's common stock increasing total
outstanding common shares from 3,568,217 to 4,495,496.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

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

     (b)  Rent-A-Wreck  of  America,  Inc.  filed one report on Form 8-K for the
quarter ended September 30, 2000.

          1. Date  September  21,  2000,  reporting  the  repurchase  of certain
options and authorizing  1,000,000 share addition to the Company's ongoing share
repurchase program.

                                       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:                                               Dated:

         /s/Mitra Ghahramanlou                                November 10, 2000
         ---------------------------------                    ------------------
         Mitra Ghahramanlou
         Chief Accounting Officer


         /s/ Kenneth L. Blum, Sr.                             November 10, 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 SEPTEMBER 30, 2000




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

    27            Financial Data Schedule                        Filed herewith.

                                       18