MOTOR CLUB OF AMERICA
                                95 ROUTE 17 SOUTH
                            PARAMUS, NEW JERSEY 07653

                                =================
                                  MOTOR CLUB OF
                                [LOGO] AMERICA(R)
                                =================


                                   ----------
                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

                                  June 7, 2000
                                   ----------

TO THE HOLDERS OF COMMON STOCK OF MOTOR CLUB OF AMERICA:

      NOTICE IS HEREBY GIVEN that the Annual  Meeting of  Stockholders  of Motor
Club of America (the Company) will be held at the Marriott at Glenpointe  Hotel,
100 Frank W. Burr Boulevard, Teaneck, New Jersey, on Wednesday, June 7, 2000, at
10:00 o'clock A.M. (New Jersey Time), for the following purposes:

            1. To elect eight (8)  directors of the Company to hold office until
      the 2001 Annual Meeting of Stockholders  and until their  successors shall
      have been duly elected and qualified; and

            2. To transact  such other  business as may properly come before the
      meeting or any adjournment thereof.

      The Board of Directors  has fixed the close of business on April 27, 2000,
as the record date for the determination of the holders of Common Stock entitled
to notice of and to vote at the meeting.

      If you  cannot  be  present  in  person,  your  management  would  greatly
appreciate  your filling in,  signing and returning the enclosed  proxy,  in the
envelope provided for the purpose, in time to arrive no later than June 6, 2000.
Any  proxy not  received  by that  date may  arrive  too late to be voted at the
meeting.

                                      By Order of the Board of Directors

                                                        Peter K. Barbano
                                                            Secretary

Dated: Paramus, New Jersey
       May 4, 2000


<PAGE>

                              MOTOR CLUB OF AMERICA
                                95 ROUTE 17 SOUTH
                            PARAMUS, NEW JERSEY 07653

                                   ----------
                                 PROXY STATEMENT
                                   ----------

                         Annual Meeting of Stockholders
                                  June 7, 2000
                                   ----------

      This statement is furnished in connection with the solicitation of proxies
by the management of MOTOR CLUB OF AMERICA for use at the 2000 Annual Meeting of
Stockholders  to be  held  on June  7,  2000,  and at any  and all  adjournments
thereof.  The Board of Directors has selected the close of business on April 27,
2000 as the record date,  for purposes of determining  shareholders  entitled to
notice of, and entitled to vote at the Annual Meeting,  and this proxy statement
is being  mailed to such  shareholders  on or about May 4,  2000.  On the record
date,  there were 2,124,387  shares of Common Stock of the Company  outstanding,
all of the par  value of $.50 per  share  and each  entitled  to one vote on any
matter to be voted on at the meeting.

      Other than the election of  directors,  which  requires a plurality of the
votes  cast,  each  matter to be  submitted  to the  stockholders  requires  the
affirmative vote of a majority of the votes cast at the meeting. For purposes of
determining the number of votes cast with respect to a particular  matter,  only
those cast "For" or "Against" are included. Abstentions and broker non-votes are
counted  only for  purposes  of  determining  whether a quorum is present at the
meeting.

      If the enclosed form of proxy is properly executed and returned in time to
be voted at the  meeting,  the shares  represented  thereby  will be voted.  The
attendance at the meeting by any  stockholder  who has previously  given a proxy
will not have the effect of revoking the proxy;  however,  any such  stockholder
may vote in person by  delivering  written  notice of revocation of the proxy to
the Secretary of the Company prior to the exercise of the proxy.

Election of Directors

      At the meeting eight  directors are to be elected to hold office until the
2001 Annual Meeting of  Stockholders,  and until their successors have been duly
elected and qualified.  It is the intention of the persons named in the enclosed
form of proxy to vote the shares  represented  thereby  for the  election of the
following nominees as directors of the Company. Each of the nominees is a member
of the Board of Directors of the Company.  The principal  occupations of Messrs.
Galatin, Fried, Lobeck, McWhorter,  McWhorter, Jr. and Swanner for the last five
years appear below;  Messrs.  Gilbert and Haveron  devote  substantially  all of
their business time to the affairs of the Company or one or more other companies
in the Motor Club of America Group,  and have been active in the business of one
or more  companies in the Motor Club of America  Group for more than five years.
Should any of these  nominees be unable or  unwilling  to accept  nomination  or
election for any presently  unknown  reason,  it is the intention of the persons
named in this proxy to vote for such other  person or persons as the  management
of the Company may nominate.


<PAGE>

<TABLE>
<CAPTION>
                                                                                                           Common Stock of the
                                                                                                              Company Owned
                                                                                                             Beneficially at
                                                                                                             March 31, 2000
                                                                         Years in Which              -----------------------------
                                                                       Nominee Has Served               Number
                                                                      as Director of This                 of             Percent
   Name and Age                    Principal Occupations             Company (Inclusive)(A)          Shares(B)(C)      of Class(C)
   ------------                    ---------------------             ----------------------          ------------      -----------
<S>                             <C>                                        <C>                          <C>               <C>
Archer McWhorter, 78(D) ........Chairman of   the    Board    of           1986-2000                    525,671           19.84
                                  Directors  of Companies in the
                                  Motor Club of  America  Group;
                                  from   1995  to  March   1997,
                                  Director   of   National   Car
                                  Rental   Systems,   Inc.   and
                                  affiliated corporations, a car
                                  rental   enterprise   ("NCR");
                                  from  1995 to  February  1997,
                                  one-third  owner of Santa  Ana
                                  Holdings,  Inc. ("Santa Ana"),
                                  which  exchanged its 90% stock
                                  interest  in NCR for  stock in
                                  Republic Industries, Inc. (now
                                  known  as  AutoNation,  Inc.);
                                  from February 1997 to February
                                  1998,   consultant   of   NCR;
                                  President (to January 1996) of
                                  Acceptance,  Inc.,  a  finance
                                  company

Stephen A. Gilbert, 61(E) ......President  and  Chief  Executive            1984-2000                     38,625            1.79
                                  Officer  of  Companies  in the
                                  Motor Club of  America  Group;
                                  Chairman   of  the  Board  and
                                  Chief  Executive   Officer  of
                                  North East Insurance Company

Robert S. Fried, 70(E) .........Retired Senior Vice President of            1956-2000                      1,000             .05
                                  Companies in the Motor Club of
                                  America Group

William E. Lobeck, Jr., 60 .....From March 1997,  President  and            1986-2000                    503,589           19.16
                                  COO of the  Automotive  Rental
                                  Group  of  AutoNation,   Inc.;
                                  from  1995 to May  1997,  CEO,
                                  President and Director of NCR;
                                  from  1995 to  February  1997,
                                  one-third  owner of Santa Ana,
                                  which  exchanged its 90% stock
                                  interest  in NCR for  stock in
                                  Republic Industries, Inc. (now
                                  known  as  AutoNation,  Inc.);
                                  President  of The Numbered Car
                                  Co., a car dealership

Alvin E. Swanner, 71 .......... From   1995   to   March   1997,            1986-2000                    525,669           19.84
                                  Chairman   of  the  Board  and
                                  Director of NCR;  from 1995 to
                                  February 1997, one-third owner
                                  of Santa Ana  which  exchanged
                                  its 90% stock  interest in NCR
                                  for    stock    in    Republic
                                  Industries, Inc. (now known as
                                  AutoNation,     Inc.);    from
                                  February   1997  to   February
                                  1998,   consultant   of   NCR;
                                  President    of    Swanner   &
                                  Associates,  Inc.,  formerly a
                                  car rental company;  President
                                  of Chateau,  Inc.,  a golf and
                                  country   club,   and  Chateau
                                  Development  Company,  Inc., a
                                  development company; President
                                  of 135 St.  Charles,  Inc.,  a
                                  hotel development company

Malcolm Galatin, 60 ............Professor of Economics, The City            1987-2000                         --              --
                                  College of The  University  of
                                  New York City

Patrick J. Haveron, 38 (E) .....Executive Vice President,  Chief            1994-2000                     18,100             .84
                                  Executive  Officer  and  Chief
                                  Financial   Officer  of  Motor
                                  Club  of  America;   Executive
                                  Vice   President   and   Chief
                                  Financial Officer of Companies
                                  in the Motor  Club of  America
                                  Group; Treasurer of Motor Club
                                  of America  Insurance  Company
                                  and    Preserver     Insurance
                                  Company

Arche McWhorter, Jr., 56(D) ....Associate Professor,  University            1998-2000                         --              --
                                  of Houston
</TABLE>


                                       2
<PAGE>

     Following is stock  ownership  information  of officers of the Company who
are listed in the compensation  tables that follow,  but who are not included in
the Director tabulations above.


<TABLE>
<CAPTION>
                                                                                        Common Stock of the
                                                                                    Company Owned Beneficially
                                                                                         at March 31, 2000
                                                                                   -----------------------------
                                                                                      Number of       Percent
       Name                                            Title                         Shares (B)(C)  of Class (C)
        ------                                         -----                       --------------  -------------
<S>                                         <C>                                         <C>             <C>
Myron Rogow, 57 ........................... Vice President--Underwriting                 6,875          .32
Charles Pelosi, 55 ........................ Vice President--Information Services        10,375          .49
G. Bruce Patterson, 56 .................... Vice President--Marketing                   10,375          .49
                                              and Administration
</TABLE>

      Following is stock  ownership  information by persons known to the Company
to be a  beneficial  owner of more than five  percent of such stock at March 31,
2000.

                           Name and Address
                           ----------------
Archer McWhorter...................................... 525,671        19.84
   1600 Smith Street
   Houston, Texas 77002

William E. Lobeck, Jr................................. 503,589        19.16
   1132 South Lewis Avenue
   Tulsa, Oklahoma 74104

Alvin E. Swanner...................................... 525,669        19.84
   28 Chateau Haut Brion Street
   Kenner, Louisiana 70065

Heartland Advisors, Inc............................... 171,500         8.07
   790 North Milwaukee Street
   Milwaukee, Wisconsin 53202

      Following is stock ownership  information by all 13 directors and officers
of the Company as a group at March 31, 2000.

                            Title of Class
                            --------------

Motor Club of America Common Stock
(par value $.50 per share) ......................... 1,645,099        59.77

----------
(A)   Includes years during any portion of which the nominee served as director.

(B)   As reported to the Company by the named persons.  The nature of beneficial
      ownership  or shares  shown in this  Proxy  Statement  is sole  voting and
      investment power, except the shares of Heartland  Advisors,  Inc. is based
      on a Schedule 13G dated January 20, 2000, which indicates sole dispositive
      power as to 171,500  shares but only sole voting power as to 3,000 of such
      shares.

(C)   Includes  (1)  stock   options  for  Common  Stock  which  are   currently
      exercisable  or  exercisable  within  60 days of March 31,  2000;  for Mr.
      Gilbert  10,625  shares,  for Mr.  Haveron 8,750  shares,  and for Messrs.
      Rogow,  Pelosi and Patterson  3,125 shares each; (2) Debentures for Common
      Stock which are currently  convertible;  for Mr. Archer McWhorter  201,736
      shares by a limited  partnership of which he is general  partner,  for Mr.
      Lobeck  193,688  shares,  and for Mr.  Swanner  201,735  shares owned by a
      Louisiana partnership in commendam of which he is general partner; and (3)
      for Mr. Archer McWhorter  323,935 shares which are owned by a family trust
      of which he is trustee;  for Mr.  Lobeck  11,150 shares which are owned by
      the William E. Lobeck  Revocable Trust of which he is trustee,  and 11,150
      which are owned by the  Kathryn L.  Taylor  Revocable  Trust  (Kathryn  L.
      Taylor is Mr. Lobeck's wife, and Mr. Lobeck disclaims beneficial ownership
      in the shares owned by his wife's  Revocable  Trust);  and for Mr. Swanner
      22,300 shares which are owned by the Louisiana partnership in commendam of
      which he is general partner.

(D)   Archer McWhorter is the father of Archer McWhorter,  Jr., who presently is
      a beneficiary of his father's  family trust (25%) and limited  partnership
      (14.5%);  Mr. Archer McWhorter,  Jr. disclaims any beneficial ownership in
      his father's Debentures and Common Stock.

(E)   Member of Finance Committee


                                       3
<PAGE>

      One of the Company's insurance subsidiaries, MCA Insurance Company (MCAIC)
was  declared  insolvent  on October 23, 1992 as a result of claims of Hurricane
Andrew,  which struck the South of Florida coast on August 24, 1992. The Company
wrote   off  in  1992   its   investment   in   MCAIC   and  its   subsidiaries,
Property-Casualty   Company  of  MCA  and   Fairmount   Central   Urban  Renewal
Corporation.  The  directors  and  executive  officers of the Company,  with the
exception of Malcolm  Galatin and Archer  McWhorter,  Jr.,  were  directors  and
executive officers of MCAIC.

Committees of the Board

      The Executive Committee serves as a policy-making and supervisory body for
all  operations  of the  Company,  has all the  eligible  powers of the Board of
Directors  between  meetings  of the  Board  and  also  acts  as the  nominating
committee.  Shareholders  who wish to suggest nominees for director should write
to the  Secretary  of the  Company  at 95 Route 17 South,  Paramus,  New  Jersey
07653-0931,   stating  in  detail  the   qualifications   of  such  persons  for
consideration by the Committee.

      The   Compensation   and  Evaluation   Committee   administers   executive
compensation and bonus plans; it met two times during 1999.

      The Stock Option Plan Committee  administers the 1987, 1992 and 1999 Stock
Option Plans and met two times during 1999.

      The  Executive  and Stock Option Plan  Committees  are comprised of Archer
McWhorter,  William E. Lobeck,  Jr. and Alvin E. Swanner.  The  Compensation and
Evaluation  Committee  is  comprised  of  William  E.  Lobeck,  Jr. and Alvin E.
Swanner.

      The Audit  Committee,  which is comprised of Malcolm Galatin and Robert S.
Fried,  assesses  the  Company's  risk of  fraudulent  financial  reporting  and
management's  program to monitor  compliance with the code of corporate conduct,
participates in the recommendation of independent public accountants and reviews
the audit plans of the internal auditor and independent public accountants.  The
Audit Committee met three times during 1999.

      The Board of Directors of the Company met on four occasions during 1999.

      During 1999, none of the incumbent directors attended less than 75% of the
aggregate  of (1) the total  number of  meetings  of the Board ( held during the
period for which he has been a director) and (2) the total number of meetings of
all  committees  of the  Board on which he served  (during  the  period  that he
served).

Directors' Compensation

      Each non-employee director receives $1,000 per month from Companies in the
Motor Club of America Group. Directors who are also employees do not receive any
amount, in addition to their compensation,  for being directors.  Each member of
the Executive  Committee  receives  $4,000 per month from Companies in the Motor
Club of America  Group;  and each  non-employee  member of the Audit and Finance
Committees receives $250 per meeting.


                                       4
<PAGE>

Executive Compensation Tables

      The following tables provide information about executive compensation.

                           SUMMARY COMPENSATION TABLE

      The following table sets forth  information  about the compensation of the
chief executive officer and each of the four most highly  compensated  executive
officers of the Company for  services in all  capacities  to the Company and its
subsidiaries.

<TABLE>
<CAPTION>
                                                                                   Long Term
                                                                                 Compensation
                                                     Annual Compensation           Award (2)
                                                   -----------------------       ------------
           (a)                        (b)            (c)             (d)              (e)              (f)
                                                                                  Securities
                                                                                  Underlying        All Other
                                                                                   Options/          Compen-
   Names and Principal                             Salary         Bonus (1)        SAR's (3)       sation (4)
        Position                     Year            ($)             ($)              (#)              ($)
   -------------------               ----          ------         --------        ----------       ----------
<S>                                  <C>           <C>              <C>              <C>            <C>
Stephen A. Gilbert ................  1999          175,000          45,000           7,500          19,409
   President and Chief               1998          170,962         121,000           7,500          15,010
   Executive Officer                 1997          165,000         121,000          17,500          14,760

Patrick J. Haveron ................  1999          163,250          45,000           7,500           9,151
   Executive Vice President,         1998          140,192         100,000           5,000           7,515
   Chief Executive Officer           1997          135,000         100,000          15,000           6,486
   and Chief Financial Officer

Myron Rogow .......................  1999          130,000          20,000           2,500           6,388
   Vice President--                  1998          130,962          42,435           2,500           7,422
   Underwriting                      1997          125,000          42,951           5,000           6,200

Charles Pelosi ....................  1999           97,135          15,250           2,500           4,745
   Vice President--                  1998           96,833          35,362           2,500           5,690
   Information Services              1997           92,135          35,792           5,000           5,224

G. Bruce Patterson ................  1999           85,000          17,500           2,500           4,570
   Vice President--                  1998           84,230          38,900           2,500           4,661
   Marketing and Administration      1997           74,615          39,372           5,000           3,547
</TABLE>

----------
(1)   Bonus  amounts  shown were earned with respect to the year  indicated  but
      were paid in the following year.

(2)   The  Company  does not have a  restricted  stock award plan or a long term
      incentive award plan other than certain stock option plans.

(3)   Amounts shown  represent  the number of stock  options  granted each year;
      there are no stock appreciation rights.

(4)   Amounts  shown include (a) Company  contributions  for the account of each
      named  executive  officer under the 401(k) Plan, a  tax-qualified  defined
      contribution  plan  open to all  salaried  employees  of the  Company  and
      certain subsidiaries upon completion of one year of service, (b) the value
      of certain group life insurance premiums;  and (c) for Mr. Gilbert and Mr.
      Haveron, contributions to a non-qualified deferred compensation plan.


                                       5
<PAGE>

                      OPTION/SAR GRANTS IN LAST FISCAL YEAR

      The  following  table  shows all grants of options to the named  executive
officers of the Company in 1999.  Pursuant to Securities and Exchange Commission
rules,  the table also shows the value of the options  granted at the end of the
option terms (five years) if the stock price were to  appreciate  annually by 5%
and  10%,  respectively.  There  is no  assurance  that  the  stock  price  will
appreciate at the rates shown in the table. The table also indicates that if the
stock price of the option does not appreciate,  there will be no increase in the
potential realizable value of the options granted.

<TABLE>
<CAPTION>
                                                                                        Potential Realizable Value at
                                                                                        Assumed Annual Rates of Stock
                                                                                           Price Appreciation for
                                   Individual Grants                                             Option Term
-------------------------------------------------------------------------------------- -------------------------------
         (a)                           (b)           (c)           (d)         (e)             (f)          (g)
                                    Number of
                                   Securities
                                   Underlying    % of Total
                                    Options/    Options/SAR's   Exercise
                                      SAR's      Granted to      or Base
                                   Granted(1)   Employees in      Price    Expiration
        Name                           (#)       Fiscal Year    ($/Share)     Date             5%          10%
       ------                      ----------    -----------   ----------  -----------      ----------  -----------
<S>                                    <C>          <C>          <C>          <C> <C>        <C>           <C>
Stephen A. Gilbert ...............     7,500        24.2         12.875       6/7/04         26,700        58,950
Patrick J. Haveron ...............     7,500        24.2         12.875       6/7/04         26,700        58,950
Myron Rogow ......................     2,500         8.1         12.875       6/7/04          8,900        19,650
Charles Pelosi ...................     2,500         8.1         12.875       6/7/04          8,900        19,650
G. Bruce Patterson ...............     2,500         8.1         12.875       6/7/04          8,900        19,650
</TABLE>


----------
(1)   Amounts shown  represent  the number of stock options  granted in 1999; no
      stock appreciation rights ("SAR's) have ever been issued.  Options may not
      be  exercised  for at least one year after grant and may then be exercised
      in  installments  of 25% of the grant amount each year until they are 100%
      vested.  Payment must be made in full upon  exercise in cash or such other
      consideration as is acceptable to the Stock Option Plan Committee.

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

      The following table provides  information as to options  exercised by each
of the named  executive  officers  of the  Company  during 1999 and the value of
options held by such officers at year end measured in terms of the closing price
of the Company Common Stock on December 31, 1999.

<TABLE>
<CAPTION>
         (a)                           (b)           (c)                       (d)                             (e)
                                                                      Number of Securities
                                                                     Underlying Unexercised             Value of Unexercised
                                     Shares                          Options/SAR's at Fiscal          In-the-money Option/SAR's
                                    Acquired         Value               Year-End (1)(#)            at Fiscal Year-End (1),(2)($)
                                  on Exercise      Realized        --------------------------       -----------------------------
        Name                           (#)           ($)           Exercisable  Unexercisable       Exercisable   Unexercisable
       ------                     -----------    -----------       -----------  -------------       -----------   -------------
<S>                                       <C>           <C>         <C>          <C>                     <C>           <C>
Stephen A. Gilbert ...............         0             0           10,625       21,875                  0             0
Patrick J. Haveron ...............         0             0            8,750       18,750                  0             0
Myron Rogow ......................         0             0            4,375        5,625                  0             0
Charles Pelosi ...................         0             0            4,375        5,625                  0             0
G. Bruce Patterson ...............         0             0            4,375        5,625                  0             0
</TABLE>

----------
(1)   No SAR's have ever been issued.

(2)   At December  31, 1999,  there were no  unexercised  in-the-money  options.
      Options  are  in-the-money  if the fair market  value of the Common  Stock
      exceeds the exercise price of the option.

              LONG TERM INCENTIVE PLANS--AWARDS IN LAST FISCAL YEAR

      The Company  does not maintain  any Long Term  Incentive  Plans other than
stock option plans previously disclosed.

                      STOCKHOLDER RETURN PERFORMANCE GRAPH

      Set forth on the following  page is a line graph  comparing the cumulative
total  stockholder  return on the Company's  Common Stock against the cumulative
total return of the Center for Research in Security  Prices at The University of
Chicago Graduate School of Business (CRSP) Index for NASDAQ Stock Market (United
States  Companies)  and the CRSP  Index  for  NASDAQ  Fire,  Marine  &  Casualty
Insurance for the period of five years  commencing  December 30, 1994 and ending
December 31, 1999. The graph and table assume that $100 was invested on December
30, 1994 in each of the Company's  Common  Stock,  the CRSP Index for the NASDAQ
Stock Market (United  States  Companies) and the CRSP Index for the NASDAQ Fire,
Marine & Casualty Insurance. This data was furnished by CRSP.


                                       6
<PAGE>

             Comparison of Five Year-Cumulative Total Years Returns

                              Performance Graph for

                              MOTOR CLUB OF AMERICA

   [The following table is depicted in the printed material as a line graph.]

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
                                     Legend

CRSP TOTAL RETURNS INDEX FOR:                 12/30/94     12/29/95     12/31/96     12/31/97     12/31/98     12/31/99
-----------------------------                 --------     --------     --------     --------     --------     --------
<S>                                             <C>          <C>          <C>          <C>          <C>          <C>
MOTOR CLUB OF AMERICA                           100.0        236.4        345.5        490.9        520.5        304.5
Nasdaq Stock Market (US Companies)              100.0        141.3        173.9        213.1        300.2        542.4
NASDAQ Stocks (SIC 6330-6339 US Companies)      100.0        140.2        152.0        230.9        197.0        148.2
  Fire, Marine, and Casualty Insurance

Notes:

      A.    The lines  represent  monthly index levels  derived from  compounded
            daily returns that include all dividends.

      B.    The indexes are reweighted daily, using the market capitalization on
            the previous trading day.

      C.    If the  monthly  interval,  based on the fiscal  year-end,  is not a
            trading day, the preceding trading day is used.

      D.    The index level for all series was set to $100.0 on 12/30/94.
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       7
<PAGE>

                             Executive Compensation

Report of the Compensation and Evaluation Committee and
  Stock Option Plan Committee on Executive Compensation

      The  Compensation  and  Evaluation  Committee  was charged by the Board of
Directors  with  administering  salaries and other  compensation  for  executive
officers.  The Stock Option Plan Committee  administers the Company's  incentive
stock  option  programs.   For  the  purposes  of  insuring  continuity  in  the
application  of  the  Company's   compensation   philosophy,   both   Committees
(hereinafter referred to as the Committee) have identical  membership,  with Mr.
Archer McWhorter also being a member of the Stock Option Plan Committee.

COMPENSATION PHILOSOPHY

      There are several  guiding  principles of the Committee in performing  its
functions. The compensation philosophy of the Company and its subsidiaries is to
provide a competitive salary and other remuneration tied to Company  performance
against  operating  goals in order  to  attract  and  retain  quality  insurance
executives.  Stock  options  are  provided  to  executives  to offer  additional
incentive compensation commensurate with Company performance.

      The Committee believes this compensation  philosophy properly balances its
executives incentives to provide short-term operating performance.

      The Company's continuing  financial  improvement is the preeminent concern
of the Committee, and all compensation decisions derive from this concern.

COMPONENTS OF EXECUTIVE COMPENSATION

      The Company's  executive  compensation  program consists of: (i) an annual
salary, (ii) a short-term incentive in the form of bonuses and (iii) a long-term
incentive in the form of stock options.

Salary

      The Committee  believes the Company has attracted  executive officers with
talent and expertise which exceed the Company's  current  operating  environment
and market  scope.  Accordingly,  these  executive  officers  are paid an annual
salary which is commensurate with their industry expertise, functional expertise
and value in the insurance marketplace.

      Historically,  many  factors  have been used to  determine  annual  salary
increases.  Such factors include Company  performance,  the Company's  operating
plan and objectives thereunder,  individual performance,  Company performance in
relation to the industry,  and the  regulatory  environment in which the Company
operates. In addition,  exceptional performance by an individual, whether or not
it has a direct impact on Company performance,  is taken into account in setting
salary increases.

      During  recent  years,  the Company  has in general  employed a cap on the
maximum increase any employee,  including executive  officers,  may receive over
the previous  year's salary.  The Company has utilized this strategy in order to
control its expenses.

      In order  to  control  expenses  further  and  assist  with the  Company's
financial recovery,  the Committee  eliminated all salary increases for calendar
year 1993,  including  executive  officers'  salaries;  for calendar years since
1994, the Committee eliminated or substantially limited salary increases for key
and executive officers. The Committee does not believe these salary actions will
be  detrimental  to the Company's  long-term  prospects.  The Committee  further
believes  that  total  compensation  for  executives  and  key  officers  should
primarily be determined by Company  performance  and that bonuses  should be the
featured additional remuneration component for these individuals,  as opposed to
salary.

Stock Options

      Stock options are granted as a means of providing  executive  officers and
key employees long term benefits and  incentives  from an improvement in Company
share  performance.  The options are granted at the market value of the stock on
the date of grant.  Thus,  the  options  gain value only to the extent the stock
price  exceeds  the option  price  during the life of the  option.  Options  are
awarded in a manner which  maintains the  executive's  focus on long-term  share
performance.


                                       8
<PAGE>

      Many of the principal competitors of the Company have adopted and now have
in operation  stock  option  plans.  The plans are used as incentive  devices by
corporations  which wish to attract new  management,  to convert their  officers
into  "partners" by giving them a stake in the business,  to retain the services
of executives who might otherwise leave and to give their employees  generally a
more direct interest in the success of the corporation.

Bonuses--Annual Incentive Program

      The Company  also pays bonuses for special  performance  and offers an AIP
which provides  incentive  compensation tied to the profitability of the Company
against a performance  factor which is derived from the Company's  calendar year
Budget and Profit Plan. The Compensation  Committee selected participants in the
1999 AIP who perform  functions which directly affect the ability of the Company
to meet its business and performance objectives.

      Under the 1999 AIP,  income before  Federal  income taxes for the year was
not within a specific  range as compared  to the  performance  factor.  However,
since the Company met or exceeded  all its 1999 goals  except for the Motor Club
of America  Insurance  Company Accident Year 1999 Personal Injury  Protection No
Fault losses, AIP bonuses, adjusted to reflect individual performance, have been
paid to participants, including executive officers, during 2000.

      The  Committee  reserves  the  right  to  withdraw  the AIP in total or an
executive's  participation in the AIP at any time. The Committee has established
an AIP for 2000 and its terms and  performance  factor  are  effective  only for
2000.

      The 2000 AIP will offer incentive  compensation  tied to the profitability
of the  Company  and its  subsidiaries  against  performance  factors  which are
derived  from  the  Company's   calendar  year  Budget  and  Profit  Plan.   The
Compensation  Committee  will  select  participants  in the 2000 AIP who perform
functions which directly affect the ability of the Company and its  subsidiaries
to meet their business and performance objectives.

      Under the 2000 AIP,  if income for the year is within a specific  range as
compared to the  performance  factor,  bonuses,  adjusted to reflect  individual
performance,  will be paid during  2001.  The  executive  officers  named in the
Summary Compensation Table are participating in the AIP in 2000.

Chief Executive Officer Compensation

      The  Committee  evaluated  the base  compensation  of Messrs.  Gilbert and
Haveron,  the  rewards  of the AIP,  and the long term  incentive  plan.  It was
determined that total compensation received by the Chief Executive Officers were
commensurate  with similar officers within the insurance  industry peer group as
well  their  personal  and  Company   performance  on  both  a  qualitative  and
quantitative basis.

      William E. Lobeck, Jr.                                Alvin E. Swanner

   Compensation and Evaluation Committee Interlocks and Insider Participation

      William  E.  Lobeck,  Jr.  and Alvin E.  Swanner,  who are  members of the
Compensation and Evaluation Committee and the Stock Option Plan Committee,  each
was paid director's fees of $60,000 during 1999.  There are no Compensation  and
Evaluation Committee interlocks.

Retirement Plan and Certain Transactions

      In 1954, the Company  established an Employees'  Retirement  Plan (Pension
Plan),  which as amended  covers  employees with one year's service and provides
annual retirement benefits based on salary and length of service to companies in
the Motor Club of America Group. The Pension Plan was amended as of January 1992
to  suspend  benefit  accruals.  The  trustees  of the  Pension  Plan,  which is
non-contributory,  are  Robert S.  Fried,  Stephen  A.  Gilbert  and  Patrick J.
Haveron.

      In order to fund Plan benefits,  the trustees have purchased United States
Government  obligations,  and have  placed  funds  with money  managers  who are
investing   these  monies  in  a  balanced   relationship   between  equity  and
fixed-income securities.


                                       9
<PAGE>

      The annual Pension Plan benefits  payable upon  retirement at or after the
normal  retirement age of 65 consist of an amount equal to the sum as of January
1992 of:

      (a)  1  1/2%  of  the  first  $12,000  of  an  employee's  average  annual
compensation  plus 2 1/4% in excess of  $12,000,  multiplied  by the  employee's
years of plan participation prior to January 15, 1983; and

      (b) for each plan year after January 15, 1983, 1 3/4% of the first $13,200
of the employee's annual compensation plus 2 3/4% in excess of $13,200.

      Early  retirement  is  available  at age 55 with 15  years of  service.  A
participant's  Pension  Plan  benefits  become 100%  vested  after five years of
service.  Pension Plan amounts are not subject to deductions for Social Security
benefits or other offset amounts.

      The following table sets forth certain information relating to the Pension
Plan with respect to the five most highly compensated  executive officers of the
Company who are participants in the Pension Plan:

<TABLE>
<CAPTION>
                                               Estimated Annual     Latest Remuneration   Credited Years
         Name                                  Benefit at Age 65   Covered by the Plan(1) of Service (1)
         -----                                 -----------------   ---------------------  --------------
<S>                                                  <C>                  <C>                   <C>
   Stephen A. Gilbert ......................         $52,650              $175,000              24
   Patrick J. Haveron ......................           4,950                79,500               4
   Myron Rogow .............................           9,500               113,950               4
   Charles Pelosi ..........................          21,250                86,920              18
   G. Bruce Patterson ......................           5,125                76,766               4
</TABLE>

----------
(1)   As of January 1992 when Pension Plan accruals were suspended.

Other Business

      The  management  of the  Company  knows of no other  matters  which may be
presented  at the  meeting.  However,  if any matter not now known  should  come
before the meeting,  it is intended  that the persons named in the enclosed form
of proxy,  or their  substitutes,  will vote the shares  represented  by them in
accordance with their judgment on such matter.

Financial Statements Available

      A copy of the  Annual  Report  of the  Company  for 1999,  which  contains
financial statements audited by the Company's independent public accountants, is
being sent to all stockholders with this proxy statement.

      A copy of the  Company's  1999  Annual  Report on Form 10-K filed with the
Securities  and Exchange  Commission  is available  without  charge upon written
request  to the  Chief  Financial  Officer  of the  Company,  95 Route 17 South,
Paramus, New Jersey 07653-0931.

Relationship with Independent Public Accountants

      The Board of Directors  has  selected  the firm of  PricewaterhouseCoopers
L.L.P. as the Company's principal  independent public accountant for the year of
2000. One or more members of this firm will attend the Annual Meeting, will have
the  opportunity  to make a statement if they so desire and will be available to
answer questions that may be asked by stockholders.

Proposals of Stockholders

      In order  for  proposals  of  stockholders  to be  included  in the  proxy
materials for the 2001 Annual  Meeting of  Stockholders,  such proposals must be
received by the Secretary of the Company no later than January 5, 2001.

      A proposal of stockholders not included in the proxy material for the 2001
Annual Meeting of Stockholders  can be presented to that Annual Meeting by other
means.  However,  if notice of a proposal is not given to the  Secretary  of the
Company on or before March 20, 2001,  the persons  authorized  under  management
proxies will have  discretionary  authority  to vote and act  according to their
best judgment on the matter, without any specific or further instructions of the
stockholders whose proxies they hold.


                                       10
<PAGE>

Cost of Solicitation

      The costs of the meeting,  including the solicitation of proxies,  will be
borne  by the  Company.  Proxies  will be  solicited  by  mail,  and may also be
solicited,  without  extra  compensation,  by certain  directors,  officers  and
regular employees of the Company,  by mail,  telephone,  telegraph,  telecopy or
personally. Arrangement will be made with brokerage houses and other custodians,
nominees and fiduciaries to forward proxy soliciting  material to the beneficial
owners of stock held of record by such  persons,  and the Company may  reimburse
them for reasonable out-of-pocket expenses incurred by them in doing so.

      If you  cannot  be  present  in  person,  your  management  would  greatly
appreciate  your filling in,  signing and returning the enclosed  proxy,  in the
envelope  provided  for the  purpose,  in time to arrive  not later than June 7,
2000. Any proxy not received by that date may arrive too late to be voted at the
meeting.

                                              By Order of the Board of Directors

                                                             Peter K. Barbano,
                                                                 Secretary

Dated: Paramus, New Jersey
       May 4, 2000


                                       11

<PAGE>


                                =================
                                  MOTOR CLUB OF
                                [LOGO] AMERICA(R)
                                =================

                         Annual Meeting of Stockholders

                          Marriott at Glenpointe Hotel
                           100 Frank W. Burr Boulevard
                               Teaneck, New Jersey
                                  June 7, 2000
                                   10:00 A. M.





                            \/ Fold and detach here \/
--------------------------------------------------------------------------------

                              Motor Club of America

               Proxy Solicited on Behalf of the Board of Directors
         for the Annual Meeting of Stockholders to be Held June 7, 2000


PROXY: ARCHER McWHORTER, ALVIN E. SWANNER, WILLIAM E. LOBECK, JR. AND STEPHEN A.
GILBERT,  and each of them are hereby  appointed as attorneys and proxies,  with
full power of substitution,  to represent and to vote all stock of MOTOR CLUB OF
AMERICA (the Company) in the name of the  undersigned,  as fully and effectively
as the  undersigned  could do if personally  present,  at the Annual  Meeting of
Stockholders of the Company, to be held at the Marriott at Glenpointe Hotel, 100
Frank W.  Burr  Boulevard,  Teaneck,  New  Jersey  07666,  on June 7, 2000 at 10
o'clock A.M. (New Jersey Time), and at any adjournment thereof, upon the matters
set forth in the Proxy  Statement,  which has been received by the  undersigned,
and in  their  discretion  in the  transaction  of such  other  business  as may
properly come before the meeting or any adjournment thereof.



<PAGE>

--------------------------------------------------------------------------------
        (Please mark, sign and date this proxy and return promptly in the
                               envelope provided)

                             Motor Club of America
               Proxy Solicited on Behalf of the Board of Directors


1. Election of directors (Mark Only One Box).
   Nominees: A. McWhorter, S.A. Gilbert, R.S. Fried, M. Galatin,
   W.E. Lobeck, Jr., A.E. Swanner, P.J. Haveron, A. McWhorter, Jr.

   |_| Vote FOR all nominees listed above and recommended by the Board of
   Directors, EXCEPT vote withheld from the following nominees (if any):

   |_| Vote WITHHELD from all nominees.

If no  indication  is made,  the  proxies  shall  vote FOR the  election  of the
director nominees.

(INSTRUCTION:  To withhold authority to vote for any individual  nominee,  write
that nominee name on the line provided below.)

--------------------------------------------------------------------------------

2.  In their  discretion,  the  proxies  are  authorized  to vote upon any other
    business that may come before the meeting or any adjournment thereof.


                    Please sign here personally, exactly as your name appears
                    hereon. Joint owners must both sign.

                    DATED                                      2000
                         --------------------------------------

                    SIGNED
                          -----------------------------------------

                    SIGNED
                          -----------------------------------------
                    Please mark, sign and date this proxy and return promptly in
                    the envelope provided