----

----

| (Mark      one)                                                                                                                                                                          |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| [X]           Quarterly      report under Section 13 or 15(d) of the Securities Exchange Act of      1934                         |
|                                                                                                                                                       |
| For      the quarterly period ended March 31, 2008                                                                                                                                       |
|                                                                                                                                                       |
| [   ]           Transition      report pursuant to Section 13 or 15(d) of the Securities Exchange Act of      1934 |
|                                                                                                                                                       |
| For      the transition period from ___________ to ____________                                                                                                                          |
|                                                                                                                                                       |
| Commission      File Number:  0-11582                                                                                                                                          |
|                                                                                                                                                       |
| AUTO UNDERWRITERS OF      AMERICA, INC.(Exact      Name of Small Business Issuer as Specified in its  Charter)                                                                           |
|                                                                                                                                                       |
| California(State      or Other Jurisdiction ofIncorporation      or Organization)                                                                                                        | 94-2915849(IRS      EmployerIdentification      No.) |
|                                                                                                                                                       |
| 2670      South White RoadSuite      241San Jose, CA      95148(Address      of Principal Executive Offices)                                                                             | (408)      270-3587(Issuer’s      Telephone Number) |
|                                                                                                                                                       |
| (Former      Name, Former Address and Former Fiscal Year, if Changed Since Last      Report)                                                                                             |

----

----

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|                           |                                                                                      | PAGE             |
|--------------------------------|-------------------------------------------------------------------------------------------|------------------|
|                           |                                                                                      |             |
| PART I.                        | FINANCIAL INFORMATION                                                                     |             |
|       |                                                                  |             |
| Item 1.                        | Financial Statements                                                                      |             |
|       |                                                                  |             |
|                           | Balance Sheets as of March 31, 2008 and June 30,      2007                                | 3                |
|       |                                                                  |             |
|                           | Statements of Operations for the Three and Nine Months Ended      March 31, 2008 and 2007 | 4                |
|       |                                                                  |             |
|                           | Statements of Cash Flows for the Nine Months Ended March 31,      2008 and 2007           | 5                |
|       |                                                                  |             |
|                           | Notes to Financial Statements                                                             | 6      - 7       |
|       |                                                                  |             |
| Item 2.                        | Management’s Discussion and Analysis of Financial      Condition                    | 8 -      12 |
|       |                                                                  |             |
| Item 3.                        | Controls and Procedures                                                                   | 12               |
|       |                                                                  |             |
| PART II.                       | OTHER INFORMATION                                                                         |             |
|       |                                                                  |             |
| Item 1.                        | Legal Proceedings                                                                         | 13               |
|       |                                                                  |             |
| Item 2.                        | Unregistered Sales of Equity Securities and Use of      Proceeds                          | 14               |
|       |                                                                  |             |
| Item 3.                        | Default Upon Senior Securities                                                            | 14               |
|       |                                                                  |             |
| Item 4.                        | Submission of Matters to a Vote of Security      Holders                                  | 14               |
|       |                                                                  |             |
| Item 5.                        | Other Information                                                                         | 14               |
|       |                                                                  |             |
| Item 6.                        | Exhibits                                                                                  | 14               |

----

Part 

Item 

Auto

|                           |   | March      31, 2008 |       |   | June      30, 2007 |   |
|--------------------------------|--------|---------------------|------------|--------|--------------------|--------|
| Assets:                   |   |                |       |   |               |   |
| Cash      and cash equivalents |   | $                   | 510,458    |   |               | $      | 1,671,430 |   |
| Finance      receivables, net  |   |                | 13,008,027 |   |               |   | 8,932,091 |   |
| Other      receivables         |   |                | 1,014,442  |   |               |   | 35,572 |   |
| Inventory                      |   |                | 1,493,882  |   |               |   | 1,507,276 |   |
| Fixed      assets, net         |   |                | 74,941     |   |               |   | - |   |
| Prepaid      and other assets  |   |                | 48,880     |   |               |   | 27,898 |   |
| Deferred      financing costs  |   |                | -          |   |               |   | 111,408 |   |
| Total      assets              |   | $                   | 16,150,630 |   |               | $      | 12,285,675 |   |

| Liabilities      and stockholders’ deficit: |   |   |       |   |   |   |
|---------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Accounts      payable and accrued liabilities     |   | $      | 1,724,581  |   |   | $      | 989,818 |   |
| Drafts      payable and floor plan liabilities    |   |   | 1,184,625  |   |   |   | 1,103,250 |   |
| Dividends      payable                            |   |   | 519,546    |   |   |   | 187,749 |   |
| Other      notes payable                          |   |   | 1,145,364  |   |   |   | 961,198 |   |
| Senior      debts - revolving line of credit      |   |   | 14,576,917 |   |   |   | 10,086,070 |   |
| Deferred      sales tax                           |   |   | 1,248,122  |   |   |   | 892,763 |   |
| Advances      from related parties                |   |   | 673,846    |   |   |   | 673,846 |   |
| Total      liabilities                            |   |   | 21,073,001 |   |   |   | 14,894,694 |   |
|                                              |   |   |       |   |   |   |   |   |
| Commitments      and contingencies                |   |   | -          |   |   |   | - |   |

| Stockholders’      deficit:                                                                                                                                                    |   |   |        |   |   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
| Series      A convertible preferred stock: no par value: 10,000,000 authorized,      2,426,420 and 1,280,020 issued or outstanding                                                   |   |   | 5,069,433   |   |   |   | 4,253,735 |   |
|                  Series B convertible preferred stock: no par value, 4,800,000      authorized, 0 issued and outstanding |   |   | -           |   |   |   | - |   |
| Common      stock: no par value: 100,000,000 authorized, issued and outstanding: 7,400,575      and 6,418,570 respectively                                                           |   |   | 10,852,441  |   |   |   | 10,825,909 |   |
| Retained      deficit                                                                                                                                                                |   |   | (20,844,245 | )      |   |   | (17,688,663 | ) |
| Total      stockholders’ deficit                                                                                                                                               |   |   | (4,922,371  | )      |   |   | (2,609,019 | ) |
|                                                                                                                                                                                 |   |   |        |   |   |   |   |   |
| Total      liabilities and stockholders’ deficit                                                                                                                               |   | $      | 16,150,630  |   |   | $      | 12,285,675 |   |

----

Auto

|                                               |   | Three      Months EndedMarch      31, |      |   | Nine      Months EndedMarch      31, |   |
|----------------------------------------------------|--------|---------------------------------------|-----------|--------|--------------------------------------|--------|
|                                               |   | 2008                                  |      |   | 2007                                 |   |   | 2008 |   |   | 2007 |   |
|                                               |   |                                  |      |   |                                 |   |   |   |   |   |   |   |
| Revenues:                                          |   |                                  |      |   |                                 |   |   |   |   |   |   |   |
| Sales                                              |   | $                                     | 7,219,449 |   |                                 | $      | 3,557,413 |   |   | $ | 13,371,455 |   |   | $ | 6,229,008 |   |
| Interest      income                               |   |                                  | 516,426   |   |                                 |   | 360,604 |   |   |   | 1,370,605 |   |   |   | 1,100,619 |   |
| Other                                              |   |                                  | 51,503    |   |                                 |   | 88,067 |   |   |   | 234,870 |   |   |   | 131,691 |   |
|                                               |   |                                  | 7,787,378 |   |                                 |   | 4,006,084 |   |   |   | 14,976,931 |   |   |   | 7,461,318 |   |
|                                               |   |                                  |      |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Costs      and expenses:                           |   |                                  |      |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Cost      of sales                                 |   |                                  | 4,831,057 |   |                                 |   | 2,502,516 |   |   |   | 9,057,707 |   |   |   | 4,041,655 |   |
| Selling,      general and administrative           |   |                                  | 1,403,854 |   |                                 |   | 1,015,039 |   |   |   | 4,168,468 |   |   |   | 3,114,305 |   |
| Provision      for credit losses                   |   |                                  | 1,039,640 |   |                                 |   | 819,368 |   |   |   | 2,599,920 |   |   |   | 1,582,598 |   |
| Interest      expense – warrants             |   |                                  | -         |   |                                 |   | - |   |   |   | - |   |   |   | 561,045 |   |
| Interest      expense – other                |   |                                  | 466,739   |   |                                 |   | 446,512 |   |   |   | 1,938,155 |   |   |   | 1,202,844 |   |
| Depreciation      and amortization                 |   |                                  | 10,259    |   |                                 |   | 99,933 |   |   |   | 36,467 |   |   |   | 300,125 |   |
|                                               |   |                                  | 7,751,549 |   |                                 |   | 4,883,368 |   |   |   | 17,800,718 |   |   |   | 10,802,572 |   |
|                                               |   |                                  |      |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Income      (Loss) before income taxes             |   |                                  | 35,829    |   |                                 |   | (877,285 | ) |   |   | (2,823,786 | ) |   |   | (3,341,254 | ) |
|                                               |   |                                  |      |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Provision      for income tax (income tax benefit) |   |                                  | -         |   |                                 |   | - |   |   |   | - |   |   |   | - |   |
|                                               |   |                                  |      |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Net      Income  (Loss)                  |   | $                                     | 35,829    |   |                                 | $      | (877,285 | ) |   | $ | (2,823,786 | ) |   | $ | (3,341,254 | ) |
| Preferred      deemed dividends                    |   |                                  | -         |   |                                 |   | - |   |   |   | - |   |   |   | (2,056,629 | ) |
| Net      loss available to common stockholders     |   | $                                     | 35,829    |   |                                 | $      | (877,285 | ) |   | $ | (2,823,786 | ) |   | $ | (5,397,883 | ) |
|                                               |   |                                  |      |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Basic      and diluted net income (loss)per share: |   | $                                     | 0         |   |                                 | $      | (0.13 | ) |   | $ | (0.40 | ) |   | $ | (0.82 | ) |
|                                               |   |                                  |      |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      average shares outstanding:          |   |                                  | 7,123,419 |   |                                 |   | 6,666,555 |   |   |   | 7,040,570 |   |   |   | 6,550,708 |   |

----

Auto

|                                                                 |   | Nine      Months EndedMarch      31, |       |
|----------------------------------------------------------------------|--------|--------------------------------------|------------|
|                                                                 |   | 2008                                 |       |   | 2007 |   |
| Operating      activities:                                           |   |                                 |       |   |   |   |
| Net      loss                                                        |   | $                                    | (2,823,786 | ) |   | $ | (3,341,254 | ) |
| Stock      compensation expense                                      |   |                                 | -          |   |   |   | 127 |   |
| Warrant      expense                                                 |   |                                 | -          |   |   |   | 561,045 |   |
| Bad      debt expense                                                |   |                                 | -          |   |   |   | 35,000 |   |
| Gain      on written off loan                                        |   |                                 | -          |   |   |   | (21,490 |   |
| Depreciation      and amortization                                   |   |                                 | 220,633    |   |   |   | 300,125 |   |
| Imputed      interest                                                |   |                                 | 26,532     |   |   |   | 30,045 |   |
| Changes      in finance receivables, net:                            |   |                                 |       |   |   |   |   |   |
| Finance      receivables originations and purchased, net of payments |   |                                 | (8,949,798 | ) |   |   | (2,741,043 | ) |
| Provision      for credit losses                                     |   |                                 | 2,599,920  |   |   |   | 1,582,598 |   |
| Inventory      acquired in repossession                              |   |                                 | 2,273,941  |   |   |   | 1,290,364 |   |
| Subtotal      finance receivables                                    |   |                                 | (4,075,936 | ) |   |   | 131,919 |   |
| Changes      in operating assets and liabilities:                    |   |                                 |       |   |   |   |   |   |
| Deferred      financing cost                                         |   |                                 |       |   |   |   | (52,361 | ) |
| Other      receivables                                               |   |                                 | (978,870   | ) |   |   | (24,346 | ) |
| Inventory                                                            |   |                                 | 13,394     |   |   |   | (681,054 | ) |
| Prepaid      and other assets                                        |   |                                 | (20,982    | )  |   |   | 6,087 |   |
| Accounts      payable and accrued liabilities                        |   |                                 | 734,764    |   |   |   | (176,432 | ) |
| Funding      payable                                                 |   |                                 | 81,375     |   |   |   | - |   |
| Drafts      payable and floor plan liabilities                       |   |                                 | -          |   |   |   | 823,080 |   |
| Deferred      sales tax                                              |   |                                 | 355,359    |   |   |   | 96,893 |   |
| Net      cash used in operating activities                           |   |                                 | (6,467,518 | ) |   |   | (2,312,616 | ) |
|                                                                 |   |                                 |       |   |   |   |   |   |
| Investing      activities:                                           |   |                                 |       |   |   |   |   |   |
| Purchase      of property, equipment and leasehold improvements      |   |                                 | -          |   |   |   | (11,380 | ) |
| Net      cash (used in) provided by investing activities             |   |                                 | -          |   |   |   | (11,380 | ) |
|                                                                 |   |                                 |       |   |   |   |   |   |
| Financing      activities:                                           |   |                                 |       |   |   |   |   |   |
| Repayments      of other notes payable                               |   |                                 |       |   |   |   | (460,871 | ) |
| Proceeds      from Series A Preferred Stock                          |   |                                 | 815,698    |   |   |   | 3,232,455 |   |
| Proceeds      from secured notes payable                             |   |                                 | -          |   |   |   | - |   |
| Proceeds      from revolving credit facilities, net                  |   |                                 | 4,490,847  |   |   |   | 55,871 |   |
| Proceeds      from (repayments to) related parties, net              |   |                                 | -          |   |   |   | (3,948 | ) |
| Net      cash provided by financing activities                       |   |                                 | 5,306,545  |   |   |   | 2,823,507 |   |
|                                                                 |   |                                 |       |   |   |   |   |   |
| Increase      (decrease) in cash and cash equivalents                |   |                                 | (1,160,973 | )  |   |   | 499,511 |   |
| Cash      at: Beginning of period                                    |   |                                 | 1,671,430  |   |   |   | 4,161 |   |
| Cash      at: End of period                                          |   | $                                    | 510,458    |   |   | $ | 503,672 |   |
|                                                                 |   |                                 |       |   |   |   |   |   |
| Cash      paid for:                                                  |   |                                 |       |   |   |   |   |   |
| Income      tax                                                      |   | $                                    | -          |   |   | $ | - |   |
| Interest                                                             |   |                                 | 1,282,972  |   |   |   | 1,078,275 |   |
|                                                                 |   |                                 |       |   |   |   |   |   |
| Non-cash      supplemental disclosures:                              |   |                                 |       |   |   |   |   |   |
| Preferred      deemed dividend                                       |   | $                                    | -          |   |   | $ | 2,020,074 |   |
| Common      stock issued to repay debt                               |   | $                                    | -          |   |   | $ | 1,633,000 |   |
| Common      stock issued for offering expense                        |   | $                                    | 720,000    |   |   |   | - |   |

----

| Auto Underwriters of America, Inc.Notes      to Financial Statements(Unaudited) |
|---------------------------------------------------------------------------------|

| Finance      receivables                                                                                                                                                                                                                                                                                                                                                                   |   | $      | 16,051,729 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|
| Allowance      for credit losses                                                                                                                                                                                                                                                                                                                                                           |   |   | (3,043,702 | )      |
|                                                                 |   |   |       |   |
| Finance      receivables, net                                                                                                                                                                                                                                                                                                                                                              |   | $      | 13,008,027 |   |

| Balance      at beginning of period                                                                                                                                                                                                                                                                                                                                                        |   | $      | 2,505,933  |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|
| Provision      for credit losses                                                                                                                                                                                                                                                                                                                                                           |   |   | 2,599,920  |   |
| Net      recoveries                                                                                                                                                                                                                                                                                                                                                                        |   |   | 2,273,941  |   |
| Net      charge offs                                                                                                                                                                                                                                                                                                                                                                       |   |   | (4,336,097 | )      |
|                                                                 |   |   |       |   |
| Balance      at end of period                                                                                                                                                                                                                                                                                                                                                              |   | $      | 3,043,702  |   |

----

----

Item

|   | · | our      ability to continue operating as a going  concern; |
|--------|--------|-------------------------------------------------------------|

|   | · | resolution      and payment of unpaid federal and statetaxes; |
|--------|--------|---------------------------------------------------------------|

|   | · | unfavorable      outcome with respect to pendinglitigation; |
|--------|--------|-------------------------------------------------------------|

|   | · | general      economic and industry conditions; |
|--------|--------|------------------------------------------------|

|   | · | our      capital requirements and dependence on the sale of our equity      securities; |
|--------|--------|-----------------------------------------------------------------------------------------|

|   | · | the      liquidity of the Company’s common stock will be affected by the lack of or      limited trading market; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------|

|   | · | intense      industry competition; |
|--------|--------|------------------------------------|

|   | · | our      ability to purchase installmentcontracts; |
|--------|--------|----------------------------------------------------|

|   | · | the      creditworthiness of contractobligors; |
|--------|--------|------------------------------------------------|

|   | · | shortages      in availability of qualifiedpersonnel; |
|--------|--------|-------------------------------------------------------|

|   | · | legal      and financial implications of unexpected catastrophic    events; |
|--------|--------|-----------------------------------------------------------------------------|

|   | · | regulatory      or legislative changes effecting the automobile finance industry;      and |
|--------|--------|--------------------------------------------------------------------------------------------|

|   | · | reliance      on, and the ability to attract, keypersonnel. |
|--------|--------|-------------------------------------------------------------|

----

|   | · | Our      ability to procure suitable lot locations at reasonable    costs. |
|--------|--------|----------------------------------------------------------------------------|

|   | · | Our      ability to build our management strength to support the store      growth. |
|--------|--------|-------------------------------------------------------------------------------------|

|   | · | Our      ability to maintain competitive direct retail and direct lending      operations. |
|--------|--------|--------------------------------------------------------------------------------------------|

----

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | Nine      Months EndedMarch      31, |       |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------|------------|
|                                                                                                                                       |   | 2008                                 |       |   | 2007 |   |
| Operating      activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                 |       |   |   |   |
| Net      loss                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | $                                    | (2,823,786 | ) |   | $ | (3,341,254 | ) |
| Imputed      interest                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                 | 26,532     |   |   |   | 30,045 |   |
| Stock      compensation expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                 | -          |   |   |   | 127 |   |
| Depreciation      and amortization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                 | 220,633    |   |   |   | 300,125 |   |
| Warrant      expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                 | -          |   |   |   | 561,045 |   |
| Bad      debt expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                 | -          |   |   |   | 35,000 |   |
| Gain      on write down of loan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                 | -          |   |   |   | (21,490 | ) |
| Changes      in finance receivables, net:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                 | (4,075,937 | ) |   |   | 131,919 |   |
| Changes      in operating assets and liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                 | 185,040    |   |   |   | (8,133 | ) |
| Net      cash used in operating activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                 | (6,467,518 | ) |   |   | (2,312,616 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                 |       |   |   |   |   |   |
| Cash      used in investing activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                 | -          |   |   |   | (11,380 | )  |
| Cash      provided by financing activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                 | 5,306,545  |   |   |   | 2,823,507 |   |
| Increase      (decrease) in cash                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | $                                    | (1,160,973 | ) |   | $ | 499,511 |   |

----

Item

----

Part

ITEM

----

ITEM

ITEM

ITEM

ITEM

ITEM

| 31.1     | Principal      Executive Officer Certification under Section 302 of the Sarbanes-Oxley      Act of 2002 |
|------------------------------|---------------------------------------------------------------------------------------------------------|
| 31.2                         | Principal      Financial Officer Certification under Section 302 of the Sarbanes-Oxley      Act of 2002 |
| 32.1                         | Principal      Executive Officer Certification under Section 906 of the Sarbanes-Oxley      Act of 2002 |
| 32.2                         | Principal      Financial Officer Certification under Section 906 of the Sarbanes-Oxley      Act of 2002 |

----

|                                         | Auto      Underwriters of America, Inc.                                                  |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                       |                                                                                     |
|                                                                                                                                                                                                                                       | By:   /s/ Dean      Antonis                                               |
|                                                                                                                                                                                                                                       | Dean      Antonis                                                                        |
|                                                                                                                                                                                                                                       | President      and Treasurer (Principal Executive,Financial      and Accounting Officer) |