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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                   FORM 10-K
                            ------------------------
(MARK ONE)

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

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

                                       OR

     [ ]   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: 28050

                          ONYX ACCEPTANCE CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S>                                            <C>
                  DELAWARE                                      33-0577635
       (STATE OR OTHER JURISDICTION OF                       (I.R.S. EMPLOYER
       INCORPORATION OR ORGANIZATION)                     IDENTIFICATION NUMBER)
</TABLE>

                          ONYX ACCEPTANCE CORPORATION
                      27051 TOWNE CENTRE DRIVE, SUITE 100
                            FOOTHILL RANCH, CA 92610
              (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

                                 (949) 465-3900
              (REGISTRANT'S TELEPHONE NUMBER INCLUDING AREA CODE)

        SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE

          SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                         COMMON STOCK ($0.01 PAR VALUE)

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes [ ]  No [X]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendments to
this Form 10-K. [X]

     The number of shares outstanding of the Company's Common Stock as of the
closing of the market on March 16, 2000 was 6,183,635. The registrant does not
have different classes of Common Stock. Based on the closing sale price of $5.50
the registrant's Common Stock as quoted on the Nasdaq National Market on March
16, 2000, the aggregate market value of such stock held by non-affiliates of the
registrant was approximately $15.4 million on that date.

                      DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the registrant's Proxy Statement for the Annual Meeting of
Stockholders currently expected to be held on May 31, 2000, to be filed with the
Commission pursuant to Regulation 14A, are incorporated by reference in Part III
of this Report.

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<PAGE>   2

                           ANNUAL REPORT ON FORM 10-K

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                        PAGE
                                                                        ----
<S>       <C>                                                           <C>
                                   PART I
Item 1.   Business....................................................    3
Item 2.   Properties..................................................   18
Item 3.   Litigation..................................................   18
Item 4.   Submission of Matters to a Vote of Security Holders.........   19

                                  PART II
Item 5.   Market for Registrant's Common Equity and Related
            Stockholder Matters: Price Range of Common Stock..........   20
Item 6.   Selected Financial Data.....................................   21
Item 7.   Management's Discussion and Analysis of Financial Condition
            and Results of Operations.................................   23
Item 7A.  Quantitative and Qualitative Disclosures about Market
            Risk......................................................   33
Item 8.   Financial Statements and Supplementary Data.................   34
Item 9.   Changes in and Disagreements with Accountants on Accounting
            and Financial Disclosure..................................   34

                                  PART III
Item 10.  Directors and Executive Officers of the Registrant..........   34
Item 11.  Executive Compensation......................................   34
Item 12.  Security Ownership of Certain Beneficial Owners and
            Management................................................   34
Item 13.  Certain Relationships and Related Transactions..............   34

                                  PART IV
Item 14.  Exhibits, Financial Statement Schedules and Reports on Form
            8-K.......................................................   35
</TABLE>

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                                     PART I

FORWARD-LOOKING STATEMENTS

     When used throughout this Annual Report, the words "believes",
"anticipates" and "expects" and similar expressions are intended to identify
forward-looking statements. Such statements are subject to the many risks and
uncertainties which affect the Company's business and actual results could
differ materially from those projected and forecasted. These uncertainties,
which include competition within the automobile finance industry, the effect of
economic conditions, litigation risks and the availability of capital to finance
planned growth, are described, but are not limited to those disclosed in this
Annual Report. These and other factors which could cause actual results to
differ materially from those in the forward-looking statements are discussed
under the heading "Risk Factors." Given these uncertainties, readers are
cautioned not to place undue reliance on such statements. The Company also
undertakes no obligation to publicly release the result of any revisions to
these forward-looking statements that may be made to reflect any future events
or circumstances.

ITEM 1. BUSINESS

GENERAL

     Onyx Acceptance Corporation, a Delaware Corporation, ("Onyx" or the
"Company") is a specialized consumer finance company engaged in the purchase,
securitization and servicing of motor vehicle retail installment contracts
originated by franchised and select independent automobile dealerships, and to a
small extent the origination or purchase of motor vehicle loans on a direct
basis through its subsidiaries to consumers throughout the United States
(collectively the "Contracts"). The Company focuses its efforts on acquiring
Contracts collateralized by late model used and, to a lesser extent, new motor
vehicles, entered into with purchasers whom the Company believes have a
favorable credit profile. Since commencing the purchase, origination and
servicing of Contracts in February 1994, the Company has purchased or originated
in excess of $3.8 billion in Contracts and currently has an active dealer base
of approximately 7,600 dealerships. The Company has expanded its operations from
a single office in Orange County, California to 17 auto finance centers (the
"Auto Finance Centers") serving many regions of the United States.

BACKGROUND

     The Company was founded in August 1993 by a team of executives with
extensive automobile finance experience including responsibility for the major
aspects of near-prime auto lending, including underwriting, servicing,
information systems implementation, interest rate management, securitizations
and auto dealer center management.

     The Company was initially capitalized by three venture capital firms in
November 1993. In February 1994, the Company began building its portfolio of
near-prime quality Contracts collateralized by new and used motor vehicles
pursuant to its managed growth strategy. Within its first six years of
operations, the Company expanded to 17 Auto Finance Centers, purchased or
originated over $3.8 billion in Contracts and completed 18 securitizations.

MARKET AND COMPETITION

     The Company operates in a highly competitive market. The automobile finance
market has historically been serviced by a variety of financial entities
including the captive finance affiliates of major automotive manufacturers,
banks, savings associations, independent finance companies, credit unions and
leasing companies. A number of these competitors have greater financial
resources than the Company. Many of these competitors also have long-standing
relationships with automobile dealerships and may offer dealerships or their
customers other forms of financing or services not provided by the Company.

     The Company competes for the purchase of Contracts which meet its
underwriting criteria on the basis of emphasizing strong relationships with its
dealership customer base through its local presence. The Company

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<PAGE>   4

supports its dealership customer base with an operation that is open seven days
a week, and has the ability to finalize purchases of Contracts on weekends. The
Company believes that its strong personal relationships with and its level of
service to the dealerships in its customer base provide a competitive advantage
to the Company.

BUSINESS STRATEGY

     The Company's principal objective remains to become one of the leading
sources of near-prime auto lending in the United States by leveraging the
experience of its senior management team in this industry. The Company seeks to
maintain and increase profitability through the implementation of the following
strategies:

     Targeted Market and Product Focus: The Company targets the near-prime auto
lending market because it believes that near-prime lending produces greater
origination and operating efficiency than does sub-prime lending. The Company
focuses on late model used rather than new vehicles, as management believes the
risk of loss on used vehicles is lower due to lower depreciation rates, while
interest rates are typically higher. In addition, the Company believes that the
late model used motor vehicle finance market is growing at a faster rate than is
the finance market for new motor vehicles.

     Localized Dealership Service: The Company provides a high level of service
to its dealership base by underwriting and purchasing Contracts and marketing to
and servicing dealerships on a local level through its Auto Finance Centers. The
Company strategically locates its Auto Finance Centers in geographic areas of
high dealership concentration to facilitate personal service in the local
markets, including consistent buying practices, operations open seven days a
week, competitive rates, a dedicated dealer service staff, fast turnaround time
and systems designed to expedite the processing of Contract applications. This
personal service is provided by a team of experienced account managers (the
"Account Managers") with an established reputation for responsiveness and
integrity who call on dealerships in a consistent and professional manner. The
Company believes that its local presence and service provide the opportunity to
build strong and lasting relationships with dealerships.

     Expansion of Dealership Customer Base: The Company establishes active
relationships with a substantial percentage of franchised dealerships in the
regions in which it does business through its 17 existing Auto Finance Centers.
The Company intends to establish additional relationships as it expands into
other states during 2000.

     Maintenance of Underwriting Standards and Portfolio Performance: The
Company has developed an underwriting process that is designed to achieve
attractive yields while minimizing delinquencies and losses. Based on its belief
that a standardized commercially available credit scoring system is a less
effective means of assessing credit risk, especially in the near-prime sector,
the Company employs experienced credit managers (the "Credit Managers") in the
local Auto Finance Centers to purchase Contracts satisfying the underwriting
criteria developed by the Company. The Company's Credit Managers and Account
Managers are compensated as a team and their compensation relies, in part, upon
the quality of underwriting of the Contracts they approve. The Company has
developed a credit review process where a post funding audit is performed on
most purchases and originations by reviewing Contracts against the Company's
underwriting standards shortly after they have been funded. This audit provides
feedback to enhance the underwriting process. To further monitor the integrity
of the underwriting process, management regularly tracks the delinquency and
loss rates of Contracts purchased by each Credit and Account Manager team.

     Technology-Supported Operational Controls: The Company has developed and
instituted control and review systems that enable it to monitor both the
operations of the Company and the performance of the servicing portfolio. These
systems allow senior management to monitor Contract production, yields and
performance on a real-time basis. The Company believes that its information
systems not only enhance its internal controls but also allow it to
significantly expand its Servicing Portfolio without a significant corresponding
increase in its labor costs.

     Liquidity Through Warehousing and Securitizations: The Company's strategy
is to complete securitizations on a regular basis and to use warehouse credit
facilities to fund Contracts prior to securitization. To fund

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dealer participation and finance daily operations the Company relies to a
significant extent on credit facilities that are collateralized by the Company's
retained interest in securitized assets ("RISA"). The Company also utilizes both
securitization and hedging strategies to leverage its capital efficiently and
substantially reduce its interest rate risk.

OPERATIONS

     Dealership Marketing and Service: As of December 31, 1999, the Company had
17 Auto Finance Centers located throughout the United States and had an active
dealer base of approximately 7,600 dealerships. Of these dealerships,
approximately 89% are franchised and approximately 11% are independent
automobile dealerships. The Company believes that franchised and select
independent automobile dealerships are most likely to provide the Company with
Contracts that meet the Company's underwriting standards.

     The Company has significantly expanded its customer base of automobile
dealerships, and has substantially increased both monthly Contract purchases and
originations and the size of its servicing portfolio. The following table sets
forth information about the Company's Contracts and Auto Finance Centers as of
the dates indicated:

<TABLE>
<CAPTION>
                                                           FOR THE YEARS ENDED DECEMBER 31,
                                             ------------------------------------------------------------
                                               1995        1996        1997         1998          1999
                                             --------    --------    --------    ----------    ----------
                                                                (DOLLARS IN THOUSANDS)
<S>                                          <C>         <C>         <C>         <C>           <C>
Number of auto finance centers.............         5           9          10            14            17
Number of contracts purchased..............    16,571      26,244      50,214        86,150       127,628
Dollar volume of contracts collateralized
  by new vehicles..........................  $ 39,706    $ 68,654    $129,178    $  186,654    $  245,058
Dollar volume of contracts collateralized
  by used vehicles.........................  $159,691    $251,186    $476,727    $  851,881    $1,313,946
Dollar volume of contracts.................  $199,397    $319,840    $605,905    $1,038,535    $1,559,004
Average dollar volume of contracts per auto
  finance center...........................  $ 39,879    $ 35,538    $ 60,591    $   74,181    $   91,706
Number of active dealerships...............       769       1,471       2,846         5,401         7,617
Servicing portfolio........................  $218,207    $400,665    $757,277    $1,345,961    $2,133,460
</TABLE>

     The Company's growth objectives over the next 12 months are to open
additional Auto Finance Centers in metropolitan areas within the United States
and to further develop relationships with existing franchised dealerships in the
states where the Company is currently doing business.

     The Account Managers work from the Auto Finance Centers to solicit, enroll
and educate new dealerships as well as to maintain relationships with the
Company's existing dealership customer base. Each Account Manager visits
dealership finance managers at each targeted dealership in his or her territory
and presents information about the Company's dealership services. The Company's
services include service hours seven days a week and the ability to rapidly
respond to credit applications. The Account Managers educate the dealership
finance managers about the Company's underwriting philosophy, including its
preference for near-prime quality Contracts collateralized by late model used
motor vehicles and its practice of using experienced Credit Managers (rather
than sole reliance upon computerized scoring systems) to review applications.

     The Account Managers also advise the dealership finance managers regarding
the Company's commitment to serve a broad scope of qualified borrowers through
its three near-prime auto lending programs: the "Premier", the "Preferred", and
the "Standard" Programs. The Premier Program allows the Company to market lower
interest rates in order to capture customers of superior credit quality. The
Preferred Program allows the Company to offer Contracts at higher interest rates
to borrowers with proven credit quality. The Standard Program allows the Company
to assist qualified borrowers, who may have experienced previous credit problems
or have not yet established a significant credit history, at interest rates
higher than the Company's other programs.

     The Company enters into a non-exclusive dealership agreement containing
certain representations and warranties by the dealership about the Contracts.
After this relationship is established, the Account Managers

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continue to actively monitor the relationship to meet the Company's objectives
with respect to the volume of applications satisfying the Company's underwriting
standards. Due to the non-exclusive nature of the Company's relationships with
dealerships, the dealerships retain discretion to determine whether to solicit
financing from the Company or from another source or sources for a customer
seeking to finance a vehicle purchase. The Account Managers regularly telephone
and visit finance managers to reinforce to them the Company's objectives and to
answer any questions they may have. To increase the effectiveness of these
contacts, the Account Managers can obtain from the Company's management
information systems real-time information listing by dealership the number of
applications submitted, the Company's response and the reasons why a particular
application was rejected. The Company believes that the personal relationships
its Account Managers, Credit Managers and Auto Finance Center Managers establish
with the finance managers at the dealerships are a significant factor in
creating and maintaining productive relationships with its dealership customer
base.

UNDERWRITING AND PURCHASING OF CONTRACTS

     The Company's underwriting standards are applied by experienced Credit
Managers with a personal, hands-on analysis of the creditworthiness of each
applicant, rather than sole reliance upon standardized commercially available
credit scoring systems used by several of the Company's competitors. The Company
believes that credit-scoring systems may approve applicants who are in fact not
creditworthy, while denying credit to others whom may have acceptable credit
risk for the interest rate being charged. In addition, the Company believes that
it can enhance the relationship with its dealership and consumer customer base
by having its Credit Managers utilize a rules/exception based credit/audit
system to personally review each application and communicate to the submitting
dealership the results of the review, including the reasons why a particular
application may have been declined. This practice encourages the dealership
finance managers to submit Contracts meeting the Company's underwriting
standards, thereby increasing the Company's operating efficiency. In order to
ensure consistent application of its underwriting standards as its volume of
Contract purchases increases, the Company has a formal internal training program
for new and existing Account Managers and Credit Managers.

     The underwriting process begins when an application is faxed by a
dealership to a central toll-free number, at the Company's corporate
headquarters, where it is input into the Company's front-end application
processing system. Each application is evaluated by a Credit Manager in the
local Auto Finance Center or corporate headquarters, using uniform underwriting
standards developed by the Company. These underwriting standards are intended to
assess the applicant's ability to timely repay all amounts due under the
Contract and the adequacy of the financed vehicle as collateral. To evaluate
credit applications, the Credit Manager reviews, among other things, on-line
information, including reports of credit reporting agencies, nationally
recognized vehicle valuation services, and ownership of real estate listed on an
application. The Company's wide area network permits a Credit Manager in any
Auto Finance Center or the corporate headquarters to access an application on a
real-time basis. This computer network enables senior management to efficiently
review Contracts requiring approval, and permits the Company to seamlessly shift
underwriting work among any of the Auto Finance Centers to increase operating
efficiency. Finally, the Company's computer network permits daily review by
senior management of operating results sorted by any number of variables,
including by Credit Manager, Auto Finance Center or auto dealership.

     The funds advanced by the Company to purchase a Contract generally do not
exceed: (i) for a new financed vehicle, the dealer's invoice plus taxes, title
and license fees, any extended warranty and credit insurance; or (ii) for a used
financed vehicle, the wholesale value assigned by a nationally recognized
vehicle valuation service value guide, plus taxes, title and license fees, any
extended warranty and credit insurance. However, the actual amount advanced for
a Contract may be limited by a number of factors, including the length of the
Contract term, the make, model and year of the financed vehicle and the
creditworthiness of the obligor. These adjustments are made to insure that the
financed vehicle constitutes adequate collateral to secure the Contract.
Contracts purchased or originated in 1999 had an average loan to value ratio at
purchase or origination of 104% which the Company believes is one of the lowest
in the industry.

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<PAGE>   7

     Once the review of an application is completed, the Credit Manager
communicates his or her decision to the dealership specifying approval,
conditional approval (such as an increase in the downpayment, reduction in the
term of the financing, or the addition of a co-signer to the Contract), or
denial.

     The dealership is required to deliver the necessary documentation for each
Contract approved for purchase by the Company to the originating Auto Finance
Center. The Company audits such documents for completeness and consistency with
the application, providing final approval for purchase of the Contract once
these requirements have been satisfied. The completed Contract file is then
promptly forwarded to the corporate headquarters.

     The Auto Finance Center purchasing the Contract funds the purchase and pays
a dealer participation fee, if any. The dealership can receive 100% of the
dealer participation, at purchase or at month-end, and the Company is entitled
to recover from the dealership over the life of the Contract the unearned
portion of the dealer participation in the event of a prepayment of the
purchased Contract or charge-off of the Contract. The Company also offers three
other participation methods, in which the Company pays less than 100% of the
dealer participation, but for which the dealership is under no obligation to
refund any unearned participation if the contract defaults or pre-pays after the
expiration of a set period of time after the Contract purchase date.

     The Company conducts a post-funding credit review of most of its Contracts.
In the review, the approved application is re-examined to be certain it complies
with the Company's underwriting requirements. The results of these reviews are
then reviewed by senior management to ensure consistent application of the
Company's underwriting standards.

     The Company employs a compensation system for its Credit Managers, Account
Managers and Auto Finance Center Managers designed to reward those employees
whose Contract purchases meet the Company's volume and yield objectives while
preserving credit quality. Generally, these bonuses, which are payable monthly,
may constitute up to 40% of an employee's compensation and are initially
calculated based on the volume of Contracts purchased and the yield on such
Contracts. This bonus amount is reduced if the Company's post-funding credit
review reveals that a portion of the purchased Contracts did not satisfy the
Company's underwriting standards. Under this system, 50% of the bonus payment is
based on attainment of Account Manager/Credit Manager team objectives and 50% is
based on attainment of the Auto Finance Center objectives. The Company believes
this incentive compensation system motivates employees to purchase only those
near-prime quality Contracts that meet the Company's objectives of increasing
volume at targeted yields while preserving credit quality.

     The following table sets forth information about the Company's Contracts as
of the dates indicated:

<TABLE>
<CAPTION>
                                                            FOR THE YEARS ENDED DECEMBER 31,
                                              ------------------------------------------------------------
                                                1995        1996        1997         1998          1999
                                              --------    --------    --------    ----------    ----------
                                                                 (DOLLARS IN THOUSANDS)
<S>                                           <C>         <C>         <C>         <C>           <C>
Contracts purchased.........................  $199,397    $319,840    $605,905    $1,038,535    $1,559,004
Average contract amount purchased...........  $   12.0    $   12.2    $   12.1    $     12.1    $     12.2
Weighted average initial term (months)......      55.5        56.2        57.0          57.5          57.0
Weighted average A.P.R. (at end of
  period)...................................     15.00%      14.72%      14.66%        14.72%        14.77%
Percentage of dollar amount of contracts
  collateralized by new motor vehicles
  purchased.................................     19.91%      21.47%      21.32%        17.97%        15.72%
Percentage of dollar amount of contracts
  collateralized by used motor vehicles
  purchased.................................     80.09%      78.53%      78.68%        82.03%        84.28%
</TABLE>

     Periodically the Company performs an analysis of its servicing portfolio to
evaluate the effectiveness of its underwriting guidelines. If external economic
factors, credit delinquencies or credit losses change, the Company may adjust
its underwriting guidelines to maintain the asset quality deemed acceptable by
the Company's management.

SERVICING AND COLLECTION PROCEDURES

     The Company services all Contracts in its servicing portfolio. To reduce
the costs of its servicing operations, the Company has outsourced certain data
processing and billing functions related to its servicing of
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Contracts. This includes a three-year contract expiring in 2000 with a service
bureau to provide certain loan accounting, reporting, collections and servicing
functions; the Company intends to take these processes in-house at the
expiration of this contract. Through its service providers, the Company mails to
each obligor a monthly billing statement 20 days prior to the due date. The
Company believes this method has proven to be more effective in controlling
delinquency, and therefore losses, than payment coupon books which are delivered
to the obligor at the time the Contract is purchased. The Company charges a late
fee, where allowed by law, on any payment received after the expiration of the
statutory or contractual grace period. Most payments from obligors are deposited
directly into a lockbox account while the remainder of payments are received
directly by the Company and promptly deposited by the Company into the lockbox
account.

     Under the terms of its credit facilities and securitization trusts, the
Company acts as servicer with respect to all Contracts purchased or originated
in its servicing portfolio. The Company receives servicing fees for servicing
securitized Contracts equal to one percent per annum of the outstanding
principal balance of such Contracts. The Company services the securitized
Contracts by collecting payments due from obligors and remitting such payments
to the trustee in accordance with the terms of the servicing agreements. The
Company maintains computerized records with respect to each Contract to record
receipts and disbursements and to prepare related servicing reports.

COLLECTION PROCEDURES

     Collection activities with respect to delinquent Contracts are performed by
the Company at its Foothill Ranch, California Collection Center. Collection
activities include prompt investigation and evaluation of the causes of any
delinquency. An obligor is considered delinquent when he or she has failed to
make a scheduled payment under the Contract within 30 days of the related due
date (each a "Due Date").

     To automate its collection procedures, the Company uses features of the
computer system of its third party service bureau to provide tracking and
notification of delinquencies. The collection system provides relevant obligor
information (for example, current addresses, phone numbers and loan information)
and records of all Contracts. The system also records an obligor's promise to
pay and affords supervisors the ability to review collection personnel activity
and to modify collection priorities with respect to Contracts. The Company
utilizes a predictive dialing system located at the Foothill Ranch Collection
Center to make phone calls to obligors whose payments are past due by more than
eight days but less than 20 days. The predictive dialer is a computer-controlled
telephone dialing system which dials phone numbers of obligors from a file of
records extracted from the Contract database. By eliminating time wasted on
attempting to reach obligors, the system gives a single collector, on average,
the ability to speak with and work 200 to 250 accounts per day. Once a live
voice responds to the automated dialer's call, the system automatically
transfers the call to a collector and the relevant account information to the
collector's computer screen. The system also tracks and notifies collections
management of phone numbers that the system has been unable to reach within a
specified number of days, thereby promptly identifying for management all
obligors who cannot be reached by telephone.

     Once an obligor is 20 days or more delinquent, these accounts are assigned
to specific collectors at the Foothill Ranch Collection Center who have primary
responsibility for such delinquent accounts until they are resolved. To expedite
collections from late paying obligors, the Company uses Western Union "Quick
Collect," which allows an obligor to pay, at numerous locations, any late
payments which are in turn wired daily to the Company's lockbox account by
Western Union. The Company also uses a Western Union payment system that allows
an obligor to authorize the Company to present a draft directly to the obligor's
bank for payment to the Company.

     Generally, after a scheduled payment under a Contract continues to be past
due for between 45 and 60 days, the Company will initiate repossession of the
financed vehicle. However, if a Contract is deemed uncollectable, if the
financed vehicle is deemed by collection personnel to be in danger of being
damaged, destroyed or made unavailable for repossession, or if the obligor
voluntarily surrenders the financed vehicle, Onyx may repossess it without
regard to the length or existence of payment delinquency. Repossessions are
conducted by third parties that are engaged in the business of repossessing
vehicles for secured parties. Under

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<PAGE>   9

California law and the laws of most other states, after repossession, the
obligor generally has an additional period of time to redeem the financed
vehicle before the financed vehicle may be resold by the Company in an effort to
recover the balance due under the Contract.

     If the proceeds from the sale of a repossessed vehicle fall short of the
balance due on the Contract, the Company will experience a loss. The current
policy of the Company is to recognize losses on repossessed vehicles in the
month in which the vehicle is sold or in which the scheduled payment becomes 120
days delinquent, whichever occurs first. Losses may occur in connection with
delinquent Contracts for which the vehicle was not repossessed, either because
of a discharge of the obligor's indebtedness in a bankruptcy proceeding or due
to the Company's inability to locate the financed vehicle or the obligor. In
these cases, losses are recognized at the time a Contract is deemed
uncollectable or during the month a scheduled payment under the Contract becomes
150 days past due, whichever occurs first.

     Upon repossession and sale of the financed vehicle, any deficiency
remaining is pursued against the obligor to the extent deemed practical by the
Company and to the extent permitted by law. The loss recognition and collection
policies and practices of the Company may change over time in accordance with
the Company's business judgement.

MODIFICATIONS AND EXTENSIONS

     The Company offers certain credit-related extensions to obligors.
Generally, these extensions are offered only when (i) the Company believes that
the obligor's financial difficulty has been resolved or will no longer impair
the obligor's ability to make future payments, (ii) the extension will result in
the obligor's payments being brought current, (iii) the total number of
credit-related extensions granted on the Contract will not exceed three, and the
total credit-related extensions granted on the Contract will not exceed three
months in the aggregate, (iv) there has been no more than one credit-related
extension granted on the Contract in the immediately preceding twelve months,
and (v) Onyx (or its assignee) has held the Contract for at least six months.
Any deviation from this policy requires the concurrence of a Collection
Supervisor and the Company's Collection Manager and the Executive Vice
President, Collections. The total number of extensions was less than 4% of the
number of Contracts in the Servicing Portfolio for the years ending December 31,
1999, and December 31, 1998.

INSURANCE

     Each Contract requires the obligor to obtain comprehensive and collision
insurance with respect to the related financed vehicle with the Company named as
a loss payee. In the event that the obligor fails to maintain the required
insurance, however, the Company has purchased limited comprehensive and
collision insurance, referred to as the "Blanket Insurance Policy" coverage. The
Blanket Insurance Policy provides the Company with protection on each uninsured
or underinsured financed vehicle against total loss, damage or theft. The
Company has obtained its Blanket Insurance Policy from Great American Insurance
Companies. For the Blanket Insurance Policy, the Company is assessed a premium
based on the size of the Servicing Portfolio. In 1998, the Company opened an
insurance tracking department at its corporate headquarters. The Company
believes that this function has helped reduce its exposure to uninsured
motorists through its prompt follow up on non-compliant obligors.

FINANCING AND SALE OF CONTRACTS

     The Company finances the acquisition and origination of Contracts primarily
through its warehouse credit facilities as discussed below:

     CP Facilities: As of December 31, 1999, the Company was party to two
primary auto loan warehousing programs (the "CP Facilities"), one, a $375
million facility with Triple-A One Funding Corporation ("Triple-A"), and the
other, a $150 million facility with Park Avenue Receivables Corporation
("Parco"). Two of the Company's special purpose subsidiaries, Onyx Acceptance
Financial Corporation ("Finco") for the Triple-A One Facility, and newly created
Onyx Acceptance Receivables Corporation ("Recco") for the Parco Facility, are
the borrowers under the CP Facilities. The CP Facilities are used to fund the
purchase or
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<PAGE>   10

origination of Contracts. Triple-A and Parco are both rated commercial paper
asset-backed conduits sponsored by MBIA Insurance Corporation ("MBIA") and The
Chase Manhattan Bank ("Chase"), respectively. MBIA provides credit enhancement
for both facilities by issuing financial guarantee insurance policies covering
all principal and interest obligations owed for the borrowings under the
facilities. The Company pledges its Contracts held for sale to borrow from
Triple-A and from Parco. The Parco Facility was executed in August 1999, and
expires in August 2000, but may be renewed at the option of the lenders. The
Triple-A Facility is subject to renewal in September 2000 at the option of the
lenders, and, if so renewed, will expire in September 2001.

     The Merrill Line: A subsidiary of the Company, Onyx Acceptance Funding
Corporation ("Fundco"), has a $100 million line of credit (the "Merrill Line"),
with Merrill Lynch Mortgage Capital, Inc. ("MLMCI"), which provides warehouse
funding for the purchase or origination of Contracts and is used in concert with
the CP Facilities the Company currently has in place. The Merrill Line was
renewed in February 2000 for a one year term, but can be terminated at the
option of the lender at any time.

     The Company finances dealer participation payments and daily operations
principally through credit facilities collateralized by its retained interest in
securitized assets, as well as through proceeds from subordinated debt
offerings.

     The Residual Lines: The Company, through Fundco, has two residual
Facilities: a $10 million committed facility with MLMCI and a $50 million line
with Salomon Smith Barney Realty Corporation ("SBRC") (the "SBRC Line" and
together with the facility with MLMCI, the "Residual Lines"). The Residual Lines
are used by the Company to finance operating requirements. The lines utilize a
collateral-based formula that sets borrowing availability to a percentage of the
value of excess cash flow to be received from certain securitizations. The
facility provided by MLMCI was renewed in February 2000 for a one year term.
Each loan under the SBRC Line matures one year after the date of the loan; the
Company expects each loan to be renewed at term.

     Excess Servicing Facility: The Company is party to a collateralized loan
("Excess Servicing Facility") with a lending group for up to $45 million, which
was used for working capital and other expenditures. The Excess Servicing
Facility matured in June 1999. This line is now in the amortization period and
all cash flows from the underlying securitizations, which are collateral, are
being used to repay the outstanding principal balance.

     Subordinated Debt: As of December 31, 1999, the Company had outstanding $10
million of subordinated debt with an initial term of two years. In February
2000, the Company exercised its option to extend the term by three years during
which the loan will fully amortize. Final maturity is scheduled for February
2003.

     The facilities and lines above contain affirmative, negative and financial
covenants typical of such credit facilities. The Company was in compliance with
these covenants as of December 31, 1999.

     Hedging and Interest Rate Risk Management: The Company employs a hedging
strategy that is intended to minimize the risk of interest rate fluctuations,
and which historically has involved the execution of forward interest rate swaps
or use of a pre-funding structure for the Company's securitizations. The Company
is not required to maintain collateral on the outstanding hedging program, until
the point where the fair value declines below ($1.0) million.

     Securitization: Regular securitizations are an integral part of the
Company's business plan because they allow the Company to increase its
liquidity, provide for redeployment of its capital and reduce risks associated
with interest rate fluctuations. The Company has developed a securitization
program that involves selling interests in pools of its Contracts to investors
through the public issuance of AAA/Aaa rated asset-backed securities. The
Company completed four AAA/Aaa rated publicly underwritten asset-backed
securitizations in the amount of $1.45 billion in 1999.

     The net proceeds of these securitizations are used to pay down outstanding
indebtedness incurred under the Company's credit facilities to purchase
Contracts, thereby creating availability for the purchase of additional
Contracts. Through December 31, 1999, the Company had securitized $3.4 billion
of Contracts in 18 separate transactions. In each of its securitizations, the
Company sold its Contracts to a newly formed

                                       10
<PAGE>   11

grantor or owner trust which issued pass-through certificates or notes in an
amount equal to the aggregate principal balance of the Contracts.

     To improve the level of profitability from the sale of securitized
Contracts, the Company arranges for credit enhancement to achieve an improved
credit rating on the asset-backed securities issued. This credit enhancement has
taken the form of a financial guaranty issued by MBIA, or a predecessor, which
issues a financial guaranty insurance policy (the "Financial Guarantee Insurance
Policy") insuring the payment of principal and interest due on the asset-backed
securities.

     The Company receives servicing fees for its duties relating to the
accounting for and collection of the Contracts. In addition, the Company is
entitled to the future excess cash flows arising from the trusts. Generally, the
Company sells the Contracts at face value and without recourse, except that
certain representations and warranties with respect to the Contracts are
provided by the Company as the servicer and Finco as the seller to the trusts.

     Gains on sale of Contracts arising from securitizations provide a
significant portion of the Company's revenues. Several factors affect the
Company's ability to complete securitizations of its Contracts, including
conditions in the securities markets generally, conditions in the asset-backed
securities market specifically, the credit quality of the Company's portfolio of
Contracts and the Company's ability to obtain credit enhancement.

GOVERNMENT REGULATION

     The Company's operations are subject to regulation, supervision, and
licensing under various federal, state and local statutes, ordinances and
regulations. The Company is required to comply with the laws of those states in
which it conducts operations. Management believes that it is in compliance with
these laws and regulations.

     Consumer Protection Laws: Numerous federal and state consumer protection
laws and related regulations impose substantial requirements upon lenders and
servicers involved in consumer finance. These laws include the Truth-in-Lending
Act, the Equal Credit Opportunity Act, the Federal Trade Commission Act, the
Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the
Magnuson-Moss Warranty Act, the Federal Reserve Board's Regulations B and Z,
states' adaptations of the Uniform Consumer Credit Code and of the Uniform
Commercial Code (the "UCC") and state motor vehicle retail installment sales
acts and other similar laws. These laws, among other things, require the Company
to provide certain disclosures to applicants, prohibit misleading advertising
and protect against discriminatory financing or unfair credit practices. The
Truth in Lending Act and Regulation Z promulgated thereunder require disclosure
of, among other things, the payment schedule, the finance charge, the amount
financed, the total of payments and the annual percentage rate charged on each
retail installment contract. The Equal Credit Opportunity Act prohibits
creditors from discriminating against loan applicants (including retail
installment contract obligors) on the basis of race, color, sex, age (provided
the applicant has the capacity to contract), marital status, religion, national
origin, the fact that all or part of the applicant's income derives from a
public assistance program, or the fact that the applicant has in good faith
exercised any right under the Consumer Credit Protection Act. Under the Equal
Credit Opportunity Act, creditors are required to make certain disclosures
regarding consumer rights and advise consumers whose credit applications are not
approved. The rules of the Federal Trade Commission (the "FTC") limit the types
of property a creditor may accept as collateral to secure a consumer loan, and
its holder in due course rules provide for the preservation of the consumer's
claims and defenses when a consumer obligation is assigned to a subject holder.
With respect to used vehicles specifically, the FTC's rule on Sale of Used
Vehicles requires that all sellers of used vehicles prepare, complete and
display a Buyer's guide which explains any applicable warranty coverage for such
vehicles. Also, some state laws impose finance charge ceilings and other
restrictions on consumer transactions and require contract disclosures in
addition to those required under federal law. These requirements impose specific
statutory liabilities upon creditors who fail to comply with their provisions.
In some cases these provisions could affect the Company's ability to enforce
Contracts it purchases or originates.

                                       11
<PAGE>   12

EMPLOYEES

     The Company employs personnel experienced in all areas of loan
originations, documentation, collection and administration. The Company employs
and trains specialists in loan processing and servicing with minimal crossover
of duties. At December 31, 1999, the Company had 715 full-time employees, none
of whom were covered by collective bargaining agreements. The Company believes
it has good relationships with its employees.

                                  RISK FACTORS

     You should carefully consider the following risks in your evaluation of us
and our common stock. The risks and uncertainties described below are not the
only ones facing our company. Additional risks and uncertainties, including, but
not limited to, credit, economic, competitive, governmental and financial
factors affecting our operations, markets, financial products, and services and
other factors discussed in our filings with the Securities and Exchange
Commission may also adversely impact and impair our business. If any of these
risks actually occur, our business, results of operations, cash flows or
financial condition would likely suffer. In such case, the trading price of our
common stock could decline, and you may lose all or part of the money you paid
to buy our common stock.

WE NEED SUBSTANTIAL LIQUIDITY.

     We require a substantial amount of liquidity to operate our business. Among
other things, we use such liquidity to:

     - acquire Contracts;

     - pay dealer participation;

     - pay securitization costs and fund related accounts;

     - settle hedge transactions;

     - satisfy working capital requirements and pay operating expenses; and

     - pay interest expense.

     A substantial portion of our revenues in any period is represented by gain
on sale of Contracts generated by a securitization in such period, but the cash
underlying such revenues is received over the life of the Contracts.

     We have operated on a negative cash flow basis and expect to do so in the
future as long as the volume of Contract purchases continues to grow. We have
historically funded these negative operating cash flows principally through
borrowings from financial institutions, sales of equity securities and sales of
subordinated notes. We cannot assure you, however, that (1) we will have access
to the capital markets in the future for equity, debt issuances or
securitizations, or (2) financing through borrowings or other means will be
available on acceptable terms to satisfy our cash requirements. If we are unable
to access the capital markets or obtain acceptable financing, our results of
operations, financial condition and cash flows would be materially and adversely
affected. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Liquidity and Capital Resources."

WE DEPEND ON WAREHOUSE FINANCING.

     We depend on warehousing facilities with financial institutions to finance
the purchase or origination of Contracts pending securitization. See
"Business -- Financing and Sale of Contracts." Our business strategy requires
that such financing continue to be available during the warehousing period.

                                       12
<PAGE>   13

     Whether the CP Facilities continue to be available to us depends on, among
other things, whether we maintain a target net yield for the Contracts financed
under the CP Facilities and comply with certain financial covenants contained in
the sale and servicing agreements between us, as seller, and our wholly-owned
special purpose finance subsidiaries, Finco or Recco, as applicable, as
purchaser. These financial covenants include:

     - a minimum ratio of net worth plus subordinated debt to total assets;

     - a maximum ratio of credit enhancement assets to tangible net worth;

     - earnings before interest, depreciation and taxes coverage ratio; and

     - minimum cash on hand.

     We also have a warehouse line of credit with Merrill Lynch. Whether the
Merrill Line continues to be available to us depends on whether we meet certain
debt to equity ratios and minimum equity requirements.

     We cannot assure you that our CP Facilities or Merrill Line will be
available to us or that they will be available on favorable terms. If we are
unable to arrange new warehousing credit facilities or extend our existing
credit facilities when they expire, our results of operations, financial
condition and cash flows could be materially and adversely affected.

WE DEPEND ON RESIDUAL FINANCING.

     When we sell our Contracts in securitizations, we receive cash and a
residual interest in the securitized assets ("RISA"). The RISA represents the
future cash flows to be generated by the Contracts in excess of the interest
paid on the securities issued in the securitization and other costs of servicing
the Contracts and completing the securitization. (See "Management's Discussion
and Analysis of Financial Condition and Results of
Operations -- Securitizations"). We typically use the RISA from each
securitization as collateral to borrow cash to finance our operations. The
amount of cash advanced by our lenders under our Residual Lines depends on a
collateral formula that is determined in large part by how well our securitized
Contracts perform. If our portfolio of securitized Contracts experienced higher
delinquency and loss ratios than expected, then the amount of money we could
borrow under the Residual Lines would be reduced. The reduction in availability
under these Residual Lines could materially and adversely affect our operations,
financial condition and cash flows. Additionally, we are subject, under the
documentation governing the Residual Lines, to minimum net worth and
subordinated debt plus net worth tests, a limitation on quarterly operating
losses and covenants restricting delinquencies, losses, prepayments and net
yields of Contracts included in a securitization.

     The continued amortization of our Excess Servicing Facility depends on,
among other things, whether we meet financial covenants that are substantially
similar to those of the CP Facilities. A failure to meet these requirements
could result in an acceleration of the amount due.

WE DEPEND ON SECURITIZATIONS TO GENERATE REVENUE.

     We rely significantly upon securitizations to generate cash proceeds for
repayment of our warehouse credit facilities and to create availability to
purchase additional Contracts. Further, gain on sale of Contracts generated by
our securitizations represents a significant portion of our revenues. Our
ability to complete securitizations of our Contracts is affected by the
following factors, among other things:

     - conditions in the securities markets generally;

     - conditions in the asset-backed securities market specifically;

     - the credit quality of our portfolio of Contracts; and

     - our ability to obtain credit enhancement.

     If we were unable to profitably securitize a sufficient number of our
Contracts in a particular financial reporting period, then our revenues for such
period could decline and could result in lower net income or a loss
                                       13
<PAGE>   14

for such period. In addition, unanticipated delays in closing a securitization
could also increase our interest rate risk by increasing the warehousing period
for our Contracts. See "Management's Discussion and Analysis of Results of
Operations and Financial Condition -- Liquidity and Capital Resources," and
"Business Financing and Sale of Contracts."

WE DEPEND ON CREDIT ENHANCEMENT.

     From inception through December 31, 1999, each of our securitizations has
utilized credit enhancement in the form of a financial guarantee insurance
policy issued by MBIA, or its predecessor, in order to achieve "AAA/Aaa"
ratings. This form of credit enhancement reduces the cost of the securitizations
relative to alternative forms of credit enhancements currently available to us.
MBIA is not required to insure future securitizations, and we are not restricted
in our ability to obtain credit enhancement from providers other than MBIA or to
use other forms of credit enhancement. We cannot assure you that:

     - we will be able to continue to obtain credit enhancement in any form from
       MBIA;

     - we will be able to obtain credit enhancement from any other provider of
       credit enhancement on acceptable terms; or

     - future securitizations will be similarly rated.

     We also rely on MBIA's financial guarantee insurance policy to reduce our
borrowing cost under the CP Facilities. If MBIA's credit rating is downgraded or
if it withdraws our credit enhancement, we could be subject to higher interest
costs for our future securitizations and financing costs during the warehousing
period. Such events could have a material adverse effect on our results of
operations, financial condition and cash flows.

WE ARE SUBJECT TO INTEREST RATE FLUCTUATIONS.

     Our profitability is largely determined by the difference, or "spread,"
between the effective rate of interest received by us on the Contracts acquired
and the interest rates payable under our credit facilities during the
warehousing period and for securities issued in securitizations.

     Several factors affect our ability to manage interest rate risk. First, the
Contracts are purchased or originated at fixed interest rates, while amounts
borrowed under our credit facilities bear interest at variable rates that are
subject to frequent adjustment to reflect prevailing rates for short-term
borrowings. Our policy is to increase the buy rates we issue to dealerships or
to increase rates we make available to consumers for Contracts in response to
increases in our cost of funds during the warehousing period. However, there is
generally a time lag before such increased borrowing costs can be offset by
increases in the buy rates for Contracts and, in certain instances, the rates
charged by our competitors may limit our ability to pass through our increased
costs of warehouse financing.

     Second, the spread can be adversely affected after a Contract is purchased
or originated and while it is held during the warehousing period by increases in
the prevailing rates in the commercial paper markets. While the CP Facilities
permit us to select maturities of up to 270 days for commercial paper, if we
selected a shorter maturity or had a delay in completing a securitization, we
would face this risk.

     Third, the interest rate demanded by investors in securitizations is a
function of prevailing market rates for comparable transactions and the general
interest rate environment. Because the Contracts purchased or originated by us
have fixed rates, we bear the risk of spreads narrowing because of interest-rate
increases during the period from the date the Contracts are purchased until the
pricing of our securitization of such Contracts. We employ a hedging strategy
that is intended to minimize this risk and which historically has involved the
execution of forward interest rate swaps or use of a pre-funding structure for
our securitizations. However, we cannot assure you that this strategy will
consistently or completely offset adverse interest-rate movements during the
warehousing period or that we will not sustain losses on hedging transactions.
Our hedging strategy requires estimates by management of monthly Contract
acquisition volume and timing of our

                                       14
<PAGE>   15

securitizations. If such estimates are materially inaccurate, then our gains on
sales of Contracts, results of operations and cash flows could be materially and
adversely affected.

     We also have exposure to interest rate fluctuations under the Residual
Lines and the Excess Servicing Facility. The interest rates are based on 30 day
LIBOR and the Prime Rate. The LIBOR lines reset each month while the Prime Rate
line is reset with any change in the Prime rates. In periods of increasing
interest rates our cash flows, results of operations and financial condition
could be adversely affected.

     In addition, we have some interest rate exposure to falling interest rates
to the extent that the interest rates charged on Contracts sold in a
securitization with a pre-funding structure decline below the rates prevailing
at the time that the securitization prices. Such a rate decline would reduce the
interest rate spread because the interest rate on the notes and/or the
certificates would remain fixed. This would negatively impact the gains on sale
of Contracts and our results of operations and cash flows.

WE WILL BE ADVERSELY AFFECTED WHEN CONTRACTS ARE PREPAID OR DEFAULTED.

     Our results of operations, financial condition, cash flows, and liquidity
depend, to a material extent, on the performance of Contracts purchased,
originated, warehoused, and securitized by us. A portion of the Contracts
acquired by us may default or prepay during the warehousing period. We bear the
risk of losses resulting from payment defaults during the warehousing period. In
the event of payment default, the collateral value of the financed vehicle may
not cover the outstanding Contract balance and costs of recovery. We maintain an
allowance for credit losses on Contracts held during the warehousing period
which reflects management's estimates of anticipated credit losses during such
period. If the allowance is inadequate, then we would recognize as an expense
the losses in excess of such allowance, and our results of operations could be
adversely affected. In addition, under the terms of the CP Facilities, we are
not able to borrow against defaulted Contracts.

     Our servicing income can also be adversely affected by prepayment of or
defaults under Contracts in the servicing portfolio. Our contractual servicing
revenue is based on a percentage of the outstanding principal balance of such
Contracts. Thus, if Contracts are prepaid or charged-off, then our servicing
revenue will decline to the extent of such prepaid or charged-off Contracts.

     The gain on sale of Contracts recognized by us in each securitization and
the value of the retained interest in securitized assets ("RISA") in each
transaction reflects management's estimate of future credit losses and
prepayments for the Contracts included in such securitization. If actual rates
of credit loss or prepayments, or both, on such Contracts exceed those
estimated, the value of the RISA would be impaired. We periodically review our
credit loss and prepayment assumptions relative to the performance of the
securitized Contracts and to market conditions. In this event, our results of
operations and liquidity could be adversely affected if credit loss or
prepayment levels on securitized Contracts substantially exceed anticipated
levels. If necessary, we would write-down the value of the RISA through a
reduction to servicing fee income. Further, any write down of RISA would reduce
the amount available to us under our residual lines, thus requiring us to pay
down amounts outstanding under the facilities or provide additional collateral
to cure the borrowing base deficiency.

WE WILL BE ADVERSELY AFFECTED IF WE LOSE SERVICING RIGHTS.

     Our results of operations, financial condition and cash flows would be
materially and adversely affected if any of the following were to occur:

     - loss of the servicing rights under our sale and servicing agreements for
       the CP Facilities;

     - loss of the servicing rights under the applicable pooling and servicing
       or sale and servicing agreement of a grantor trust and owner trust,
       respectively; or

     - a trigger event that would block release of future excess cash flows
       generated from the grantor trusts' or owner trusts' respective spread
       accounts.

                                       15
<PAGE>   16

     We are entitled to receive servicing income only while we act as servicer
under the applicable sales and servicing agreements or pooling and servicing
agreements. Under the CP Facilities our right to act as servicer can be
terminated by MBIA, upon the occurrence of certain events.

OUR QUARTERLY EARNINGS MAY FLUCTUATE.

     Our revenues have fluctuated in the past and are expected to fluctuate in
the future principally as a result of the following factors:

     - the timing and size of our securitizations;

     - variations in the volume of our Contract acquisitions;

     - the interest rate spread between our cost of funds and the average
       interest rate of purchased Contracts;

     - the effectiveness of our hedging strategies; and

     - the investor rate for securitizations.

     Any significant decrease in our quarterly revenues could have a material
adverse effect on our results of operations, financial condition and cash flows.

WE DEPEND ON KEY PERSONNEL.

     Our future operating results depend in significant part upon the continued
service of our key senior management personnel, none of whom is bound by an
employment agreement. Our future operating results also depend in part upon our
ability to attract and retain qualified management, technical, and sales and
support personnel for our operations. Competition for such personnel is intense.
We cannot assure you that we will be successful in attracting or retaining such
personnel. The loss of any key employee, the failure of any key employee to
perform in his or her current position or our inability to attract and retain
skilled employees, as needed, could materially and adversely affect our results
of operations, financial condition and cash flows.

OUR INDUSTRY IS HIGHLY COMPETITIVE.

     Competition in the field of financing retail motor vehicle sales is
intense. The automobile finance market is highly fragmented and historically has
been serviced by a variety of financial entities including the captive finance
affiliates of major automotive manufacturers, banks, savings associations,
independent finance companies, credit unions and leasing companies. Several of
these competitors have greater financial resources than we do. Many of these
competitors also have long-standing relationships with automobile dealerships,
and offer dealerships or their customers other forms of financing or services
not provided by us. Our ability to compete successfully depends largely upon our
relationships with dealerships and the willingness of dealerships to offer those
Contracts that meet our underwriting criteria to us for purchase. We cannot
assure you that we will be able to continue to compete successfully in the
markets we serve.

WE MAY BE HARMED BY ADVERSE ECONOMIC CONDITIONS.

     We are a motor vehicle consumer auto finance company whose activities are
dependent upon the sale of motor vehicles. Our ability to continue to acquire
Contracts in the markets in which we operate and to expand into additional
markets is dependent upon the overall level of sales of new and used motor
vehicles in those markets. A prolonged downturn in the sale of new and used
motor vehicles, whether nationwide or in the California markets, could have an
adverse impact upon us, our results of operations and our ability to implement
our business strategy.

     The automobile industry generally is sensitive to adverse economic
conditions both nationwide and in California, where we have our largest
single-state exposure. Periods of rising interest rates, reduced economic
activity or higher rates of unemployment generally result in a reduction in the
rate of sales of motor vehicles and higher default rates on motor vehicle
contracts. We cannot assure you that such economic conditions will

                                       16
<PAGE>   17

not occur, or that such conditions will not result in severe reductions in our
revenues or the cash flows available to us to permit us to remain current on our
credit facilities.

WE ARE SUBJECT TO MANY REGULATIONS.

     Our business is subject to numerous federal and state consumer protection
laws and regulations, which, among other things:

     - require us to obtain and maintain certain licenses and qualifications;

     - limit the interest rates, fees and other charges we are allowed to
       charge;

     - limit or prescribe certain other terms of our Contracts;

     - require specific disclosures; and

     - define our rights to repossess and sell collateral.

     We believe that we are in compliance in all material respects with all such
laws and regulations, and that such laws and regulations have had no material
adverse effect on our ability to operate our business. However, we will be
materially and adversely affected if we fail to comply with:

     - applicable laws and regulations;

     - changes in existing laws or regulations;

     - changes in the interpretation of existing laws or regulations; or

     - any additional laws or regulations that may be enacted in the future.

WE ARE SUBJECT TO LITIGATION RISKS.

     We are party to various legal proceedings, similar to actions brought
against other companies in the motor vehicle finance industry. Companies in the
motor vehicle finance industry have been named as defendants in an increasing
number of class action lawsuits brought by purchasers of motor vehicles claiming
violation of various federal and state consumer credit and similar laws and
regulations. We are defendants in three such consumer class action lawsuits, one
of which was served on us in 2000. One such proceeding served in 1999, in which
we are a defendant, has been brought as a putative class action and is pending
in the State of California. A class has yet to be certified in this case in
which the plaintiffs allege certain defects in post-repossession notice forms in
the State of California. Another proceeding also served in 1999, in which we are
a defendant, has been brought as a putative class action and also is pending in
the State of California. A class was certified in 2000; in the matter, the
plaintiffs raise issues regarding the payment of dealer participation to
dealers.

     On January 25, 2000, a putative class action complaint was filed against us
and certain of our officers and directors alleging violations of Section 10(b)
and 20(a) of the Securities and Exchange Act of 1934 arising from our use of the
cash-in method of measuring and accounting for credit enhancement assets in the
financial statements. We believe that our previous use of the cash-in method of
measuring and accounting for credit enhancement assets was consistent with then
current generally accepted accounting principles and accounting practices of
other finance companies. As required by the Financial Accounting Standards
Board's Special Report, "A Guide to Implementation of Statement 125 on
Accounting for Transfers and Servicing of Financial Assets and Extinguishment of
Liabilities, Second Edition," dated December 1998 and related statements made by
the staff of the Securities and Exchange Commission, we retroactively changed
the method of measuring and accounting for credit enhancement assets to the
cash-out method and restated our financial statements for 1996, 1997 and the
first three fiscal quarters of 1998. We intend to vigorously defend against the
complaint.

     While we intend to vigorously defend ourselves against such proceedings
there is a chance that our results of operations, financial condition and cash
flows could be materially and adversely affected by unfavorable outcomes.

                                       17
<PAGE>   18

WE MAY HAVE COMPUTER PROBLEMS RELATED TO THE YEAR 2000.

     Because of the nature of our consumer finance business and the increasing
number of electronic transactions in this industry, we have come to rely heavily
on our in-house and third party computer systems, business applications and
other information technology systems ("IT systems"). Historically, many IT
systems were developed to recognize the year as a two-digit number, with the
digit "00" being recognized as the year 1900. The year 2000 presents a number of
potential problems for such systems, including potentially significant
processing errors or failure. Given our reliance on computer systems, our
results of operations and cash flows could be materially adversely affected by
any significant errors or failures.

     In the event that the Company does not complete any additional phases of
its plan, the Company may be unable to perform its key operating activities,
such as the purchase of Contracts and the invoicing, collecting and application
of obligor payments. The Company could be subject to litigation for computer
systems failure, such as improper application of payments and resulting
incorrect credit reporting to credit bureaus. In addition, disruptions in the
economy generally resulting from Year 2000 issues could also materially
adversely affect the Company. The amount of potential liability and lost revenue
cannot reasonably be estimated at this time.

ITEM 2. PROPERTIES

     The Company did not own any real property at December 31, 1999. In January
1999, the Company moved into it new headquarters in Foothill Ranch, California
after signing a 10-year lease for approximately 82,000 square feet of office
space. The Company also leases office space for its Auto Finance Centers; the
average size of such centers is generally four to five thousand square feet. One
Auto Finance Center is located in the corporate headquarters building.

ITEM 3. LITIGATION

     As a consumer finance company, the Company is subject to various consumer
claims and litigation seeking damages and statutory penalties based upon, among
other things, disclosure inaccuracies and wrongful repossession, which could
take the form of a plaintiff's class action complaint. The Company, as the
assignee of finance contracts originated by dealers, may also be named as a
co-defendant in lawsuits filed by consumers principally against dealers. The
damages and penalties claimed by consumers in these types of matters can be
substantial. The relief requested by the plaintiffs varies but includes requests
for compensatory, statutory and punitive damages. The Company is a defendant in
three consumer class action lawsuits, one of which was served in 2000. One such
proceeding served in 1999, in which the Company is a defendant, has been brought
as a putative class action and is pending in the State of California. A class
has yet to be certified in this case in which the plaintiffs allege certain
defects in post-repossession notice forms in the State of California. Another
proceeding also served in 1999, in which the Company is a defendant, has been
brought as a putative class action and is also pending in the State of
California. A class was certified in 2000; in the matter, the plaintiffs raise
issues regarding the payment of dealer participation to dealers.

     Management believes that the Company has taken prudent steps to address the
litigation risks associated with the Company's business activities. However,
there can be no assurance that the Company will be able to successfully defend
against all such claims or that the determination of any such claim in a manner
adverse to the Company would not have a material adverse effect on the Company's
automobile finance business.

     On January 25, 2000, a putative class action complaint was filed against
the Company and certain of the Company's officers and directors alleging
violations of Section 10(b) and 20(a) of the Securities and Exchange Act of 1934
arising from the Company's use of the cash-in method of measuring and accounting
for credit enhancement assets in the financial statements. The Company believes
that its previous use of the cash-in method of measuring and accounting for
credit enhancement assets was consistent with then current generally accepted
accounting principles and accounting practices of other finance companies. As
required by the Financial Accounting Standards Board's Special Report, "A Guide
to Implementation of Statement 125 on Accounting for Transfers and Servicing of
Financial Assets and Extinguishment of Liabilities, Second Edition," dated
December 1998 and related statements made by the staff of the Securities and
Exchange
                                       18
<PAGE>   19

Commission, the Company retroactively changed the method of measuring and
accounting for credit enhancement assets to the cash-out method and restated the
Company's financial statements for 1996, 1997 and the first three fiscal
quarters of 1998. The Company intends to vigorously defend against the
complaint.

     In the opinion of management, the resolution of the proceedings described
in this section will not have a material adverse effect on the Company's
consolidated financial position, results of operations or liquidity.

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

     No matters were submitted during the fourth quarter of the fiscal year
covered by this Annual Report on Form 10-K to a vote of security holders,
through the solicitation of proxies or otherwise.

                                       19
<PAGE>   20

                                    PART II

ITEM 5.MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS:
       PRICE RANGE OF COMMON STOCK

     The Company's Common Stock is traded on the NASDAQ under the symbol "ONYX".
The following table provides quarterly high and low closing prices for the
Company's Common Stock for the years ended December 31, 1999 and December 31,
1998.

<TABLE>
<CAPTION>
                                                               HIGH      LOW
                                                              ------    -----
<S>                                                           <C>       <C>
1998
First quarter...............................................  $11.50    $7.25
Second quarter..............................................  $12.63    $8.88
Third quarter...............................................  $10.31    $5.63
Fourth quarter..............................................  $ 6.75    $4.88

1999
First quarter...............................................  $ 6.63    $5.19
Second quarter..............................................  $ 8.63    $5.75
Third quarter...............................................  $ 9.44    $6.69
Fourth quarter..............................................  $ 7.50    $6.00
</TABLE>

     At March 16, 2000, there were approximately 1,606 beneficial holders of the
Company's Common Stock.

DIVIDEND POLICY

     The Company has never declared or paid dividends on its Common Stock. The
Company currently intends to retain any future earnings for its business and
does not anticipate declaring or paying any dividends on the Common Stock in the
foreseeable future. In addition, the Company's ability to declare or pay
dividends is restricted by the terms of the credit facilities.

                                       20
<PAGE>   21

ITEM 6. SELECTED FINANCIAL DATA

                            SELECTED FINANCIAL DATA

     The following selected financial data should be read in conjunction with
the Consolidated Financial Statements of the Company and the notes thereto and
Management's Discussion and Analysis of Financial Condition and Results of
Operations included elsewhere herein.

<TABLE>
<CAPTION>
                                                           FOR THE YEARS ENDED DECEMBER 31,
                                             ------------------------------------------------------------
                                               1995        1996        1997         1998          1999
                                             --------    --------    --------    ----------    ----------
                                                 (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)
<S>                                          <C>         <C>         <C>         <C>           <C>
STATEMENT OF OPERATIONS DATA:
  Net interest income......................  $  2,225    $  4,140    $  5,036    $    7,312    $    6,146
  Servicing fee income.....................     1,381       3,236       9,189        16,663        28,877
  Gain on sale of contracts................     2,012      15,251      19,586        36,417        53,920
                                             --------    --------    --------    ----------    ----------
         Total revenues....................     5,618      22,627      33,811        60,392        88,943
                                             --------    --------    --------    ----------    ----------
  Provision for credit losses..............       465         266         785         1,580         1,246
  Operating expenses.......................     8,340      15,394      30,740        48,427        70,959
                                             --------    --------    --------    ----------    ----------
         Total expenses....................     8,805      15,660      31,525        50,007        72,205
                                             --------    --------    --------    ----------    ----------
  Income (loss) before income taxes........    (3,187)      6,967       2,286        10,385        16,738
  Income taxes.............................         0         851         984         4,310         6,946
                                             --------    --------    --------    ----------    ----------
  Net income (loss)........................  $ (3,187)   $  6,116    $  1,302    $    6,075    $    9,792
                                             ========    ========    ========    ==========    ==========
  Net income (loss) available to common
    stockholders...........................  $ (3,763)   $  6,116    $  1,302    $    6,075    $    9,792
                                             ========    ========    ========    ==========    ==========
  Net income (loss) per share of Common
    Stock:
    Basic..................................  $  (1.68)   $   1.19    $   0.22    $     0.99    $     1.59
    Diluted................................  $  (1.68)   $   1.09    $   0.21    $     0.95    $     1.50
  Basic shares outstanding (in
    thousands).............................     2,234       5,159       6,000         6,112         6,174
  Diluted shares outstanding(in
    thousands).............................     2,234       5,585       6,294         6,425         6,514
OPERATING DATA:
  Contracts purchased during the period....  $199,397    $319,840    $605,905    $1,038,535    $1,559,004
  Number of contracts purchased during the
    period.................................    16,571      26,244      50,214        86,150       127,628
  Contracts securitized during the
    period.................................  $105,000    $405,514    $527,276    $  911,760    $1,450,000
  Number of active dealerships (at end of
    period)................................       769       1,471       2,846         5,401         7,617
  Operating expenses as percentage of
    average servicing portfolio during the
    period(1)..............................       5.9%        4.9%        5.5%          4.7%          4.1%
SELECTED PORTFOLIO DATA:
  Servicing portfolio (at end of period)...  $218,207    $400,665    $757,277    $1,345,961    $2,133,460
  Average servicing portfolio during the
    period(1)..............................  $141,029    $311,340    $563,343    $1,023,237    $1,728,875
  Number of contracts in servicing
    portfolio (at end of period)...........    20,156      38,275      73,502       131,862       209,745
  Weighted average annual percentage rate
    (at end of period)(2)..................     15.00%      14.72%      14.66%        14.72%        14.77%
  Delinquencies as a percentage of the
    dollar amount of servicing portfolio
    (at end of period)(3)..................      1.20%       2.03%       2.51%         2.83%         3.24%
  Net charge-offs as a percentage of the
    average servicing portfolio during the
    period(1)..............................      0.37%       1.63%       2.03%         1.72%         1.85%
</TABLE>

                                       21
<PAGE>   22

<TABLE>
<CAPTION>
                                                                   AS OF DECEMBER 31,
                                                 -------------------------------------------------------
                                                   1995       1996        1997        1998        1999
                                                 --------    -------    --------    --------    --------
                                                                 (DOLLARS IN THOUSANDS)
<S>                                              <C>         <C>        <C>         <C>         <C>
BALANCE SHEET DATA:
  Cash and cash equivalents....................  $  1,623    $   603    $    991    $  1,929    $  5,190
  Contracts held for sale(4)...................   116,893     12,238      63,380     151,952     229,475
  Credit enhancement assets....................    12,390     37,144      71,736     112,953     142,884
  Total assets.................................   136,077     54,083     141,836     275,422     393,835
  Warehouse borrowings.........................   112,380     10,108      60,506     150,044     232,288
  Excess servicing and residual lines..........     9,569      2,500      30,000      49,556      55,879
  Subordinated debt............................    10,000          0           0      10,000      10,000
  Redeemable series A preferred stock..........     9,379          0           0           0           0
  Stockholders' equity (deficit)...............    (7,896)    36,358      37,717      43,824      53,108
</TABLE>

---------------
(1) Averages are based on daily balances.

(2) The weighted averages are based on the serviced portfolio outstanding at the
    end of the period.

(3) Excludes repossessed inventory.

(4) Contracts held for sale excludes dealer participation and allowance for
    credit losses. See Note 4 to the Consolidated Financial Statements.

                                       22
<PAGE>   23

ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
       OF OPERATIONS

OVERVIEW

     Onyx is a specialized consumer finance company engaged in the purchase,
origination, securitization and servicing of Contracts originated by franchised
and select independent automobile dealerships in the United States and to a
small extent the origination or purchase of motor vehicle loans through a
subsidiary of Onyx on a direct basis to consumers. The Company focuses its
efforts on acquiring Contracts that are collateralized by late model used and,
to a lesser extent, new automobiles, that are entered into with purchasers whom
the Company believes have a favorable credit profile. Since commencing the
purchase of Contracts in February 1994, the Company has acquired more than $3.8
billion in Contracts and currently has an active dealer base of over 7,600
dealerships. The Company has expanded its operations from a single office in
California to 17 Auto Finance Centers serving many regions of the United States.

     The Company generates revenues primarily through the purchase, origination,
warehousing, subsequent securitization and ongoing servicing of Contracts. The
Company earns net interest income on Contracts held during the warehousing
period. Upon the securitization and sale of Contracts, the Company recognizes a
gain on sale of Contracts, receives future excess cash flows generated by owner
and grantor trusts, and earns fees from servicing the securitized Contracts.

     The following table illustrates the changes in the Company's Contract
acquisition volume, total revenue, securitization activity and servicing
portfolio during the past three fiscal years.

                         SELECTED FINANCIAL INFORMATION

<TABLE>
<CAPTION>
                                                    FOR THE YEARS ENDED DECEMBER 31,
                                                  ------------------------------------
                                                    1997         1998          1999
                                                  --------    ----------    ----------
                                                         (DOLLARS IN THOUSANDS)
<S>                                               <C>         <C>           <C>
Contracts purchased during year.................  $605,905    $1,038,535    $1,559,004
Average monthly purchases during the year.......    50,492        86,544       129,917
Gain on sale of contracts.......................    19,586        36,417        53,920
Total revenue(1)................................    33,811        60,392        88,943
Contracts securitized during the year...........   527,276       911,760     1,450,000
Servicing portfolio at year end.................   757,277     1,345,961     2,133,460
</TABLE>

---------------
(1) Total revenue is comprised of net interest income, servicing fee income and
    gain on sale of contracts.

CONTRACTS PURCHASED AND SERVICING PORTFOLIO

     Since its inception, the Company has experienced significant growth in its
purchased volume of Contracts. Acquisition volume for the year ended December
31, 1999, was $1.6 billion compared to $1.0 billion for the year ended December
31, 1998, representing an increase of 60%. This growth in acquisition volume is
attributable primarily to (i) the opening of three additional Auto Finance
Centers during 1999, and (ii) an increased penetration of existing dealers due
to the maturation of existing Auto Finance Centers. For the year ended December
31, 1999, Contract acquisition growth was 41% in Auto Finance Centers opened
prior to 1999.

     The Company's increase in Contract acquisition volume has resulted in the
growth in the Company's servicing portfolio. The servicing portfolio at December
31, 1999, was $2.1 billion compared to $1.3 billion at December 31, 1998, an
increase of 62%.

RESULTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

     The Company had net income of $9.8 million for the year ended December 31,
1999, compared to net income of $6.1 million and $1.3 million for the years
ended December 31, 1998 and 1997, respectively. The

                                       23
<PAGE>   24

increase in net income from 1998 to 1999 is attributable to several factors,
including (i) a 59% increase in the dollar volume of Contracts securitized,
resulting in a 48% increase in gains on sales, (ii) higher servicing fee income
due to an increase in the serviced portfolio and (iii) improvements in the cost
structure of the Company which resulted in a decline in operating expenses as a
percentage of average servicing portfolio to 4.1% for 1999 from 4.7% for 1998.
The increase in net income from 1997 to 1998 was primarily attributable to a 73%
increase in the dollar volume of Contracts securitized, which resulted in an 86%
increase in gain on sales.

     Net Interest Income. Net interest income consists primarily of the
difference between the finance revenue earned on Contracts held on the balance
sheet during the warehousing period and the interest costs associated with the
Company's borrowings to purchase such Contracts. The following table illustrates
the weighted average yield on Contracts held on balance sheet, the weighted
average rate paid on warehouse borrowings to fund these Contracts, and the
corresponding net interest income margin realized by the Company.

                           NET INTEREST INCOME MARGIN

<TABLE>
<CAPTION>
                                                                FOR THE YEARS ENDED
                                                                   DECEMBER 31,
                                                              -----------------------
                                                              1997     1998     1999
                                                              -----    -----    -----
<S>                                                           <C>      <C>      <C>
Yield on contracts(1).......................................  13.85%   13.96%   13.63%
Cost of warehouse borrowings................................   6.76     6.72     6.32
                                                              -----    -----    -----
Net interest income margin..................................   7.09%    7.24%    7.31%
                                                              =====    =====    =====
</TABLE>

---------------
(1) The yield on Contracts is net of dealer participation amortized expenses.

     To arrive at net interest income, the Company also deducts the interest
charges associated with non-warehouse borrowings, including interest expense
incurred on subordinated debt, residual and excess servicing lines, capital
lease outstandings, and other miscellaneous long term borrowings.

     Net interest income declined by 16% to $6.1 million for 1999, from $7.3
million during 1998, but increased from $5.0 million during 1997. The reduction
from 1998 to 1999 was principally due to a growing percentage of more expensive
non-warehouse borrowings relative to warehouse debt in the Company's capital
structure, which offset a 0.07% increase in net interest income margin to 7.31%
in 1999 from 7.24% in 1998. The 46% increase in net interest income from 1997 to
1998 was due to a combination of a 0.15% increase in net interest income margins
and an increase in the average amount of Contracts held for sale. The average
amount of Contracts held for sale increased to $148.6 million in 1998 from $85.7
million in 1997.

     Servicing Fee Income. Contractual servicing is earned at a rate of 1.0% per
annum on the outstanding principal balance of Contracts securitized, and
management believes this is consistent with industry standards. Excess servicing
income is dependent upon the average excess spread on the Contracts sold and the
performance of those Contracts. Servicing fee income is related to the size of
the serviced portfolio and also includes investment interest, late fees,
extension fees, document fees and other fees charged to customer accounts.

     Servicing fee income increased to $28.9 million for the year ended December
31, 1999, from $16.7 million for the year ended December 31, 1998, and from $9.2
million for the year ended December 31, 1997. The increase was attributable to
an increase in the size of the average sold portion of the servicing portfolio.
For the year ended December 31, 1999, the size of the average sold servicing
portfolio increased to $1.6 billion from $874.6 million and from $477.6 million
for the same period in 1998 and 1997, respectively.

     Gain on Sale of Contracts. The Company computes a gain on sale with respect
to Contracts securitized based on the present value of the estimated future
excess cash flows to be received from such Contracts using a market discount
rate. Gain on sale is recorded as a credit enhancement asset on the statement of
financial condition, and is amortized against servicing income over the life of
the contracts. The gain recorded in the

                                       24
<PAGE>   25

statement of income is adjusted for prepaid dealer participation, issuance costs
and the effect of hedging activities.

     The Company recorded gains on sales of Contracts of $53.9 million on the
sale of $1.45 billion of Contracts in 1999 for its securitizations. The gains on
sales of Contracts is affected by the amount of Contracts securitized and the
net interest rate spread on those Contracts. The following table illustrates the
net interest rate spread for each of the Company's securitizations:

<TABLE>
<CAPTION>
                                                       SECURITIZATION TRANSACTIONS(4)
                                ----------------------------------------------------------------------------
                                               REMAINING      WEIGHTED    WEIGHTED
                                               BALANCE AT     AVERAGE     AVERAGE
                                 ORIGINAL     DECEMBER 31,    CONTRACT    INVESTOR      GROSS         NET
        SECURITIZATION           BALANCE          1999        RATE(1)     RATE(1)     SPREAD(2)    SPREAD(3)
        --------------          ----------    ------------    --------    --------    ---------    ---------
                                                           (DOLLARS IN THOUSANDS)
<S>                             <C>           <C>             <C>         <C>         <C>          <C>
1994-1 Grantor Trust..........  $   38,601    Paid in Full     13.75%       6.90%       6.85%        1.94%
1995-1 Grantor Trust..........     105,000    Paid in Full     14.94        7.00        7.94         1.86
1996-1 Grantor Trust..........     100,500     $    4,923      15.07        5.40        9.67         3.83
1996-2 Grantor Trust..........      85,013          7,665      14.84        6.40        8.44         3.61
1996-3 Grantor Trust..........     120,000         15,271      14.54        6.45        8.09         3.14
1996-4 Grantor Trust..........     100,000         17,148      14.80        6.20        8.60         3.28
1997-1 Grantor Trust..........      90,000         19,113      13.86        6.55        7.31         2.78
1997-2 Grantor Trust..........     121,676         30,802      14.85        6.35        8.50         3.11
1997-3 Grantor Trust..........     149,600         46,996      14.77        6.35        8.42         3.30
1997-4 Grantor Trust..........     166,000         60,118      14.69        6.30        8.39         3.27
1998-1 Grantor Trust..........     173,000         72,133      14.91        5.95        8.96         3.40
1998-A Owner Trust............     208,759        100,434      14.73        5.87        8.86         3.34
1998-B Owner Trust............     250,000        140,356      14.73        5.78        8.95         3.18
1998-C Owner Trust............     280,000        176,354      14.89        5.72        9.17         3.51
1999-A Owner Trust............     310,000        213,417      14.33        5.73        8.60         3.44
1999-B Owner Trust............     350,000        276,098      14.65        5.86        8.79         3.54
1999-C Owner Trust............     400,000        350,806      14.82        6.62        8.20         2.86
1999-D Owner Trust............     390,000        365,607      15.01        6.90        8.11         2.87
                                ----------     ----------
         Total................  $3,438,149     $1,897,241
                                ==========     ==========
</TABLE>

---------------
(1) As of issue date.

(2) Difference between weighted average contract rate and weighted average
    investor rate as of the issue date.

(3) Difference between weighted average contract rate and weighted average
    investor rate, net of underwriting costs, other issuance costs, servicing
    fees, estimated credit losses, ongoing financial guarantee insurance policy
    premiums, and the hedging gain or loss.

(4) The Company assumes an average prepayment speed of 1.75% ABS, a discount
    rate ranging from 3.5% to 4.5% above the weighted average investor rate, and
    utilizes a lifetime loss rate ranging from 3.5% to 4.0% of the original
    balance, for all remaining securitizations.

     The Company completed four securitizations totaling $1.45 billion during
the year ended December 31, 1999, resulting in gains on sale of $53.9 million,
compared to four securitizations totaling $911.8 million and a whole loan sale
of $15 million during the year ended December 31, 1998, resulting in gains on
sale of Contracts totaling $36.4 million, and four securitizations totaling
$527.3 million for the year ended December 31, 1997, resulting in gains on sale
of Contracts of $19.6 million. The average net spread on the 1999
securitizations was 3.15% compared to 3.36% in 1998 and 3.16% in 1997.

     Provision for Credit Losses. The Company maintains an allowance for credit
losses to cover anticipated losses on the Contracts held on the statement of
financial condition. The allowance for credit losses is increased by charging
the provision for credit losses and decreased by actual losses on the Contracts
held on the statement of financial condition or by the sale of Contracts held on
the statement of financial condition.

                                       25
<PAGE>   26

The level of the allowance is based principally on the outstanding balance of
Contracts held on the statement of financial condition, and historical loss
trends. When the Company sells Contracts in a securitization transaction, it
reduces its allowance for credit losses and factors potential losses into its
calculations of gain on sale. The provision for credit losses was $1.2 million
during 1999 compared to $1.6 million during 1998 and $0.8 million during 1997.
The reduction in provision for credit losses in 1999 relative to 1998 was due
primarily to a reduction in the year over year net change in Contracts held for
sale. At year-end 1999, Contracts held for sale had increased $77.5 million over
year-end 1998, while at year-end 1998, Contracts held for sale had increased
$88.6 million over year-end 1997.

     Salaries and Benefits Expense. The Company incurred salary and benefit
expenses of $40.0 million during the year ended December 31, 1999, compared to
$26.8 million during the year ended December 31, 1998, and $17.4 million for the
year ended December 31, 1997. In order to support the growth of its operations
and the servicing portfolio, the number of employees increased from 319 at
December 31, 1997, to 526 at December 31, 1998, to 715 at December 31, 1999.

     Other Operating Expenses. Other operating expenses increased to $30.9
million at December 31, 1999, from $21.7 million at December 31, 1998, and from
$13.3 million for the year ended December 31, 1997. The majority of the
increases were due to the growth of the average servicing portfolio from $563.3
million to $1.02 billion and $1.7 billion at December 31, 1997, 1998 and 1999,
respectively. Additionally, the Company opened additional Auto Finance Centers
during the years ended December 31, 1999, December 31, 1998, and December 31,
1997.

     Income Taxes. The Company files federal and certain state tax returns as
part of a consolidated group. Tax liabilities from the consolidated returns are
allocated in accordance with a tax sharing agreement based on the relative
income or loss of each entity on a stand-alone basis. The effective tax rate for
Onyx was 41.5% in 1999 and 1998 and 43.0% in 1997. The reduction in tax rates
between 1998 and 1997 is due to lower tax rates in the states where the Company
has opened new Auto Finance Centers.

FINANCIAL CONDITION

CONTRACTS HELD FOR SALE

     Contracts held for sale totaled $230.0 million at December 31, 1999,
compared to $152.8 million at December 31, 1998. The number and principal
balance of Contracts held for sale is largely dependent upon the timing and size
of the Company's securitizations. The increase in the Contracts held for sale
from year end 1998 to year end 1999 is primarily attributable to the Company's
higher contract volume during the respective warehousing periods. The Company
believes that the allowance for credit losses is currently adequate to absorb
potential losses in the owned portfolio. The allowance for credit losses as of
December 31, 1999, was approximately $1.4 million, compared to $1.0 million as
of December 31, 1998.

CREDIT ENHANCEMENT ASSETS

     Credit enhancement assets consisted of the following:

<TABLE>
<CAPTION>
                                                       AS OF DECEMBER 31,
                                                  ----------------------------
                                                      1998            1999
                                                  ------------    ------------
<S>                                               <C>             <C>
Trust receivable................................  $  3,712,501    $  5,712,501
RISA............................................   109,240,692     137,171,469
                                                  ------------    ------------
          Total.................................  $112,953,193    $142,883,970
                                                  ============    ============
</TABLE>

     Trust receivable represent servicer advances and initial deposits in spread
accounts.

                                       26
<PAGE>   27

     RISA consists of the estimated present value of future servicing cash flows
from related securitizations. Future servicing cash flows are computed by taking
into account certain assumptions principally regarding prepayments, losses and
servicing costs. These cash flows are then discounted until they are released
from the spread account and received by the Company at a market-based rate. The
balance is then amortized against actual servicing fee income on a monthly
basis. The following table provides historical data regarding the RISA. Included
in RISA is restricted cash of $35.8 million and $32.7 million for the years
ended December 31, 1999 and 1998, respectively.

                    RETAINED INTEREST IN SECURITIZED ASSETS

<TABLE>
<CAPTION>
                                                          FOR THE YEARS ENDED
                                                              DECEMBER 31,
                                                         ----------------------
                                                           1998         1999
                                                         ---------    ---------
                                                         (DOLLARS IN THOUSANDS)
<S>                                                      <C>          <C>
Beginning balance......................................  $ 64,358     $109,241
Additions..............................................    80,633      101,586
Amortization...........................................   (35,750)     (72,704)
Change in unrealized loss on securities available for
  sale.................................................         0         (952)
                                                         --------     --------
Ending balance.........................................  $109,241     $137,171
                                                         ========     ========
</TABLE>

ASSET QUALITY

     The Company monitors and attempts to minimize delinquencies and losses
through timely collections and the use of a predictive dialing system. At
December 31, 1999, delinquencies represented 3.24% of the amount of Contracts in
its servicing portfolio compared to 2.83% at December 31, 1998, and 2.51% at
December 31, 1997. Net charge-offs as a percentage of the average servicing
portfolio were 1.85% for the year ended December 31, 1999, compared to 1.72% and
2.03% for the years ended December 31, 1998, and 1997, respectively. The levels
of delinquencies at December 31, 1999, increased over December 31, 1998,
primarily due to the difficulties the Company experienced in attracting and
retaining qualified collection staff as a result of a tight labor market and
aggressive pursuit by local competitors for these skilled positions. The
increase in delinquency from 1997 to 1998 was attributable in part to the
relocation of the collection and customer service areas in conjunction with the
relocation of the corporate headquarters beginning in December 1998. The
increase in loan losses from 1998 to 1999 is directly correlated to the rise in
delinquencies.

     Management has increased its off balance sheet reserves as a percentage of
the serviced portfolio sold. Reserves have increased from 3.68% at December 31,
1997, to 4.31% at December 31, 1998, to 4.42% at December 31, 1999. Off balance
sheet reserves are those reserves established upon the sale of Contracts to the
grantor and owner trusts in connection with securitized Contracts.

               DELINQUENCY EXPERIENCE OF THE SERVICING PORTFOLIO

<TABLE>
<CAPTION>
                                                    FOR THE YEARS ENDED DECEMBER 31,
                                                  ------------------------------------
                                                    1997         1998          1999
                                                  --------    ----------    ----------
                                                         (DOLLARS IN THOUSANDS)
<S>                                               <C>         <C>           <C>
Servicing portfolio.............................  $757,277    $1,345,961    $2,133,460
Delinquencies(1)(2) 30 - 59 days................    11,902        26,410        38,376
60 - 89 days....................................     3,370         6,876        16,596
90+ days........................................     3,743         4,790        14,203
          Total delinquencies as a percent of
            servicing portfolio.................      2.51%         2.83%         3.24%
</TABLE>

---------------
(1) Delinquencies include principal amounts only, net of repossessed inventory.

(2) The period of delinquency is based on the number of days payments are
    contractually past due.

                                       27
<PAGE>   28

                LOAN LOSS EXPERIENCE OF THE SERVICING PORTFOLIO

<TABLE>
<CAPTION>
                                                    FOR THE YEARS ENDED DECEMBER 31,
                                                  ------------------------------------
                                                    1997         1998          1999
                                                  --------    ----------    ----------
                                                         (DOLLARS IN THOUSANDS)
<S>                                               <C>         <C>           <C>
Number of contracts.............................    73,502       131,862       209,745
Period end servicing portfolio..................  $757,277    $1,345,961    $2,133,460
Average servicing portfolio(1)..................  $563,343    $1,023,237    $1,728,875
Number of gross charge-offs.....................     2,161         3,761         6,398
Gross charge-offs...............................  $ 13,076    $   20,640    $   37,024
Net charge-offs(2)..............................  $ 11,434    $   17,618    $   31,963
Net charge-offs as a percent of average
  servicing portfolio...........................      2.03%         1.72%         1.85%
On and off balance sheet reserves as a percent
  of period end serviced portfolio..............      3.42%         3.87%         4.00%
</TABLE>

---------------
(1) Average is based on daily balances.

(2) Net charge-offs are gross charge-offs minus recoveries on Contracts
    previously charged off.

                                       28
<PAGE>   29

     The following table illustrates the monthly performance of each of the
securitized pools outstanding for the period from the date of securitization
through December 31, 1999.

<TABLE>
<CAPTION>
MONTH   96-1   96-2   96-3   96-4   97-1   97-2   97-3   97-4   98-1   98-A   98-B   98-C   99-A   99-B   99-C   99-D
-----   ----   ----   ----   ----   ----   ----   ----   ----   ----   ----   ----   ----   ----   ----   ----   ----
<S>     <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>
  1     0.00%  0.01%  0.00%  0.00%  0.00%  0.00%  0.00%  0.00%  0.00%  0.00%  0.00%  0.00%  0.00%  0.00%  0.00%  0.00%
  2     0.03%  0.07%  0.02%  0.02%  0.00%  0.00%  0.00%  0.00%  0.01%  0.01%  0.00%  0.02%  0.00%  0.00%  0.01%  0.00%
  3     0.05%  0.20%  0.07%  0.05%  0.03%  0.02%  0.02%  0.01%  0.02%  0.03%  0.02%  0.02%  0.02%  0.03%  0.03%  0.01%
  4     0.11%  0.33%  0.16%  0.14%  0.06%  0.07%  0.09%  0.04%  0.08%  0.07%  0.08%  0.04%  0.05%  0.07%  0.06%
  5     0.23%  0.46%  0.43%  0.24%  0.13%  0.22%  0.13%  0.11%  0.14%  0.14%  0.19%  0.15%  0.11%  0.14%  0.16%
  6     0.40%  0.78%  0.54%  0.38%  0.26%  0.32%  0.24%  0.20%  0.24%  0.23%  0.33%  0.27%  0.21%  0.27%
  7     0.69%  0.98%  0.74%  0.53%  0.37%  0.59%  0.36%  0.28%  0.40%  0.37%  0.45%  0.46%  0.35%  0.43%
  8     0.82%  1.15%  0.97%  0.81%  0.52%  0.80%  0.47%  0.43%  0.53%  0.42%  0.61%  0.57%  0.49%  0.60%
  9     0.93%  1.39%  1.13%  0.98%  0.60%  0.91%  0.62%  0.55%  0.68%  0.51%  0.82%  0.74%  0.63%
 10     1.15%  1.52%  1.32%  1.18%  0.76%  1.07%  0.73%  0.72%  0.85%  0.70%  0.95%  0.94%  0.81%
 11     1.25%  1.69%  1.47%  1.43%  0.92%  1.26%  0.81%  0.87%  1.04%  0.85%  1.10%  1.12%  1.04%
 12     1.47%  1.94%  1.60%  1.63%  1.02%  1.42%  0.94%  0.95%  1.20%  1.01%  1.20%  1.30%
 13     1.65%  2.08%  1.77%  1.73%  1.13%  1.58%  1.10%  1.08%  1.33%  1.17%  1.36%  1.54%
 14     1.79%  2.34%  1.94%  1.87%  1.23%  1.68%  1.23%  1.19%  1.46%  1.37%  1.48%  1.73%
 15     2.02%  2.52%  2.09%  2.07%  1.40%  1.80%  1.38%  1.36%  1.61%  1.48%  1.64%
 16     2.25%  2.76%  2.27%  2.23%  1.56%  1.97%  1.58%  1.42%  1.71%  1.59%  1.89%
 17     2.43%  2.89%  2.42%  2.33%  1.68%  2.10%  1.68%  1.52%  1.88%  1.76%
 18     2.59%  3.10%  2.57%  2.49%  1.75%  2.23%  1.77%  1.64%  2.01%  1.96%
 19     2.77%  3.14%  2.70%  2.62%  1.85%  2.35%  1.91%  1.75%  2.17%  2.07%
 20     2.93%  3.30%  2.83%  2.73%  1.92%  2.48%  2.04%  1.85%  2.25%
 21     3.06%  3.47%  2.94%  2.84%  1.98%  2.59%  2.11%  1.97%  2.41%
 22     3.15%  3.60%  3.00%  2.93%  2.09%  2.72%  2.20%  2.08%  2.52%
 23     3.21%  3.70%  3.08%  3.02%  2.17%  2.81%  2.31%  2.12%
 24     3.28%  3.81%  3.17%  3.10%  2.22%  2.85%  2.41%  2.23%
 25     3.40%  3.93%  3.28%  3.22%  2.31%  2.93%  2.51%  2.36%
 26     3.43%  4.06%  3.38%  3.29%  2.38%  2.96%  2.59%
 27     3.55%  4.13%  3.43%  3.39%  2.44%  3.09%  2.71%
 28     3.60%  4.22%  3.54%  3.46%  2.50%  3.17%  2.79%
 29     3.73%  4.23%  3.59%  3.58%  2.55%  3.22%
 30     3.75%  4.29%  3.69%  3.61%  2.63%  3.26%
 31     3.79%  4.31%  3.77%  3.64%  2.67%  3.33%
 32     3.85%  4.33%  3.75%  3.72%  2.73%
 33     3.88%  4.37%  3.77%  3.74%  2.77%
 34     3.90%  4.39%  3.79%  3.77%  2.84%
 35     3.94%  4.39%  3.81%  3.79%
 36     3.94%  4.42%  3.83%  3.81%
 37     3.94%  4.42%  3.84%  3.83%
 38     3.97%  4.43%  3.88%
 39     3.99%  4.45%  3.92%
 40     3.96%  4.46%  3.92%
 41     3.96%  4.45%
 42     3.95%  4.45%
 43     3.96%  4.45%
 44     3.94%  4.48%
 45     3.97%
 46     3.95%
 47     3.92%
 48     3.90%
</TABLE>

LIQUIDITY AND CAPITAL RESOURCES

     The Company requires substantial cash and capital resources to operate its
business. Its primary uses of cash include: (i) acquisition of Contracts; (ii)
payments of dealer participation; (iii) securitization costs; (iv) settlements
of hedging transactions; (v) operating expenses; and (vi) interest expense. The
capital

                                       29
<PAGE>   30

resources available to the Company include: (i) interest income during the
warehousing period; (ii) servicing fees; (iii) releases from spread accounts;
(iv) settlements of hedging transactions; (v) sales of Contracts in
securitizations; and (vi) borrowings under its credit facilities. Management
believes that the resources available to the Company provide the needed capital
to fund the anticipated expansion of the Company, Contract purchases, and
investments in origination and servicing capabilities.

     Cash used in operating activities was $80.3 million for the year ended
December 31, 1999, compared to $113.6 million used in for the year ended
December 31, 1998. The decrease in cash used in operating activities was
primarily due to an increase in accounts payable and other liabilities. Cash
used in investing activities was $5.4 million for the twelve months ended
December 31, 1999, compared to $3.8 million for the twelve months ended December
31, 1998. A reduction in the use of the Company's capital lease lines coupled
with the relocation of the Company's corporate headquarters contributed to the
increase in investing activities. Cash provided by financing activities was
$89.0 million for the twelve months ended December 31, 1999, compared to $118.4
million for the twelve months ended December 31, 1998. Higher spread account
cash releases from securitization trusts combined with a lower net change in
Contracts held for sale during 1999 versus 1998 reduced the requirement for
financing sources. The Company also issued $10.0 million in subordinated debt
during the previous year.

     CP Facilities. As of December 31, 1999, the Company was party to two
primary auto loan warehousing programs (the "CP Facilities"), one a $375 million
facility with Triple-A One Funding Corporation ("Triple-A"), and the other a
$150 million facility with Park Avenue Receivables Corporation ("Parco"). Two of
the Company's special purpose subsidiaries, Onyx Acceptance Financial
Corporation ("Finco") for the Triple-A One Facility, and newly created Onyx
Acceptance Receivables Corporation ("Recco") for the Parco Facility, are the
borrowers under the CP Facilities. The CP Facilities are used to fund the
purchase or origination of Contracts. Triple-A and Parco are both rated
commercial paper asset-backed conduits sponsored by MBIA Insurance Corporation
("MBIA") and The Chase Manhattan Bank ("Chase"), respectively. MBIA provides
credit enhancement for both facilities by issuing financial guarantee insurance
policies covering all principal and interest obligations owed for the borrowings
under the facilities. The Company pledges its Contracts held for sale to borrow
from Triple-A and from Parco. The Parco Facility was executed in August 1999 and
expires in August 2000, but may be renewed at the option of the lenders. The
Triple-A Facility is subject to renewal in September 2000 at the option of the
lenders, and, if so renewed, will expire in September 2001.

     The Merrill Line. A subsidiary of the Company, Onyx Acceptance Funding
Corporation ("Fundco"), has an uncommitted $100 million line of credit (the
"Merrill Line"), with Merrill Lynch Mortgage Capital, Inc. ("MLMCI"), which
provides warehouse funding for the purchase or origination of Contracts and is
used in concert with the CP Facilities the Company currently has in place. The
Merrill Line was renewed in February 2000 for a one year term.

     The Residual Lines. The Company, through Fundco, has two residual
Facilities: a $10.0 million committed facility with MLMCI and a $50.0 million
line with Salomon Smith Barney Realty Corporation ("SBRC") (the "SBRC Line" and
together with the Facility with MLMCI, the "Residual Lines"). The Residual Lines
are used by the Company to finance operating requirements. The lines utilize a
collateral-based formula that sets borrowing availability to a percentage of the
value of excess cash flow to be received from certain securitizations. The
facility provided by MLMCI was renewed in February 2000 for a one year term.
Each loan under SBRC Line matures one year after the date of the loan; the
Company expects each loan to be renewed at term.

     Excess Servicing Facility. The Company is party to a collateralized loan
("Excess Servicing Facility") with a lending group for up to $45 million, which
was used for working capital and other expenditures. The Excess Servicing
Facility matured in June 1999. This line is now in the amortization period and
all cash flows from the underlying securitizations, which are collateral, are
being used to repay the outstanding principal balance.

     Subordinated Debt. As of December 31, 1999, the Company had outstanding
$10.0 million of subordinated debt with an initial term of two years. In
February 2000, the Company exercised its option to

                                       30
<PAGE>   31

extend the term by three years during which the loan will fully amortize. Final
maturity is scheduled for February 2003.

     The facilities and lines above contain affirmative, negative and financial
covenants typical of such credit facilities. The Company was in compliance with
these covenants as of December 31, 1999.

     Hedging and Interest Rate Risk Management. The Company employs a hedging
strategy that is intended to minimize the risk of interest rate fluctuations and
which historically has involved the execution of forward interest rate swaps or
use of a pre-funding structure for the Company's securitizations. The Company is
not required to maintain collateral on the outstanding hedging program.

SECURITIZATIONS

     Regular securitizations are an integral part of the Company's business plan
because they allow the Company to increase its liquidity, provide for
redeployment of its capital and reduce risks associated with interest rate
fluctuations. The Company has developed a securitization program that involves
selling interests in pools of its Contracts to investors through the public
issuance of AAA/Aaa rated asset-backed securities. The Company completed four
AAA/Aaa rated publicly underwritten asset-backed securitizations in the amount
of $1.45 billion in 1999.

     The net proceeds of these securitizations are used to pay down outstanding
indebtedness incurred under the Company's credit facilities to purchase
Contracts, thereby creating availability for the purchase of additional
Contracts. Since 1994, the Company has securitized $3.4 billion of its Contracts
in 18 separate transactions. In each of its securitizations, the Company has
sold its Contracts to a newly formed grantor or owner trust which issued
pass-through certificates or notes in an amount equal to the aggregate principal
balance of the Contracts.

     To improve the level of profitability from the sale of securitized
Contracts, the Company arranges for credit enhancement to achieve an improved
credit rating on the asset-backed securities issued. This credit enhancement has
taken the form of a financial guaranty issued by MBIA, or a predecessor of MBIA,
which issues a financial guaranty insurance policy (the "Financial Guarantee
Insurance Policy") insuring the payment of principal and interest due on the
asset-backed securities.

     The Company receives servicing fees for its duties relating to the
accounting for and collection of the Contracts. In addition, the Company is
entitled to the future excess cash flows arising from the trusts. Generally, the
Company sells the Contracts at face value and without recourse, except that
certain representations and warranties with respect to the Contracts are
provided by the Company as the servicer and Finco as the seller to the trusts.

     Gains on sale of Contracts arising from securitizations provide a
significant portion of the Company's revenues. Several factors affect the
Company's ability to complete securitizations of its Contracts, including
conditions in the securities markets generally, conditions in the asset-backed
securities market specifically, the credit quality of the Company's portfolio of
Contracts and the Company's ability to obtain credit enhancement.

     In the first quarter of 2000, the Company securitized contracts in the
amount of $430 million.

     During the first quarter of 2000, the Company securitized the cash flows
from 15 of its outstanding securitizations and sold $49.0 million of notes. The
transaction was rated BBB by Standard & Poor's Ratings Services, a division of
The McGraw-Hill Companies, Inc.

INTEREST RATE EXPOSURE AND HEDGING

     The Company is able through the use of varying maturities on advances from
the CP Facilities to lock in rates during the warehousing period, when in
management's judgment it is appropriate, to limit interest rate exposure during
such warehousing period (See "Risk Factors -- Interest Rate Risk").

                                       31
<PAGE>   32

     The Company has the ability to move rates upward in response to rising
borrowing costs because the Company currently does not originate loans near the
maximum rates permitted by law. Further, the Company employs a hedging strategy
which primarily consists of the execution of forward interest rate swaps. These
hedges are entered into by the Company in numbers and amounts which generally
correspond to the anticipated principal amount of the related securitization.
Gains and losses relative to these hedges are recognized in full at the time of
securitization as an adjustment to the gain on sale of the Contracts. The
Company has only used counterparties with investment grade debt ratings from
national rating agencies for its hedging transactions.

     Management monitors the Company's hedging activities on a frequent basis to
ensure that the value of hedges, their correlation to the Contracts being hedged
and the amounts being hedged continue to provide effective protection against
interest rate risk. The Company's hedging strategy requires estimates by
management of monthly Contract acquisition volume and timing of its
securitizations. If such estimates are materially inaccurate, then the Company's
gain on sales of Contracts and results of operations and cash flows could be
adversely affected. The amount and timing of hedging transactions are determined
by senior management based upon the amount of Contracts purchased and the
interest rate environment. Senior management currently expects to hedge
substantially all of its Contracts pending securitization.

NEW ACCOUNTING PRONOUNCEMENTS

     In June 1998, the FASB issued Statement of Financial Accounting Standards
No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS
133"). SFAS 133 establishes accounting and reporting standards for derivative
contracts, and for hedging activities. The new standard requires that all
derivatives be recognized as either assets or liabilities in the consolidated
statements of financial condition and that those instruments be measured at fair
value. If certain conditions are met, a derivative may be specifically
designated as a hedging instrument. The accounting for changes in the fair value
of a derivative (that is, unrealized gains and losses) depends on the intended
use of the derivative and the resulting designation. The statement is effective
in the first quarter of year 2001. The Company is presently assessing the effect
of SFAS 133 on the consolidated financial statements of the Company.

YEAR 2000 COMPLIANCE

     The Company is substantially dependent on its and third party computer
systems, business applications and other information technology systems ("IT
systems"), due to the nature of its consumer finance business and the increasing
number of electronic transactions in the industry. Historically, many IT systems
were developed to recognize the year as a two-digit number, with the digits "00"
being recognized as the year 1900. The year 2000 presents a number of potential
problems for such systems, including potentially significant processing errors
or failure. Given the Company's reliance on its computer systems, the Company's
results of operations and cash flows could be materially adversely affected by
any significant errors or failures.

     The Company developed and executed a comprehensive plan designed to address
the "Year 2000" issue for its in-house and third party IT applications. To date,
the Company has not experienced any significant year 2000-related disruptions
internally or with any other company with which the Company interacts on a
regular basis. The Company will continue to monitor its IT and non-IT systems
throughout 2000 with respect to year 2000 issues.

     The Company incurred costs related to Year 2000 compliance remediation for
Company-owned IT systems and applications of $450,000 in 1999. The amount
expended during 1999 represented approximately 9% of the Company's IT budget.

FORWARD LOOKING INFORMATION

     The preceding Management's Discussion and Analysis of the Company's
Financial Condition and Results of Operations contain certain "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995, which can be identified by the use of forward-looking terminology such
as "may," "will," "expect," "anticipate," "estimate," "should" or "continue" or
the negative thereof or
                                       32
<PAGE>   33

other variations thereon or comparable terminology. The matters set forth in
this Annual Report on Form 10-K constitute cautionary statements identifying
important factors with respect to such forward-looking statements, including
certain risks and uncertainties, that could cause actual results to differ
materially from those in such forward-looking statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Company's earnings are affected by changes in interest rates as a
result of its dependence upon the issuance of interest-bearing securities and
the incurrence of debt to fund its lending activities. Several factors can
influence the Company's ability to manage interest rate risk. First, Contracts
are purchased at fixed interest rates, while the amounts borrowed under
warehouse credit facilities bear interest at variable rates that are subject to
frequent adjustment to reflect prevailing market interest rates. Second, the
interest rate demanded by investors in a securitization is a function of
prevailing market rates for comparable transactions and the general interest
rate environment. Because the Contracts originated by the Company have fixed
interest rates, the Company bears the risk of smaller gross interest rate
spreads in the event interest rates increase during the period between the date
contracts are purchased and the completion and pricing of securitization
transactions.

     The Company uses several strategies to minimize interest rate risk,
including the utilization of derivative financial instruments, the regular sale
of contracts and pre-funding of securitization transactions. Pre-funding
securitizations is the practice of issuing more asset-backed securities than the
amount of contracts initially sold to the Trust. The proceeds from the
pre-funded portion are held in an escrow account until additional contracts are
sold to the Trust in amounts up to the balance of the pre-funded escrow account.
In pre-funded securitizations, borrowing costs are locked in with respect to the
contracts subsequently delivered to the Trust. However, the Company incurs an
expense in pre-funded securitizations equal to the difference between the money
market yields earned on the proceeds held in escrow prior to the subsequent
delivery of contracts and the interest rate paid on the asset-backed securities
outstanding.

     Derivative financial instruments are utilized to manage the gross interest
rate spread on the Company's securitization transactions. The Company sells
fixed rate contracts to the Trusts that, in turn, sell fixed rate securities to
investors. The fixed rates on securities issued by the Trust are indexed to
rates on U.S. Treasury Notes with similar average maturities or various London
Interbank Offered Rates ("LIBOR"). The Company periodically executes the sale of
forward swap agreements to lock in the indexed rate for specific anticipated
securitization transactions. The Company utilizes these derivative financial
instruments to modify its net interest sensitivity to levels deemed appropriate
based on the Company's risk tolerance. All transactions are entered into for
purposes other than trading, and are settled quarterly upon pricing of the
securitization.

     The Company received a cash payment net of expenses of $1.8 million in
1999, and made cash payments net of expenses of $4.8 million and $1.3 million in
1998 and 1997, respectively, to settle forward interest rate swap agreements.
These amounts were included in the gain on sale of contracts in securitization
transactions. Cash payments are recovered over time through a higher gross
interest rate spread on the related securitization transaction, while cash
receipts are offset through a lower gross interest rate spread on the related
securitization transaction. As of December 31, 1999, the Company had $150.0
million of forward swap agreements outstanding.

                                       33
<PAGE>   34

     The table below provides information about the Company's derivative
financial instruments by expected maturity date as of December 31, 1999 (dollars
in thousands). Notional amounts, which are used to calculate the contractual
payments to be exchanged under the contracts, represent average amounts that
will be outstanding for each of the years included in the table. Notional
amounts do not represent amounts exchanged by parties and, thus, are not a
measure of the Company's exposure to loss through its use of the agreements.

<TABLE>
<CAPTION>
      YEARS ENDED DECEMBER 31,          2000       2001       2002       2003       2004     FAIR VALUE
      ------------------------        --------   --------   --------   --------   --------   ----------
<S>                                   <C>        <C>        <C>        <C>        <C>        <C>
Interest Rate Swaps:
  Average Notional Amounts
     ($000's).......................  $113,281   $101,563    $64,063    $26,563       $781      $618
  Average interest rate paid........     6.48%      6.48%      6.48%      6.48%      6.48%
  Average interest rate received....  Variable   Variable   Variable   Variable   Variable
</TABLE>

     There can be no assurance that the Company's strategies will be effective
in minimizing interest rate risk or that increases in interest will not have an
adverse effect on the Company's profitability.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The Company's financial statements, as listed under Item 14, appear in a
separate section of this Annual Report on Form 10-K beginning on page F-1.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

     None.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     Information regarding the directors and officers of the Company is
incorporated herein by reference to the descriptions set forth under the caption
"Election of Directors" and "Management" in the Proxy Statement to be filed with
the Securities and Exchange Commission for the Annual Meeting of Stockholders
currently expected to be held May 31, 2000 (the "2000 Proxy Statement").

ITEM 11. EXECUTIVE COMPENSATION

     Information regarding executive compensation is incorporated herein by
reference to the descriptions to be set forth under the caption "Executive
Compensation" in the 2000 Proxy Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     Information regarding security ownership of certain beneficial owners and
management of the Company is incorporated herein by reference to the information
to be set forth under the caption "Security Ownership of Certain Beneficial
Owners and Management" in the 2000 Proxy Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Information regarding certain relationships and related transactions with
the Company is incorporated herein by reference to the information to be set
forth under the caption "Certain Transactions and Related Transactions" in the
2000 Proxy Statement.

                                       34
<PAGE>   35

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)(1) FINANCIAL STATEMENTS:

     The Company's financial statements appear in a separate section of this
Annual Report on Form 10-K beginning on the pages referenced below:

<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
Report of Independent Accountants...........................  F-2
Consolidated Statements of Financial Condition as of
  December 31, 1999 and 1998................................  F-3
Consolidated Statements of Income for the years ended
  December 31, 1999, 1998 and 1997..........................  F-4
Consolidated Statements of Stockholders' Equity for the
  years ended December 31, 1999, 1998 and 1997..............  F-5
Consolidated Statements of Cash Flows for the years ended
  December 31, 1999, 1998 and 1997..........................  F-6
Notes to Consolidated Financial Statements..................  F-7
</TABLE>

(a) EXHIBITS

     The following Exhibits are attached hereto and incorporated herein by
reference.

                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
    EXHIBIT
    NUMBER                            DESCRIPTION
    -------                           -----------
    <C>       <S>
     3.1      Certificate of Incorporation of the Company.(1)
     3.2      Bylaws of the Company.(1)
     4.1      Rights Agreement dated as of July 8, 1997, between the
              Company and American Stock Transfer and Trust Company, as
              Rights Agent (which includes the form of Certificate of
              Designation for the Series A Participating Preferred Stock
              and the form of Rights Certificate of the Company.(3)
    10.1      Form of Indemnification Agreement of the Company.(1)
    10.2      Second Amended and Restated 1994 Stock Option Plan.(1)
    10.3      Form of Notice of Grant of Stock Option under Second Amended
              and Restated 1994 Stock Option Plan.(1)
    10.4      Form of Stock Option Agreement under Second Amended and
              Restated 1994 Option Plan.(1)
    10.5      Form of Stock Purchase Agreement under Second Amended and
              Restated 1994 Stock Option Plan.(1)
    10.6      1994 Special Performance Option Grant Plan.(1)
    10.7      Form of Notice of Grant of Stock Option under 1994 Special
              Performance Option Grant Plan.(1)
    10.8      Form of Stock Option Agreement under 1994 Special
              Performance Option Grant Plan.(1)
    10.9      Form of Stock Purchase Agreement under 1994 Special
              Performance Option Grant Plan.(1)
    10.10     Third Amendment to Amended and Restated Investors' Rights
              Agreement between and among Onyx Acceptance Corporation and
              the Investors identified therein dated as of November 27,
              1995.(1)
    10.11     Senior Subordinated Note and Warrant Purchase Agreement
              between and among Onyx Acceptance Corporation, Capital
              Resource Lenders II, L.P. and Dominion Fund III, L.P., dated
              as of November 17, 1994.(1)
</TABLE>

                                       35
<PAGE>   36

<TABLE>
<CAPTION>
    EXHIBIT
    NUMBER                            DESCRIPTION
    -------                           -----------
    <C>       <S>
    10.12     Warrant to purchase Common Stock in favor of Capital
              Resource Lenders II, L.P. from Onyx Acceptance Corporation
              dated as of November 17, 1994.(1)
    10.13     Warrant to purchase Common Stock in favor of Dominion Fund
              III, L.P. from Onyx Acceptance Corporation dated as of
              November 17, 1994.(1)
    10.14     Amended and Restated Co-Sale and First Refusal Agreement
              between and among Onyx Acceptance Corporation and the
              Shareholders identified therein dated as of November 17,
              1994.(1)
    10.15     Amended and Restated Investors' Rights Agreement between and
              among Onyx Acceptance Corporation, the Investors and the
              Management Holders identified therein dated as of November
              17, 1994.(1)
    10.16     Amended and Restated Voting Agreement between and among Onyx
              Acceptance Corporation and the Shareholders identified
              therein dated as of November 17, 1994.(1)
    10.17     Triple-A One Funding Corporation Note in favor of Onyx
              Acceptance Financial Corporation from Triple-A One Funding
              Corporation dated as of September 12, 1994.(1)
    10.18     Seller Note in favor of Onyx Acceptance Corporation from
              Onyx Acceptance Financial Corporation dated September 12,
              1994.(1)
    10.19     Subordinated Note in favor of Onyx Acceptance Corporation
              from Onyx Acceptance Financial Corporation dated September
              12, 1994.(1)
    10.20     Sublease and Administrative Services Agreement between Onyx
              Acceptance Corporation and Onyx Acceptance Financial
              Corporation dated as of September 8, 1994.(1)
    10.21     Tax Allocation Agreement between Onyx Acceptance Corporation
              and Onyx Acceptance Financial Corporation dated as of
              September 1, 1994.(1)
    10.22     Corporate Separateness Agreement between Onyx Acceptance
              Corporation and Onyx Acceptance Financial Corporation dated
              September 8, 1994.(1)
    10.23     Amendment Number One to Security Agreement, Subordinated
              Security Agreement, Sale and Servicing Agreement and
              Definitions List between and among Onyx Acceptance Financial
              Corporation, Onyx Acceptance Corporation, Triple-A One
              Funding Corporation and Capital Markets Assurance
              Corporation dated March 1, 1995.(1)
    10.24     First Amendment to Amended and Restated Investors' Rights
              Agreement between and among Onyx Acceptance Corporation and
              certain Investors identified therein dated as of December
              15, 1994.(1)
    10.25     Master Lease Agreement between Onyx Acceptance Corporation
              and Comdisco, Inc. dated January 7, 1994.(1)
    10.26     Warrant to purchase Series A Preferred Stock in favor of
              Comdisco, Inc. from Onyx Acceptance Corporation dated as of
              January 7, 1994.(1)
    10.27     Warrant to purchase Common Stock in favor of Lighthouse
              Capital Partners from Onyx Acceptance Corporation dated
              November 3, 1995.(1)
    10.28     Master Lease Agreement between Lighthouse Capital Partners
              and Onyx Acceptance Corporation dated November 3, 1995.(1)
    10.29     Second Amendment to Amended and Restated Investors' Rights
              Agreement between and among Onyx Acceptance Corporation and
              the Investors identified therein dated as of November 3,
              1995.(1)
    10.30     Agreement for On-Line Services between On-Line Computer
              Systems, Inc. and Onyx Acceptance Corporation dated as of
              November 19, 1993.(1)
    10.31     Agreement for On-Line Service between On-Line Computer
              Systems, Inc. and Onyx Acceptance Financial Corporation
              dated as of September 7, 1994.(1)
</TABLE>

                                       36
<PAGE>   37

<TABLE>
<CAPTION>
    EXHIBIT
    NUMBER                            DESCRIPTION
    -------                           -----------
    <C>       <S>
    10.32     Option Agreement between Onyx Acceptance Corporation and
              John W. Hall dated as of December 20, 1994.(1)
    10.33     Promissory Note in favor of Onyx Acceptance Corporation from
              John Hall dated as of December 20, 1994.(1)
    10.34     Option Agreement between Onyx Acceptance Corporation and
              Brian MacInnis dated as of December 20, 1994.(1)
    10.35     Promissory Note in favor of Onyx Acceptance Corporation from
              Brian MacInnis dated as of December 20, 1994.(1)
    10.36     Stock Purchase Agreement between and among Brian MacInnis
              and certain Investors identified therein dated as of June 7,
              1995.(1)
    10.37     Stock Purchase Agreement between and among John W. Hall and
              certain Investors identified therein dated as of June 7,
              1995.(1)
    10.38     Sublease Agreement between Onyx Acceptance Corporation and
              AT&T Resource Management Corporation dated as of August 31,
              1993.(1)
    10.39     Office Space Lease (Master Lease) between and among The
              Irvine Company and American Telephone and Telegraph Company
              dated as of April 29, 1987.(1)
    10.40     First Amendment to Sublease between and among AT&T Resource
              Management Corporation and Onyx Acceptance Corporation dated
              as of September 1, 1993.(1)
    10.41     Onyx Acceptance Corporation 401(k) Plan dated January 1,
              1994.(1)
    10.42     Pooling and Servicing Agreement between Onyx Acceptance
              Financial Corporation, Onyx Acceptance Corporation and
              Bankers Trust Company dated as of January 1, 1996.(1)
    10.43     Underwriting Agreement between Onyx Acceptance Financial
              Corporation and Merrill Lynch, Pierce, Fenner & Smith
              Incorporated dated January 31, 1996.(1)
    10.44     Indemnification Agreement by and among Capital Markets
              Assurance Corporation, Onyx Acceptance Corporation, Onyx
              Acceptance Financial Corporation and Merrill Lynch, Pierce,
              Fenner & Smith Incorporated dated January 31, 1996.(1)
    10.45     Indemnification Agreement by and between Onyx Acceptance
              Corporation and Merrill Lynch, Pierce, Fenner & Smith
              Incorporated dated as of January 31, 1996.(1)
    10.46     Subordination and Intercreditor Agreement by and among State
              Street Bank and Trust Company, The First National Bank of
              Boston, Capital Resource Lenders II, L.P., Dominion Fund III
              and Onyx Acceptance Corporation dated as of January 31,
              1996.(1)
    10.47     1996-1 Spread Account Trust Agreement between Onyx
              Acceptance Financial Corporation and Bankers Trust
              (Delaware) dated as of February 6, 1996.(1)
    10.48     Form of Dealer Agreement Non-Recourse (U) between Dealership
              and Onyx Acceptance Corporation.(1)
    10.49     Form of Dealer Agreement Non-Recourse (N) between Dealership
              and Onyx Acceptance Corporation.(1)
    10.50     1996 Stock Option/Stock Issuance Plan.(1)
    10.51     1996-2 Pooling and Servicing Agreement between Onyx
              Acceptance Financial Corporation, Onyx Acceptance
              Corporation and Bankers Trust Company of New York dated May
              17, 1996.(1)
    10.52     1996-2 Spread Account Trust Agreement between Onyx
              Acceptance Financial Corporation and Bankers Trust
              (Delaware) dated as of May 17, 1996.(1)
    10.53     Underwriting Agreement between Onyx Acceptance Financial
              Corporation and Merrill Lynch, Pierce, Fenner & Smith
              Incorporated, dated May 10, 1996.(1)
</TABLE>

                                       37
<PAGE>   38

<TABLE>
<CAPTION>
    EXHIBIT
    NUMBER                            DESCRIPTION
    -------                           -----------
    <C>       <S>
    10.54     1996-3 Pooling and Servicing Agreement between Onyx
              Acceptance Financial Corporation, Onyx Acceptance
              Corporation and Bankers Trust Company of New York dated
              September 17, 1996.(1)
    10.55     1996-3 Spread Account Trust Agreement between Onyx
              Acceptance Financial Corporation and Bankers Trust
              (Delaware) as of September 17, 1996.(1)
    10.56     Underwriting Agreement between Onyx Acceptance Financial
              Corporation and Merrill Lynch, Pierce, Fenner & Smith
              Incorporated, dated as of September 13, 1996.(1)
    10.57     Form of Pooling and Servicing Agreement between Onyx
              Acceptance Financial Corporation, Onyx Acceptance
              Corporation and Bankers Trust Company in connection with
              1997-1 Grantor Trust.(2)
    10.58     Form of Underwriting Agreement between Onyx Acceptance
              Financial Corporation and Merrill Lynch, Pierce, Fenner &
              Smith Incorporated in connection with 1997-1 Grantor
              Trust.(2)
    10.59     Form of Pooling and Servicing Agreement between Onyx
              Acceptance Financial Corporation, Onyx Acceptance
              Corporation, and Bankers Trust Company in connection with
              1997-2 Grantor Trust.(4)
    10.60     Form of Underwriting Agreement between Onyx Acceptance
              Financial Corporation, Merrill Lynch, Pierce, Fenner & Smith
              Incorporated in connection with 1997-2 Grantor Trust.(4)
    10.61     Form of Pooling and Servicing Agreement between Onyx
              Acceptance Financial Corporation, Onyx Acceptance
              Corporation and Bankers Trust Company in connection with
              1997-3 Grantor Trust.(5)
    10.62     Form of Underwriting Agreement between Onyx Acceptance
              Financial Corporation and Merrill Lynch, Pierce, Fenner &
              Smith Incorporated in connection with 1997-3 Grantor
              Trust.(5)
    10.63     1997-4 Spread Account Trust Agreement between Onyx
              Acceptance Financial Corporation and Bankers Trust
              (Delaware) dated as of December 12, 1997.(6)
    10.64     Form of Pooling and Servicing Agreement between Onyx
              Acceptance Financial Corporation, Onyx Acceptance
              Corporation and Bankers Trust Company in connection with
              1997-4 Onyx Acceptance Grantor Trust.(6)
    10.65     Form of Underwriting Agreement between Onyx Acceptance
              Financial Corporation, Onyx Acceptance Corporation and
              Merrill Lynch & Co. in connection with 1997-4 Onyx
              Acceptance Grantor Trust.(6)
    10.66     Term Loan Agreement by and between Bay View Capital
              Corporation and Onyx Acceptance Corporation dated February
              24, 1998.(7)
    10.67     Master Repurchase Agreement Annex by and between Merrill
              Lynch Mortgage Capital Inc. and Onyx Acceptance Financial
              Corporation dated February 4, 1998.(7)
    10.68     Master Assignment Agreement by and between Merrill Lynch
              Mortgage Capital Inc. and Onyx Acceptance Financial
              Corporation dated February 4, 1998.(7)
    10.69     Second Amendment to Master Assignment Agreement between Onyx
              Acceptance funding Corporation and Merrill Lynch Mortgage
              Capital Inc. dated July 7, 1999.(15)
    10.70     Amended and Restated Residual Interest in Securitized Assets
              Revolving Credit Agreement dated June 12, 1998 by and among
              Onyx Acceptance Corporation, State Street Bank and Trust
              Company, BankBoston and The Travelers Insurance Company.(8)
    10.71     Second Amendment to Loan Agreement and Pledge and Security
              Agreement by and among Onyx Acceptance Corporation, State
              Street Bank and Trust Company, BankBoston and The Travelers
              Insurance Company dated August 9, 1999.(15)
    10.72     Amended and Restated Pledge and Security Agreement dated
              June 12, 1998 by and among Onyx Acceptance Corporation,
              State Street Bank and Trust Company, BankBoston and The
              Travelers Insurance Company.(8)
    10.73     First Amendment to Loan Agreement and Confirmation of Pledge
              and Security Agreement dated June 29, 1999.(14)
</TABLE>

                                       38
<PAGE>   39

<TABLE>
<CAPTION>
    EXHIBIT
    NUMBER                            DESCRIPTION
    -------                           -----------
    <C>       <S>
    10.74     Amended and Restated Sale and Servicing Agreement between
              Onyx Acceptance Corporation and Onyx Acceptance Financial
              Corporation dated as of September 4, 1998.(9)
    10.75     Amended and Restated Triple-A One Funding Corporation Credit
              Agreement between and among Onyx Acceptance Financial
              Corporation, Triple-A One Funding Corporation, CapMAC
              Financial Services, Inc. and Capital Markets Assurance
              Corporation dated as of September 4, 1998.(9)
    10.76     Amended and Restated Triple-A One Funding Corporation
              Security Agreement between and among Onyx Acceptance
              Financial Corporation, Triple-A One Funding Corporation and
              Capital Markets Assurance Corporation dated as of September
              4, 1998.(9)
    10.77     Amended and Restated Subordinated Security Agreement between
              Onyx Acceptance Corporation and Onyx Acceptance Financial
              Corporation dated as of September 4, 1998.(9)
    10.78     Amended and Restated Insurance and Indemnity Agreement
              between and among Onyx Acceptance Corporation, Capital
              Markets Assurance Corporation, Onyx Acceptance Financial
              Corporation and Triple-A One Funding Corporation dated as of
              September 4, 1998.(9)
    10.79     Master Loan Agreement between Onyx Acceptance Financial
              Corporation and Salomon Brothers Realty Corp. dated
              September 3, 1998.(9)
    10.80     Form of Pooling and Servicing Agreement between Onyx
              Acceptance Corporation, Onyx Acceptance Financial
              Corporation, and Bankers Trust Company in connection with
              the 1998-1 Onyx Acceptance Grantor Trust.(10)
    10.81     Form of Underwriting Agreement between Onyx Acceptance
              Financial Corporation, Onyx Acceptance Corporation and
              Merrill Lynch & Co. in connection with the 1998-1 Onyx
              Acceptance Grantor Trust.(10)
    10.82     Form of Sale and Servicing Agreement between Onyx Acceptance
              Corporation, Onyx Acceptance Financial Corporation, and
              Chase Manhattan Bank in connection with the Onyx Acceptance
              Owners Trust 1998-A.(11)
    10.83     Form of Sale and Servicing Agreement between Onyx Acceptance
              Corporation, Onyx Acceptance Financial Corporation, and
              Chase Manhattan Bank in connection with the Onyx Acceptance
              Owners Trust 1998-B.(11)
    10.84     Form of Sale and Servicing Agreement between Onyx Acceptance
              Corporation, Onyx Acceptance Financial Corporation and Chase
              Manhattan Bank in connection with the Onyx Acceptance Owners
              Trust 1998-C.(11)
    10.85     Amendment Number One dated December 22, 1998 to Amended and
              Restated Onyx Warehouse Facility and Assignment and
              Assumption Agreement.(12)
    10.86     Amendment No. 2 to the Amended and Restated Onyx Warehouse
              Facility effective as of March 30, 1999 by and among Onyx
              Acceptance Corporation, Onyx Acceptance Financial
              Corporation, Triple-A One Funding Corporation, Capital
              Markets Assurance Corporation, CapMAC Financial Services,
              Inc. and MBIA Insurance Corporation.(13)
    10.87     Sale and Servicing Agreement between Onyx Acceptance
              Corporation as Seller and Servicer and Onyx Acceptance
              Receivables Corporation, as Purchaser, dated August 9,
              1999.(15)
    10.88     Security Agreement between Onyx Acceptance Receivables
              Corporation and The Chase Manhattan Bank as Funding Agent,
              dated August 9, 1999.(15)
    10.89     Subordinated Security Agreement between Onyx Acceptance
              Receivables Corporation, and Onyx Acceptance Corporation,
              dated August 9, 1999.(15)
    10.90     Asset Purchase Agreement between Park Avenue Receivables
              Corporation and The Chase Manhattan Bank and Onyx Acceptance
              Receivables Corporation, dated August 9, 1999.(15)
    10.91     Funding Agreement between Onyx Acceptance Receivables
              Corporation and Park Avenue Receivables Corporation and The
              Chase Manhattan Bank, dated August 9, 1999.(15)
    10.92     Form of Sale and Servicing Agreement between Onyx Acceptance
              Corporation, Onyx Acceptance Financial Corporation and Chase
              Manhattan Bank in connection with the Onyx Acceptance Owners
              Trust 1999-A.(16)
</TABLE>

                                       39
<PAGE>   40

<TABLE>
<CAPTION>
    EXHIBIT
    NUMBER                            DESCRIPTION
    -------                           -----------
    <C>       <S>
    10.93     Form of Sale and Servicing Agreement between Onyx Acceptance
              Corporation, Onyx Acceptance Financial Corporation and Chase
              Manhattan Bank in connection with the Onyx Acceptance Owners
              Trust 1999-B.(17)
    10.94     Form of Sale and Servicing Agreement between Onyx Acceptance
              Corporation, Onyx Acceptance Financial Corporation and Chase
              Manhattan Bank in connection with the Onyx Acceptance Owners
              Trust 1999-C.(18)
    10.95     Form of Sale and Servicing Agreement between Onyx Acceptance
              Corporation, Onyx Acceptance Financial Corporation and Chase
              Manhattan Bank in connection with the Onyx Acceptance Owners
              Trust 1999-D.(19)
    10.96     Consent and Amendment Agreement between and among Onyx
              Acceptance Corporation and State Street Bank and Trust
              Company, BankBoston and the Travelers Insurance Company.(15)
    21.1      Subsidiaries of the Registrant.*
    23.1      Consent of Independent Accountants.*
    27.1      Financial Data Schedule.*
</TABLE>

---------------
   * Filed herewith

 (1) Incorporated by reference from the Company's Registration Statement on Form
     S-1 (Registration No. 333-00680).

 (2) Incorporated by reference from Onyx Acceptance Financial Corporation's
     Registration Statement on Form S-1 (Registration No. 333-22301)

 (3) Incorporated by reference from the Company's Current Report on Form 8-K
     dated July 8, 1997. (File No. 000-28050)

 (4) Incorporated by reference from Onyx Acceptance Financial Corporation's
     Registration Statement on Form S-1 (Registration No. 333-28893).

 (5) Incorporated by reference from Onyx Acceptance Financial Corporation's
     Registration Statement on Form S-1 (Registration No. 333-33471).

 (6) Incorporated by reference from Onyx Acceptance Financial Corporation's
     Registration Statement on Form S-1 (Registration No. 333-40089).

 (7) Incorporated by reference from the Company's Form 10-Q for quarterly period
     ended March 31, 1998. (File No. 000-28050).

 (8) Incorporated by reference from the Company's Form 10-Q for quarterly period
     ended June 30, 1998. (File No. 000-28050).

 (9) Incorporated by reference from the Company's Form 10-Q for quarterly period
     ended September 30, 1998. (File No. 000-28050).

(10) Incorporated by reference from Onyx Acceptance Financial Corporation's
     Registration Statement on Form S-3 (Registration No. 333-46359).

(11) Incorporated by reference from Onyx Acceptance Financial Corporation's
     Registration Statement on Form S-3 (Registration No. 333-51239).

(12) Incorporated by reference from the Company's Form 10-K for the year ended
     December 31, 1998. (File No. 000-28050).

(13) Incorporated by reference from the Company's Form 10-Q for quarterly period
     ended March 31, 1999. (File No. 000-28050).

(14) Incorporated by reference from the Company's Form 10-Q quarterly period
     ended June 30, 1999. (File No. 000-28050).

(15) Incorporated by reference from the Company's Form 10-Q quarterly period
     ended September 30, 1999. (File No. 000-28050).

                                       40
<PAGE>   41

(16) Incorporated by reference from Onyx Acceptance Financial Corporation's
     Current Report on Form 8-K dated March 11, 1999. (File No. 333-28893).

(17) Incorporated by reference from Onyx Acceptance Financial Corporation's
     Current Report on Form 8-K dated May 28, 1999. (File No. 333-28893).

(18) Incorporated by reference from Onyx Acceptance Financial Corporation's
     Current Report on Form 8-K dated September 14, 1999. (File No. 333-28893).

(19) Incorporated by reference from Onyx Acceptance Financial Corporation's
     Current Report on Form 8-K dated November 12, 1999. (File No. 333-28893).

(a)(3) FINANCIAL STATEMENT SCHEDULES

     None.

(b) EXHIBITS ON FORM 8-K

     None.

                                       41
<PAGE>   42

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Annual Report on Form
10-K to be signed on its behalf by the undersigned, thereunto duly authorized.

                                          ONYX ACCEPTANCE CORPORATION

                                          By:       /s/ JOHN W. HALL
                                            ------------------------------------
                                                        John W. Hall
                                               President and Chief Executive
                                                           Officer
                                               (Principal Executive Officer)

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
Annual Report on Form 10-K has been signed by the following persons on behalf of
the Registrant in the capacities and on the date indicated.

<TABLE>
<CAPTION>
                      SIGNATURE                                     TITLE                    DATE
                      ---------                                     -----                    ----
<C>                                                    <C>                              <S>
                /s/ THOMAS C. STICKEL                     Chairman of the Board of      March 30, 2000
-----------------------------------------------------             Directors
                  Thomas C. Stickel

                  /s/ JOHN W. HALL                       President, Chief Executive     March 30, 2000
-----------------------------------------------------       Officer and Director
                    John W. Hall                        (Principal Executive Officer)

                /s/ BRUCE R. HALLETT                              Director              March 30, 2000
-----------------------------------------------------
                  Bruce R. Hallett

                /s/ G. BRADFORD JONES                             Director              March 30, 2000
-----------------------------------------------------
                  G. Bradford Jones

                /s/ C. THOMAS MEYERS                              Director              March 30, 2000
-----------------------------------------------------
                  C. Thomas Meyers

                  /s/ DON P. DUFFY                      Executive Vice President and    March 30, 2000
-----------------------------------------------------     Chief Financial Officer,
                    Don P. Duffy                        Director (Principal Financial
                                                           and Accounting Officer)
</TABLE>

                                       42
<PAGE>   43

                          ONYX ACCEPTANCE CORPORATION

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                    CONTENTS

<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
Report of Independent Accountants...........................  F-2
Consolidated Statements of Financial Condition as of
  December 31, 1999 and 1998................................  F-3
Consolidated Statements of Income for the years ended
  December 31, 1999, 1998 and 1997..........................  F-4
Consolidated Statements of Stockholders' Equity for the
  years ended December 31, 1999, 1998 and 1997..............  F-5
Consolidated Statements of Cash Flows for the years ended
  December 31, 1999, 1998 and 1997..........................  F-6
Notes to Consolidated Financial Statements..................  F-7
</TABLE>

                                       F-1
<PAGE>   44

                       REPORT OF INDEPENDENT ACCOUNTANTS

Board of Directors and Stockholders
Onyx Acceptance Corporation

     In our opinion, the accompanying consolidated statements of financial
condition and the related consolidated statements of income, stockholders'
equity and cash flows present fairly, in all material respects, the financial
position of Onyx Acceptance Corporation and its subsidiaries (the "Company") as
of December 31, 1999 and 1998, and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 1999, in
conformity with accounting principles generally accepted in the United States.
These financial statements are the responsibility of the Company's management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States, which require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for the opinion expressed above.

                                          PRICEWATERHOUSECOOPERS LLP

Costa Mesa, California
January 26, 2000

                                       F-2
<PAGE>   45

                  ONYX ACCEPTANCE CORPORATION AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

                                     ASSETS

<TABLE>
<CAPTION>
                                                                      DECEMBER 31,
                                                              ----------------------------
                                                                  1999            1998
                                                              ------------    ------------
<S>                                                           <C>             <C>
Cash and cash equivalents...................................  $  5,190,271    $  1,928,991
Contracts held for sale (net of allowance)..................   229,991,667     152,760,781
Credit enhancement assets , at fair value...................   142,883,970     112,953,193
Furniture and equipment (net of accumulated depreciation)...     6,641,918       4,734,857
Other assets................................................     9,127,284       3,043,902
                                                              ------------    ------------
          Total Assets......................................  $393,835,110    $275,421,724
                                                              ============    ============

                                       LIABILITIES
Accounts payable............................................  $ 21,066,849    $ 10,959,913
Warehouse borrowings........................................   232,287,908     150,044,464
Excess servicing credit and residual lines..................    55,879,341      49,555,597
Subordinated debt...........................................    10,000,000      10,000,000
Capital lease obligations...................................       348,058         696,995
Accrued interest payable....................................     1,467,495         790,055
Other liabilities...........................................    19,677,435       9,550,979
                                                              ------------    ------------
          Total Liabilities.................................   340,727,086     231,598,003
Commitments and Contingencies

                                   STOCKHOLDERS' EQUITY
Common stock
  Par value $0.01 per share; authorized 15,000,000 shares;
     issued and outstanding 6,177,804 as of December 31,
     1999 and issued and outstanding 6,171,034 shares as of
     December 31, 1998......................................        61,778          61,710
  Additional paid in capital................................    37,892,071      37,839,151
  Retained earnings.........................................    15,714,771       5,922,860
Accumulated other comprehensive loss, net of tax............      (560,596)             --
                                                              ------------    ------------
     Total Equity...........................................    53,108,024      43,823,721
                                                              ------------    ------------
          Total Liabilities and Stockholders' Equity........  $393,835,110    $275,421,724
                                                              ============    ============
</TABLE>

          See accompanying notes to consolidated financial statements.
                                       F-3
<PAGE>   46

                  ONYX ACCEPTANCE CORPORATION AND SUBSIDIARIES

                       CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                           FOR THE YEAR ENDED DECEMBER 31,
                                                      -----------------------------------------
                                                         1999           1998           1997
                                                      -----------    -----------    -----------
<S>                                                   <C>            <C>            <C>
REVENUES:
  Finance income....................................  $22,303,838    $20,753,734    $11,866,957
  Investment income.................................    2,129,528      1,194,477        431,373
                                                      -----------    -----------    -----------
INTEREST INCOME -- TOTAL............................   24,433,366     21,948,211     12,298,330
  Interest expense..................................   18,287,107     14,636,534      7,261,645
                                                      -----------    -----------    -----------
NET INTEREST INCOME.................................    6,146,259      7,311,677      5,036,685
  Servicing fee income..............................   28,877,019     16,663,450      9,189,108
  Gain on sale of contracts.........................   53,919,657     36,417,216     19,586,291
                                                      -----------    -----------    -----------
TOTAL REVENUES......................................   88,942,935     60,392,343     33,812,084
                                                      -----------    -----------    -----------
EXPENSES:
  Provision for credit losses.......................    1,246,074      1,579,831        785,445
  Salaries and benefits.............................   40,034,851     26,754,000     17,424,729
  Occupancy.........................................    3,297,431      1,823,290      1,478,349
  Depreciation......................................    3,482,202      2,105,743      1,194,186
  General and administrative expenses...............   24,144,418     17,743,525     10,643,087
                                                      -----------    -----------    -----------
TOTAL EXPENSES......................................   72,204,976     50,006,389     31,525,796
                                                      -----------    -----------    -----------
NET INCOME BEFORE INCOME TAXES......................   16,737,959     10,385,954      2,286,288
  Income taxes......................................    6,946,048      4,310,170        984,017
                                                      -----------    -----------    -----------
NET INCOME..........................................  $ 9,791,911    $ 6,075,784    $ 1,302,271
                                                      ===========    ===========    ===========
NET INCOME PER SHARE OF COMMON STOCK
  Basic.............................................  $      1.59    $      0.99    $      0.22
  Diluted...........................................  $      1.50    $      0.95    $      0.21
                                                      ===========    ===========    ===========
Basic shares outstanding............................    6,173,922      6,112,370      6,000,431
                                                      ===========    ===========    ===========
Diluted shares outstanding..........................    6,514,477      6,424,959      6,294,071
                                                      ===========    ===========    ===========
</TABLE>

          See accompanying notes to consolidated financial statements.
                                       F-4
<PAGE>   47

                  ONYX ACCEPTANCE CORPORATION AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                       ACCUMULATED
                                       COMMON STOCK       ADDITIONAL     RETAINED     COMPREHENSIVE       TOTAL
                                    -------------------     PAID IN      EARNINGS     LOSS, NET OF    STOCKHOLDERS'
                                     SHARES     AMOUNT      CAPITAL      (DEFICIT)         TAX           EQUITY
                                    ---------   -------   -----------   -----------   -------------   -------------
<S>                                 <C>         <C>       <C>           <C>           <C>             <C>
BALANCE AT DECEMBER 31, 1996......  5,904,768   $59,048   $37,753,725   $(1,455,195)                   $36,357,578
Issuance of Common Stock..........    112,867     1,128        56,433                                       57,561
Net Income........................                                        1,302,271                      1,302,271
                                    ---------   -------   -----------   -----------     ---------      -----------
BALANCE AT DECEMBER 31, 1997......  6,017,635    60,176    37,810,158      (152,924)                    37,717,410
Issuance of Common Stock..........    153,399     1,534        28,993                                       30,527
Net Income........................                                        6,075,784                      6,075,784
                                    ---------   -------   -----------   -----------     ---------      -----------
BALANCE AT DECEMBER 31, 1998......  6,171,034    61,710    37,839,151     5,922,860                     43,823,721
Issuance of Common Stock..........      6,770        68        52,920                                       52,988
Comprehensive income:
  Unrealized losses in credit
    enhancement assets, net of tax
    of $391,545...................                                                      $(560,596)        (560,596)
Net Income........................                                        9,791,911                      9,791,911
                                                                        -----------     ---------      -----------
Total Comprehensive Income........                                        9,791,911     $(560,596)       9,231,315
                                    ---------   -------   -----------   -----------     ---------      -----------
BALANCE, DECEMBER 31, 1999........  6,177,804   $61,778   $37,892,071   $15,714,771     $(560,596)     $53,108,024
                                    =========   =======   ===========   ===========     =========      ===========
</TABLE>

          See accompanying notes to consolidated financial statements.
                                       F-5
<PAGE>   48

                  ONYX ACCEPTANCE CORPORATION AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                FOR THE YEAR ENDED DECEMBER 31,
                                                      ---------------------------------------------------
                                                           1999               1998              1997
                                                      ---------------    ---------------    -------------
<S>                                                   <C>                <C>                <C>
OPERATING ACTIVITIES
  Net Income........................................  $     9,791,911    $     6,075,784    $   1,302,271
     Adjustments to reconcile net income to net cash
       used in operating activities:
       Amortization of retained interest in
          securitized assets........................       72,703,567         35,749,891       10,775,171
       Write-off of unamortized participation on
          securitized loans.........................       41,693,823         27,467,086       15,523,390
       Provision for credit losses..................        1,246,074          1,579,831          785,446
       Depreciation and amortization................        3,482,202          2,105,743        1,194,186
       Decrease (increase) in trust receivable......       (2,000,000)         3,665,300       (3,763,661)
       Increase in retained interest in securitized
          assets....................................     (101,586,485)       (80,632,733)     (41,603,001)
       (Increase) decrease in other assets..........       (6,083,382)        (1,118,928)         521,949
       Increase in accounts payable.................       10,106,936          4,395,467        4,896,659
       Increase in accrued interest payable.........          677,440            487,817          229,077
       Increase in other liabilities................        9,837,822          4,057,894        3,245,629
       Proceeds from the securitization of contracts
          held for sale.............................    1,450,000,000        926,759,606      527,276,091
       Purchase of contracts held for sale..........   (1,559,003,536)    (1,038,534,757)    (605,905,410)
       Repurchase of trust contracts................       (6,367,145)       (12,387,783)              --
       Principal payments received on contracts held
          for sale..................................       41,201,966         39,182,459       26,957,179
       Payments of participation to dealers (net of
          chargeback collections and amortized
          expense)..................................      (46,002,066)       (32,484,915)     (16,416,931)
                                                      ---------------    ---------------    -------------
Cash used in operating activities...................      (80,300,873)      (113,632,238)     (74,981,955)
                                                      ---------------    ---------------    -------------
INVESTING ACTIVITIES
  Purchase of furniture and equipment...............       (5,389,265)        (3,835,335)      (1,824,853)
                                                      ---------------    ---------------    -------------
Cash used in investing activities...................       (5,389,265)        (3,835,335)      (1,824,853)
                                                      ---------------    ---------------    -------------
FINANCING ACTIVITIES
  Payments on capital leases........................         (348,937)          (468,060)        (425,189)
  Proceeds from warehouse line......................    1,371,842,851        985,997,562      538,897,511
  Payments on warehouse line........................   (1,289,599,407)      (896,459,000)    (488,500,000)
  Proceeds from drawdown on excess service
     borrowings.....................................       39,257,170         32,000,000       27,500,000
  Payments to paydown excess service credit
     borrowings.....................................      (32,933,427)       (12,444,403)              --
  Proceeds from subordinated debt...................                          10,000,000               --
  Proceeds from exercise of options/warrants........           52,988             30,527           57,561
  Proceeds from other loans.........................        1,013,323                 --               --
  Payments on other loans...........................         (333,143)          (251,072)        (335,093)
                                                      ---------------    ---------------    -------------
Cash provided by financing activities...............       88,951,418        118,405,554       77,194,790
                                                      ---------------    ---------------    -------------
Increase in cash and cash equivalents...............        3,261,280            937,981          387,982
Cash and cash equivalents at beginning of period....        1,928,991            991,010          603,028
                                                      ---------------    ---------------    -------------
Cash and cash equivalents at end of period..........  $     5,190,271    $     1,928,991    $     991,010
                                                      ===============    ===============    =============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Noncash activities:
     Additions to capital leases....................  $            --    $       162,744    $     884,654
  Cash paid:
     Interest.......................................  $    17,609,667    $    14,148,717    $   7,032,567
     Income taxes...................................  $     1,198,090    $       130,020    $     541,890
</TABLE>

          See accompanying notes to consolidated financial statements.
                                       F-6
<PAGE>   49

                  ONYX ACCEPTANCE CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 -- NATURE OF OPERATIONS

     Onyx Acceptance Corporation ("Onyx") was incorporated on August 17, 1993,
and commenced operations in February 1994. Onyx and its wholly owned special
purpose finance subsidiaries Onyx Acceptance Financial Corporation ("OAFC"),
Onyx Acceptance Funding Corporation ("OFC") and Onyx Acceptance Receivables
Corporation ("OARC") (collectively, the "Company") specialize in the purchase,
origination, sale and servicing of retail automobile installment loans ("Loans"
or "Contracts") originated by automobile dealers. The Company provides an
independent source to automobile dealers to finance their customers' purchases
of new and used vehicles. The Company attempts to meet the needs of dealers
through consistent buying practices, competitive rates, a dedicated customer
service staff, fast turnaround time and systems designed to expedite the
processing of loan applications.

NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Principles of Consolidation: The accompanying consolidated financial
statements include the accounts of Onyx, OAFC, OFC and OARC. All significant
intercompany accounts and transactions have been eliminated upon consolidation.

     Cash and Cash Equivalents: The Company considers all significant
investments with maturity at acquisition of three months or less to be cash
equivalents.

     Contracts Held for Sale: Contracts held for sale are stated at the lower of
aggregate amortized cost or net realizable value, net of allowance for credit
losses.

     The Company defers certain Contract origination fees and participation paid
to dealers. The net amount is amortized as an adjustment to the related
Contract's yield, on the same basis as that used to record income on the
Contracts, over the contractual life of the related Contracts. At the time of
sale or securitization, any remaining amounts are included as part of the
computation of the gain on sale of Contracts.

     The current policy of the Company is to recognize losses on repossessed
vehicles in the month in which the vehicle is sold or in which the scheduled
payment becomes 120 days delinquent, whichever occurs first. Losses may occur in
connection with delinquent Contracts for which the vehicle was not repossessed,
either because of a discharge of the obligor's indebtedness in a bankruptcy
proceeding or due to the Company's inability to locate the financed vehicle or
the obligor. In these cases, losses are recognized at the time a Contract is
deemed uncollectable or during the month a scheduled payment under the Contract
becomes 150 days past due, whichever occurs first.

     Allowance for Credit Losses: The allowance for credit losses is maintained
at a level believed adequate by management to absorb potential losses in the
Contracts held for sale. The provision rate is established by management using
the following criteria: past loss experience, current economic conditions,
volume, growth and other relevant factors, and is re-evaluated on a quarterly
basis. The allowance is increased by provisions for Contract losses charged
against income. All recoveries on finance receivables previously charged off are
credited to the allowance, while charge-off's of finance receivables are
deducted from the allowance.

     Sales of Contracts: The Company purchases Contracts to be sold to investors
with servicing rights retained by the Company. The Company sells a majority of
its Contracts and does not retain any residual interest in securitized or sold
Contracts. Contracts are sold at or near par value with the Company retaining a
participation in the future cash flows released by Trusts in Contracts
securitized but on cash sales no participation is retained in the future cash
flows. As of December 31, 1999 the Company was servicing all the Contracts sold
to the Trusts. As of December 31, 1999 and 1998, 39% and 54% respectively, of
the sold portfolio was originated in California.

     Furniture and Equipment: Furniture and equipment are stated at cost less
accumulated depreciation, and are depreciated for financial reporting purposes
on a straight-line basis over a three year estimated life.
                                       F-7
<PAGE>   50
                  ONYX ACCEPTANCE CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Capitalized leased assets are amortized over the lease term. Leasehold
improvements are amortized over a period not exceeding the term of the lease.

     Interest and Fee Income: Interest and fee income on Contracts held for sale
is determined on a monthly basis using either the simple interest (level yield)
method or the sum-of-the-months digits method, which approximates the effective
yield method.

     Income Taxes: The Company utilizes Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes," which requires the recognition
of deferred tax liabilities and assets for the expected future tax consequences
of events that have been included in the financial statements or tax returns.
Under this method, deferred tax liabilities and assets are determined based on
the difference between the financial statements and the tax basis of assets and
liabilities using enacted tax rates in effect for the year in which the
differences are expected to reverse. Valuation allowances are established, when
necessary, to reduce deferred tax assets to the amount expected to be realized.
The provision for income taxes represents the tax payable for the period and the
change during the year in deferred tax assets and liabilities. The Company files
consolidated federal and state tax returns.

     Net Income Per Share: Net income per share are presented in a dual format,
computed both including and excluding the impact of potential common stock.

     Derivative Financial Instruments: The Company employs hedging strategies to
manage its gross interest rate risk. The hedging strategies include the use of
forward swap agreements to manage the interest rate on securitization of the
Contracts held for sale.

     The forward swap agreements are entered into by the Company in numbers and
amounts which correspond to the anticipated principal amount of future
securitization transactions. The market value of these forward agreements
responds inversely to the market value change of the underlying Contracts.
Because of this inverse relationship, the Company can effectively lock in its
gross interest rate spread at the time the hedge transaction is entered into.
Unrealized gains and losses relative to these agreements are deferred and
recognized in full at the time of securitization as an adjustment to the gain on
sale of contracts. The Company is not required to maintain any collateral with
respect to its hedging strategies, until the point where the fair value declines
below ($1.0) million. The Company only uses highly rated counterparties. Credit
exposure is limited to those transactions with a positive fair value.

     Pervasiveness of Estimates: The preparation of the consolidated financial
statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the consolidated financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.

     Stock-based Compensation: Statement of Financial Accounting Standards No.
123, "Accounting for Stock Based Compensation" ("SFAS No. 123"), encourages, but
does not require companies to recognize compensation expense associated with
stock based compensation plans over the anticipated service period based on the
fair value of the award on the date of grant. As allowed by SFAS 123, however,
the Company has elected to continue to measure compensation costs as prescribed
by APB Opinion No. 25 "Accounting for Stock Issued to Employees." See footnote
12 for Pro Forma disclosures of net income and net income per share, as if SFAS
123 had been adopted.

     Comprehensive Income: The Company adopted Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income" ("SFAS 130"), effective
January 1, 1998. SFAS 130 establishes standards for reporting comprehensive
income and its components in a full set of financial statements. The standard
requires that all items that are required to be recognized under accounting
standards as components of comprehensive income, including an amount
representing total comprehensive income, be reported in a

                                       F-8
<PAGE>   51
                  ONYX ACCEPTANCE CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

financial statement that is displayed with the same prominence as other
financial statements. Pursuant to SFAS 130, the Company has reported
comprehensive income in the accompanying Consolidated Statements of
Stockholders' Equity.

     Reclassification: Certain amounts in the prior year consolidated financial
statements have been reclassified to conform to 1999 presentation.

NOTE 3 -- RECENT ACCOUNTING PRONOUNCEMENTS

     In June 1998, the FASB issued Statement of Financial Accounting Standards
No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS
133"). SFAS 133 establishes accounting and reporting standards for derivative
contracts, and for hedging activities. The new standard requires that all
derivatives be recognized as either assets or liabilities in the consolidated
statements of financial condition and that those instruments be measured at fair
value. If certain conditions are met, a derivative may be specifically
designated as a hedging instrument. The accounting for changes in the fair value
of a derivative (that is, unrealized gains and losses) depends on the intended
use of the derivative and the resulting designation. The statement is effective
in the first quarter of year 2001. The Company is presently assessing the effect
of SFAS 133 on the consolidated financial statements of the Company.

NOTE 4 -- CONTRACTS HELD FOR SALE

     Contracts held for sale consist of the following:

<TABLE>
<CAPTION>
                                                                  DECEMBER 31,
                                                          ----------------------------
                                                              1999            1998
                                                          ------------    ------------
<S>                                                       <C>             <C>
Gross Contracts held for sale...........................  $235,694,305    $160,386,439
Less unearned interest..................................     6,219,049       8,434,206
                                                          ------------    ------------
Contracts held for sale.................................   229,475,256     151,952,233
Allowance for credit losses.............................    (1,453,660)     (1,052,178)
                                                          ------------    ------------
                                                           228,021,596     150,900,055
Dealer participation....................................     1,970,071       1,860,726
                                                          ------------    ------------
          Total.........................................  $229,991,667    $152,760,781
                                                          ============    ============
</TABLE>

     As of December 31, 1999 and 1998, 25% and 39% of Contracts held for sale
were originated in California, respectively.

     At December 31, 1999, contractual maturities of Contracts held for sale
were as follows:

<TABLE>
<S>                                                           <C>
2000........................................................  $    369,477
2001........................................................     2,749,083
2002........................................................    10,278,621
2003........................................................    25,296,345
2004 and thereafter.........................................   190,781,730
                                                              ------------
                                                              $229,475,256
                                                              ============
</TABLE>

                                       F-9
<PAGE>   52
                  ONYX ACCEPTANCE CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

     Changes in the allowance for credit losses were as follows:

<TABLE>
<CAPTION>
                                                            DECEMBER 31,
                                               ---------------------------------------
                                                  1999           1998          1997
                                               -----------    -----------    ---------
<S>                                            <C>            <C>            <C>
Balance at beginning of period...............  $ 1,052,178    $   316,902    $  61,190
Provision for credit losses..................    1,246,074      1,579,831      785,446
Charged-off loans............................   (1,160,883)    (1,100,158)    (620,781)
Recoveries...................................      316,291        255,603       91,047
                                               -----------    -----------    ---------
Balance at end of period.....................  $ 1,453,660    $ 1,052,178    $ 316,902
                                               ===========    ===========    =========
</TABLE>

     The fair value of Contracts held for sale was $243.9 million and $163.5
million at December 31, 1999 and 1998, respectively.

     At December 31, 1999, the Company had entered into four year amortizing
forward swap agreements with a notional face amount outstanding of $150.0
million with maturities matching the average life of the Contracts being hedged.
At December 31, 1999, these agreements had a fair value of $618,000. In
addition, at December 31, 1999, the Company had offsetting swap agreements of
$73.3 million in notional face amount outstanding with a fair value of
($259,600). At December 31, 1998, the Company had similar agreements with a
notional face amount outstanding of $81.0 million with deferred losses of $1.0
million.

     Included in the Gain on Sale of Contracts for the year ended December 31,
1999, is a gain of $1.8 million related to hedging activities. Gain on sale of
Contracts for the years ended December 31, 1998 and 1997 included losses of $4.8
million and $1.3 million respectively, arising from hedging activities.

     Contracts serviced by the Company for the benefit of others totaled
approximately $1.9 billion at December 31, 1999 and $1.2 billion at December 31,
1998. These amounts are not reflected in the accompanying consolidated financial
statements.

NOTE 5 -- CREDIT ENHANCEMENT ASSETS

     SFAS 125 requires that following a transfer of financial assets, an entity
is to recognize the assets it controls and the liabilities it has incurred, and
derecognize assets for which control has been surrendered and liabilities that
have been extinguished.

     Credit enhancement assets consisted of the following:

<TABLE>
<CAPTION>
                                                                  DECEMBER 31,
                                                          ----------------------------
                                                              1999            1998
                                                          ------------    ------------
<S>                                                       <C>             <C>
Trust receivable........................................  $  5,712,501    $  3,712,501
RISA....................................................   137,171,469     109,240,692
                                                          ------------    ------------
          Total.........................................  $142,883,970    $112,953,193
                                                          ============    ============
</TABLE>

     Retained interest in securitized assets ("RISA") capitalized upon
securitization of Contracts represent the present value of the estimated future
earnings to be received by the Company from the excess spread created in
securitization transactions. Excess spread is calculated by taking the
difference between the coupon rate of the Contracts sold and the weighted
average certificate rate paid to the investors less contractually specified
servicing and guarantor fees and projected credit losses, after giving effect to
estimated prepayments.

     Prepayment and credit loss assumptions are utilized to project future
earnings and are based on historical experience. Credit losses are estimated
using cumulative loss frequency and severity estimates by management. All
assumptions are evaluated each quarter and adjusted, if appropriate, to reflect
the actual performance of the contracts.

     Future earnings are discounted at a rate management believes to be
representative of market at the time of securitization. The balance of RISA is
amortized against actual excess spread income earned on a monthly

                                      F-10
<PAGE>   53
                  ONYX ACCEPTANCE CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

basis over the expected repayment life of the underlying contracts. RISA is
classified in a manner similar to available for sale securities and as such is
marked to market each quarter. Market value changes are calculated by
discounting the remaining projected excess spread using a current market
discount rate. Any changes in the market value of the RISA is reported as a
separate component of shareholders' equity as an unrealized gain or loss, net of
deferred taxes. As of December 31, 1999 the market value of RISA was $1.0
million lower than cost. As of December 31, 1998 the market value of RISA
approximated cost. The Company retains the rights to service all contracts it
securitizes.

     The following table presents the balances and activity for RISA:

<TABLE>
<CAPTION>
                                                                  DECEMBER 31,
                                                          ----------------------------
                                                              1999            1998
                                                          ------------    ------------
<S>                                                       <C>             <C>
Beginning Balance.......................................  $109,240,692    $ 64,357,850
Additions...............................................   101,586,485      80,632,733
Amortization............................................   (72,703,567)    (35,749,891)
Change in unrealized loss on securities available for
  sale..................................................      (952,141)              0
                                                          ------------    ------------
          Ending Balance................................  $137,171,469    $109,240,692
                                                          ============    ============
</TABLE>

     In initially valuing the RISA, the Company establishes an off balance sheet
allowance for expected future credit losses. The allowance is based upon
historical experience and management's estimate of future performance regarding
credit losses. The amount is reviewed periodically and adjustments are made if
actual experience or other factors indicate that future performance may differ
from management's prior estimates.

     The following table presents the estimated future undiscounted retained
interest earnings to be received from securitizations. Estimated future
undiscounted RISA earnings are calculated by taking the difference between the
coupon rate of the Contracts sold and the weighted average certificate rate paid
to the investors, less the contractually specified servicing fee of 1.0% and
financial insurance fees, after giving effect to estimated prepayments and
assuming no losses. To arrive at the RISA, this amount is reduced by the off
balance sheet allowance established for potential future losses and by
discounting to present value.

<TABLE>
<CAPTION>
                                                                 DECEMBER 31,
                                                       --------------------------------
                                                            1999              1998
                                                       --------------    --------------
<S>                                                    <C>               <C>
Estimated net undiscounted RISA earnings.............  $  246,233,703    $  176,600,869
Off balance sheet allowance for losses...............      83,890,616        51,009,542
Discount to present value............................      25,171,618        16,350,635
                                                       --------------    --------------
Retained interest in securitized assets..............  $  137,171,469    $  109,240,692
                                                       ==============    ==============
Outstanding balance of contracts sold through
  securitizations....................................  $1,897,241,943    $1,183,157,096
</TABLE>

                                      F-11
<PAGE>   54
                  ONYX ACCEPTANCE CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 6 -- FURNITURE AND EQUIPMENT

     Furniture and equipment consisted of the following:

<TABLE>
<CAPTION>
                                                                   DECEMBER 31,
                                                            --------------------------
                                                               1999           1998
                                                            -----------    -----------
<S>                                                         <C>            <C>
OWNED:
  Office furniture........................................  $ 3,095,882    $ 2,031,561
  Computer equipment......................................   10,485,292      5,869,612
  Leasehold improvements..................................    1,454,053        748,292
                                                            -----------    -----------
          Total...........................................   15,035,227      8,649,465
                                                            -----------    -----------
CAPITALIZED LEASES:
  Computer equipment......................................      449,500      1,441,073
                                                            -----------    -----------
          Total...........................................      449,500      1,441,073
                                                            -----------    -----------
Total furniture and equipment.............................   15,484,727     10,090,538
Less: accumulated depreciation and amortization...........    8,842,809      5,355,681
                                                            -----------    -----------
Furniture and equipment, net..............................  $ 6,641,918    $ 4,734,857
                                                            ===========    ===========
</TABLE>

NOTE 7 -- WAREHOUSE BORROWING

     The Company has two commercial paper facilities (the "CP Facilities") with
financial institutions, one with Triple-A One Funding Corporation ("Triple-A")
and the other with The Chase Manhattan Bank ("Chase"). The Chase facility was
entered into in August 1999 and provides $150 million of additional borrowing
capacity. There were no borrowings outstanding under the Chase facility as of
December 31, 1999. The Triple-A facility, which provides borrowing availability
of $375 million, had borrowings outstanding at December 31, 1999 of $232,287,908
and at December 31, 1998 of $150,044,464. Under terms of the agreements the
Company is able to borrow 98% of the principal amount of Contracts purchased.
Borrowings under these facilities become due as the principal payments are
received or the related automobile Contracts are sold. The amount of commercial
paper outstanding under these facilities at any time is collateralized by the
Contracts held for sale. The MBIA facility matures in September 2000 while the
Chase facility matures in August 2000. Both are subject to annual renewals on
each respective anniversary date. The Company is in compliance with certain
ratios and other borrowing covenants under each arrangement. The fair value of
commercial paper was $232.3 million and $150.0 million at December 31, 1999 and
1998 respectively. The commercial paper facilities had an average interest rate
of 6.18% for the year ended December 31, 1999, and 6.47% for the year ended
December 31, 1998.

     Additionally, the Company has a repurchase facility with Merrill Lynch (the
"Merrill Line") providing $100 million of borrowing capacity for the purchase or
origination of Contracts. Outstanding debt is collateralized by Contracts held
for sale. As of December 31, 1999 and December 31, 1998, there was no debt
outstanding under this line. This facility was renewed in February 2000 for a
one year term.

NOTE 8 -- EXCESS SERVICING LINES

     The Company has three credit lines collateralized by credit enhancement
assets. Total borrowings outstanding under all three lines at December 31, 1999
were $55.9 million and $49.6 million at December 31, 1998.

     The Company is party to a collateralized loan ("Excess Servicing Facility")
with a lending group for up to $45 million, which was used for working capital
and other expenditures. The Excess Servicing Facility matured in June 1999. This
line is now in the amortization period and all cash flows from the underlying
securitizations, which are collateral, are being used to repay the outstanding
principal balance. Total

                                      F-12
<PAGE>   55
                  ONYX ACCEPTANCE CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

borrowings outstanding under the Excess Servicing Facility were $25.0 million at
December 31, 1999 and $38.5 million at December 31, 1998. The Excess Servicing
Facility had an average interest rate of 8.66% for the year ended December 31,
1999 and 8.76% for 1998. The fair value of the Excess Servicing Facility was
$25.0 million at December 31, 1999 and $38.5 million at December 31, 1998. The
Company is in compliance with certain ratios and other borrowing covenants under
the Excess Servicing Facility.

     The Company, through OFC, has two residual Facilities: a $10.0 million
committed facility with MLMCI and a $50.0 million line with Salomon Smith Barney
Realty Corporation ("SBRC") (the "SBRC Line" and together with the facility with
MLMCI, the "Residual Lines"). The Residual Lines are used by the Company to
finance operating requirements. The lines utilize a collateral-based formula
that sets borrowing availability to a percentage of the value of excess cash
flow to be received from certain securitizations. The facility provided by MLMCI
was renewed in February 2000 for a one year term. Each loan under the SBRC Line
matures one year after the date of the loan; the Company expects each loan to be
renewed at term.

     Interest paid under each line is tied to the 30 day Libor Rate. The average
interest rates for year ending 1999 were 7.86% for the MLMCI facility and 7.94%
for the SBRC facility compared to 8.19% and 8.06% respectively for the year
ending December 31, 1998. The Residual Lines had a combined fair value of $30.9
million at December 31, 1999, with debt outstanding under the MLMCI line of $9.2
million and debt outstanding under the SBRC line of $21.7 million.

NOTE 9 -- SUBORDINATED DEBT

     The Company has a $10.0 million subordinated debt offering. The term of the
subordinated debt is for two years ending February 24, 2000, and bears a fixed
interest rate of 9.5%. In February 2000, the Company exercised its option to
extend the term by three years during which the loan will fully amortize. The
Company also issued to the lender a warrant for Common Stock in the amount of
180,529 shares of the Common Stock of the Company.

NOTE 10 -- COMMITMENTS AND CONTINGENCIES

     Leases: The Company leases furniture, fixtures and equipment under capital
leases with terms in excess of one year. The Company leases its office space
under operating leases with options to renew. Certain operating lease agreements
provide for escalations based on contractual provisions.

     Future minimum lease payments required under capital leases and
noncancelable operating leases are as follows as of December 31, 1999:

<TABLE>
<CAPTION>
                                                             CAPITAL           OPERATING
                                                              LEASES             LEASES
                                                          --------------    ----------------
<S>                                                       <C>               <C>
2000....................................................    $ 210,448         $ 4,555,030
2001....................................................      120,704           4,435,197
2002....................................................      102,739           4,222,244
2003....................................................       15,627           4,098,162
2004 and thereafter.....................................            0          19,949,395
                                                            ---------         -----------
          Total.........................................      449,518         $37,260,028
                                                                              ===========
Less amounts representing interest......................     (101,460)
                                                            ---------
Present value of net minimum lease payments.............    $ 348,058
                                                            =========
</TABLE>

     Rental expenses for premises and equipment amounted to approximately $3.1
million, $1.7 million and $1.4 million for the year ended December 31, 1999,
1998, and 1997 respectively.

                                      F-13
<PAGE>   56
                  ONYX ACCEPTANCE CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 11 -- LITIGATION

     As a consumer finance company, the Company is subject to various consumer
claims and litigation seeking damages and statutory penalties based upon, among
other things, disclosure inaccuracies and wrongful repossession, which could
take the form of a plaintiff's class action complaint. The Company, as the
assignee of finance contracts originated by dealers, may also be named as a
co-defendant in lawsuits filed by consumers principally against dealers. The
damages and penalties claimed by consumers in these types of matters can be
substantial. The relief requested by the plaintiff's varies but includes
requests for compensatory, statutory and punitive damages. The Company is a
defendant in three consumer class actions, one of which was served in 2000. One
such proceeding served in 1999, in which the Company is a defendant, has been
brought as a putative class action and is pending in the State of California. A
class has yet to be certified in this case in which the plaintiffs allege
certain defects in post-repossession notice forms in the State of California.
Another proceeding also served in 1999, in which the Company is a defendant, has
been brought as a putative class action and also is pending in the State of
California. A class was certified in 2000; in the matter, the plaintiffs raise
issues regarding the payment of dealer participation dealers.

     Management believes that the Company has taken prudent steps to address the
litigation risks associated with the Company's business activities. However,
there can be no assurance that the Company will be able to successfully defend
against all such claims or that the determination of any such claim in a manner
adverse to the Company would not have a material adverse effect on the Company's
automobile finance business.

     On January 25, 2000, a putative class action complaint was filed against
the Company and certain of the Company's officers and directors alleging
violations of Section 10(b) and 20(a) of the Securities and Exchange Act of 1934
arising from the Company's use of the cash-in method of measuring and accounting
for credit enhancement assets in the financial statements. The Company believes
that its previous use of the cash-in method of measuring and accounting for
credit enhancement assets was consistent with then current generally accepted
accounting principles and accounting practices of other finance companies. As
required by the Financial Accounting Standards Board's Special Report, "A Guide
to Implementation of Statement 125 on Accounting for Transfers and Servicing of
Financial Assets and Extinguishment of Liabilities, Second Edition," dated
December 1998 and related statements made by the staff of the Commission, the
Company retroactively changed the method of measuring and accounting for credit
enhancement assets to the cash-out method and restated the Company's financial
statements for 1996, 1997 and the first three fiscal quarters of 1998. The
Company intends to vigorously defend against the complaint.

     In the opinion of management, the resolution of the proceedings described
in this section will not have a material adverse effect on the Company's
consolidated financial position, results of operations or liquidity.

NOTE 12 -- STOCK OPTIONS

     As of December 31, 1999, the Company has reserved 1,539,624 shares for
future issuance to certain employees under its stock option plans. The options
may be exercised at prices ranging from $0.51 per share to $11.50 per share at
any time, in whole or part, within ten years after the date of grant. Reserved,
unoptioned shares totaled 249,488 at December 31, 1999, 240,566 at December 31,
1998, and 185,176 at December 31, 1997.

                                      F-14
<PAGE>   57
                  ONYX ACCEPTANCE CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

     A summary of the status of the Company's stock option plan as of December
31, 1999, 1998 and 1997, and changes during the years ending on those dates is
presented below:

<TABLE>
<CAPTION>
                                     1999                      1998                     1997
                            ----------------------    ----------------------    ---------------------
                                          WEIGHTED                  WEIGHTED                 WEIGHTED
                                          AVERAGE                   AVERAGE                  AVERAGE
                                          EXERCISE                  EXERCISE                 EXERCISE
         OPTIONS              SHARES       PRICE        SHARES       PRICE       SHARES       PRICE
         -------            ----------    --------    ----------    --------    ---------    --------
<S>                         <C>           <C>         <C>           <C>         <C>          <C>
Outstanding at beginning
  of year.................   1,120,697     $5.59         802,200     $7.51        597,480     $6.10
Granted...................     256,325      6.11       1,296,878      6.32        402,700      7.89
Exercised.................      (6,770)     7.83         (38,118)     0.80       (112,867)     0.51
Forfeited.................     (80,116)     6.01        (940,263)     8.39        (85,113)     8.66
                            ----------     -----      ----------     -----      ---------     -----
Outstanding at end of
  year....................   1,290,136     $5.66       1,120,697     $5.59        802,200     $7.51
                            ==========     =====      ==========     =====      =========     =====
Options exercisable at
  year end................     774,506                   502,624                  321,564
                            ==========                ==========                =========
Weighted-average fair
  value of options granted
  during the year.........  $     6.11                $     6.32                $    7.89
                            ==========                ==========                =========
</TABLE>

     The following table summarizes information about stock options outstanding
at December 31, 1999:

<TABLE>
<CAPTION>
                                                                           OPTIONS EXERCISABLE
                                 OPTIONS OUTSTANDING                  ------------------------------
                  -------------------------------------------------     NUMBER
                    NUMBER      WEIGHTED-AVERAGE                      EXERCISABLE
   RANGE OF       OUTSTANDING      REMAINING       WEIGHTED-AVERAGE       AT        WEIGHTED-AVERAGE
EXERCISE PRICES   AT 12/31/99   CONTRACTUAL LIFE    EXERCISE PRICE     12/31/99      EXERCISE PRICE
---------------   -----------   ----------------   ----------------   -----------   ----------------
<S>               <C>           <C>                <C>                <C>           <C>
$ 0.51               114,399       4.26 years           $  .51          114,399          $  .51
$ 5.50 -  5.81     1,037,199             7.66             5.74          558,687            5.75
$ 6.75 -  8.00        56,380             8.39             7.45           31,046            7.41
$ 8.50 -  9.13        10,700             9.09             8.85            1,000            8.50
$10.29 - 11.50        71,458             7.36            10.94           69,374           10.96
                   ---------       ----------           ------          -------          ------
$ 0.51 - 11.50     1,290,136             7.39           $ 5.66          774,506          $ 5.51
                   =========       ==========           ======          =======          ======
</TABLE>

     Substantially all of the options granted by the Company vest over a four
year period, 25% after one year and the remaining 75% ratably over the following
36 month period. All of the options are granted at the closing price on the date
of the grant.

     SFAS 123 provides for companies to recognize compensation expense
associated with stock based compensation plans over the anticipated service
period based on the fair value of the award on the date of grant. However, SFAS
123 allows companies to continue to measure compensation costs prescribed by APB
Opinion No. 25 "Accounting for Stock Issued to Employees" ("APB 25"). Companies
electing to continue accounting for stock based compensation plans under APB 25
must make pro forma disclosures of net income and net income per share, as if
SFAS 123 had been adopted. The company has continued to account for stock-based
compensation plans under APB 25. The fair value of the options was estimated at
date of grant using a Black-Scholes single option pricing model using the
following assumptions:

<TABLE>
<CAPTION>
                                                                DECEMBER 31,
                                                   --------------------------------------
                                                      1999          1998          1997
                                                   ----------    ----------    ----------
<S>                                                <C>           <C>           <C>
Risk free interest rate..........................         5.6%          5.1%          5.5%
Expected stock price volatility..................        76.0%         63.9%         52.0%
Expected life of options.........................  four years    four years    four years
Expected dividends...............................        none          none          none
</TABLE>

                                      F-15
<PAGE>   58
                  ONYX ACCEPTANCE CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

     The following table presents the pro forma disclosures required for SFAS
123 for the years ended December 31:

<TABLE>
<CAPTION>
                                                               1999     1998    1997
                                                              ------   ------   -----
<S>                                                           <C>      <C>      <C>
Pro forma net income (in thousands).........................  $7,831   $5,322   $ 895
Pro forma net income per share-basic........................  $ 1.27   $ 0.87   $0.15
Pro forma net income per share-diluted......................  $ 1.23   $ 0.83   $0.14
</TABLE>

NOTE 13 -- EMPLOYEE 401K DEFERRED SAVINGS PLAN

     The Company has established a salary deferral savings program pursuant to
IRS Code Section 401(k) (the "401(k) Plan") for qualified employees. Under this
plan, employees may contribute a percentage of their pre-tax earnings to the
401(k) Plan. Effective July 1, 1998, the Company amended the 401(k) Plan to
permit matching Company contributions. Employee contributions up to the lesser
of $10,000 or 6% of pre-tax earnings made after one year of service are matched
by a Company contribution equal to 50% of the employee's contribution. Matching
contributions are made in the Company's common stock and begin vesting 20% per
year following the completion of three years of service. Company expense related
to the 401(k) Plan totaled $176,589 in 1999 and $87,000 in 1998.

NOTE 14 -- SHAREHOLDERS' EQUITY

     Preferred Stock: The Company has 3 million shares of preferred stock
authorized of which 200,000 shares have been designated Series A participating
Preferred Stock.

     In July 1997, the Company's Board of Directors adopted a Stockholder Rights
Plan ("Plan") in which preferred stock purchase rights were distributed as a
dividend at the rate of one preferred share purchase right (a "Right") for each
outstanding share of common stock held by stockholders of record on July 21,
1997. The Rights are designed to guard against partial tender offers and other
abusive tactics that might be used in an attempt to gain control of the Company
or to deprive stockholders of their interest in the long-term value of the
Company. The Rights will be exercisable only if a person or group acquires 15%
or more of the Company's common stock (subject to certain exceptions stated in
the Plan) or announces a tender offer, the consummation of which would result in
ownership by a person or group of 15% or more of the Company's common stock. The
Rights will expire on July 20, 2007.

     Dividends: The Company does not intend to declare dividends in the
foreseeable future. The Company's ability to pay or declare dividends is
restricted by the terms of its current credit facilities.

NOTE 15 -- INCOME TAXES

     The following table presents the current and deferred provision for federal
and state income taxes for the years ended December 31, 1999, 1998 and 1997:

<TABLE>
<CAPTION>
                                                     1999          1998         1997
                                                  ----------    ----------    --------
<S>                                               <C>           <C>           <C>
Current:
  Federal.......................................  $2,318,566    $  698,132    $252,897
  State.........................................   1,227,606        17,744      69,332
                                                  ----------    ----------    --------
          Total.................................   3,546,172       715,876     322,229
                                                  ----------    ----------    --------
Deferred:
  Federal.......................................   3,266,896     3,070,600     460,648
  State.........................................     132,980       523,694     201,140
                                                  ----------    ----------    --------
          Total.................................   3,399,876     3,594,294     661,788
                                                  ----------    ----------    --------
          Combined Total........................  $6,946,048    $4,310,170    $984,017
                                                  ==========    ==========    ========
</TABLE>

                                      F-16
<PAGE>   59
                  ONYX ACCEPTANCE CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

     The provision for income taxes differs from the amount that would result
from applying the federal statutory rate as follows for the years ended December
31, 1999, 1998 and 1997:

<TABLE>
<CAPTION>
                                                              1999    1998    1997
                                                              ----    ----    ----
<S>                                                           <C>     <C>     <C>
Statutory regular federal income tax rate (benefit).........   34%     34%     34%
State taxes (net of federal benefit)........................    6       7       8
Other.......................................................    1       0       1
                                                               --      --      --
                                                               41%     41%     43%
                                                               ==      ==      ==
</TABLE>

     The components of the deferred income tax asset or (liability) as of
December 31, 1999 and 1998 are as follows:

<TABLE>
<CAPTION>
                                                              1999            1998
                                                          ------------    ------------
<S>                                                       <C>             <C>
Property and equipment..................................  $  1,275,232    $    855,656
Unrealized loss in credit enhancement assets............      (391,545)             --
Accrued liabilities.....................................     1,939,275         408,438
Capitalized costs.......................................      (904,538)       (675,204)
Allowance for credit losses.............................       610,490         441,880
Gain on sale of Contracts...............................   (11,726,155)    (20,164,719)
Net operating losses....................................            --      14,055,868
Credit carryover........................................        18,211          18,211
State taxes.............................................       853,155         525,415
                                                          ------------    ------------
                                                          $ (8,325,875)   $ (4,534,455)
                                                          ============    ============
</TABLE>

NOTE 16 -- WARRANTS

     At December 31, 1999, the Company had the following warrants outstanding to
purchase shares of common stock:

<TABLE>
<CAPTION>
                                     BALANCE           NET          BALANCE           NET          BALANCE
                                   OUTSTANDING     REDUCTIONS     OUTSTANDING     REDUCTIONS     OUTSTANDING
                                        AT             TO              AT             TO              AT
                       EXERCISE    DECEMBER 31,    OUTSTANDING    DECEMBER 31,    OUTSTANDING    DECEMBER 31,
                        PRICE          1997         WARRANTS          1998         WARRANTS          1999
                       --------    ------------    -----------    ------------    -----------    ------------
<S>                    <C>         <C>             <C>            <C>             <C>            <C>
Warrants.............   $ 0.03       116,922         115,286          1,636          0               1,636
Warrants.............   $ 0.51        84,311               0         84,311          0              84,311
Warrants.............   $11.50        16,332               0         16,332          0              16,332
Warrants.............   $17.15         3,791               0          3,791          0               3,791
Warrants.............   $ 8.88             0               0        180,529          0             180,529
                                     -------         -------        -------           ---          -------
          Total......                221,356         115,286        286,599          0             286,599
                                     =======         =======        =======           ===          =======
</TABLE>

     At December 31, 1999, all the Company's warrants outstanding to purchase
shares of common stock were exercisable.

     No warrants were exercised during 1999.

                                      F-17
<PAGE>   60
                  ONYX ACCEPTANCE CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 17 -- NET INCOME PER SHARE

     In accordance with Statement of Financial Accounting Standards No. 128, the
following is an illustration of the dilutive effect of the Company's potential
common stock on net income per share.

<TABLE>
<CAPTION>
                                                            YEAR ENDED DECEMBER 31,
                                                           --------------------------
                                                            1999      1998      1997
                                                           ------    ------    ------
                                                           (IN THOUSANDS, EXCEPT NET
                                                               INCOME PER SHARE)
<S>                                                        <C>       <C>       <C>
Net income...............................................  $9,792    $6,076    $1,302
                                                           ------    ------    ------
Weighted average shares outstanding......................   6,174     6,112     6,000
Net effect of dilutive stock options/warrants............     340       313       294
                                                           ------    ------    ------
Fully diluted weighted average shares outstanding........   6,514     6,425     6,294
                                                           ======    ======    ======
Net income per share.....................................  $ 1.59    $ 0.99    $ 0.22
                                                           ======    ======    ======
Net income per share assuming full dilution..............  $ 1.50    $ 0.95    $ 0.21
                                                           ======    ======    ======
</TABLE>

     As of December 31, 1999, 1998 and 1997, 310,384, 473,344, and 645,370 of
combined options and warrants, respectively, were not included in the
calculation of full dilution, as they were antidilutive.

NOTE 18 -- FAIR VALUE OF FINANCIAL INSTRUMENTS

     The estimated fair value of financial instruments have been determined by
the Company, using available market information and appropriate valuation
methodologies. However, considerable judgement is necessarily required in
interpreting market data to develop the estimates of fair value. Accordingly,
the estimates presented herein are not necessarily indicative of the amounts
that the Company could realize in a current market exchange. The use of
different market assumptions and/or estimation methodologies may have a material
effect on the estimated fair value amounts.

     The following methods and assumptions were used to estimate the fair value
of each class of financial instruments for which it is practicable to estimate
that value:

     Cash and Cash Equivalents: The carrying amount approximates fair value
because of the short maturity of those investments.

     Warehouse borrowings, residual and excess service lines: The fair value of
the Company's debt is estimated based upon the quoted market prices for the same
or similar issues or on the current rates offered to the Company for debt of the
same remaining maturities and characteristics.

     Contracts held for sale: The fair value of Contracts held for sale is based
on the estimated proceeds expected on securitization of the Contracts held for
sale.

     Credit enhancement assets: The carrying amount is accounted for at an
estimated fair value which is calculated by discounting the excess spread using
a current market discount rate.

     Hedging. The fair value of the Company's outstanding forward agreements are
estimated based on current rates offered to the Company for forward agreements
with similar terms and conditions.

                                      F-18
<PAGE>   61
                  ONYX ACCEPTANCE CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

     The estimated fair values of the Company's financial instruments are as
follows at December 31:

<TABLE>
<CAPTION>
                                                             1999                   1998
                                                      -------------------    -------------------
                                                      CARRYING     FAIR      CARRYING     FAIR
                                                       AMOUNT      VALUE      AMOUNT      VALUE
                                                      --------    -------    --------    -------
                                                                    (IN MILLIONS)
<S>                                                   <C>         <C>        <C>         <C>
Cash and cash equivalents...........................  $   5.2     $   5.2    $   1.9     $   1.9
Contracts held for sale.............................  $ 230.0     $ 243.9    $ 152.8     $ 163.5
Credit enhancement assets...........................  $ 142.9     $ 142.9    $ 112.9     $ 112.9
Warehouse borrowings................................  $(232.3)    $(232.3)   $(150.0)    $(150.0)
Excess service and residual lines...................  $ (55.9)    $ (55.9)   $ (49.6)    $ (49.6)
Hedging Forward agreements..........................  $  (0.3)    $  (0.3)   $  (1.2)    $  (0.9)
</TABLE>

NOTE 19 -- RELATED PARTIES

     The Company has a note receivable from a certain shareholder in the amount
of $175,000. The note bears interest at 6.66% per annum. Principal and accrued
interest are due on December 20, 2000.

NOTE 20 -- QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

<TABLE>
<CAPTION>
                                                                 THREE MONTHS ENDED
                                                 --------------------------------------------------
                                                 MARCH 31    JUNE 30    SEPTEMBER 30    DECEMBER 31
                                                 --------    -------    ------------    -----------
                                                       (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                              <C>         <C>        <C>             <C>
1999
  Interest income..............................   $5,766     $6,723        $7,153         $4,791
  Interest expense.............................    4,235      4,331         5,488          4,234
  Net interest income..........................    1,531      2,392         1,665            557
  Provision for credit losses..................      500        249           204            294
  Income before income taxes...................    3,714      4,100         4,428          4,496
  Income taxes.................................    1,541      1,700         1,838          1,865
  Net income...................................    2,173      2,399         2,590          2,630
  Net income per common share (Basic)..........   $ 0.35     $ 0.39        $ 0.42         $ 0.43
  Net income per common share (Diluted)........   $ 0.34     $ 0.37        $ 0.39         $ 0.41
1998
  Interest income..............................   $4,481     $5,222        $7,001         $5,245
  Interest expense.............................    2,821      3,617         4,214          3,985
  Net interest income..........................    1,660      1,605         2,787          1,260
  Provision for credit losses..................      307        325           598            350
  Income before income taxes...................    1,269      1,872         2,996          4,249
  Income taxes.................................      527        777         1,243          1,763
  Net income...................................      742      1,095         1,753          2,486
  Net income per common share (Basic)..........   $ 0.12     $ 0.18        $ 0.28         $ 0.40
  Net income per common share (Diluted)........   $ 0.12     $ 0.17        $ 0.27         $ 0.39
</TABLE>

NOTE 21 -- SUBSEQUENT EVENTS (UNAUDITED)

     In the first quarter of 2000, the Company securitized contracts totaling
$430.0 million.

     During the first quarter of 2000, the Company securitized the cash flows
from 15 of its outstanding securitizations and sold $49.0 million of notes. The
transaction was rated BBB by Standard & Poor's Ratings Services, a division of
The McGraw-Hill Companies, Inc.

                                      F-19
<PAGE>   62

                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
                                                                         SEQUENTIALLY
 EXHIBIT                                                                   NUMBERED
  NUMBER                            DESCRIPTION                              PAGE
----------                          -----------                          ------------
<C>         <S>                                                          <C>
 3.1        Certificate of Incorporation of the Company(1)..............
 3.2        Bylaws of the Company(1)....................................
 4.1        Rights Agreement dated as of July 8, 1997, between the
            Company and American Stock Transfer and Trust Company, as
            Rights Agent (which includes the form of Certificate of
            Designation for the Series A Participating Preferred Stock
            and the form of Rights Certificate of the Company(2)........
</TABLE>

 10.1 through 10.96 Omitted.............................................

<TABLE>
<C>         <S>                                                          <C>
21.1        Subsidiaries of the Registrant*.............................
23.1        Consent of Independent Accountants*.........................
27.1        Financial Data Schedule*....................................
</TABLE>

---------------
  *  Filed herewith.

 (1) Incorporated by reference from the Company's Registration Statement on Form
     S-1 (Registration No. 333-00680).

 (2) Incorporated by reference from the Company's Current Report on Form 8-K
     dated July 8, 1997. (File No. 000-28050)