<PAGE>1
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                      SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D. C.   20549
-----------------------------------------------------------------------------
                                   FORM 10-Q

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

                        FOR THE QUARTERLY PERIOD ENDED

                              SEPTEMBER 30, 1997

                       Commission File Number 000-20841

               U G L Y   D U C K L I N G   C O R P O R A T I O N

            (Exact name of registrant as specified in its charter)

               Delaware                                        86-0721358
     (State or other jurisdiction of                      (I.R.S. employer
    incorporation or organization)                     identification no.)

                            2525 E. Camelback Road,
                                  Suite 1150
                           Phoenix, Arizona    85016

             (Address of principal executive offices)  (Zip Code)

      Registrant's telephone number, including area code: (602) 852-6600

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    X                  No
                            -----

INDICATE  THE  NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF
COMMON  STOCK,  AS  OF  THE  LATEST  PRACTICABLE  DATE:

At  November    14, 1997, there were 18,520,916 shares of Common Stock, $0.001
par  value,  outstanding.

This  document serves both as a resource for analysts, shareholders, and other
interested  persons, and as the quarterly report on Form 10-Q of Ugly Duckling
Corporation  (Company)  to  the  Securities and Exchange Commission, which has
taken  no action to approve or disapprove the report or pass upon its accuracy
or  adequacy.    Additionally, this document is to be read in conjunction with
the  consolidated  financial  statements  and  notes  thereto  included in the
Company's  Annual Report on Form 10-K, as amended, for the year ended December
31,  1996.


<PAGE>2




                           UGLY DUCKLING CORPORATION

                                   FORM 10-Q

                               TABLE OF CONTENTS


                        Part I. - FINANCIAL STATEMENTS


                                                                         Page
Item 1.     FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets - September 30, 1997 and

December 31,  1996                                                        3
Condensed Consolidated  Statements of Operations -Three Months and Nine
Months  Ended September 30, 1997 and September 30, 1996                   4
Condensed Consolidated Statements of Cash Flows - Nine   Months Ended
September 30, 1997 and September 30, 1996                                 5
Notes to Condensed Consolidated Financial Statements                      6

Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION  AND RESULTS OF OPERATIONS                                      8

Part II. -  OTHER INFORMATION

Item 1.    LEGAL PROCEEDINGS                                              30

Item 2.    CHANGES IN SECURITIES                                          30

Item 3.    DEFAULTS UPON SENIOR SECURITIES                                30

Item 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS            30

Item 5.    OTHER INFORMATION                                              30

Item 6.    EXHIBITS AND REPORTS ON FORM 8-K                               30

SIGNATURES                                                               S-1

Exhibit 10.a
Exhibit 10.b
Exhibit 10.c
Exhibit 11                                                                i
Exhibit 27                                                                ii
Exhibit 99                                                               iii











<PAGE>3
                                    ITEM 1.

                  UGLY DUCKLING CORPORATION AND SUBSIDIARIES

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                (IN THOUSANDS)
<TABLE><CAPTION>
                                           SEPTEMBER 30,    DECEMBER 31,
                                                1997            1996
                                           --------------  --------------
ASSETS
<S>                                        <C>             <C>
Cash and Cash Equivalents                  $        4,401  $      18,455 
Finance Receivables Held for Sale, net             36,346         51,063 
Residuals in Finance Receivables Sold              25,755          9,889 
Investments Held in Trust                          16,192          3,479 
Notes Receivable                                   93,833          1,063 
Income Taxes Receivable                             3,760            315 
Inventory                                          20,936          5,752 
Property and Equipment, net                        37,892         20,652 
Goodwill and Trademarks, net                       17,181          2,150 
Other Assets                                       14,989          5,265 
                                           -------------- ---------------
                                           $      271,285  $     118,083 
                                           ==============  ==============

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
  Accounts Payable                         $        3,765  $       2,132 
  Accrued Expenses and Other Liabilities           19,344          6,728 
  Notes Payable                                    58,781         12,904 
  Subordinated Notes Payable                       12,000         14,000 
                                           --------------  --------------
     Total Liabilities                             93,890         35,764 
                                           --------------  --------------
Stockholders' Equity:
  Common Stock                                    171,943         82,612 
  Retained Earnings (Accumulated Deficit)           5,452           (293)
                                           --------------  --------------
     Total Stockholders' Equity                   177,395         82,319 
                                           --------------  --------------

                                           $      271,285  $     118,083 
                                           ==============  ==============
</TABLE>












See  accompanying  notes  to  Condensed  Consolidated  Financial  Statements.

<PAGE>4
UGLY DUCKLING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except earnings per common share)
<TABLE><CAPTION>
                                                     Three Months Ended                Nine Months Ended
                                              September 30,    September 30,    September 30,    September 30,
                                                  1997             1996             1997             1996
                                             ---------------  ---------------  ---------------  ---------------
<S>                                          <C>              <C>              <C>              <C>
Sales of Used Cars                           $       33,530   $       12,320   $       79,543   $       42,497 
Cost of Used Cars Sold                              (18,537)          (6,977)         (42,537)         (23,835)
Provision for Credit Losses                          (6,538)          (2,541)         (15,367)          (7,713)
                                             ---------------  ---------------  ---------------  ---------------
                                                      8,455            2,802           21,639           10,949 
                                             ---------------  ---------------  ---------------  ---------------
Interest Income                                      10,645            4,190           23,390           11,881 
Gain (Loss) on Sale of Finance Receivables           (2,487)           1,400           10,323            2,578 
                                             ---------------  ---------------  ---------------  ---------------
                                                      8,158            5,590           33,713           14,459 
                                             ---------------  ---------------  ---------------  ---------------
Other Income                                          3,516              349            6,953              780 
                                             ---------------  ---------------  ---------------  ---------------
Income before Operating Expenses                     20,129            8,741           62,305           26,188 

Operating Expenses:
  Selling and Marketing                               2,887              652            6,680            2,915 
  General and Administrative                         17,629            4,505           40,489           13,551 
  Depreciation and Amortization                       1,001              427            2,459            1,128 
                                             ---------------  ---------------  ---------------  ---------------
                                                     21,517            5,584           49,628           17,594 
                                             ---------------  ---------------  ---------------  ---------------

Operating Income (Loss)                              (1,388)           3,157           12,677            8,594 

Interest Expense                                      1,578            1,190            2,914            4,479 
                                             ---------------  ---------------  ---------------  ---------------

Earnings (Loss) before Income Taxes                  (2,966)           1,967            9,763            4,115 

Income Taxes (Benefit)                               (1,138)               -            4,018                - 
                                             ---------------  ---------------  ---------------  ---------------

Net Earnings (Loss)                          $       (1,828)  $        1,967   $        5,745   $        4,115 
                                             ===============  ===============  ===============  ===============

Earnings (Loss) per Common Share                     ($0.10)  $         0.19   $         0.32   $         0.46 
                                             ===============  ===============  ===============  ===============

Shares Used in Computation                           19,000            9,205           18,200            7,230 
                                             ===============  ===============  ===============  ===============
</TABLE>







See  accompanying  notes  to  Condensed  Consolidated  Financial  Statements.
<PAGE>5
                  UGLY DUCKLING CORPORATION AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                 NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
                                (IN THOUSANDS)
<TABLE><CAPTION>
                                                           1997       1996
                                                        ----------  --------
<S>                                                     <C>         <C>
Cash Flows from Operating Activities:
Net Earnings                                              $5,745     $4,115
Adjustments to Reconcile Net Earnings to Net
Cash Provided by Operating Activities:
Provision for Credit Losses                               15,367      7,713
Gain on Sale of Finance Receivables                      (10,323)    (2,578)
Purchase of Finance Receivables                         (195,127)   (70,847)
Proceeds from Sale of Finance Receivables                193,823     29,029
Collections of Finance Receivables                        37,157     31,107
Decrease in Deferred Income Taxes                          1,500          -
Depreciation and Amortization                              2,459      1,128
Decrease (Increase) in Inventory                          (8,869)       440
Increase in Other Assets                                  (8,478)      (584)
Increase in Accounts Payable, Accrued Expenses, and
Other Liabilities                                         11,497      1,430
Increase (Decrease) in Income Taxes Receivable/Payable    (3,445)       684
                                                       ----------  ---------
Net Cash Provided by Operating Activities                 41,306      1,637
                                                       ----------  ---------
Cash Flows Used In Investing Activities:
Increase in Investments Held in Trust                    (12,713)    (8,963)
Net Decrease (Increase) in Notes Receivable              (29,485)       100
Purchase of Property and Equipment                       (15,481)    (4,013)
Payment for Acquisition of Assets                        (45,260)         -
                                                       ----------  ---------
Net Cash Used in Investing Activities                   (102,939)   (12,876)
                                                       ----------  ---------
Cash Flows from Financing Activities:
Issuance of Notes Payable, net                           (39,084)    (2,824)
Net Repayment of Subordinated Notes Payable               (2,000)      (553)
Proceeds from Issuance of Common Stock                    88,719     14,844
Other, Net                                                   (56)      (963)
                                                       ----------  ---------
Net Cash Provided by Financing Activities                 47,579     10,504
                                                       ----------  ---------
Net Decrease in Cash and Cash Equivalents                (14,054)      (735)
Cash and Cash Equivalents at Beginning of Period          18,455      1,419
                                                       ----------  ---------
Cash and Cash Equivalents at End of Period                $4,401       $684
                                                       ==========  =========
</TABLE>








See  accompanying  notes  to  Condensed  Consolidated  Financial  Statements.

<PAGE>6
                           UGLY DUCKLING CORPORATION
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

NOTE 1.    BASIS OF PRESENTATION
           ---------------------

The accompanying unaudited condensed consolidated financial statements of Ugly
Duckling  Corporation  (Company)  have  been  prepared  in  accordance  with
generally  accepted  accounting  principles for interim financial information
and  pursuant  to  rules  and  regulations  of  the  Securities  and  Exchange
Commission.    Accordingly,  they  do  not  include all of the information and
footnotes  required by generally accepted accounting principles for a complete
financial  statement  presentation.    In  the  opinion  of  management,  such
unaudited  interim  information  reflects  all adjustments, consisting only of
normal  recurring  adjustments,  necessary  to present the Company's financial
position  and results of operations for the periods presented.  The results of
operations  for  interim periods are not necessarily indicative of the results
to  be  expected  for  a full fiscal year.  The Condensed Consolidated Balance
Sheet  as of December 31, 1996 was derived from audited consolidated financial
statements  as  of  that  date  but  does  not include all the information and
footnotes  required  by  generally  accepted  accounting  principles.    It is
suggested  that  these  condensed consolidated financial statements be read in
conjunction  with  the  Company's  audited  consolidated  financial statements
included in the Company's Annual Report on Form 10-K, as amended, for the year
ended  December  31,  1996.

NOTE 2.    SUMMARY OF FINANCE RECEIVABLES, NET
           -----------------------------------

Following  is  a summary of Finance Receivables, net, as of September 30, 1997
and  December  31,  1996  (in  thousands):

<TABLE><CAPTION>
                                            September 30,    December 31,
                                                1997             1996
                                           ---------------  --------------
<S>                                        <C>              <C>
  Principal Balances. . . . . . . . . . .  $       41,727   $      58,281 
  Add:  Accrued Interest. . . . . . . . .             447             718 
   Loan Origination Costs . . . . . . . .             503             189 
  Finance Receivables . . . . . . . . . .          42,677          59,188 
  Less Allowance for Credit Losses. . . .          (6,331)         (8,125) 
                                           ---------------  --------------
  Finance Receivables, net. . . . . . . .  $       36,346   $      51,063 
                                           ===============  ==============

  Finance Receivables Held for Sale . . .  $       42,677   $       7,000 
  Finance Receivables Held for Investment               -          52,188 
                                           ---------------  --------------
                                           $       42,677   $      59,188 
                                           ===============  ==============
</TABLE>






<PAGE>7
NOTE  3.        RESIDUALS  IN  FINANCE  RECEIVABLES  SOLD
                -----------------------------------------

As  of  September  30,  1997  and  December 31, 1996, the Residuals in Finance
Receivables  Sold  were  comprised  of  the  following  (in  thousands):
<TABLE><CAPTION>
                                                                September 30,    December 31,
                                                                   1997             1996
                                                               ---------------  --------------
<S>                                                            <C>              <C>
  Retained interest in subordinated securities
    (B Certificates)                                           $       41,700   $      10,900 
  Net interest spreads, less present value discount                    29,055           6,839 
  Reduction for estimated credit losses                               (45,000)         (7,850)
                                                               ---------------  --------------
  Residuals in finance receivables sold                        $       25,755   $       9,889 
                                                               ===============  ==============

  Securitized principal balances outstanding                   $      228,996   $      51,663 
                                                               ===============  ==============
  Estimated credit losses as a % of securitized 
    principal balances outstanding.                                     19.7%           15.2%
                                                               ===============  ==============

</TABLE>


The  following  table  reflects  a  summary  of  activity for the Residuals in
Finance  Receivables Sold for the three and nine month periods ended September
30,  1997  and  1996,  respectively  (in  thousands).

<TABLE><CAPTION>
                                                      THREE MONTHS ENDED    NINE MONTHS ENDED
                                                         SEPTEMBER 30,        SEPTEMBER 30,
                                                    ---------------------  -------------------
                                                       1997        1996       1997      1996
                                                    ----------  ---------  --------  ---------
<S>                                                 <C>         <C>        <C>       <C>      
Balance, Beginning of Period                        $  27,441   $  5,001   $ 9,889   $      - 
Additions                                              12,377      2,313    34,599      7,445 
Amortization                                           (4,063)      (410)   (8,733)      (541)
Write-down of Residual in Finance Receivables Sold    (10,000)         -   (10,000)         -
                                                    ----------  ---------  --------  ---------
Balance, End of Period                              $  25,755   $  6,904   $25,755   $  6,904 
                                                    ==========  =========  ========  =========
</TABLE>













<PAGE>8
NOTE  4.      NOTES  RECEIVABLE
              -----------------

Following  is  a  summary  of  Notes  Receivable  as of September 30, 1997 and
December  31,  1996  (in  thousands).

<TABLE><CAPTION>

                                   September 30,   December 31,
                                        1997           1996
                                   --------------  -------------
<S>                                <C>             <C>
  FMAC secured debt . . . . . . .  $       63,599  $           -
  FMAC debtor in possession  loan           3,878              -
  Cygnet Program notes receivable          23,664              -
  Others. . . . . . . . . . . . .           2,692          1,063
                                   --------------  -------------
                                   $       93,833  $       1,063
                                   ==============  =============
</TABLE>


NOTE  5.      NOTES  PAYABLE
              --------------

Following is a summary of Notes Payable as of  September 30, 1997 and December
31,  1996  (in  thousands).

<TABLE><CAPTION>
                                                     September 30,   December 31,
                                                          1997           1996
                                                     --------------  -------------
<S>                                                  <C>             <C>
  Revolving Facility with GE Capital                 $          128
  Mortgage loan with finance company                          7,450          7,450
  Note with Bank Group secured by FMAC secured debt          50,429              -
  Other                                                         774            852
                                                     --------------  -------------
                                                     $       58,781  $      12,904
                                                     ==============  =============
</TABLE>

NOTE  6.        COMMON  STOCK  EQUIVALENTS
                --------------------------

Net Earnings (Loss) per common share amounts are based on the weighted average
number  of common shares and common stock equivalents outstanding as reflected
on  Exhibit  11  to  this  Quarterly  Report  on  Form  10-Q.

NOTE  7.        ACQUISITIONS
                ------------

On  January  15, 1997, the Company acquired substantially all of the assets of
Seminole  Finance  Corporation  and  related companies ("Seminole"), including
four  dealerships  in  Tampa/St.  Petersburg  and  a  contract  portfolio  of
approximately  $31.1  million  (6,953 contracts) in exchange for approximately
$2.5 million in cash and assumption of $29.9 million in debt.  The combination
of  the  Company's  audited  consolidated statement of operations for the year
ended  December  31,  1996  and  Seminole's  audited  combined  statement  of
operations for the same period (as if the Seminole acquisition had taken place
on  January  1, 1996) results in combined net loss for the year ended December
<PAGE>9
31,  1996  of  $(3.6)  million.  These  pro  forma results are not necessarily
indicative  of  the future results of operations of the Company or the results
that would have been obtained had the Seminole acquisition occurred on January
1,  1996.  In  addition,  the  pro  forma  results  are  not  intended to be a
projection  of future results. The Company's results of operations in 1997 for
the  assets acquired from Seminole differ materially from 1996 results because
the  Company  significantly  altered  the  type  of vehicles sold at the newly
acquired  car  dealerships,  the  methodology by which the acquired operations
acquire,  recondition,  and market used cars, and the methodology by which the
related  finance  receivables are underwritten and collected, which management
believes  have  resulted  in the acquired operations being profitable in 1997.
Furthermore,  Seminole's audited combined statement of operations for 1996 was
impacted  by several factors that are not expected to have an impact on future
operations.  Such  factors  were  related  to  the  deterioration  of its loan
portfolio,  which  the  Company  believes  resulted from poor underwriting and
ineffective  collection  efforts.  First, due to the deterioration of its loan
portfolio  in 1996, Seminole recorded a total of $7.1 million in provision for
credit  losses.  Second,  the deterioration of its loan portfolio also reduced
its borrowing capacity, thereby reducing Seminole's liquidity. As a result, in
order to raise cash, Seminole sold vehicles at substantially lower margins and
sold  a  portfolio  of notes in December 1996 for a loss of approximately $1.5
million.

On  April 1, 1997, the Company purchased substantially all of the assets of EZ
Plan,  Inc.  (EZ  Plan),  a  Company  engaged  in  the business of selling and
financing  used motor vehicles, including seven dealerships in San Antonio and
a  contract  portfolio  of  approximately  $24.3  million (6,297 contracts) in
exchange  for  $26.3 million in cash. The combination of the Company's audited
consolidated  statement of operations for the year ended December 31, 1996 and
EZ  Plan's audited combined statement of operations for the same period (as if
the  EZ  Plan  acquisition  had  taken  place  on  January 1, 1996) results in
combined  net  earnings  for the year ended December 31, 1996 of $5.9 million.
These  pro  forma results are not necessarily indicative of the future results
of  operations of the Company or the results that would have been obtained had
the  EZ  Plan  acquisition  occurred  on January 1, 1996. In addition, the pro
forma  results  are  not  intended  to  be a projection of future results. The
Company's  results  of operations in 1997 for the assets acquired from EZ Plan
differ  from 1996 results because the Company's management altered the type of
vehicles  sold at the newly acquired car dealerships, the methodology by which
the  acquired  operations  acquire, recondition, and market used cars, and the
methodology  by  which  the  related  finance receivables are underwritten and
collected.

On  September  19,  1997,  the  Company  purchased  substantially  all  of the
dealership  and  loan  servicing assets of Kars Yes Holdings, Inc. and related
companies  (Kars),  a  company  in  the business of selling and financing used
motor  vehicles,  including  six dealerships in the Los Angeles market, two in
the  Miami  market, two in the Atlanta market, and two in the Dallas market in
exchange  for  approximately  $5.5  million  in  cash.  The combination of the
Company's  audited  consolidated  statement  of  operations for the year ended
December 31, 1996 and Kars' statement of operations for the same period (as if
the  Kars  acquisition had taken place on January 1, 1996) results in combined
earnings for the year ended December 31, 1996 of $9.8 million. These pro forma
results  are not necessarily indicative of the future results of operations of
the  Company  or  the  results  that  would  have  been  obtained had the Kars
acquisition  occurred  on  January 1, 1996. In addition, the pro forma results
are  not  intended  to be a projection of future results. The Company does not
expect  the results of operations in 1997 for the assets acquired from Kars to
have  a  material  impact  on  the  Company's  results  of  operations
<PAGE>10
The following summary, prepared on a pro forma basis combines the consolidated
results of operations (unaudited) for the nine months ended September 30, 1997
as  if  the  acquisitions  had  been consummated as of January 1, 1997.  These
proforma  results  are  not  necessarily  indicative  of the future results of
operations of the Company or the results that would have been obtained had the
acquisitions taken place on January 1, 1997.  Comparative information for 1996
for  the  acquired businesses is not available (in thousands, except per share
data).

<TABLE><CAPTION>
                       Nine Months Ended
                       September 30, 1997
                      --------------------
<S>                   <C>
  Sales of Used Cars  $           179,696 
  Interest Income     $            25,054 
  Other Income        $            19,139 
  Total Revenues      $           223,889 
  Net Loss            $            (2,771)
  Loss per Share      $             (0.15)
</TABLE>


NOTE  8.        USE  OF  ESTIMATES
                ------------------

The  preparation of financial statements requires management to make estimates
and  assumptions that affect the reported amount of assets and liabilities and
disclosure  of  contingent assets and liabilities at the date of the financial
statement  and  the  reported  amounts  of  revenues  and  expenses during the
reporting  period.    Actual  results  could  differ  from  those  estimates.

NOTE  9.        BANKRUPTCY  REMOTE  ENTITIES
                ----------------------------

Champion  Receivables Corporation ("CRC") and Champion Receivables Corporation
II ("CRC II") (collectively referred to as "Securitization Subsidiaries"), are
the  Company's  wholly-owned  special  purpose  "bankruptcy  remote entities".
Their  assets  include  Residuals  in Finance Receivables Sold and Investments
Held  In  Trust,  in  the  amounts  of  $25.8  million  and  $16.2  million,
respectively,  at  September 30, 1997, which amounts would not be available to
satisfy  claims  of  creditors  of  the  Company  on  a  consolidated  basis.

NOTE  10.        RECLASSIFICATIONS
                 -----------------

Certain reclassifications have been made to previously reported information to
conform  to  the  current  presentation.

                                    ITEM 2.

          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS

This  Quarterly  Report  on  Form  10-Q  contains  forward looking statements.
Additional  written  or  oral  forward  looking  statements may be made by the
Company  from  time  to  time  in  filings  with  the  Securities and Exchange
Commission  or  otherwise.    Such  forward  looking statements are within the
meaning of that term in Section 27A of the Securities Act of 1933, as amended,
<PAGE>11
and  Section  21E  of  the  Securities Exchange Act of 1934, as amended.  Such
statements  may  include,  but  not  be  limited  to, projections of revenues,
income,  or loss, capital expenditures, plans for future operations, financing
needs  or plans, and plans relating to products or services of the Company, as
well as assumptions relating to the foregoing.  The words "believe," "expect,"
"anticipate,"  "estimate," "project," and similar expressions identify forward
looking  statements.    Forward  looking  statements are inherently subject to
risks  and  uncertainties,  some  of  which cannot be predicted or quantified.
Future  events and actual results could differ materially from those set forth
in,  contemplated  by,  or  underlying  the  forward  looking statements.  The
Company  undertakes  no  obligation  to  publicly update or revise any forward
looking  statements, whether as a result of new information, future events, or
otherwise.    Statements  in this Quarterly Report, including the Notes to the
Condensed  Consolidated  Financial Statements and "Management's Discussion and
Analysis  of Financial Condition and Results of Operations," describe factors,
among  others, that could contribute to or cause such differences.  Additional
risk  factors  that could cause actual results to differ materially from those
expressed in such forward looking statements are set forth in Exhibit 99 which
is attached hereto and incorporated by reference into this Quarterly Report on
Form  10-Q.

INTRODUCTION

General.    Ugly  Duckling  Corporation  ("Company")  operates a chain of "buy
here-pay  here"  used  car  dealerships  in the United States and underwrites,
finances, and services retail installment contracts generated from the sale of
used  cars  by its dealerships ("Company Dealerships") and by third party used
car dealers ("Third Party Dealers") located in selected markets throughout the
country.    As  part  of its financing activities, the Company has initiated a
collateralized  dealer  financing program ("Cygnet Program") pursuant to which
it  provides  qualified  independent  used car dealers with operating lines of
credit  secured  by  the  dealers'  retail installment contract portfolios and
inventory.    The  Company  targets its products and services to the sub-prime
segment  of  the  automobile  financing industry, which focuses on selling and
financing  the sale of used cars to persons who have limited credit histories,
low  incomes,  or  past  credit  problems.

The  Company  commenced  its  used  car  sales and finance operations with the
acquisition  of  two  Company  Dealerships  in  1992. During 1993, the Company
acquired  three  additional  Company  Dealerships.  In  1994,  the  Company
constructed  and  opened  four  new  Company  Dealerships  that  were  built
specifically to meet the Company's new standards of appearance, reconditioning
capabilities,  size, and location. During 1994, the Company closed one Company
Dealership  because the facility failed to satisfy these new standards and, at
the end of 1995, closed its Gilbert, Arizona dealership.  In January 1997, the
Company  acquired  selected  assets  of  a  group  of companies engaged in the
business  of  selling  and  financing  used  motor  vehicles,  including  four
dealerships  located  in  the  Tampa Bay/St. Petersburg market (Seminole).  In
March  1997, the Company opened its first used car dealership in the Las Vegas
market.    In April 1997, the Company acquired selected assets of a company in
the  business  of  selling  and financing used motor vehicles, including seven
dealerships  located  in  the  San Antonio market (EZ Plan).  In addition, the
Company  opened  two  additional dealerships in the Albuquerque market and one
additional dealership in the Phoenix market during the second quarter of 1997.
In  August  1997,  the  Company  closed  a dealership in Prescott, Arizona. In
September  1997,  the  Company  acquired  selected  assets of a company in the
business  of selling used motor vehicles, including six dealerships in the Los
Angeles  market, two in the Miami market, two in the Atlanta market and two in
the  Dallas  market  (Kars).  The  Company  operated  35  and 8 dealerships at
<PAGE>12
September  30,  1997  and  1996,  respectively.

In  1994,  the  Company  acquired  Champion  Financial  Services,  Inc.,  an
independent  automobile finance company.  In April 1995, the Company initiated
an  aggressive plan to expand the number of contracts purchased from its Third
Party  Dealer  network.  This  expansion  enabled  the Company to leverage its
existing  infrastructure and increase its contract portfolio much more quickly
than  it  could through the expansion of its Company Dealerships.  The Company
operated  83  and  22  branch  offices  at  September  30,  1997  and  1996,
respectively.    The  Company is in the process of further expanding its Third
Party  Dealer  operations  and  diversifying  its  earning  asset  base  by
implementing  the  Cygnet Program pursuant to which the Company provides Third
Party  Dealers  with  operating credit lines primarily secured by the dealers'
retail  installment  contract  portfolios  and  inventory.

In  1996  the  Company  completed  an  initial public offering and a secondary
offering  in  which  it  sold  common  stock for a total of $82.3 million.  In
February 1997, the Company completed a private placement of common stock for a
total  of  $88.7  million, net of expenses.  The registration of the resale of
the  shares  sold  in  the  private  placement  was  effective  in April 1997.

First Merchants Acceptance Corporation ("FMAC") filed for reorganization under
Chapter  11  of  the  Federal  Bankruptcy  Code  on July 11, 1997 ("Bankruptcy
Case").    In  connection  with  the  Bankruptcy Case, the Company, which owns
approximately  2  1/2% of FMAC's outstanding common stock with a cost basis of
approximately  $1.5 million, agreed to provide up to $10 million of "debtor in
possession"  financing  to  FMAC,  of  which  approximately  $3.8  million was
outstanding  at  September  30, 1997. On August 20, 1997, the Company acquired
approximately  78%  of  the  senior secured debt ("Secured Debt") of FMAC from
certain  members  of  the  senior bank group (Bank Group) that held such debt.
The  Secured  Debt  totaled approximately $97.8 million.  The more significant
terms  of  the  purchase of the Secured Debt included, among other things, the
(i)  purchase  by the Company of the debt at a 10% discount of the outstanding
principal  amount;  (ii) short-term financing by the Bank Group to the Company
for  the  purchase,  with  interest  accruing at LIBOR plus 2% and an up-front
payment  by  the Company to the Bank Group equal to 20% of the purchase price;
and  (iii)  issuance  of  stock  warrants  to the Bank Group to purchase up to
389,800  shares  of the Company's common stock at an exercise price of $20 per
share  over  a thirty-month term and subject to a call feature by the Company.
See Part II, Item 5, Other Information, for subsequent events which impact the
FMAC  Secured  Debt  and  debtor  in  possession  loan.

The  following  discussion  and  analysis  provides  information regarding the
Company's  consolidated  financial  position  as  of  September  30,  1997 and
December  31,  1996, and its results of operations for the three month periods
ended  September  30,  1997 and 1996, respectively, and the nine month periods
ended  September  30,  1997  and  1996,  respectively.

Growth  in Finance Receivables.  As a result of the Company's rapid expansion,
contract  receivables  serviced  increased  by  146.3%  to  $270.7  million at
September  30,  1997 (including $229.0 million in contracts serviced under the
Company's  Securitization  Program)  from  $109.9 million at December 31, 1996
(including  $51.7  million  in  contracts  serviced  under  the  Company's
Securitization  Program).

The  following  tables  reflect  the growth in period end balances measured in
terms  of  the  principal  amount  and  the  number  of  contracts.


<PAGE>13
<TABLE><CAPTION>
TOTAL  CONTRACTS  OUTSTANDING:
(IN  THOUSANDS,  EXCEPT  NUMBER  OF  CONTRACTS)
-----------------------------------------------
                                                 SEPTEMBER 30,          DECEMBER 31,
                                             ---------------------  --------------------
                                                      1997                1996
                                             ---------------------  --------------------
                                              PRINCIPAL   NO  OF    PRINCIPAL    NO  OF
                                                AMOUNT   CONTRACTS    AMOUNT   CONTRACTS
                                             ----------  ---------  ---------  ---------
<S>                                          <C>         <C>        <C>         <C>
Company Dealerships                          $  120,307     24,567  $   49,066    9,615
Third Party Dealers                             150,416     31,483      60,878   12,942
                                             ----------  ---------  ----------  -------
Total Portfolio Managed                         270,723     56,050     109,944   22,557
                                             ----------  ---------  ----------  -------
  Less Portfolios Securitized and Sold:
   Company Dealerships                          103,762     21,912      41,998    8,570
   Third Party Dealers                          125,234     25,028       9,665    2,042
                                             ----------  ---------  ----------  -------
      Total Portfolios Securitized and Sold     228,996     46,940      51,663   10,612
                                             ----------  ---------  ----------  -------
  Company Total                              $   41,727      9,110  $   58,281   11,945
                                             ==========  =========  ==========  =======
</TABLE>

In  addition  to the Company Dealership and Third Party Dealer loan portfolios
summarized  above, the Company also services loan portfolios totaling approxi-
mately $162.0 million for Kars as of September 30, 1997.

The  following  tables  reflect the growth in contract originations by Company
Dealerships  and contract purchases from Third Party Dealers measured in terms
of  the  principal  amount  and  the  number  of  contracts.

<TABLE><CAPTION>
TOTAL CONTRACTS ORIGINATED/PURCHASED:
(IN THOUSANDS, EXCEPT NUMBER OF CONTRACTS)
THREE MONTHS ENDED SEPTEMBER 30,
------------------------------------------                                                               
                                                          1997                        1996
                                            -------------------------------  ---------------------------------
                                           PRINCIPAL     NO. OF    AVERAGE   PRINCIPAL     NO. OF     AVERAGE
                                             AMOUNT    CONTRACTS  PRINCIPAL    AMOUNT    CONTRACTS   PRINCIPAL
                                           ----------  ---------  ---------  ----------  ---------  ----------
<S>                                        <C>         <C>        <C>        <C>         <C>        <C>
Company Dealerships                        $   32,147      4,389  $   7,324  $   11,082      1,575  $7,036
Third Party Dealers                            52,588      9,236      5,694      15,716      2,678   5,869
                                           ----------  ---------  ---------  ----------  ---------  ------
  Total                                    $   84,735     13,625  $   6,219  $   26,798      4,253  $6,301
                                           ==========  =========  =========  ==========  =========  ======
</TABLE>







<PAGE>14
<TABLE><CAPTION>
TOTAL CONTRACTS ORIGINATED/PURCHASED:
(IN THOUSANDS, EXCEPT NUMBER OF CONTRACTS)
NINE MONTHS ENDED SEPTEMBER 30,
------------------------------------------
                                                          1997                        1996
                                            -------------------------------  ---------------------------------
                                           PRINCIPAL     NO. OF    AVERAGE   PRINCIPAL     NO. OF     AVERAGE
                                             AMOUNT    CONTRACTS  PRINCIPAL    AMOUNT    CONTRACTS   PRINCIPAL
                                           ----------  ---------  ---------  ----------  ---------  ----------
<S>                                        <C>         <C>        <C>        <C>         <C>        <C>
Company Dealerships                        $  131,526     23,458  $   5,607  $   38,179      5,413     $7,053
Third Party Dealers                           144,237     26,147      5,516      32,919      5,781      5,694
                                           ----------  ---------  ---------  ----------  ---------  ----------
  Total                                    $  275,763     49,605  $   5,559  $   71,098     11,194     $6,351
                                           ==========  =========  =========  ==========  =========  ==========
</TABLE>

Finance  Receivable  Principal  Balances originated/purchased during the three
months  ended  September  30,  1997  increased by 216.2% to $84.7 million from
$26.8  million  in  the  three month period ended September 30, 1996.  For the
nine  month  period  ended  September  30,  1997, Finance Receivable Principal
Balances originated/purchased increased by 287.9% to $275.8 million, including
$55.4  million  from the Seminole and EZ Plan acquisitions (13,250 contracts),
from  $71.1  million  in  the  nine  month  period  ended  September 30, 1996.


RESULTS  OF  OPERATIONS
FOR  THREE  MONTHS  ENDED  SEPTEMBER  30,  1997
COMPARED  TO  THREE  MONTHS  ENDED  SEPTEMBER  30,  1996

The  prices at which the Company sells its cars and the interest rates that it
charges  to  finance  these  sales  take into consideration that the Company's
primary  customers  are  high-risk borrowers, many of whom ultimately default.
The  Provision  for Credit Losses reflects these factors and is treated by the
Company  as  a cost of both the future interest income derived on the contract
receivables originated at Company Dealerships as well as a cost of the sale of
the  cars  themselves.  Accordingly,  unlike  traditional car dealerships, the
Company  does  not  present  gross  profits  in  its  Statements of Operations
calculated  as  Sales  of  Used  Cars  less  Cost  of  Used  Cars  Sold.

Sales  of  Used Cars.  Sales of Used Cars increased by 172.2% to $33.5 million
for  the  three  month period ended September 30, 1997 from $12.3  million for
the  three  month  period  ended  September  30,  1996. This growth reflects a
significant increase in the number of used car dealerships in operation. Units
sold  increased  by  156.1%  to  4,523  units  in the three month period ended
September  30, 1997 from 1,766 units in the three month period ended September
30,  1996.    Same  store  sales  increased  by 4.3% in the three months ended
September  30,  1997  compared  to  the three months ended September 30, 1996.

The average sales price per car increased to $7,413 for the three month period
ended  September  30,  1997  from  $6,976  for  the  three  month period ended
September  30,  1996.

Cost of Used Cars Sold and Gross Margin.  The Cost of Used Cars Sold increased
by 165.7% to $18.5 million for the three month period ended September 30, 1997
from  $7.0  million  for the three month period ended September 30, 1996. On a
per unit basis, the Cost of Used Cars Sold increased by 3.7% to $4,098 for the
three  month  period  ended September 30, 1997 from $3,951 for the three month
<PAGE>15
period  ended September 30, 1996. The gross margin on used car sales (Sales of
Used  Cars  less Cost of Used Cars Sold excluding Provision for Credit Losses)
increased  by  180.6%  to  $15.0    million  for  the three month period ended
September  30,  1997  from  $5.3  million  for  the  three  month period ended
September  30,  1996. As a percentage of sales, the gross margin was 44.7% and
43.4%  for  the  three  month  periods  ended  September  30,  1997  and 1996,
respectively.    On a per unit basis, the gross margin per car sold was $3,315
and  $3,025  for  the  three  month periods ended September 30, 1997 and 1996,
respectively.

Provision  for  Credit  Losses.    A  high  percentage  of  Company Dealership
customers  ultimately  do  not  make  all  of  their  contractually  scheduled
payments,  requiring the Company to charge off the remaining principal balance
due.  As  a  result,  the  Company recognizes a Provision for Credit Losses in
order  to  establish  an Allowance for Credit Losses. The Provision for Credit
Losses  increased  by  157.3%  to $6.5 million in the three month period ended
September  30,  1997  from  $2.5  million  for  the  three  month period ended
September  30,  1996.  This includes an increase of $ 454,000 in the Provision
for Credit Losses in the three month period ended September 30, 1997 for Third
Party  Dealer  receivables and Cygnet Program dealer notes receivable over the
three  month period ended September 30, 1996 when the Company recorded no such
Provision  for Credit Losses.  On a percentage basis, the Provision for Credit
Losses per unit originated at Company Dealerships decreased by 14.1% to $1,386
per  unit  in  the three month period ended September 30, 1997 from $1,613 per
unit  in  the  three month period ended September 30, 1996. As a percentage of
contract  balances originated at Company Dealerships, the Provision for Credit
Losses  averaged  18.2%  and  22.9%, for the for the three month periods ended
September  30, 1997 and 1996, respectively.  The decrease in the Provision for
Credit  Losses per unit and the decrease in the Provision for Credit Losses as
a  percentage  of  contract  balances  originated,  is  due  in  part  to  the
implementation  at  the Company's Arizona based dealerships in the three month
period  ended  September  30,  1997  of  the Company's Gold Wing program which
provides  the  buyer  with certain life and disability insurance.  The Company
purchases  the  insurance  on  behalf of the buyer resulting in an increase in
cost  of sales.  However, as the Company expects fewer charge offs as a result
of customer death or disability, it reduced its Provision for Credit Losses by
an  amount  approximating  the  cost  of  the  insurance  coverage.

Interest  Income.    Interest Income consists primarily of interest on finance
receivables  from  Company  Dealership  sales,  interest on Third Party Dealer
finance receivables, income from Residuals in Finance Receivables Sold, income
from the Cygnet Program, and other interest income from the FMAC Secured Debt.

Company  Dealership  Receivables  - Interest Income increased by 67.7% to $3.7
million  for the three month period ended September 30, 1997 from $2.2 million
for  the  three  month  period  ended  September 30, 1996. Interest Income was
reduced  by  sales  of $155.9 million in Company Dealership contract principal
balances  since  inception of the Securitization Program, and will continue to
be affected in future periods by additional securitizations. A primary element
of the Company's sales strategy is to provide financing to customers with poor
credit  histories  who  are  unable  to  obtain  automobile  financing through
traditional sources.  The Company financed 99.7% of sales revenue and 97.0% of
the  used  cars  sold  at Company Dealerships for the three month period ended
September  30,  1997  compared to 90.0% of sales revenue and 89.2% of the used
cars  sold  for  the  three month period ended September 30, 1996. The average
amount financed increased to $7,614 for the three month period ended September
30,  1997  from  $7,036  for  the three month period ended September 30, 1996.
Primarily as a result of its expansion into markets with interest rate limits,
the Company's yield on its Company Dealership Receivable portfolio has trended
<PAGE>16
downward.  The effective yield on Finance Receivables from Company Dealerships
was  26.0% and 29.5%, for the three month periods ended September 30, 1997 and
1996,  respectively.  The Company's policy is to charge 29.9% per annum on its
Company  Dealership  contracts.    However,  in those states that impose usury
limits  the  Company  charges  the  maximum  interest  rate  permitted.

Third  Party  Dealer  Receivables - Interest Income increased by 96.4% to $3.9
million  for the three month period ended September 30, 1997 from $2.0 million
in  the  three  month  period  ended  September 30, 1996.  Interest Income was
reduced  by  sales  of $157.9 million in Third Party Dealer contract principal
balances  since  inception of the Securitization Program, and will continue to
be  affected  in future periods by additional securitizations. Interest income
has  increased  in  conjunction  with  the  increases  in  Third  Party Dealer
contracts  purchased  and  outstanding. Primarily as a result of its expansion
into markets with interest rate limits, the Company's yield on its Third Party
Dealer  portfolio  has trended downward.  Portfolio yield was 23.6% and 24.2%,
for  the  three month periods ended September 30, 1997 and 1996, respectively.

Cygnet  Program  and  Other  Interest  Income   - Interest income increased by
100.0%  to  $3.0  million for the three month period ended September 30, 1997.
This  income  consisted  of  $1.2  million  in interest income from the Cygnet
Program  and $1.8 million in other interest income from the FMAC Secured Debt.

Gain on Sale of Finance Receivables.  Champion Receivables Corporation ("CRC")
and  Champion  Receivables Corporation II ("CRC II") (collectively referred to
as  "Securitization  Subsidiaries"),  are  the  Company's wholly-owned special
purpose  "bankruptcy  remote  entities". During the first quarter of 1996, the
Company  initiated  a  Securitization  Program under which CRC sold securities
backed  by  contracts  to  SunAmerica  Life  Insurance Company ("SunAmerica").
Beginning  with  the  third  fiscal  quarter of 1997, the Company expanded the
Securitization  Program  to  include  CRC  II  and  sales of CRC II securities
through  private  placement of securities to investors other than Sun America.
Under  the  Securitization Program, the Securitization Subsidiaries assign and
transfer  the  contracts to separate trusts ("Trusts") pursuant to Pooling and
Servicing  Agreements  (the  "Pooling  Agreements").  Pursuant  to the Pooling
Agreements,  Class  A  Certificates  and subordinated Class B Certificates are
issued  to  the  Securitization  Subsidiaries. The Securitization Subsidiaries
then  sell  the  Class  A Certificates to unrelated investors. The transferred
contracts  are  serviced  by  Champion Acceptance Corporation ("CAC"), another
subsidiary of the Company.  Prior to the Company's securitization in the three
month  period  ended  September  30,  1997, the Company's Class A Certificates
received  ratings  from Standard & Poors ranging from "BBB" to "A".  To obtain
these  ratings  from  Standard  &  Poors, CRC was required to provide a credit
enhancement  by  establishing  and  maintaining  a cash spread account for the
benefit  of  the certificate holders.  For the securitization transaction that
was  consummated  during  the three month period ended September 30, 1997, the
Company's  Class A Certificates received a "AAA" rating from Standard & Poors,
and  a  "Aaa" rating from Moody's Investors Service.  To obtain these ratings,
CRC  II (1) obtained an insurance policy from MBIA Insurance Corporation which
unconditionally  and  irrevocably  guaranteed full and complete payment of the
Class  A  guaranteed  distribution  (as  defined),  and  (2) provided a credit
enhancement  by  establishing  and  maintaining  a cash spread account for the
benefit  of  the  certificate holders. The Securitization Subsidiaries make an
initial  cash  deposit  into  the spread account, ranging from 3% to 4% of the
initial underlying finance receivables principal balance and pledges this cash
to  the Trusts. The Securitization Subsidiaries are also required to then make
additional deposits to the spread account from the residual cash flow (through
the  trustees)  as  necessary  to  attain and maintain the spread account at a
specified  percentage,  ranging  from  6.0% to 8.0%, of the underlying finance
<PAGE>17
receivables  principal  balance.  Distributions  are  not  made  to  the
Securitization  Subsidiaries  on  the  Class  B Certificates unless the spread
account  has the required balance, the required periodic payments to the Class
A  Certificate  holders  are  current,  and  the  trustee,  servicer and other
administrative  costs  are  current.

During  the  three  months  ended  September 30, 1997, CRC made initial spread
account  deposits totaling $4.2 million. Additional net deposits to the spread
accounts  during  the  three  months  ended  September  30,  1997 totaled $2.3
million.    Based upon securitizations in effect as of September 30, 1997, the
Company  was  required to maintain an aggregate balance in all spread accounts
of  $17.8 million, a portion of which may be funded over time. As of September
30,  1997,  the  Company maintained a spread account balance of $15.1 million.
Accordingly,  an  additional  $2.7  million will need to be funded from future
cash  flows.  The additional funding requirements will decline as the trustees
deposit  additional  cash  flows  into the spread account and as the principal
balance  of  the  underlying finance receivables declines.  In addition to the
spread  account balance of $15.1 million, the Company had deposited a total of
$1.1  million  in trust accounts in conjunction with certain other agreements.

The  contracts  transferred to the Trusts were purchased by the Securitization
Subsidiaries  from either CAC, Champion Financial Services, Inc. ("CFS"), Ugly
Duckling Car Sales Florida, Inc. ("UDCSF"), or Ugly Duckling Cars Sales Texas,
LLP  ("UDCST"),  in  "true  sale"  transactions  pursuant to separate purchase
agreements.  The  obligations  of  CAC,  as  servicer, pursuant to the Pooling
Agreements are guaranteed by the Company and certain other subsidiaries of the
Company,  other  than  CRC,  CRC  II,  CAC,  CFS,  UDCSF,  and  UDCST.

The  Company  recognizes  a  Gain  on Sale of Finance Receivables equal to the
difference  between the yield earned on the contract portfolio securitized and
the  return  on  the  securities sold plus the release of Allowance for Credit
Losses.    The  amount  of  any  Gain  on  Sale of Loans is based upon certain
estimates, which may not subsequently be realized.  The amount of Gain on Sale
of  Loans  recognized  is  a  function of a number of items including, but not
limited  to,  the seasoning, remaining term, and weighted average net interest
rate  spread  of  the  portfolio  sold, as well as the amount of Allowance for
Credit  Losses  available  for  release.    The amount of Allowance for Credit
Losses  available  for  release  is  evaluated in light of the adequacy of the
Allowance  for  Credit  Losses  as a percentage of retained contract principal
balances.   To the extent that actual cash flows on a securitization are below
original  estimates,  and  differ  materially from the original securitization
assumptions,  and in the opinion of management, those differences appear to be
other  than  temporary in nature, the Company would be required to revalue the
Residual  in  Finance  Receivables Sold, and record a charge to earnings based
upon  the  reduction.  During the three month period ended September 30, 1997,
the  Company  recorded a $10.0 million charge (approximately $6.0 million, net
of  income  taxes)  to  write  down the retained portion of the securitization
assets.

The  Company utilizes a number of estimates in arriving at the Gain on Sale of
Loans.  With  the  exception  of  the  Company's  first  two  securitization
transactions  which  took  place  during  the  first  six  months of 1996, the
estimated  cash  flows into the Trusts were discounted with a rate of 16%. The
two securitization transactions that took place during the first six months of
1996  were  discounted  with  a  rate of 25%.  For securitization transactions
between  June 30, 1996 and June 30, 1997,  for contracts originated at Company
Dealerships,  net  losses  were  originally  estimated  using  total  expected
cumulative net losses at loan origination of approximately 26.0%, adjusted for
actual  cumulative net losses prior to securitization. For contracts purchased
<PAGE>18
from  Third  Party  Dealers,  net losses were originally estimated using total
expected  cumulative  net  losses  at loan origination of approximately 13.5%,
adjusted  for actual cumulative net losses prior to securitization. Prepayment
rates  were estimated to be 1.5% per month of the beginning of month balances.
The  $10.0 million charge (approximately $6.0 million, net of income taxes) in
the three month period ended September 30, 1997, which resulted in a reduction
in  the  carrying  value of the Residuals in Finance Receivables Sold, had the
effect  of  increasing  the  cumulative  net  loss  assumption  for  contracts
originated  at  Company  Dealerships to approximately 27.5%, and for contracts
purchased  from  Third  Party  Dealers  to  approximately  17.5%  for  the
securitization  transactions  that  took place prior to the three month period
ended  September  30,  1997.

For  the  securitization  transaction  that  took place during the three month
period  ended  September  30,  1997,  for  contracts  originated  at  Company
Dealerships,  net  losses  were  estimated using total expected cumulative net
losses  at  loan  origination  of  approximately  27.5%,  adjusted  for actual
cumulative  net  losses  prior  to securitization, and for contracts purchased
from  Third  Party  Dealers,  net  losses  were estimated using total expected
cumulative net losses at loan origination of approximately 17.5%, adjusted for
actual  cumulative  net  losses prior to securitization. Prepayment rates were
estimated  to  be  1.5%  per  month  of  the  beginning  of  month  balance.

The  assumptions  utilized in prior securitizations may not necessarily be the
same  as those utilized in future securitizations.  The Company classifies the
residuals  as  "held-to-maturity"  securities in accordance with SFAS No. 115.

The  Company  securitized an aggregate of $103.7 million in contracts, issuing
$85.1  million in securities during the three months ended September 30, 1997.
In  conjunction  with  this transaction, the Company reduced its Allowance for
Credit  Losses  by  $17.7  million during the three months ended September 30,
1997  and retained a Residual in Finance Receivables Sold of $12.4 million for
a  balance  of $ 25.8 million at September 30, 1997. The Company recorded Loss
on  Sale  of  Loans  during  the three months ended September 30, 1997 of $2.5
million,  which  consisted  of  a Gain on Sale of Loans of $7.5 million from a
securitization,  net  of  the $10.0 million charge to revalue the Residuals in
Finance  Receivables  Sold from prior securitizations.  The Company recognized
Gain  on  Sale  of  Loans  of $1.4 million during the three month period ended
September  30,  1996.   The Gain on Sale of Loans as a percentage of principal
balances  securitized  in  the three month period ended September 30, 1997 was
8.1%  and  6.4%  for  the Company Dealership and Third Party Dealer portfolios
securitized,  respectively,  compared  to  8.2%  for  the  Company  Dealership
portfolio  securitized in the three month period ended September 30, 1996.  No
Third  Party Dealer contracts were securitized in the three month period ended
September  30,  1996.

During  the  three  month  period  ended  September 30, 1997, the Trust issued
certificates  at  a  yield  of 6.3% resulting in net spread, before net credit
losses  and  after  servicing,  insurer,  and  trustee  fees,  of  15.0%.

The Company's net earnings may fluctuate from quarter to quarter in the future
as  a  result  of  the  timing  and  size  of  its  securitizations.

Champion  Receivables Corporation ("CRC") and Champion Receivables Corporation
II ("CRC II") (collectively referred to as "Securitization Subsidiaries"), are
the  Company's  wholly-owned  special  purpose  "bankruptcy  remote entities".
Their  assets  include  Residuals  in Finance Receivables Sold and Investments
Held  In  Trust,  in  the  amounts  of  $25.8  million  and  $16.2  million,
respectively,  at  September 30, 1997, which amounts would not be available to
<PAGE>19
satisfy  claims  of  creditors  of  the  Company  on  a  consolidated  basis.

Other  Income.  Other Income consists primarily of servicing income, insurance
premiums  earned  on  force placed insurance policies, earnings on investments
from  the  Company's  cash  and  cash equivalents, and franchise fees from the
Company's  rent-a-car  franchisees.  This income increased to $3.5 million for
three months ended September 30, 1997 from $349,000 for the three months ended
September  30,  1996.  The  Company services the $229.0 million in securitized
contract  principal balances for monthly fees ranging from .25% to .33% of the
beginning  of  period  principal  balances  (3.0%  to  4.0%  annualized).   In
addition,  in  conjunction  with  the  Kars acquisition in September 1997, the
Company  recognizes  income  from  servicing  the  Kars portfolio at a rate of
approximately  .33%  (4.0%  annualized)  of  beginning  of  period  principal
balances.  Servicing  income  for  the  three  months ended September 30, 1997
increased  to  $2.1  million  from  $240,000  in  the three month period ended
September  30,  1996.    This increase is due to the increase in the principal
balance of contracts being serviced pursuant to the Securitization Program and
the  addition of servicing of the Kars portfolio.  The increase is also due to
an  increase  in  insurance premium income of $427,000 over the same period in
the  prior  year when the Company recognized no insurance premium income.  The
Company  no  longer  actively  engages  in  the rent-a-car franchise business.

Income  before  Operating  Expenses.    As a result of the Company's continued
expansion,  Income  before  Operating Expenses grew by 130.3% to $20.1 million
for  the three month period ended September 30, 1997 from $8.7 million for the
three  month  period  ended  September 30, 1996. Growth of Sales of Used Cars,
Interest  Income  on  the  loan  portfolios  and Other Income were the primary
contributors  to  the  increase.

Operating  Expenses.    Operating  Expenses  consist  of Selling and Marketing
Expenses,  General  and  Administrative  Expenses,  and  Depreciation  and
Amortization.

The  Company has five distinct business segments.  These consist of retail car
sales  operations  (Company  Dealerships),  operations  attributable  to  the
administration  and collection of finance receivables generated at the Company
Dealerships  (Company  Dealership Receivables), activities associated with the
origination,  administration  and  collection of finance receivables purchased
from  Third Party Dealers (Third Party Dealers),  financing activities related
to  the  collateralized  dealer  financing program (Cygnet), and corporate and
other  operations.

A  summary  of  Operating  Expenses  by  business  segment for the three month
periods  ended  September  30,  1997  and  1996,  respectively,  follows:

<TABLE><CAPTION>
                                                 Company       Third
                                   Company      Dealership     Party              Corporate
                                 Dealerships   Receivables  Receivables   Cygnet    & Other   Total
                                 ------------  -----------  -----------  -------  ---------  -------
<S>                              <C>           <C>         <C>           <C>      <C>       <C>
1997:
  Selling and Marketing . . . .  $      2,887  $        -  $          -  $     -  $      -  $ 2,887
  General and Administrative. .         6,053       2,999         4,629      674     3,274   17,629
  Depreciation and Amortization           426         318           101        7       149    1,001
                                 ------------  ----------  ------------  -------  --------  -------
                                 $      9,366  $    3,317  $      4,730  $   681  $  3,423  $21,517
                                 ============  ==========  ============  =======  ========  =======
</TABLE>
<PAGE>20
<TABLE><CAPTION>
Company       Third
                                   Company      Dealership     Party              Corporate
                                 Dealerships   Receivables  Receivables   Cygnet    & Other   Total
                                 ------------  -----------  -----------  -------  ---------  -------
<S>                              <C>           <C>         <C>           <C>      <C>       <C>
1996:
  Selling and Marketing . . . .  $        635  $        -  $          -  $     -  $     17  $   652
  General and Administrative. .         2,000         339         1,260        -       906    4,505
  Depreciation and Amortization            85         200            56        -        86      427
                                 ------------  ----------  ------------  -------  --------  -------
                                 $      2,720  $      539  $      1,316  $     -  $  1,009  $ 5,584
                                 ============  ==========  ============  =======  ========  =======
</TABLE>

Selling  and  Marketing Expenses.  For the three month periods ended September
30,  1997  and  1996,  Selling  and  Marketing  Expenses were comprised almost
entirely  of  advertising costs and commissions relating to Company Dealership
operations. Selling and Marketing Expenses increased by 342.8% to $2.9 million
for  the  three  month  period  ended September 30, 1997 from $652,000 for the
three  month period ended September 30, 1996. As a percentage of Sales of Used
Cars,  these expenses averaged 8.6% for the three month period ended September
30,  1997  and  5.3% for the three month period ended September 30, 1996. On a
per  unit  sold  basis,  Selling and Marketing Expenses of Company Dealerships
increased to $638 per unit for the three month period ended September 30, 1997
from  $369  per unit for the three month period ended September 30, 1996. This
increase  is  primarily  due  to  increased marketing production costs, and an
increase  in  marketing  efforts in the Tampa Bay/St. Petersburg, San Antonio,
Las  Vegas,  and  Albuquerque  markets  where  the Company initially commenced
operations  in  1997.

General  and  Administrative  Expenses.    General and Administrative Expenses
increased  by  291.3%  to  $17.6  million    for  the three month period ended
September  30,  1997  from  $4.5  million  for  the  three  month period ended
September  30,  1996.  These  expenses  represented  31.9%  and 24.7% of total
revenues, adjusted for the $10.0 million charge, for three month periods ended
September  30,  1997,  and  1996,  respectively.   The increase in General and
Administrative  Expenses is a result of the Company's increased number of used
car  dealerships,  significant  expansion  of its Third Party Dealer financing
operations,  commencement  of  Cygnet  operations,  and continued expansion of
infrastructure  to  administer  growth.

Depreciation  and  Amortization.    Depreciation  and Amortization consists of
depreciation  and  amortization  on  the  Company's property and equipment and
amortization  of  the  Company's  goodwill  and  trademarks.  Depreciation and
amortization  increased  by  134.4% to $1.0 million for the three month period
ended  September  30,  1997  from  $427,000  for  the three month period ended
September  30,  1996.  The  increase  was  due  primarily  to  the increase in
amortization  of  goodwill  associated with the Company's recent acquisitions,
and  increased  depreciation expense from the addition of used car dealerships
and  Third  Party  Dealer  Branch  offices.

Interest  Expense.  Interest expense increased by 32.6% to $1.6 million in the
three  month  period  ended  September 30, 1997 from $1.2 million in the three
month  period  ended September 30, 1996. The increase in interest expense over
the  prior comparable period is due in part to the debt assumed by the Company
in  conjunction  with  the  acquisition  of  the  FMAC secured debt, which was
financed  by  the Company with a note payable to the FMAC senior bank group of
approximately  $55.1  million  and resulted in incremental interest expense of
<PAGE>21
$514,000.    See  Liquidity and Capital Resources-FMAC Senior Bank Group Debt.

Income  Taxes.    As  a  result of the loss incurred in the three month period
ended  September  30, 1997, the Company realized an income tax benefit of $1.1
million,  an  effective  rate  of  38.4%.    In  the  three month period ended
September  30,  1996,  no  income  tax was incurred due to income tax benefits
realized  from the Company's reduction in its valuation allowance for deferred
income  tax  assets.


RESULTS  OF  OPERATIONS
FOR  NINE  MONTHS  ENDED  SEPTEMBER  30,  1997
COMPARED  TO  NINE  MONTHS  ENDED  SEPTEMBER  30,  1996

Sales  of  Used  Cars.  Sales of Used Cars increased by 87.2% to $79.5 million
for  the nine month period ended September 30, 1997 from $42.5 million for the
nine  month period ended September 30, 1996. This growth reflects increases in
the number of used car dealerships in operation, and average unit sales price.
Units  sold  increased by 75.9% to 10,801 units in the nine month period ended
September  30,  1997 from 6,141 units in the nine month period ended September
30,  1996.  Same  store  unit sales declined by 13.4% in the nine month period
ended September 30, 1997 compared to the nine month period ended September 30,
1996.  This  is  due  to the increased emphasis on underwriting at the Company
Dealerships,  particularly  one  dealership  where unit sales decreased by 619
units,  which represents 77.0% of the decrease for the nine month period ended
September  30,  1997  compared  to  the  same  period  in  1996.

The average sales price per car increased by 6.4% to $7,364 for the nine month
period  ended  September  30, 1997 from $6,920 for the nine month period ended
September  30,  1996.

Cost of Used Cars Sold and Gross Margin.  The Cost of Used Cars Sold increased
by  78.5% to $42.5  million for the nine month period ended September 30, 1997
from  $23.8   million for the nine month period ended September 30, 1996. On a
per unit basis, the Cost of Used Cars Sold increased by 1.5% to $3,938 for the
nine  month  period  ended  September  30, 1997 from $3,881 for the nine month
period  ended September 30, 1996. The gross margin on used car sales (Sales of
Used  Cars  less Cost of Used Cars Sold excluding Provision for Credit Losses)
increased by 98.3% to $37.0  million for the nine month period ended September
30,  1997  from  $18.7  million  for the nine month period ended September 30,
1996.  As  a percentage of sales, the gross margin was 46.5% and 43.9% for the
nine  month periods ended September 30, 1997 and 1996, respectively.  On a per
unit  basis,  the gross margin per car sold was $3,426 and $3,039 for the nine
month  periods  ended  September  30,  1997  and  1996,  respectively.

Provision  for  Credit  Losses.  The  Provision for Credit Losses increased by
99.2%  to $15.4 million in the nine month period ended September 30, 1997 over
$7.7 million for the nine month period ended September 30, 1996. This includes
an  increase  of  $1.2  million in the Provision for Credit Losses in the nine
month  period  month  ended September 30, 1997 for third party receivables and
the  Cygnet dealer notes receivable over the nine month period ended September
30,  1996  when  the Company recorded no Provision for Credit losses for third
party  receivables  or  the  Cygnet  dealer  notes receivable. On a percentage
basis,  the  Provision  for  Credit  Losses  per  unit  originated  at Company
Dealerships  increased  by  12.8%  to $1,505 per unit in the nine month period
ended  September  30, 1997 from $1,334 per unit in the nine month period ended
September  30,  1996.  This  increase  is  primarily due to an increase in the
average  amount financed in the nine months ended September 30, 1997 to $7,457
per  unit  from  $6,604  per unit in the nine month period ended September 30,
<PAGE>22
1996.    As  a  percentage  of contract balances originated, the Provision for
Credit  Losses  averaged  20.2%  and  20.2%,  for the nine month periods ended
September  30,  1997  and  1996,  respectively.

Interest  Income.    Interest Income consists primarily of interest on finance
receivables  from  Company  Dealership  sales,  interest on Third Party Dealer
finance receivables, income from Residuals in Finance Receivables Sold, income
from the Cygnet Program, and other interest income from the FMAC Secured Debt.

Company  Dealership  Receivables  - Interest Income increased by 30.0% to $9.6
million  for  the nine month period ended September 30, 1997 from $7.4 million
for  the  nine  month  period  ended  September  30, 1996. Interest Income was
reduced  by  sales  of $155.9 million in Company Dealership contract principal
balances  since  inception  of  the Securitization Program, including sales of
$95.7  million  in  Company Dealership contract principal balances in the nine
months  ended  September  30, 1997, and will continue to be affected in future
periods  by  additional  securitizations.  The Company financed 95.7% of sales
revenue  and  94.5%  of the used cars sold at Company Dealerships for the nine
month  period  ended September 30, 1997 compared to 89.8% of sales revenue and
94.1%  of  the  used  cars  sold for the nine month period ended September 30,
1996.  The  average  amount  financed  increased  to $7,457 for the nine month
period  ended  September  30, 1997 from $6,604 for the nine month period ended
September  30,  1996.  As a result of its expansion into markets with interest
rate limits, the Company's yield on its Company Dealership Receivable contract
portfolio  has  trended  downward.  The effective yield on Finance Receivables
from Company Dealerships was 27.7% and 29.2%, for the nine month periods ended
September  30,  1997 and 1996, respectively. The Company's policy is to charge
29.9% per annum on its Company Dealership contracts.  However, in those states
that  impose  usury  limits  the  Company  charges  the  maximum interest rate
permitted.

Third  Party Dealer Receivables - Interest Income increased by 135.5% to $10.6
million  for  the nine month period ended September 30, 1997 from $4.5 million
in  the  nine  month  period  ended  September  30, 1996.  Interest Income was
reduced  by  sales  of $157.9 million in Third Party Dealer contract principal
balances  since  inception  of  the Securitization Program, including sales of
$147.9   million in Third Party Dealer contract principal balances in the nine
months  ended  September  30, 1997, and will continue to be effected in future
periods  by  additional  securitizations.  Interest  income  has  increased in
conjunction  with  the increases in Third Party Dealer contracts purchased and
outstanding. Primarily as a result of its expansion into markets with interest
rate  limits,  the  Company's  yield  on  its Third Party Dealer portfolio has
trended  downward.  Portfolio  yield  was  23.2% and 24.7%, for the nine month
periods  ended  September  30,  1997  and  1996,  respectively.

Cygnet  Program  and  Other  Interest  Income   - Interest income increased by
100.0%  to  $3.2  million for the three month period ended September 30, 1997.
This  income  consisted  of  $1.3  million  in interest income from the Cygnet
Program  and  $1.8  million  in  interest  income from the aforementioned FMAC
Secured  Debt.

Gain  on  Sale  of  Finance  Receivables.   During the nine month period ended
September 30, 1997, the Company  securitized an aggregate of $245.5 million in
contracts,  issuing  $202.0  million  in  securities.  Pursuant  to  these
transactions,  the  Company  reduced  its Allowance for Credit Losses by $39.5
million  during  the  nine  month period ended September 30, 1997. The Company
recorded  Gain  on  Sale of Loans during the nine month period ended September
30, 1997 of $10.3 million, which consisted of a Gain on Sale of Loans of $20.3
million  from   securitization transactions during the nine month period ended
<PAGE>23
September  30,  1997,  net  of  the  $10.0  million charge (approximately $6.0
million,  net of income taxes) to revalue the Residuals in Finance Receivables
Sold.  The Company recognized Gain on Sale of Loans of $2.6 million during the
nine  month  period  ended  September 30, 1996. The Gain on Sale of Loans as a
percentage  of  principal balances securitized was 8.6% and 8.1% respectively,
for  the  Company  Dealership and Third Party Dealer portfolios securitized in
the  nine  month  period  ended  September  30, 1997, compared to 6.2% for the
Company  Dealership  portfolios  securitized  in  the  nine month period ended
September  30,  1996.  No Third Party Dealer contracts were securitized in the
nine  month  period  ended  September  30,  1996.   The difference in the gain
percentage  on  the  Company Dealership portfolios is due to the fact that the
portfolios  securitized  in  the first nine months of 1996 were more seasoned,
resulting  in a much shorter remaining life than the portfolios securitized in
the  first nine months of 1997, and lower "A" certificate coupon rates,  which
results  in  an  increase in gain on sale, net of the impact of increasing the
cumulative  net  credit  loss  assumptions.

During  the  nine  month  period  ended  September  30, 1997, the Company made
initial spread account deposits totaling $7.4 million. Additional net deposits
to  the  spread accounts during the nine month period ended September 30, 1997
totaled  $4.9  million  resulting in a total balance in the spread accounts of
$15.1  million  as  of September 30, 1997.   In addition to the spread account
balance of $15.1 million, the Company had deposited a total of $1.1 million in
trust  accounts  in  conjunction  with  certain  other  agreements.

During  the  nine  month  period  ended  September 30, 1997, the Trusts issued
certificates  at a weighted average yield of 7.5% with the yields ranging from
6.3%  to  8.2%,  resulting  in net spreads, before net credit losses and after
servicing  and trustee fees, ranging from 12.5% to 17.8%, and averaging 15.0%.

Other  Income.    Other  Income  which consists primarily of servicing income,
insurance  premiums  earned  on  force  placed insurance policies, earnings on
investments  from  the Company's cash and cash equivalents, and franchise fees
from  the Company's rent-a-car franchisees increased by 791.4% to $7.0 million
for  nine  months  ended  September  30, 1997 from $780,000 for the nine month
period  ended  September  30, 1996. The Company services the $229.0 million in
securitized  contract principal balances for monthly fees ranging from .25% to
 .33% of the beginning of period principal balances (3.0% to 4.0% annualized In
addition,  in  conjunction  with  the  Kars acquisition in September 1997, the
Company  recognizes  income  from  servicing  the  Kars portfolio at a rate of
approximately  .33%  (4.0%  annualized)  of  beginning  of  period  principal
balances.    Servicing  income  for  the  nine months ended September 30, 1997
increased  to  $3.8  million  from  $487,000  in  the  nine month period ended
September  30,  1996.   The significant increase is due to the increase in the
principal  balance  of contracts being serviced pursuant to the Securitization
Program  and  the addition of servicing of the Kars portfolio. The increase is
also  due to an increase in insurance premium income of $607,000 over the same
period  in  the  prior  year  when the Company recognized no insurance premium
income  and an increase in earnings on investments of $1.2 million compared to
no investment earnings in the nine month period ended September 30, 1996.  The
Company  no  longer  actively  engages  in  the rent-a-car franchise business.

Income  before  Operating  Expenses.    As a result of the Company's continued
expansion,  Income  before  Operating Expenses grew by 137.9% to $62.3 million
for  the nine month period ended September 30, 1997 from $26.2 million for the
nine  month  period  ended  September  30, 1996. Growth of Sales of Used Cars,
Interest  Income  on  the  loan  portfolios,  Gain on Sale of Loans, and Other
Income  were  the  primary  contributors  to  the  increase.

<PAGE>24
Operating  Expenses.    Operating  Expenses  consist  of Selling and Marketing
Expenses,  General  and  Administrative  Expenses,  and  Depreciation  and
Amortization.

The  Company has five distinct business segments.  These consist of retail car
sales  operations  (Company  Dealerships),  operations  attributable  to  the
administration  and collection of finance receivables generated at the Company
Dealerships  (Company  Dealership Receivables), activities associated with the
origination,  administration  and  collection of finance receivables purchased
from  Third Party Dealers (Third Party Dealers),  financing activities related
to  the  collateralized  dealer  financing program (Cygnet), and corporate and
other  operations.

A summary of Operating Expenses by business segment for the nine month periods
ended  September  30,  1997  and  1996,  respectively,  follows:

<TABLE><CAPTION>
                                                 Company       Third
                                   Company      Dealership     Party              Corporate
                                 Dealerships   Receivables  Receivables   Cygnet    & Other   Total
                                 ------------  -----------  -----------  -------  ---------  -------
<S>                              <C>           <C>          <C>          <C>      <C>       <C>
1997
  Selling and Marketing . . . .  $      6,670  $         -  $        -  $      9  $      1  $ 6,680
  General and Administrative. .        14,196        7,563      10,076       896     7,758   40,489
  Depreciation and Amortization           984          785         261         7       422    2,459
                                 ------------  ----------  -----------  --------  --------  -------
                                 $     21,850  $     8,348  $   10,337  $    912  $  8,181  $49,628
                                 ============  ===========  ==========  ========  ========  =======
</TABLE>

<TABLE><CAPTION>
                                                 Company       Third
                                   Company      Dealership     Party              Corporate
                                 Dealerships   Receivables  Receivables   Cygnet    & Other   Total
                                 ------------  -----------  -----------  -------  ---------  -------
<S>                              <C>           <C>          <C>          <C>      <C>       <C>
1996:
  Selling and Marketing . . . .  $      2,898  $         -  $         -  $     -  $      17  $ 2,915
  General and Administrative. .         6,225        2,067        2,470        -      2,789   13,551
  Depreciation and Amortization           235          567          131        -        195    1,128
                                 ------------  -----------  -----------  --------  --------  -------
                                 $      9,358  $     2,634  $     2,601  $     -  $   3,001  $17,594
                                 ============  ===========  ===========  ========  ========  =======
</TABLE>

Selling  and  Marketing  Expenses.  For the nine month periods ended September
30,  1997  and  1996,  Selling  and  Marketing  Expenses were comprised almost
entirely  of  advertising costs and commissions relating to Company Dealership
operations. Selling and Marketing Expenses increased by 129.2% to $6.7 million
for  the  nine month period ended September 30, 1997 from $2.9 million for the
nine  month  period ended September 30, 1996. As a percentage of Sales of Used
Cars,  these  expenses averaged 8.4% and 6.9% for the nine month periods ended
September  30, 1997, and 1996, respectively. On a per unit sold basis, Selling
and  Marketing  Expenses of Company Dealerships increased by 30.3% to $618 per
unit for the nine month period ended September 30, 1997 from $475 per unit for
the  nine  month  period ended September 30, 1996.  This increase is primarily
due  to  increased  marketing  production  costs, and an increase in marketing
efforts  in  the  Tampa  Bay/St.  Petersburg,  San  Antonio,  Las  Vegas,  and
<PAGE>25
Albuquerque  markets where the Company initially commenced operations in 1997,
combined  with  a  decrease  in  same  store  unit  sales.

General  and  Administrative  Expenses.    General and Administrative Expenses
increased by 198.8% to $40.5 million for the nine month period ended September
30,  1997  from  $13.6  million  for the nine month period ended September 30,
1996.  These  expenses  represented 33.7% and 23.5% of total revenues for nine
month  periods  ended September 30, 1997, and 1996, respectively. The increase
in  General and Administrative Expenses is primarily a result of the Company's
increased  number  of  used  car  dealerships and significant expansion of its
Third  Party  Dealer  financing  operations  as well as continued expansion of
infrastructure  to  administer  growth.

Depreciation  and  Amortization.    Depreciation  and Amortization consists of
depreciation  and  amortization  on  the  Company's property and equipment and
amortization  of  the  Company's  goodwill  and  trademarks.  Depreciation and
amortization  increased  by  118.0%  to $2.5 million for the nine month period
ended  September  30,  1997  from $1.1 million for the nine month period ended
September  30,  1996.  The  increase  was  due  primarily  to  the increase in
amortization  of  goodwill  associated with the Company's recent acquisitions,
and  increased  depreciation expense from the addition of used car dealerships
and  Third  Party  Dealer  Branch  offices

Interest  Expense.    Interest expense decreased by 34.9% to $2.9 million from
$4.5  million in the nine month period ended September 30, 1996.  The decrease
in 1997, despite significant growth in Company assets, is primarily the result
of  the  two public offerings that were completed in 1996, a private placement
that  was  completed  in  February  of 1997 which generated, in the aggregate,
approximately $168.1 million in cash, and the Company's Securitization Program
which  generated  cash  from the sale of Finance Receivables which the Company
utilized  to  pay  down  debt.  Further, concurrent with the Company's initial
public  offering  on  June 21, 1996, the Company restructured its Subordinated
Notes  Payable  reducing  the  borrowing rate on that debt from 18% to 10% per
annum.

Income  Taxes.    Income  taxes  totaled $4.0 million in the nine month period
ended  September  30, 1997, an effective tax rate of 41.2%.  In the nine month
period  ended September 30, 1996, no income tax was incurred due to income tax
benefits  realized from the Company's reduction in its valuation allowance for
deferred  income  tax  assets.

ALLOWANCE  FOR  CREDIT  LOSSES

The  Company  has  established an Allowance for Credit Losses ("Allowance") to
cover  anticipated  credit losses on the contracts currently in its portfolio.
The  Allowance  has  been established through the Provision for Credit Losses,
and  through  nonrefundable  acquisition discounts on contracts purchased from
Third  Party  Dealers.  The  Allowance  on  contracts  originated  at  Company
Dealerships  decreased  to  20.0%  of  outstanding  principal  balances  as of
September 30, 1997 compared to 23.0% as of December 31, 1996. The Allowance as
a  percentage  of  Third  Party Dealer contracts decreased to 12.0% from 12.7%
over the same period.  The Allowance as a percentage of the Company's combined
contract  portfolio  increased  to  15.2%  at September 30, 1997 from 13.9% at
December  31, 1996.  The increase in the Allowance percentage is primarily due
to  the  composition  of  the  total portfolio with an increase in the Company
Dealership  Receivable  portfolio  relative to the total portfolio compared to
December  31,  1996.


<PAGE>26
The following table reflects activity in the Allowance, as well as information
regarding charge off activity, for the three month periods ended September 30,
1997  and  1996,  in  thousands.

<TABLE><CAPTION>
                                        COMPANY DEALERSHIPS   THIRD PARTY DEALERS
                                      ---------------------  -----------------------
                                        THREE MONTHS ENDED     THREE MONTHS ENDED
                                           SEPTEMBER 30,          SEPTEMBER 30,
                                      ---------------------  -----------------------
                                          1997        1996        1997       1996
                                      -----------  ---------  ----------  ----------
<S>                                   <C>          <C>         <C>         <C>
Allowance Activity:
Balance, Beginning of Period          $    9,929   $   5,974   $   4,506   $   2,074 
Provision for Credit Losses                6,084       2,541         228           - 
Discount Acquired                              -           -       6,581       1,816 
Reduction Attributable to Loans Sold     (10,325)     (3,263)     (7,354)          - 
Net Charge Offs                           (2,379)     (1,681)       (939)       (835)
                                      -----------  ----------  ----------  ----------
Balance, End of Period                $    3,309   $   3,571   $   3,022   $   3,055
                                      ===========  ==========  ==========  ==========
Charge off Activity:
Principal Balances:
  Collateral Recovered                $   (2,319)  $  (1,664)  $  (1,066)  $  (1,003)
  Collateral Not Recovered                  (820)       (342)       (198)       (191)
                                      -----------  ----------  ----------  ----------
  Total Principal Balances                (3,139)    (2,006)      (1,264)     (1,194)
  Accrued Interest                             -       (114)           -         (64)
  Recoveries, Net                            760        439          325         423
                                      -----------  ----------  ----------  ----------
Net Charge Offs                       $   (2,379)  $ (1,681)  $     (939)  $    (835)
                                      ===========  ==========  ==========  ==========
Net Charge Offs as % of Average             23.8%      28.3%        17.5%       10.2%
  Principal  Outstanding              ===========  ==========  =========  ===========
</TABLE>























<PAGE>27
The following table reflects activity in the Allowance, as well as information
regarding  charge off activity, for the nine month periods ended September 30,
1997  and  1996,  in  thousands.

<TABLE><CAPTION>
                                        COMPANY DEALERSHIPS   THIRD PARTY DEALERS
                                      ---------------------  ------------------------
                                         NINE MONTHS ENDED      NINE MONTHS ENDED
                                           SEPTEMBER 30,          SEPTEMBER 30,
                                      ---------------------  ------------------------
                                          1997        1996        1997       1996
                                      -----------  ---------  ----------  -----------
<S>                                   <C>          <C>         <C>         <C>
Allowance Activity:
Balance, Beginning of Period          $    1,625   $   7,500   $  6,500   $    1,000 
Provision for Credit Losses               14,193       7,713        948            - 
Discount Acquired                         15,309           -     17,713        3,646 
Discount accreted to interest income           -           -       (642)           - 
Reduction Attributable to Loans Sold     (21,407)     (6,187)   (18,096)           - 
Net Charge Offs                           (6,411)     (5,455)    (3,401)      (1,591)
                                      -----------  ---------  ---------  ------------
Balance, End of Period                $    3,309   $   3,571   $  3,022   $    3,055 
                                      ==========  ==========  =========  ============
Allowance as Percent of Period             20.0%       23.1%      12.0%         8.3%
  Ended Principal Balance             ==========  ==========  =========  ============


Charge off Activity:
Principal Balances:
  Collateral Recovered                $   (6,865)  $  (5,260)  $ (3,873)  $   (2,070)
  Collateral Not Recovered                (1,490)     (1,619)      (858)        (416)
                                      -----------  ----------  ---------  -----------
  Total Principal Balances                (8,355)     (6,879)    (4,731)      (2,486)
  Accrued Interest                             -        (486)         -         (123)
  Recoveries, Net                          1,944       1,910      1,330        1,018 
                                      ----------  -----------  ---------  -----------
Net Charge Offs                       $   (6,411)  $  (5,455)  $ (3,401)  $   (1,591)
                                      ===========  ==========  =========  ===========
Net Charge Offs as % of Average             23.9%       25.3%      15.8%       9.18%
  Principal  Outstanding              ===========  ==========  =========  ===========
</TABLE>

During the nine month period ended September 30, 1997, the Company experienced
rapid  growth in the number of states in which it operated Company Dealerships
and  Third  Party  Dealer  branches.  As a result, the Company's loan base was
more  geographically  diversified throughout the country, which in turn led to
the  Company  repossessing  significantly more vehicles throughout the country
than  it  historically had, in markets where it did not operate reconditioning
centers  or  repossession lots.  The Company, therefore, relied extensively on
third  parties  to  dispose  of  its  repossessed collateral.  This led to the
Company not realizing its expected recovery amount on the liquidation of these
repossessions.  The  Company  has  taken several actions to reverse this trend
including  consolidation  of  auction  locations  through  which  repossessed
vehicles  are  liquidated,  expansion  of  its  repossession  administration
department,  development  of  an enhanced repossession tracking and monitoring
system,  hiring  of  staff  whose  primary  responsibility is to represent the
Company  at  auctions,  and  expansion  of  efforts  to  better  recondition
repossessions  prior  to liquidation.  The Company believes these actions will
improve recovery rates to levels it historically experienced prior to the nine
<PAGE>28
month  period  ended  September  30,  1997.    For loans originated at Company
Dealerships,  recoveries  as  a  percentage  of principal balances charged off
where  collateral  has been recovered averaged 28.3% for the nine month period
ended  September  30,  1997  compared to 36.3% for the nine month period ended
September  30,  1996.    Company  Dealership  loan  recoveries  in Arizona are
positively  effected  by  the Company's ability to receive a sales tax benefit
for  charged off loans that it does not receive in other markets.  As a result
of  the  Company's  expansion  outside of the Arizona market in 1997, recovery
rates for the Company Dealership loan portfolio were negatively effected.  For
Third  Party  Dealer  loans,  recoveries as a percentage of principal balances
charged  off  where  collateral has been recovered averaged 34.3% for the nine
months  period  ended  September 30, 1997 compared to 49.2% for the nine month
period  ended  September  30,  1996.

The Company's Net Charge Offs on its Third Party Dealer contract portfolio are
lower  than  those incurred on its Company Dealership contract portfolio. This
is  attributable  to  the  relationship  of the average amount financed to the
underlying  collateral's  wholesale value and to a lesser degree the generally
more  creditworthy customers served by Third Party Dealers. In its Third Party
Dealer portfolio, the Company generally limits the amount financed to not more
than 120.0% of the wholesale value of the underlying car, although the Company
will  make  exceptions  on  a  case-by-case  basis.

Static  Pool  Analysis.    To  monitor contract performance, beginning in June
1995,  the Company implemented "static pool" analysis for contracts originated
since  January  1,  1993.  Static pool analysis is a monitoring methodology by
which  each  month's  originations  and  subsequent charge offs are assigned a
unique  pool  and  the  pool performance is monitored separately. Improving or
deteriorating performance is measured based on cumulative gross and net charge
offs  as  a  percentage of original principal balances, based on the number of
complete payments made by the customer before charge off. The table below sets
forth  the  cumulative  net  charge  offs as a percentage of original contract
cumulative  balances, based on the quarter of origination and segmented by the
number  of  payments made prior to charge off. For periods denoted by "x", the
pools  have  not  seasoned sufficiently to allow for computation of cumulative
losses.  For  periods  denoted  by  "-",  the  pools have not yet attained the
indicated  cumulative  age.  While  the Company monitors its static pools on a
monthly  basis,  for  presentation  purposes the information in the tables are
presented  on  a  quarterly  basis.

Effective  January  1,  1997,  the Company modified its methodology to reflect
additional  historical  experience in computing "Monthly Payments Completed by
Customer  Before  Charge Off" as it relates to loan balances charged off after
final  insurance  settlements and on loans modified from their original terms.
Resulting  adjustments  affect  the  timing  of  previously  reported  interim
cumulative  losses,  but  do  not  impact  ending cumulative losses.  For loan
balances  charged  off  after  insurance  settlement principal reductions, the
revised calculation method only gives credit for payments actually made by the
customer  and  excludes credit for reductions arising from insurance proceeds.
For modified loans, completed payments now reflect customer payments made both
before  and  after the loan was modified.  The numbers presented below reflect
the  adoption  of  the  revised  calculation  method.

Currently  reported  cumulative  losses  may  also  vary from those previously
reported  due  to  ongoing  collection efforts on charged off accounts and the
difference between final proceeds on the liquidation of repossessed collateral
versus original accounting estimates.  Management believes that such variation
will    not  be  material.

<PAGE>29
CONTRACTS  ORIGINATED  AT  COMPANY  DEALERSHIPS

The  following table sets forth the cumulative net charge offs as a percentage
of  original  contract  cumulative  (pool)   balances, based on the quarter of
origination  and  segmented  by  the  number  of monthly payments completed by
customer  before  charge  off.    Additionally,  set  forth  is the percent of
principal  reduction  for  each  pool since inception and cumulative total net
losses  incurred    (TLI).

         POOL'S CUMULATIVE NET LOSSES AS PERCENTAGE OF POOL'S ORIGINAL
                          AGGREGATE PRINCIPAL BALANCE
<TABLE><CAPTION>
     MONTHLY PAYMENTS COMPLETED BY CUSTOMER BEFORE CHARGE OFF PERCENT
     ----------------------------------------------------------------
                0      3      6     12     18     24     TLI   REDUCED
              -----  -----  -----  -----  -----  -----  -----  --------
<S>           <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>
1993:
1st Quarter    6.9%  18.7%  26.5%  31.8%  33.9%  35.1%  35.4%   100.0%
2nd Quarter    7.2%  18.9%  25.1%  29.4%  31.7%  32.1%  32.4%   100.0%
3rd Quarter    8.6%  19.6%  23.7%  28.5%  30.7%  31.6%  31.9%   100.0%
4th Quarter    6.3%  16.1%  21.6%  27.0%  28.9%  29.5%  29.6%   100.0%

1994:
1st Quarter    3.4%  10.0%  13.4%  18.1%  20.5%  21.2%  21.3%   100.0%
2nd Quarter    2.8%  10.5%  14.2%  19.7%  21.9%  22.4%  22.5%   100.0%
3rd Quarter    2.8%   8.2%  12.2%  16.5%  18.6%  19.5%  19.6%   100.0%
4th Quarter    2.4%   7.7%  11.3%  16.9%  20.0%  21.0%  21.1%   100.0%


1995:
1st Quarter    1.1%   7.4%  12.5%  17.8%  20.3%  21.3%  21.5%   97.6%
2nd Quarter    1.7%   7.1%  12.1%  16.7%  19.6%  21.1%  21.1%   93.0%
3rd Quarter    2.0%   7.0%  11.1%  18.1%  21.7%     x   22.8%   86.6%
4th Quarter    1.2%   5.7%  10.8%  17.8%  22.3%     -   22.6%   81.7%

1996:
1st Quarter    1.4%   7.6%  13.2%  20.6%     x      -   23.6%   74.4%
2nd Quarter    2.2%   9.2%  14.1%  22.6%     -      -   23.1%   64.4%
3rd Quarter    1.6%   7.2%  12.9%     x      -      -   18.9%   53.1%
4th Quarter    1.6%   8.7%  16.0%     -      -      -   17.6%   44.5%

1997:
1st Quarter    2.5%  10.4%     x      -      -      -   12.7%   34.0%
2nd Quarter    1.8%     x      -      -      -      -   4.7%    15.4%
3rd Quarter      x      -      -      -      -      -   0.2%     1.8%
</TABLE>

Trends  set  forth  in  the  table  above  indicate  a  deterioration  in  the
performance  of  the  associated  loan  portfolio.    Management  believes the
deterioration  is  primarily  attributable  to  less  effective  collection
procedures  resulting  from  a  loan  servicing and collection data processing
system  conversion  in  the first and second quarters of 1997 rather than from
any  fundamental  change  in loan quality or underwriting. As a result of this
trend,  the  Company  recorded  a  charge  against  its  Residuals  in Finance
Receivables  Sold  during  the  three  month  period ended September 30, 1997.

The  following  table  sets  forth  the  principal  balances  31  to  60  days
delinquent,  and 61 to 90 days delinquent as a percentage of total outstanding
Company  Dealership  contract  principal  balances.
<PAGE>30
<TABLE><CAPTION>
                    Retained   Securitized   Managed
                    ---------  ------------  --------
<S>                 <C>        <C>           <C>
September 30,1997:
31 to 60 days         1.5%         3.9%        3.6%
61 to 90 days         2.8%         1.4%        1.6%

December 31,1996:
31 to 60 days         2.3%         5.4%        5.0%
61 to 90 days         0.6%         1.9%        1.7%
</TABLE>

In accordance with the Company's charge off policy, there are no accounts more
than  90  days  delinquent  as  of  September  30, 1997 and December 31, 1996.

CONTRACTS  PURCHASED  FROM  THIRD  PARTY  DEALERS

Non-refundable acquisition discount ("Discount") acquired totaled $6.6 million
and  $1.8  million  for  the  three month periods ended September 30, 1997 and
1996,  respectively.  The  Discount,  attributable  to  Third  Party  Dealer
purchases,  averaged approximately 12.5% as a percentage of principal balances
purchased  in  the  three  month  period ended September 30, 1997, compared to
11.6%  in the three month period ended September 30, 1996.  For the nine month
period  ended  September  30,  1997  and 1996, Discount acquired totaled $17.7
million  and  $3.6  million,  respectively.    As  a  percentage  of contracts
purchased,  Discount  averaged  12.2%  and  11.1%  during  the  same  periods,
respectively.

The  following table sets forth the cumulative net charge offs as a percentage
of  original  contract  cumulative  (pool)   balances, based on the quarter of
origination  and  segmented  by  the  number  of monthly payments completed by
customer  before  charge  off.    Additionally,  set  forth  is the percent of
principal  reduction  for  each  pool since inception and cumulative total net
losses  incurred    (TLI).

POOL'S CUMULATIVE NET LOSSES AS PERCENTAGE OF POOL'S ORIGINAL
                          AGGREGATE PRINCIPAL BALANCE
<TABLE><CAPTION>
     MONTHLY PAYMENTS COMPLETED BY CUSTOMER BEFORE CHARGE OFF PERCENT
     ----------------------------------------------------------------
                0      3       6      12     18     24     TLI   REDUCED
              -----  -----  ------  -----  -----  ------  -----  --------
<S>           <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>
1995:
2nd Quarter    0.9%   4.1%    5.7%   7.7%   9.4%   10.6%  10.6%   90.1%
3rd Quarter    1.2%   3.7%    4.6%   6.3%   7.5%      x    8.1%   82.4%
4th Quarter    1.0%   4.3%    6.7%   9.3%  11.0%      -   11.2%   82.5%
1996:
1st Quarter    0.8%   3.7%    6.9%  10.8%     x       -   12.1%   74.5%
2nd Quarter    1.6%   6.2%    9.7%  13.6%     -       -   13.6%   67.8%
3rd Quarter    1.3%   6.0%    9.2%     x      -       -   14.7%   56.2%
4th Quarter    1.4%   7.4%   12.0%     -      -       -   15.2%   45.6%
1997:
1st Quarter    1.4%   7.6%      x      -      -       -    8.2%   30.9%
2nd Quarter    1.5%     x       -      -      -       -    2.4%   14.3%
3rd Quarter      x      -       -      -      -       -    0.1%    2.6%
</TABLE>



<PAGE>31
Trends  set  forth  in  the  table  above  indicate  a  deterioration  in  the
performance  of  the  associated  loan  portfolio.    Management  believes the
deterioration  is  primarily  attributable  to  less  effective  collection
procedures  resulting  from  a  loan  servicing and collection data processing
system  conversion  in  the first and second quarters of 1997 rather than from
any  fundamental  change in loan quality or underwriting.  As a result of this
trend,  the  Company  recorded  a  charge  against  its  Residuals  in Finance
Receivables  Sold  during  the  three  month  period ended September 30, 1997.

Beginning  April  1,  1995, the Company initiated a new purchasing program for
Third  Party  Dealer  contracts  which  included an emphasis on higher quality
contracts.  As  of March 31, 1995, the Third Party Dealer portfolio originated
under the prior program had a principal balance of $2.0 million which are paid
in  full.  Therefore,  contract  performance under this prior program has been
excluded  from  the  table  above.

While  the  static  pool  information  is  developing, management augments its
evaluation  of  the  adequacy of the Allowance for Third Party Dealers through
comparisons in the characteristics of collateral ratios and borrowers on Third
Party  Dealer  contracts  versus those of the Company Dealership contracts, as
well  as  through  comparisons  of  portfolio  delinquency,  actual  contract
performance  and, to the extent information is available, industry statistics.

The  following  table  sets  forth  the  principal  balances  31  to  60  days
delinquent,  and 61 to 90 days delinquent as a percentage of total outstanding
Third  Party  Dealer  contract  principal

<TABLE><CAPTION>
                     Retained   Securitized   Managed
                     ---------  ------------  --------
<S>                  <C>        <C>           <C>
September 30, 1997:
31 to 60 days . . .       1.7%          4.7%      4.2%
61 to 90 days . . .       2.5%          1.6%      1.8%

December 31, 1996:
31 to 60 days . . .       3.1%          4.3%      3.3%
61 to 90 days . . .       1.1%          1.0%      1.1%
</TABLE>

In  accordance  with  the Company's charge off policy there are no Third Party
Dealer  contracts  more  than  90 days delinquent as of September 30, 1997 and
December  31,  1996.

During  1996 and continuing throughout 1997, the Company elected to extend the
time period before repossession is ordered with respect to those customers who
exhibit  a  willingness  and  capacity  to bring their contracts current. As a
result  of  this  revised  repossession  policy,  delinquencies  increased  as
expected.

RESIDUALS  IN  FINANCE  RECEIVABLES  SOLD

Residuals  in Finance Receivables Sold represent the Company's retained potion
of  the  securitization assets.  The Company utilizes a number of estimates in
arriving  at  the  initial  valuation  of the Residuals in Finance Receivables
Sold,  which  represent  the expected present value of net cash flows into the
trust in excess of those required to pay principal and interest on the Class A
certificates.  The  present  value  of expected cash flows are a function of a
number  of items including, but not limited to, charge off rates, repossession
<PAGE>32
recovery  rates,  portfolio delinquency, prepayment rates, and trust expenses.
Subsequent  to  the  initial recording of the Residuals in Finance Receivables
Sold,  the  carrying  value  is  adjusted  for  the actual cash flows into the
respective trusts in order to maintain a carrying value which approximates the
present value of the expected net cash flows into the trust in excess of those
required  to  pay  all  obligations  of  the  respective  trust other than the
obligations  to the Class B certificates. To the extent that actual cash flows
on  a  securitization are below original estimates, and differ materially from
the  original  securitization  assumptions,  and in the opinion of management,
those  differences  appear  to  be other than temporary in nature, the Company
would  be required to revalue the residual portion of the securitization which
it  retains,  and  record  a  charge  to  earnings  based  upon the reduction.
During  the three month period ended September 30, 1997,  the Company recorded
a  $10.0  million  charge (approximately $6.0 million, net of income taxes) to
write  down the Residuals in Finance Receivables Sold.  The Company determined
a write down in the Residuals in Finance Receivables Sold was necessary due to
an  increase in net losses in the securitized loan portfolio, particularly the
Third Party Dealer portfolio. For securitization transactions between June 30,
1996  and June 30, 1997,  for contracts originated at Company Dealerships, net
losses were originally estimated using total expected cumulative net losses at
loan  origination  of  approximately 26.0%, adjusted for actual cumulative net
losses  prior  to  securitization.  For  contracts  purchased from Third Party
Dealers,  net losses were originally estimated using total expected cumulative
net  losses  at  loan  origination of approximately 13.5%, adjusted for actual
cumulative net losses prior to securitization. Prepayment rates were estimated
to  be  1.5%  per  month  of the beginning of month balance. The $10.0 million
charge  (approximately  $6.0  million, net of income taxes) in the three month
period  ended September 30, 1997 which resulted in a reduction in the carrying
value of the Company's Residuals in Finance Receivables Sold had the effect of
increasing  the  cumulative  net  loss  assumption for contracts originated at
Company  Dealerships  to approximately 27.5%, and for contracts purchased from
Third Party Dealers to approximately 17.5% for the securitization transactions
that  took place prior to the three month period ended September 30, 1997.  As
a result of this charge, the remaining allowance for credit losses inherent in
the  securitization  assumptions  as  a  percentage of the remaining principal
balances  of securitized contracts was approximately 19.7% as of September 30,
1997,  compared  to  15.2% as of December 31, 1996.  There can be no assurance
that  the  charge taken by the Company is sufficient and that the Company will
not  record  additional  charges  in  the  future  in  order to write down the
Residuals  in  Finance  Receivables  Sold.

LIQUIDITY AND CAPITAL RESOURCES

The  Company  requires capital to support increases in its contract portfolio,
expansion  of  Company  Dealerships,   Branch Offices, the Cygnet Program, the
purchase  of  inventories,  the  purchase  of  property and equipment, and for
working  capital and general corporate purposes. The Company funds its capital
requirements  through  equity  offerings,  operating  cash  flow,  the sale of
finance  receivables,  and  supplemental  borrowings.

The  Company's  Net  Cash  Provided by Operating Activities increased by $39.7
million  to  $41.3  million for the nine month period ended September 30, 1997
from  $1.6  million  in  the  nine  month period ended September 30, 1996. The
increase  was  primarily  due to an increase in proceeds from sales of finance
receivables,  provision  for credit losses, and increases in Accounts Payable,
Accrued  Liabilities  and  Other  Liabilities  offset  by increases in Finance
Receivables  Held for Sale, Gain on Sale of Finance Receivables, and increases
in  Inventory  and  Other  Assets.

<PAGE>33
The Net Cash Used in Investing Activities increased by $90.1 million to $103.0
million  in the nine months ended September 30, 1997 from $12.9 million in the
nine  months  ended September 30, 1996. The increase was due to an increase in
notes receivable of $29.6 million, an increase in the purchase of property and
equipment  of  $11.5  million,  and the purchase of the assets of Seminole, EZ
Plan,  and  Kars,  for  $45.3  million.

The  Company's  Net  Cash  Provided by Financing Activities increased by $37.1
million  to  $47.6  million  in the nine month period ended September 30, 1997
from  $10.5  million  in  the nine month period ended September 30, 1996. This
increase  was  primarily  the result of the $88.7 million in proceeds from the
Company's sale of common stock, net of the $39.1 million of repayment of Notes
Payable  and  the  repayment  of  Subordinated  Notes Payable of $2.0 million.

Revolving Facility. The Company maintains a Revolving Facility with GE Capital
that  has  a  maximum  commitment of up to $100.0 million. Under the Revolving
Facility,  the  Company  may  borrow  up  to 65.0% of the principal balance of
eligible Company Dealership contracts and up to 86.0% of the principal balance
of  eligible  Third  Party Dealer contracts. The Revolving Facility expires in
December  1998.  The facility is secured by substantially all of the Company's
assets.  As  of September 30, 1997, the Company's borrowing capacity under the
Revolving  Facility  was  $19.0  million,  the  aggregate  principal  amount
outstanding  under  the Revolving Facility was approximately $128,000, and the
amount  available  to  be  borrowed  under the facility was $18.9 million. The
Revolving  Facility  bears  interest  at  the 30-day LIBOR plus 3.15%, payable
daily  (total  rate  of  8.8%  as  of  September  30,  1997).

The  Revolving Facility contains covenants that, among other things, limit the
Company's  ability  to,  without  GE  Capital's  consent: (i) incur additional
indebtedness;  (ii)  make  unsecured  loans  or  other  advances  of  money to
officers,  directors,  employees,  stockholders  or  affiliates  in  excess of
$25,000  in total; (iii) engage in securitization transactions (other than the
Securitization  Program, for which GE Capital has consented); (iv) merge with,
consolidate  with,  acquire  or  otherwise  combine  with  any other person or
entity,  transfer  any division or segment of its operations to another person
or  entity,  or  form  new  subsidiaries;  (v)  make any change in its capital
structure;  (vi)  declare  or  pay  dividends  except  in  accordance with all
applicable  laws and not in excess of fifteen percent (15%) of each year's net
earnings  available  for  distribution;  (vii)  make  certain  investments and
capital  expenditures;  and  (viii)  engage  in  certain  transactions  with
affiliates.  These  covenants  also  require the Company to maintain specified
financial  ratios,  including  a  debt ratio of 2.1 to 1 and a net worth of at
least  $75,000,000,  and  to  comply  with  all laws relating to the Company's
business. The Revolving Facility also provides that a transfer of ownership of
the  Company  that  results  in  less than 15.0% of the Company's voting stock
being  owned  by  Mr.  Ernest C. Garcia II, will result in an event of default
under  the  Revolving  Facility.

FMAC  Senior  Bank  Group  Debt.  In  conjunction  with the acquisition of the
Secured  Debt  from  the  Bank  Group,  the Company executed a note payable of
approximately  $55.1  million  payable  to  the  Bank  Group with a balance at
September 30, 1997 at approximately $50.4 million.  The note payable, which is
due  in full in February 1998, bears interest at 30-day LIBOR plus 2.0% (7.65%
at  September  30,  1997),  and  is  payable  daily.

Subordinated  Indebtedness  and Preferred Stock.  Prior to its public offering
in June 1996, the Company historically borrowed substantial amounts from Verde
Investments  Inc.  ("Verde"),  an  affiliate  of the Company. The Subordinated
Notes  Payable  balances  outstanding to Verde totaled $12.0 million and $14.0
<PAGE>34
million  as  of September 30, 1997 and December 31, 1996, respectively.  Prior
to  June  21,  1996,  these  borrowings  accrued interest at an annual rate of
18.0%.  Effective  June  21, 1996 the annual interest rate on these borrowings
was  reduced  to  10.0%.  The  Company is required to make monthly payments of
interest  and annual payments of principal in the amount of $2.0 million. This
debt  is junior to all of the Company's other indebtedness and the Company may
suspend  interest  and  principal  payments  in  the event it is in default on
obligations  to  any  other  creditors.   In July 1997, the Company's Board of
Directors  approved  the  prepayment of the $12.0 million in subordinated debt
subject  to  various  conditions  including the Company's completion of a debt
offering.    No such prepayment has been made as of the date of filing of this
Form  10-Q.

On  December  31,  1995, Verde converted $10.0 million of subordinated debt to
Preferred  Stock  of  the Company. Prior to June 21, 1996, the Preferred Stock
accrued  a dividend of 12.0% annually, increasing one percent per year up to a
maximum of 18.0%. Effective June 21, 1996, the dividend on the Preferred Stock
was  decreased  from  12.0%  to  10.0%.  During  the  nine  month period ended
September 30, 1996, the Company paid a total of $817,000 in dividends to Verde
on  the Preferred Stock which was redeemed in November 1996.  As the preferred
stock  was  redeemed  in  1996,  there  were  no  dividends  paid  in  1997.

Securitizations.    Pursuant  to  the  Company's  Securitization  Program, the
Company  and SunAmerica entered into an agreement under which SunAmerica would
purchase  $175.0  million of certificates secured by contracts. As of June 30,
1997,  the Company had substantially utilized its maximum commitment from, and
does  not expect to complete any further securitizations with SunAmerica under
the  existing Securitization Program.  The Securitization Program has provided
the Company with a source of funding in addition to the Revolving Facility. At
the  closing  of  each securitization, the Securitization Subsidiaries receive
payment  for  the  certificates  sold (net of Investments Held in Trust).  The
Company  also  generates  cash  flow under this program from ongoing servicing
fees  and  excess  cash  flow  distributions  resulting  primarily  from  the
difference  between  the payments received from customers on the contracts and
the  payments  paid  on  the Class A Certificates. In addition, securitization
allows  the  Company  to fix its cost of funds for a given contract portfolio,
and  broadens  the Company's capital source alternatives. The Company sold its
securitization  that  was  consummated  during  the  three  month period ended
September  30,  1997  to private investors.  Failure to periodically engage in
securitization  transactions  will  adversely  affect  the  Company.

In  connection  with  its  securitization  transactions,  the  Securitization
Subsidiaries are required to make an initial cash deposit into an account held
by  the trustee (spread account) and to pledge this cash to the Trust to which
the  finance receivables were sold. The Trust in turn invests the cash in high
quality liquid investment securities. In addition, the cash flows due to the B
Certificates  first  are  deposited  into  the  spread account as necessary to
attain  and  maintain  the  spread  account  at  a specified percentage of the
underlying  finance  receivables principal balance. In the event that the cash
flows  generated by the finance receivables sold to the Trust are insufficient
to  pay  obligations  of  the  Trust,  including  principal or interest due to
certificate holders or expenses of the Trust, the trustee will draw funds from
the  spread  account  as  necessary  to  pay the obligations of the Trust. The
spread  account  must be maintained at a specified percentage of the principal
balances  of the finance receivables held by the Trust, which can be increased
in  the  event  delinquencies or losses exceed specified levels. If the spread
account  exceeds the specified percentage, the trustee will release the excess
cash  to  the  Securitization  Subsidiaries  from  the pledged spread account.

<PAGE>35
Debt  Shelf  Registration.  On  July  18,  1997,  the Company filed a Form S-3
registration  statement  for  the purpose of registering up to $200 million of
its  debt  securities  in  one  or  more  series  at prices and on terms to be
determined  at the time of sale.  The registration statement has been declared
effective  by  the  Securities  and  Exchange  Commission and is available for
future  debt  offerings.

Transactions regarding First Merchants Acceptance Corporation. First Merchants
Acceptance  Corporation  ("FMAC") filed for reorganization under Chapter 11 of
the  Federal  Bankruptcy  Code  on  July  11,  1997  ("Bankruptcy  Case").  In
connection  with  the Bankruptcy Case, the Company, which owns approximately 2
1/2%  of  FMAC's  outstanding  common stock with a cost basis of approximately
$1.5  million,  agreed  to provide up to $10 million of "debtor in possession"
financing  to  FMAC,  of  which  approximately $3.8 million was outstanding at
September 30, 1997. On August 20, 1997, the Company acquired approximately 78%
of  the  senior  secured debt ("Secured Debt") of FMAC from certain members of
the  senior  bank  group  (Bank  Group) that held such debt.  The Secured Debt
totaled  approximately  $97.8  million.    The  more  significant terms of the
purchase of the Secured Debt included, among other things, the (i) purchase by
the Company of the debt at a 10% discount of the outstanding principal amount;
(ii)  short-term  financing by the Bank Group to the Company for the purchase,
with interest accruing at LIBOR plus 2% and an up-front payment by the Company
to  the  Bank  Group equal to 20% of the purchase price; and (iii) issuance of
stock  warrants  to  the  Bank  Group  to purchase up to 389,800 shares of the
Company's  common  stock  at  an  exercise  price  of  $20  per  share  over a
thirty-month  term  and  subject  to  a  call  feature  by  the  Company.

Subsequent  to  September  30,  1997,  the  Company entered into a contract to
acquire,  subject  to various conditions that have not yet been satisfied, the
remaining  approximately  22% of the Secured Debt from two (2) unrelated third
parties  (the "Sellers").  The more significant terms of the purchase include,
among  other  things,  (i) the Company's right to purchase by an exercise of a
call right that expires on February 20, 1998 (the "Call Period"), and which is
followed  by  a  put  right by the Sellers that expires on March 15, 1998 (the
"Put Period"); (ii) a purchase price equal to ninety-five percent (95%) during
the  Call Period (and one hundred percent (100%) during the Put Period) of the
outstanding  principal balance of the purchased Secured Debt, plus interest on
such  purchase  price  from November 12, 1997 through the closing date of such
purchase  at  approximately  8.0% per annum, less all payments received by the
Sellers  with  respect  to  the  purchased  Secured  Debt  through the date of
closing;  and  (iii) the issuance of stock warrants to the Sellers to purchase
up  to  110,200  shares  of the Company's common stock at an exercise price of
$20.00  per  share  over  a 36 month term and subject to a call feature of the
Company.

Capital  Expenditures  and Commitments.  The Company is pursuing an aggressive
growth  strategy.  In  the  fourth  quarter  of 1996, the Company acquired the
leasehold  rights  to  an  existing  dealership  in  Las  Vegas, Nevada, which
commenced  operations  in  March  1997,  and has opened two new dealerships in
Phoenix,  Arizona  and  two  new  dealerships  in Albuquerque, New Mexico.  In
addition,  the  Company  has  two  dealerships in Phoenix, Arizona, one in San
Antonio,  two  in  Dallas,  one  in  Miami  and  one  in Tampa currently under
development.  Further,  the  Company  opened  11 new Branch Offices during the
three  month period ended September 30, 1997, and recently completed expansion
of  its  contract  servicing  and  collection  facility.

On  September  19,  1997,  the  Company  purchased  substantially  all  of the
dealership  and  loan  servicing  assets  of Kars Yes Holdings, Inc. (Kars), a
Company  in  the  business  of  selling  and  financing  used  motor vehicles,
<PAGE>36
including  six dealerships in the Los Angeles market, two in the Miami market,
two  in  the Atlanta market, and two in the Dallas market in exchange for $5.5
million  in  cash.    In  addition,  the Company intends to open 2 or more new
Branch  Offices  and  six or more Company Dealerships through the end of 1997.
The  Company  believes  that it will expend approximately $50,000 to establish
each  new  Branch  Office.  New Company Dealerships cost approximately $1.5 to
$1.7  million  to construct (excluding inventory).  Further, on July 11, 1997,
the  Company  entered  into  an  agreement  to  provide "debtor in possession"
financing  to  First Merchants Acceptance Corporation in an amount up to $10.0
million.  The  Company had advanced $3.8 million against this commitment as of
September 30, 1997.  The Company intends to finance these expenditures through
operating  cash flows and supplemental borrowings, including amounts available
under  the  Revolving  Facility  and  the  Securitization  Program,  if  any.

Common  Stock  Repurchase  Program.    In  October 1997 the Company's Board of
Directors  authorized  a  stock  repurchase  program  by which the Company may
acquire  up to one million shares of its common stock from time to time on the
open  market.    Under  the program, purchases may be made depending on market
conditions,  share price and other factors.  The stock repurchase program will
terminate  on  December  31,  1998,  unless extended by the Company's Board of
Directors,  and  may be discontinued at any time.  As of the date of filing of
this  Form  10-Q,  the Company had not repurchased any shares of common stock.

Year 2000.  The Company has commenced a study of its computer systems in order
to  assess  its exposure to year 2000 issues.  The Company expects to make the
necessary  modifications  or  changes  to  its computer information systems to
enable proper processing of transactions relating to the year 2000 and beyond.
The Company will evaluate appropriate courses of action, including replacement
of  certain  systems  whose  associated  costs would be recorded as assets and
subsequently  amortized.    However,  there can be no assurance that year 2000
costs  and  expenses  will  not have a material adverse affect on the Company.

SEASONALITY

Historically,  the  Company  has  experienced higher revenues in the first two
quarters of the year than in the latter half of the year. The Company believes
that  these results are due to seasonal buying patterns resulting in part from
the  fact  that  many  of  its customers receive income tax refunds during the
first  half  of  the year, which are a primary source of down payments on used
car  purchases.

INFLATION

Increases  in  inflation  generally  result  in  higher interest rates. Higher
interest rates on the Company's borrowings would decrease the profitability of
the  Company's  existing  portfolio.  The Company will seek to limit this risk
through  its  Securitization  Program  and,  to  the  extent market conditions
permit,  for contracts originated at Company Dealerships, either by increasing
the  interest  rate  charged,  or  the profit margin on, the cars sold, or for
contracts  acquired from Third Party Dealers, either by acquiring contracts at
a  higher  discount  or  with  a  higher APR. To date, inflation has not had a
significant  impact  on  the  Company's  operations.

ACCOUNTING  MATTERS

In February 1997, the Financial Accounting Standards Board issued Statement of
Financial  Accounting  Standards No. 128, "Earnings Per Share" (SFAS No. 128).
This  statement  is effective for both interim and annual periods ending after
December  15,  1997,  and  replaces the presentation of "primary" earnings per
<PAGE>37
share  with "basic" earnings per share and the presentation of "fully diluted"
earnings  per share with "diluted" earnings per share.  Earlier application is
not  permitted.    When  adopted,  all previously reported earnings per common
share  amounts must be restated based upon the provisions of the new standard.
Management  of  the Company does not expect that adoption of SFAS No. 128 will
have  a  material  impact  on  the  Company.

In  June  1997,  the  Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income" (SFAS
No.  130).    This  statement  is  effective  for  interim  and fiscal periods
beginning  after December 15, 1997, and requires the Company to classify items
of other comprehensive income by their nature in a financial statement, and to
display  the accumulated balance of other comprehensive income separately from
retained  earnings and additional paid-in capital in the equity section of the
statement  of  financial  position.  Management of the Company does not expect
that  the adoption of SFAS No. 130 will have a material impact on the Company.

In  June  1997,  the  Financial Accounting Standards Board issued Statement of
Financial  Accounting  Standards  No.  131,  "Disclosures about Segments of an
Enterprise  and  Related  Information"  (SFAS  No.  131).    This statement is
effective for fiscal years beginning after December 15, 1997, and requires the
Company to report information about operating segments in its annual financial
statements  and  further requires the Company to disclose selected information
about  operating  segments  in  interim  reports  to  shareholders.    It also
establishes  standards  for  related  disclosures about products and services,
geographic  areas,  and  major  customers.  Management of the Company does not
expect  that  the  adoption of SFAS No. 131 will have a material impact on the
Company.

The Securities and Exchange Commission has approved rule amendments to clarify
and  expand  existing  disclosure  requirements  for  derivative  financial
instruments.    The  amendments  require  enhanced  disclosure  of  accounting
policies  for  derivative  financial  instruments  in  the  footnotes  to  the
financial  statements.  In addition, the amendments expand existing disclosure
requirements  to include quantitative and qualitative information about market
risk inherent in market risk sensitive instruments.  The required quantitative
and  qualitative  information  are  to  be  disclosed  outside  the  financial
statements  and  related  notes  thereto.    The  enhanced  accounting  policy
disclosure requirements are effective for the quarter ended June 30, 1997.  As
the  Company  believe  that  the  derivative  financial  instrument disclosure
contained  within  the notes to the financial statements of its 1996 Form 10-K
substantially  conform  with  the  accounting  policy  requirements  of  these
amendments,  no further interim period disclosure has been provided.  The rule
amendments  that  require  expanded disclosure of quantitative and qualitative
information  about  market  risk  are  effective  with  the  1998  Form  10-K.


PART  II.    OTHER  INFORMATION

Item  1.                    Legal  Proceedings.

     The  Company  sells  its  cars  on  an  "as  is"  basis, and requires all
customers  to  sign  an  agreement  on  the date of sale pursuant to which the
Company  disclaims  any  obligation  for  vehicle-related  problems  that
subsequently  occur.  Although  the Company believes that such disclaimers are
enforceable  under  applicable  state, federal and other laws and regulations,
there  can be no assurance that they will be upheld in every instance. Despite
obtaining  these disclaimers, the Company, in the ordinary course of business,
receives  complaints  from customers relating to such vehicle-related problems
<PAGE>38
as  well  as alleged violations of federal and state consumer lending or other
similar laws and regulations. While most of these complaints are made directly
to  the  Company  or  to  various  consumer  protection  organizations and are
subsequently  resolved,  the  Company  is  named as a defendant in civil suits
filed  by customers in state, local, or small claims courts.  Additionally, in
the  ordinary  course of business, the Company is a defendant in various other
types  of  legal proceedings.  There can be no assurance that the Company will
not  be  a  target of similar claims and legal proceedings in the future.  The
Company  believes  that  the  ultimate  disposition  of  these  matters  on  a
cumulative  basis  will  not  have  a  material adverse effect on the Company.
However,  there  can  be  no  assurance  in  this  regard.

In  connection  with  the  Seminole  acquisition,  a purported creditor of the
sellers  filed,  on  January  21,  1997,  to  enjoin  the sale as a fraudulent
conveyance.  Alternatively,  the suit seeks to void any transfer of the assets
that has already occurred, to attach the assets that have been transferred, or
to  appoint  a  receiver to take charge of the assets transferred. The Company
has  not been named in this action, has received a specific indemnity from the
sellers  relating to this action, and has been advised by the sellers that, in
their  view,  the  claim  is  without  merit.    The Company believes that the
ultimate disposition of this matter will not have a material adverse effect on
the  Company.

Item  2.          Changes  in  Securities  and  Use  of  Proceeds.

     Warrants  to  purchase 389,800 shares of common stock of the Company were
issued in a private placement under Section 4(2) of the Securities Act of 1933
to  a group of banks in connection with the acquisition of senior Secured Debt
of  First Merchants Acceptance Corporation from such banks.  See a description
of  the  transaction  herein  under  "Management's  Discussion and Analysis of
Financial  Condition  and  Results  of  Operations  -  Introduction."

Item  3.          Defaults  Upon  Senior  Securities.

     None.

Item  4.          Submission  of  Matters  to  a  Vote  of  Security  Holders.

     None.

Item  5.          Other  Information.

     Subsequent  to September 30, 1997, the Company entered into a contract to
acquire,  subject  to various conditions that have not yet been satisfied, the
remaining  approximately  22% of the Secured Debt from two (2) unrelated third
parties  (the "Sellers").  The more significant terms of the purchase include,
among  other  things,  (i) the Company's right to purchase by an exercise of a
call right that expires on February 20, 1998 (the "Call Period"), and which is
followed  by  a  put  right by the Sellers that expires on March 15, 1998 (the
"Put Period"); (ii) a purchase price equal to ninety-five percent (95%) during
the  Call Period (and one hundred percent (100%) during the Put Period) of the
outstanding  principal balance of the purchased Secured Debt, plus interest on
such  purchase  price  from November 12, 1997 through the closing date of such
purchase  at  approximately  8.0% per annum, less all payments received by the
Sellers  with  respect  to  the  purchased  Secured  Debt  through the date of
closing;  and  (iii) the issuance of stock warrants to the Sellers to purchase
up  to  110,200  shares  of the Company's common stock at an exercise price of
$20.00  per  share  over  a 36 month term and subject to a call feature of the
Company.
<PAGE>39
Item  6.          Exhibits  and  Reports  on  Form  8-K.

     (a)          Exhibits


          Exhibit  10.a - Amended  and  Restated  Motor  Vehicle  Installment
                          Contract  Loan  and  Security  Agreement  between
                          Registrant and General Electric Capital  Corporation

          Exhibit  10.b - Employment Agreement between Registrant and Steven A.
                          Tesdahl*

          Exhibit  10.c - Amended  and Restated Employment Agreement between
                          Registrant  and  Donald  L.  Addink*

          Exhibit  11  - Statement Regarding Computation of Earnings Per Share

          Exhibit  27  - Financial  Data  Schedule

          Exhibit  99  - Cautionary  Statement  Regarding  Forward  Looking
                         Statements  and  Risk  Factors

____________________________

          *-  Denotes a management contract or compensatory plan, contract, or
              arrangement.


     (b)                    Reports  on  Form  8-K.

     During  the  third quarter of 1997, the Company filed two reports on Form
8-K.    The  first  report  on  Form  8-K,  dated July 17, 1997 and filed July
18,1997,  pursuant  to  Items  5  and  7,  filed a copy of the Company's press
release  entitled  "Ugly Duckling Corporation to Purchase Secured Bank Debt of
First Merchants Acceptance Corporation."  The second report on Form 8-K, dated
August  21,  1997  and filed September 5, 1997, pursuant to Items 2, 5, and 7,
reported  (1)  the  purchase  by  the Company of approximately 78% of the FMAC
senior  bank debt, (2) the expected recording of a third quarter charge to net
earnings  of  between  $4  million  to  $6  million  (after  taxes),  and  (3)
negotiations  between  the  Company and Kars to acquire certain dealership and
servicing assets of Kars.  After the third quarter 1997, the Company filed one
Form  8-K.   This Form 8-K, dated September 19, 1997 and filed October 5, 1997
pursuant  to Items 2, 5, and 7, reported (1) the completion of the acquisition
by  the  Company  of  certain  assets  of  Kars, and (2) the securitization of
approximately  $104  million  of  vehicle  receivables  by  CRC  II.














<PAGE>40
                                   SIGNATURE
                                   ---------

Pursuant  to  the  requirements  of  the  Securities Exchange Act of 1934, the
registrant  has  duly  caused  this  report  to be signed on its behalf by the
undersigned  thereunto  duly  authorized.


Ugly  Duckling  Corporation


Date:  November  14,  1997
       -------------------


/s/  Steven  T.  Darak
----------------------

Steven  T.  Darak
Senior  Vice  President  and
Chief  Financial  Officer
(Principal  Financial  and  Accounting  Officer)



































                                      S-1
                                      ===
<PAGE>41


                                 EXHIBIT INDEX


EXHIBIT
NUMBER          DESCRIPTION
------          -----------
10.a - Amended  and  Restated  Motor  Vehicle  Installment Contract  Loan  and 
       Security  Agreement  between Registrant and General Electric Capital  
       Corporation

10.b - Employment Agreement between Registrant and Steven A. Tesdahl*

10.c - Amended  and Restated Employment Agreement between Registrant and 
       Donald  L.  Addink*

11  - Statement Regarding Computation of Earnings Per Share

27  - Financial  Data  Schedule

99  - Cautionary  Statement  Regarding  Forward  Looking Statements  and  Risk
      Factors