CAUTIONARY  STATEMENT  REGARDING  FORWARD  LOOKING STATEMENTS AND RISK FACTORS

The  Company  wishes  to take advantage of the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995 and is filing this cautionary
statement  in connection with such safe harbor legislation. The Company's Form
10-K,  Form  10-K/A,  this  Form 10-Q, any other Form 10-Q, any Form 8-K, Form
8-K/A,  other  SEC filings, or any other written or oral statements made by or
on  behalf of the Company may include forward looking statements which reflect
the  Company's  current  views  with  respect  to  future events and financial
performance.  The  words  "believe,"  "expect,"  "anticipate,"  "intend,"
"forecast,"  "project,"  and  similar  expressions  identify  forward  looking
statements.

The  Company  wishes  to caution investors that any forward looking statements
made  by  or  on  behalf of the Company are subject to uncertainties and other
factors  that  could  cause  actual  results  to  differ  materially from such
statements. These uncertainties and other factors include, but are not limited
to,  the Risk Factors listed below (many of which have been discussed in prior
SEC  filings  by  the  Company).  Though  the  Company  has  attempted to list
comprehensively  these  important  factors,  the  Company  wishes  to  caution
investors  that  other  factors  may  in  the  future prove to be important in
affecting the Company's results of operations. New factors emerge from time to
time and it is not possible for management to predict all of such factors, nor
can  it assess the impact of each such factor on the business or the extent to
which  any  factor,  or  combination  of  factors, may cause actual results to
differ  materially  from  forward  looking  statements.

Investors  are  further  cautioned not to place undue reliance on such forward
looking  statements  as  they speak only of the Company's views as of the date
the  statement  was  made.  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.

RISK  FACTORS

Investing in the securities of the Company involves certain risks. In addition
to  the  other  information  included  elsewhere  in this Form 10-Q, investors
should  give  careful  consideration  to  the following risk factors which may
impact  the  Company's  performance  and  the  price  of  its  stock.

NO  ASSURANCE  OF  PROFITABILITY

The Company began operations in 1992 and incurred significant operating losses
in 1994 and 1995. The Company experienced net earnings of $5.9 million in 1996
and  net  earnings  for the nine month period ended September 30, 1997 of $5.7
million.  However,  the Company realized a net loss for the three month period
ended  September  30,  1997  due  in  large  part to a charge of $10.0 million
(approximately  $6.0  million,  net  of income taxes) against the Residuals in
Finance  Receivables  Sold.  There  can  be no assurance that the Company will
regain profitability in the next fiscal quarter or in future periods. See Part
1,  Item  2.  "Management's Discussion and Analysis of Financial Condition and
Results  of  Operations."




<PAGE>90
LIQUIDITY

The  Company's  cash and cash equivalents have decreased from $18.5 million at
December 31, 1996 to $4.4 million at September 30, 1997.  This decrease is due
in  large  part  to  the  Company's  FMAC  Secured Debt purchase and debtor in
possession  loans, as well as the growth of the Cygnet Program loan portfolio.
The  Company  is  currently  in negotiations with a finance company to provide
financing  for  the  Cygnet  program  and  is in the process of evaluating its
alternatives  for  the  financing  of  the  FMAC  Secured  Debt  and debtor in
possession  loans.

DEPENDENCE  ON  SECURITIZATIONS

In  recent  periods,  a significant portion of the Company's net earnings have
been  attributable  to  gains  on  sales  of  contract  receivables  under its
Securitization  Program.  To  date,  substantially  all  of  the  Company's
securitization transactions have been completed under a Securitization Program
with  SunAmerica.  Under  this  program,  SunAmerica  was granted the right to
purchase  $175.0 million of Certificates. As of June 30, 1997, the Company had
substantially  utilized  its  maximum  commitment  from  SunAmerica  under the
Securitization  Program.  Beginning with the third fiscal quarter of 1997, the
Company  expanded the Securitization Program to include CRC II (defined below)
and  sales  of  CRC  II  securities through private placement of securities to
investors  other than Sun America. The Company is actively seeking to identify
alternative  securitization  participants.  Failure  to  identify  new
securitization  participants  and  to  periodically  engage  in securitization
transactions  will adversely affect the Company's cash flows and net earnings.
The  Company's  ability to successfully complete securitizations in the future
may also be affected by several factors, including the condition of securities
markets  generally,  conditions  in  the  asset-backed  securities  markets
specifically,  and the credit quality of the Company's portfolio. In addition,
with  respect to securitization transactions that have closed in the past, the
amount  of  any  gain on sale is based upon certain estimates and assumptions,
which  may  not subsequently be realized. To the extent that actual cash flows
on  a  securitization  are  materially  below  estimates, the Company would be
required  to revalue the subordinate certificate portion of the securitization
which it retains, and record a charge to earnings based upon the reduction. In
addition,  the Company records ongoing income based upon the cash flows on its
subordinate  certificate  portion.  The  income  recorded  on  the subordinate
certificate  portion  will  vary from quarter to quarter based upon cash flows
received  in  a  given  period.  To  the extent that cash flows are deficient,
charge-offs  of  finance receivables exceed original estimates, or assumptions
that  were  applied  at  the  time  of  the  securitization  to the underlying
portfolio  are  not  realized, the Company is required to revalue the residual
portion  of  the  securitization  which  it  retains,  and  record a charge to
operations.  During  the  three  month  period  ended  September 30, 1997, the
Company recorded a charge of $10.0 million ($6.0 million, net of income taxes)
against  the carrying value of the retained portion of its securitization. The
charge  resulted from an upward revision in the Company's net loss assumptions
related  to  the  underlying  contract  portfolios  supporting  the  Company's
retained  securitization  assets.  Although the Company believes the charge is
adequate  to  adjust  the  assumptions  to  a  level  which  will more closely
approximate  future net losses in the underlying contract portfolio, there can
be  no  assurance in that regard. To the extent that cash flows are deficient,
charge-offs  of  finance  receivables  exceed  the  revised  estimates, or the
revised  assumptions  that  were  applied  to the underlying portfolio are not
realized,  the  Company  is  required  to  revalue the residual portion of the
securitization  which  it retains, and record a charge to operations. Champion
Receivables  Corporation ("CRC") and Champion Receivables Corporation II ("CRC
<PAGE>91
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 and investments held in trust,
in  the amounts of $25.8 million and $15.1 million, respectively, at September
30,  1997, which amounts would not be available to satisfy claims of creditors
of  the  Company  on  a  consolidated basis. See Part 1, Item 2. "Management's
Discussion  and  Analysis  of  Financial Condition and Results of Operations."

DEPENDENCE  ON  EXTERNAL  FINANCING  AND  SECURITIZATION  PROGRAM

The  Company has borrowed, and will continue to borrow, substantial amounts to
fund  its operations from financing companies and other lenders, some of which
are  affiliated  with  the  Company. Currently, the Company receives financing
pursuant  to  the  Revolving  Facility  with  GE  Capital, which has a maximum
commitment  of  $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
Revolving Facility is secured by substantially all of the Company's assets. In
addition,  the Revolving Facility contains various covenants that limit, among
other  things,  the  Company's  ability to engage in mergers and acquisitions,
incur  additional indebtedness, and pay dividends or make other distributions,
and  also  requires  the Company to meet certain financial tests. Although the
Company  believes  it is currently in compliance with the terms and conditions
of  the Revolving Facility, there can be no assurance that the Company will be
able  to  continue  to satisfy such terms and conditions or that the Revolving
Facility will be extended beyond its current expiration date. In addition, the
Company has established a Securitization Program pursuant to which the Company
is  subject  to  numerous terms and conditions. Pursuant to the 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 securitized an aggregate of $210.0
million  in  contracts, and SunAmerica had purchased $170.4 million in Class A
Certificates,  thereby  substantially  utilizing  the  maximum commitment from
SunAmerica.  During  the  three  month  period  ended  September 30, 1997, the
Company  completed  a securitization transaction with private investors. There
can be no assurance that any further securitizations will be completed or that
the  Company  will  be  able  to  secure  additional  financing, including the
financing  necessary  to  pay in full the FMAC Bank Group (defined below) note
payable  of  approximately  $55.1  million,  or  to fully implement the Cygnet
Program,  when  and  as  needed  in  the future, or on terms acceptable to the
Company.  See  Part  1,  Item  2.  "Management's  Discussion  and  Analysis of
Financial  Condition  and  Results  of  Operations  -  Liquidity  and  Capital
Resources."

POOR  CREDITWORTHINESS  OF  BORROWERS;  HIGH  RISK  OF  CREDIT  LOSSES

Substantially  all  of  the  contracts  that  the  Company  services  are with
Sub-Prime  Borrowers.  Due  to their poor credit histories and/or low incomes,
Sub-Prime  Borrowers  are  generally  unable to obtain credit from traditional
financial  institutions,  such  as banks, savings and loans, credit unions, or
captive  finance  companies  owned  by  automobile  manufacturers. The Company
typically  charges  fixed  interest  rates ranging from approximately 21.0% to
29.9%  on  contracts originated at Company Dealerships, while rates range from
approximately 17.6% to 29.9% on the Third Party Dealer contracts it purchases.
In addition, the Company has established an Allowance for Credit Losses, which
approximated 13.9% and 17.7% of contract principal balances as of December 31,
1996  and  1995,  respectively, and 15.2% of contract principal balances as of
September  30,  1997,  to  cover  anticipated  credit  losses on the contracts
<PAGE>92
currently  in  its  portfolio.  At  December  31, 1996 and 1995, the principal
balance  of delinquent contracts as a percentage of total outstanding contract
principal  balances  was 3.7% and 4.2%, respectively. The principal balance of
delinquent  contracts  as a percentage of total outstanding contract principal
balances  at  September  30, 1997 was 5.6%. The Company's net charge offs as a
percentage  of  average principal outstanding for the years ended December 31,
1996 and 1995 were 16.7% and 21.7%, respectively. The Company's annualized net
charge  offs  as  a  percentage  of average principal outstanding for the nine
months  ended  September 30, 1997 were 19.7%. The Company believes its current
Allowance  for  Credit Losses is adequate to absorb anticipated credit losses.
However,  no  assurance  can be given that the Company has adequately provided
for,  or  will adequately provide for, such credit risks or that credit losses
in  excess  of its Allowance for Credit Losses will not occur in the future. A
significant  variation  in  the  timing of or increase in credit losses on the
Company's  portfolio  would have a material adverse effect on the Company. See
Part  1,  Item 2. "Management's Discussion and Analysis of Financial Condition
and  Results  of  Operations  -  Allowance  for  Credit  Losses."

RISKS  ASSOCIATED  WITH  GROWTH  STRATEGY  AND  NEW  PRODUCT  OFFERINGS

The  Company's  business strategy calls for aggressive growth in its sales and
financing  activities  through  the development and acquisition of new Company
Dealerships and Branch Offices and the expansion of its existing operations to
include  additional financing and insurance services. The Company's ability to
remain  profitable  as it pursues this business strategy will depend primarily
upon  its  ability  to: (i) expand its revenue generating operations while not
proportionately  increasing  its  administrative  overhead; (ii) originate and
purchase  contracts with an acceptable level of credit risk; (iii) effectively
collect payments due on the contracts in its portfolio; (iv) locate sufficient
financing,  with acceptable terms, to fund the expansion of used car sales and
the  origination  and  purchase  of additional contracts; and (v) adapt to the
increasingly competitive market in which it operates. Outside factors, such as
the economic, regulatory, and judicial environments in which it operates, will
also  have  an  effect  on  the Company's business. The Company's inability to
achieve  or  maintain  any or all of these goals could have a material adverse
effect  on  the  Company.

The  Company  has  initiated  its Cygnet Dealer Program, pursuant to which the
Company  provides qualified Third Party Dealers with operating lines of credit
secured  by  such  dealers'  retail  installment  contract  portfolios  and/or
inventory.  While the Company will require Third Party Dealers to meet certain
minimum  net  worth  and  operating  history  criteria  to  be  considered for
inclusion  in  the  Cygnet  Dealer Program, the Company will, nevertheless, be
extending  credit  to  dealers  who  are  not  otherwise  able  to obtain debt
financing  from traditional lending institutions such as banks, credit unions,
and  major  finance  companies.  Consequently,  similar  to  other  financing
activities,  the  Company will be subject to a high risk of credit losses that
could  have a material adverse effect on the Company's financial condition and
results  of  operations and on the Company's ability to meet its own financing
obligations.  Further, there can be no assurance that the Company will be able
to obtain the financing necessary to fully implement the Cygnet Dealer Program
or  pay  in  full  the  Bank  Group  debt  which  matures in February 1998. In
addition, there can be no assurance that the Company will be successful in its
efforts  to  expand  its  insurance  services.

NO  ASSURANCE  OF  SUCCESSFUL  ACQUISITIONS

The  Company  has recently completed three significant acquisitions (Seminole,
EZ  Plan, and Kars) and intends to consider additional acquisitions, alliances
<PAGE>93
and transactions involving other companies that could complement the Company's
existing  business.  There  can  be  no  assurance  that  suitable acquisition
parties,  joint  venture  candidates,  or  transaction  counterparties  can be
identified,  or that, if identified, any such transactions will be consummated
on  terms  favorable  to  the Company, or at all. Furthermore, there can be no
assurance  that  the  Company  will  be  able  to  integrate successfully such
acquired  businesses,  including  those  recently  acquired, into its existing
operations,  which  could  increase  the  Company's  operating expenses in the
short-term  and  materially  and  adversely  affect  the  Company's results of
operations. Moreover, these types of transactions by the Company may result in
potentially  dilutive  issuances  of  equity  securities,  the  incurrence  of
additional  debt,  and  amortization  of  expenses  related  to  goodwill  and
intangible  assets,  all  of  which  could  adversely  affect  the  Company's
profitability.  As  of  September  30, 1997, the Company had Goodwill totaling
approximately  $17.2 million, the components of which will be amortized over a
period  of 15 to 20 years.  These transactions involve numerous risks, such as
the diversion of the attention of the Company's management from other business
concerns,  the  entrance of the Company into markets in which it has had no or
only  limited  experience,  and  the  potential  loss  of key employees of the
acquired  company,  all  of  which could have a material adverse effect on the
Company.

HIGHLY  COMPETITIVE  INDUSTRY

Although  the used car sales industry has historically been highly fragmented,
it  has  attracted  significant  attention  from  a number of large companies,
including  AutoNation,  U.S.A.  and Driver's Mart, which have entered the used
car  sales  business  or  announced  plans  to  develop  large  used car sales
operations.  Many  franchised  new  car  dealerships have also increased their
focus  on  the  used car market. The Company believes that these companies are
attracted  by  the  relatively high gross margins that can be achieved in this
market  and  the industry's lack of consolidation. Many of these companies and
franchised  dealers have significantly greater financial, marketing, and other
resources  than  the  Company. Among other things, increased competition could
result  in  increased  wholesale  costs  for used cars, decreased retail sales
prices,  and  lower  margins.

Like the sale of used cars, the business of purchasing and servicing contracts
originated  from  the  sale  of  used  cars  to  Sub-Prime Borrowers is highly
fragmented  and  very  competitive.  In recent years, several consumer finance
companies  have  completed  public  offerings  in  order  to raise the capital
necessary  to  fund  expansion  and  support increased purchases of contracts.
These  companies have increased the competition for the purchase of contracts,
in many cases purchasing contracts at prices that the Company believes are not
commensurate  with  the associated risk. There are numerous financial services
companies  serving,  or capable of serving, this market, including traditional
financial  institutions  such  as banks, savings and loans, credit unions, and
captive  finance  companies  owned  by  automobile  manufacturers,  and  other
non-traditional  consumer  finance companies, many of which have significantly
greater  financial and other resources than the Company. Increased competition
may  cause  downward  pressure  on  the  interest rates the Company charges on
contracts originated by its Company Dealerships or cause the Company to reduce
or  eliminate  the  nonrefundable  acquisition  discount  on  the contracts it
purchases from Third Party Dealers, which could have a material adverse effect
on  the  Company.




<PAGE>94
GENERAL  ECONOMIC  CONDITIONS

The  Company's  business  is directly related to sales of used cars, which are
affected  by  employment  rates,  prevailing interest rates, and other general
economic  conditions.  While  the  Company  believes  that  current  economic
conditions  favor continued growth in the markets it serves and those in which
it  seeks  to  expand,  a  future economic slowdown or recession could lead to
decreased  sales  of used cars and increased delinquencies, repossessions, and
credit  losses  that  could  hinder  the  Company's  business.  Because of the
Company's focus on the sub-prime segment of the automobile financing industry,
its  actual  rate  of delinquencies, repossessions, and credit losses could be
higher  under  adverse conditions than those experienced in the used car sales
and  finance  industry  in  general.

INDUSTRY  CONSIDERATIONS  AND  LEGAL  CONTINGENCIES

In  recent  periods,  several  major used car finance companies have announced
major  downward  adjustments to their financial statements, violations of loan
covenants, related litigation, and other events. In addition, certain of these
companies have filed for bankruptcy protection. These announcements have had a
disruptive effect on the market for securities of sub-prime automobile finance
companies,  to  result in a tightening of credit to the sub-prime markets, and
could  lead  to  enhanced  regulatory oversight. Furthermore, companies in the
used  vehicle financing market have been named as a defendant in an increasing
number  of  class  action lawsuits brought by customers alleging violations of
various  federal  and  state consumer credit and similar laws and regulations.
Although  the Company is not currently a named defendant in any such lawsuits,
no  assurance  can  be given that such claims will not be asserted against the
Company  in the future or that the Company's operations will not be subject to
enhanced  regulatory  oversight.

NEED  TO  ESTABLISH  AND  MAINTAIN  RELATIONSHIPS  WITH  THIRD  PARTY  DEALERS

The  Company  enters  into  nonexclusive  agreements with Third Party Dealers,
which  may  be  terminated  by either party at any time, pursuant to which the
Company purchases contracts originated by such dealers that meet the Company's
established  terms and conditions. Pursuant to the Cygnet Program, the Company
enters  into  financing  agreements  with  qualified  Third Party Dealers. The
Company's  Third  Party  Dealer financing activities depend in large part upon
its  ability  to establish and maintain relationships with such dealers. While
the Company believes that it has been successful in developing and maintaining
relationships  with  Third  Party  Dealers  in  the  markets that it currently
serves,  there  can  be  no  assurance  that the Company will be successful in
maintaining  or  increasing  its  existing  Third Party Dealer base, that such
dealers  will  continue  to  generate  a volume of contracts comparable to the
volume  of  contracts historically generated by such dealers, or that any such
dealers  will  become  involved  in  the  Cygnet  Program.

GEOGRAPHIC  CONCENTRATION

Company  Dealership  operations  are  currently  located  in Arizona, Georgia,
California, Texas, Florida, Nevada, and New Mexico. In addition, a majority of
the  Company's  Branch  Offices  are  located  in Arizona, Texas, Florida, and
Indiana.  Because  of  this  concentration,  the  Company's  business  may  be
adversely  affected  in  the  event  of  a  downturn  in  the general economic
conditions  existing  in  the  Company's  primary  markets.



<PAGE>95
SENSITIVITY  TO  INTEREST  RATES

A  substantial  portion  of  the  Company's  financing income results from the
difference  between  the  rate of interest it pays on the funds it borrows and
the  rate  of  interest  it earns on the contracts in its portfolio. While the
contracts  the  Company  owns  bear interest at a fixed rate, the indebtedness
that  the  Company  incurs  under  its  Revolving Facility bears interest at a
floating rate. In the event the Company's interest expense increases, it would
seek  to  compensate  for  such increases by raising the interest rates on its
Company  Dealership contracts, increasing the acquisition discount at which it
purchases  Third Party Dealer contracts, or raising the retail sales prices of
its  used  cars. To the extent the Company were unable to do so, the Company's
net interest margins would decrease, thereby adversely affecting the Company's
profitability.

IMPACT  OF  USURY  LAWS

The  Company typically charges fixed interest rates ranging from approximately
21.0% to 29.9% on the contracts originated at Company Dealerships, while rates
range from approximately 17.6% to 29.9% on the Third Party Dealer contracts it
purchases.  Currently,  a  significant portion of the Company's used car sales
activities  are  conducted  in, and a significant portion of the contracts the
Company  services  are originated in, Arizona, which does not impose limits on
the interest rate that a lender may charge. However, the Company has expanded,
and  will  continue  to  expand,  its operations into states that impose usury
limits, such as Florida and Texas. The Company attempts to mitigate these rate
restrictions  by  raising  the  retail  prices  of its used cars or purchasing
contracts  originated  in  these  states  at  a higher discount. The Company's
inability  to  achieve  higher  sales  prices  or adequate discounts in states
imposing  usury  limits would adversely affect the Company's planned expansion
and  its  results  of  operations.  There  can  be no assurance that the usury
limitations  to  which the Company is or may become subject or that additional
laws,  rules,  and  regulations  that  may  be  adopted in the future will not
adversely  affect  the  Company's  business.

DEPENDENCE  UPON  KEY  PERSONNEL

The  Company's  future  success will depend upon the continued services of the
Company's  senior  management  as  well  as  the  Company's ability to attract
additional  members  to  its  management  team with experience in the used car
sales  and  financing  industry. The unexpected loss of the services of any of
the  Company's  key  management  personnel,  or  its  inability to attract new
management  when  necessary,  could  have  a  material adverse effect upon the
Company.  The  Company  has  entered into employment agreements (which include
non-competition provisions) with certain of its officers. The Company does not
currently  maintain  any  key  person  life  insurance on any of its executive
officers.

CONTROL  BY  PRINCIPAL  STOCKHOLDER

Mr. Ernest C. Garcia, II, the Company's Chairman, Chief Executive Officer, and
principal  stockholder,  holds  approximately  25.1% of the outstanding Common
Stock, including 136,000 shares held by The Garcia Family Foundation, Inc., an
Arizona  non-profit  corporation.  As  a  result, Mr. Garcia has a significant
influence  upon  the  activities  of  the  Company,  as well as on all matters
requiring approval of the stockholders, including electing or removing members
of  the  Company's  Board  of  Directors,  causing  the  Company  to engage in
transactions  with  affiliated  entities,  causing  or restricting the sale or
merger  of  the  Company,  and  changing  the  Company's  dividend  policy.
<PAGE>96
POTENTIAL  ANTI-TAKEOVER  EFFECT  OF  PREFERRED  STOCK

The  Company's  Certificate  of  Incorporation authorizes the Company to issue
"blank  check"  Preferred  Stock,  the  designation,  number,  voting  powers,
preferences,  and rights of which may be fixed or altered from time to time by
the Board of Directors. Accordingly, the Board of Directors has the authority,
without  stockholder  approval,  to  issue  Preferred  Stock  with  dividend,
conversion,  redemption,  liquidation,  sinking fund, voting, and other rights
that could adversely affect the voting power or other rights of the holders of
the  Common  Stock.  The  Preferred  Stock  could  be  utilized, under certain
circumstances,  to  discourage,  delay,  or prevent a merger, tender offer, or
change  in  control  of the Company that a stockholder might consider to be in
its  best  interests. Although the Company has no present intention of issuing
any  additional  shares  of  its  authorized  Preferred Stock, there can be no
assurance  that  the  Company  will  not  do  so  in  the  future.

REGULATION,  SUPERVISION,  AND  LICENSING

The  Company's  operations are subject to ongoing regulation, supervision, and
licensing  under  various  federal, state, and local statutes, ordinances, and
regulations.  Among  other  things, these laws require that the Company obtain
and  maintain certain licenses and qualifications, limit or prescribe terms of
the  contracts that the Company originates and/or purchases, require specified
disclosures  to  customers,  limit  the  Company's right to repossess and sell
collateral,  and  prohibit  the  Company  from  discriminating against certain
customers.  The  Company  is also subject to federal and state franchising and
insurance  laws.

The  Company  believes that it is currently in substantial compliance with all
applicable  material federal, state, and local laws and regulations. There can
be  no  assurance,  however,  that  the  Company  will  be  able  to remain in
compliance  with  such  laws,  and  such  failure  could  result  in  fines or
interruption or cessation of certain of the business activities of the Company
and  could have a material adverse effect on the operations of the Company. In
addition,  the adoption of additional statutes and regulations, changes in the
interpretation of existing statutes and regulations, or the Company's entrance
into  jurisdictions  with  more stringent regulatory requirements could have a
material  adverse  effect  on  the  Company.

SHARES  ELIGIBLE  FOR  FUTURE  SALE

Approximately 5.0 million shares of Common Stock outstanding as of the date of
this  Quarterly  Report  are  "restricted securities," as that term is defined
under  Rule  144  promulgated under the Securities Act. In general, under Rule
144  as  currently  in  effect,  subject  to the satisfaction of certain other
conditions, if one year has elapsed since the later of the date of acquisition
of restricted shares from an issuer or an affiliate of an issuer, the acquiror
or  subsequent  holder  is  entitled  to  sell  in the open market, within any
three-month period, a number of shares that does not exceed the greater of one
percent  of  the  outstanding  shares  of the same class or the average weekly
trading  volume  during  the  four  calendar weeks preceding the filing of the
required  notice  of  sale.  (A  person  who  has not been an affiliate of the
Company  for  at least the three months immediately preceding the sale and who
has  beneficially owned shares of Common Stock as described above for at least
two years is entitled to sell such shares under Rule 144 without regard to any
of  the  limitations  described  above.)  Of  the  "restricted  securities"
outstanding, substantially all of these shares have been held for the one-year
holding period required under Rule 144. In addition, approximately 3.4 million
shares  of  common  stock  were  recently  registered  for  resale  under  the
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Securities  Act  of  1933,  as amended (the "Securities Act"). The possibility
that  substantial amounts of Common Stock may be sold in the public market may
adversely  affect  prevailing  market  prices  for  the  Common  Stock.

POSSIBLE  VOLATILITY  OF  STOCK  PRICE

The  market price of the common stock has been and may continue to be volatile
in response to such factors as, among others, variations in the anticipated or
actual results of operations of the Company or other companies in the used car
sales  and  finance  industry,  changes  in  conditions  affecting the economy
generally,  analyst  reports,  or  general  trends  in  the  industry.

TRANSACTIONS  WITH  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  Senior  Debt  totaled  approximately $97.8 million.  The more significant
terms of the purchase of the Senior 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.

DATA  PROCESSING  AND  TECHNOLOGY  AND  YEAR  2000

The Company has dedicated significant resources to data processing and related
technologies,  which  management expects will enhance the Company's ability to
service  loan  portfolios,  meet  the  Company's operational requirements, and
eventually  reduce  costs. The Company believes that its continuing investment
in  data  processing and technology will allow it to remain competitive in the
industry.  The success of any participant in the Sub-Prime industry, including
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the  Company,  depends  in  part  on  its  ability  to  continue  to adapt its
technology,  on  a  timely and cost-effective basis, to meet changing customer
and industry standards and requirements. Related to the preceding, the Company
recently  converted  to  a  new  loan servicing and collection data processing
system  at its Gilbert, Arizona facility which services the Company's Arizona,
Nevada, and New Mexico Company Dealership loan portfolios as well as the Third
Party  Dealer  loan  portfolio.  The  system  became  operational in the first
quarter  of  1997;  however,  although  conditions  have improved, the Company
continues  to  confront  various implementation and integration issues for the
new  loan  servicing  and  collection data processing system, which management
believes  have resulted in increases in both contract delinquencies and charge
offs.  Delay  or  failure  to fully resolve these issues could have a material
adverse  affect  on  the  Company.

The Company also services its loan portfolios on loan servicing and collection
data processing systems in Tampa/St. Petersburg, San Antonio, and Dallas which
are  different  from  the loan servicing and collection data processing system
utilized at the Gilbert , Arizona facility. The Company expects to migrate and
convert  all  of its loan servicing and collection data processing to a single
loan  servicing  and  collection  data  processing  system which has yet to be
identified.  Failure  to  identify  and  successfully migrate and convert to a
single loan servicing and data processing system could have a material adverse
affect  on  the  Company.

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  impact  on  the  Company.

The  Company  is  dependent on its main processing facilities as well as long-
distance  and local telecommunications access in order to transmit and process
information  among  its  various  facilities. The Company maintains a disaster
response  plan,  but  a  natural disaster, calamity or other significant event
that causes long-term damage to any of these facilities or that interrupts its
telecommunications  networks  could  have  a  material  adverse  effect on the
Company.  See  Part  1,  Item  2.  "Management's  Discussion  and  Analysis of
Financial Condition and Results of Operations": "Allowance for Credit Losses -
Net  Charge  Offs  -  Company  Dealerships",  "Net  Charge  Offs - Third Party
Dealerships",  and  "Static  Pool  Analysis", "Contracts Originated at Company
Dealerships",  and  "Contracts  Purchased  From  Third  Party  Dealers."