CAUTIONARY  STATEMENT  REGARDING  FORWARD  LOOKING  STATEMENTS
--------------------------------------------------------------

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 stock of the Company involves certain risks. In addition to
the  other  information included elsewhere in this From 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  CONTINUED  PROFITABILITY; FLUCTUATIONS IN OPERATING RESULTS
------------------------------------------------------------------------------

The  Company  began operations in 1992 and incurred significant losses in 1994
and  1995.  In  1996,  however,  the  Company  achieved profitability with net
earnings  of  approximately  $5.9  million  (including  $4.4  million of gains
recognized  from  the  sale  of  contract  receivables  pursuant  to  the
Securitization  Program)  on  total revenues of $75.6 million. There can be no
assurance  that  the Company will remain profitable. Historically, the Company
has  experienced  higher  car  sales 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 part of
the  year,  which are a primary source of down payments on used car purchases.
See  Part  1,  Item  2.  "Management's  Discussion  and  Analysis of Financial
Condition  and  Results  of  Operations."
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,  all  of  the  Company's  securitization
transactions  have  been  completed  under  the  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.  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.    Champion  Receivables  Corporation ("CRC"), a bankruptcy remote
entity,   is   the   Company's  wholly-owned  special  purpose  securitization
subsidiary.   Its   assets   include  residuals  in  finance  receivables  and
investments  held  in trust, in the amounts of $27.4 million and $7.2 million,
respectively,  at  June  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."

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 20.1% of contract principal balances as of
June  30,  1997, to cover anticipated credit losses on the contracts 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
June  30,  1997  was  5.5%.  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 six months ended June
30,  1997  were  20.3%.  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.  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 two acquisitions and intends to consider
additional  acquisitions, alliances 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.   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.

The  Company  believes  that recent demographic, economic, and industry trends
favor  growth  in the used car sales and Sub-Prime Borrower financing markets.
To  the  extent  such  trends  do  not  continue,  however,  the  Company's
profitability  may  be  materially  and  adversely  affected.

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
and  may  continue to have a disruptive effect on the market for securities of
sub-prime automobile finance companies, are expected to result in a tightening
of  credit  to  the  sub-prime  markets, and could lead to enhanced regulatory
oversight.  Furthermore,  companies in the used car financing market have been
subject  to 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 subject to 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 Dealer 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  Dealer  Program.

GEOGRAPHIC  CONCENTRATION
-------------------------

Company  Dealership  operations  are  currently  located  in  Arizona,  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>
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  $50.0  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  90.0% of the principal balance of eligible Third Party
Dealer contracts.  The  Revolving Facility expires in September 1997, at which
time  the  Company  has  the  option  to  renew the Revolving Facility for one
additional year. 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.    For  a  discussion  of certain possible amendments to the
Revolving  Facility, see Part 1, Item 2. "Management's Discussion and Analysis
of  Financial  Condition  and  Results  of  Operations - Liquidity and Capital
Resources  - Revolving Facility.  In addition, the Company and SunAmerica have
entered  into  the  Securitization  Program  pursuant  to which SunAmerica may
purchase  up  to  $175.0  million  of Class A certificates. The Securitization
Program  is  subject to numerous terms and conditions, including the Company's
ability  to  achieve  investment -grade ratings on Class A Certificates. 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.  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 fully implement the Cygnet Dealer 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."

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.





<PAGE>
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.

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
Securities  Act of 1933, as amended (the "Securities Act"). No predictions can
be  made with respect to the effect, if any, that sales of the Common Stock in
the  market  or the availability of shares of Common Stock for sale under Rule
144  will  have  on  the  market price of Common Stock prevailing from time to
time.  Nevertheless,  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.


<PAGE>
POSSIBLE  VOLATILITY  OF  STOCK  PRICE
--------------------------------------

The  market  price  of  the  Common  Stock  could  be  subject  to significant
fluctuations  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
-------------------------------------------------------------

On  July 11, 1997, the Company entered into an agreement in principle with the
senior  bank  group  of  First  Merchants  Acceptance  Corporation ("FMAC") to
purchase  the  secured  debt  of  FMAC  held  by  such group.  The debt totals
approximately $103 million.  FMAC filed for reorganization under Chapter 11 of
the  Federal  Bankruptcy Code on that date.  In connection with the bankruptcy
proceedings,  the  Company,  which  owns  approximately  2  1/2%  of  FMAC's
outstanding  common stock with a cost basis of $1.5 million, agreed to provide
up  to  $10  million  of "debtor in possession" financing to FMAC, of which $3
million was outstanding at August 14, 1997.  The more significant terms of the
proposed purchase of senior debt provide, among other things, for (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 500,000 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.  The purchase
is  subject  to  certain conditions, including, but not limited to, bankruptcy
court  approval,  unless waived by the bank group, and execution of definitive
agreements.  No assurance can be given that the foregoing transactions will be
consummated.   Furthermore, no assurance can be given that the secured debt to
be  purchased  by  the Company or the "debtor in possession" financing will be
repaid  in full or that the Company will not be required to write off its $1.5
million  investment  in  FMAC  common  stock  as well as the professional fees
incurred  in  pursuing  the  foregoing  transactions.  See  Part  1,  Item  2.
"Management's  Discussion  and  Analysis of Financial Condition and Results of
Operations  -  Introduction."

DATA PROCESSING AND TECHNOLOGY
------------------------------

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 competitor in the Sub-Prime industry, including
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,  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 resolve these issues could
have a material adverse affect on the Company.

The  Company also services its loan portfolios on different loan servicing and
collection  data  processing  systems  in Tampa/St. Petersburg and San Antonio
which are also 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  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."