United States Securities and Exchange Commission
                             Washington, D.C. 20549
                                    Form 10-Q

(Mark One)

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

                      For the quarterly period ended September 30, 2000

                                       or

          ( )  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 or  15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934

                  For the Transition Period from _____ to _____

                         Commission File Number: 0-26412

                          UNION ACCEPTANCE CORPORATION
                          ----------------------------
             (Exact name of registrant as specified in its charter)


        Indiana                                            35-1908796
        -------                                            ----------
(State or other jurisdiction                            (I.R.S. Employer
of incorporation or organization)                       Identification Number)


   250 N. Shadeland Avenue, Indianapolis, IN                   46219
   -----------------------------------------                   -----
    (Address of principal executive office)                  (Zip Code)


                                 (317) 231-6400
                                 --------------
              (Registrant's telephone number, including area code)

         Indicate  by check mark  whether  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
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:

                  Class                       Outstanding at November 13, 2000

Class A Common Stock, without par value           5,816,024
---------------------------------------           ---------
Class B Common Stock, without par value           7,461,608
---------------------------------------           ---------

<PAGE>

                  UNION ACCEPTANCE CORPORATION AND SUBSIDIARIES
                                    FORM 10-Q
                                      INDEX

                                                                       Page

Part I.  FINANCIAL INFORMATION

Item 1.  Consolidated Condensed Financial Statements (unaudited):

         Consolidated Condensed Balance Sheets as of
         September 30, 2000 and June 30, 2000                            3

         Consolidated Condensed Statements of Earnings
         for the Three Months Ended September 30, 2000 and 1999          4

         Consolidated Condensed Statements of Cash Flows for the
         Three Months Ended September 30, 2000 and 1999                  5

         Consolidated Condensed Statement of Shareholders'
         Equity for the Three Months Ended September 30, 2000            6

         Notes to Consolidated Condensed Financial Statements            7

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations                            10

Item 3.  Quantitative and Qualitative Disclosures about Market Risk     21

Part II. OTHER INFORMATION                                              23

         Signatures                                                     24
<PAGE>

<TABLE>
<CAPTION>

Union Acceptance Corporation and Subsidiaries
Consolidated Condensed Balance Sheets
(Dollars in thousands, except share data)
(Unaudited)
                                                                     September 30,       June 30,
Assets                                                                 2000                2000
                                                                       ---------         ---------

<S>                                                                    <C>               <C>
Cash and cash equivalents                                              $  14,425         $  14,792
Restricted cash                                                           10,377            13,010
Receivables held for sale, net                                           271,023           206,701
Retained interest in securitized assets                                  225,859           208,431
Accrued interest receivable                                                2,293             1,727
Property, equipment, and leasehold improvements, net                       9,319             9,494
Other assets                                                              24,393            23,983
                                                                       ---------         ---------
Total Assets                                                           $ 557,689         $ 478,138
                                                                       =========         =========

Liabilities and Shareholders' Equity

Liabilities
-----------
Amounts due under warehouse facilities                                 $ 246,394         $ 152,235
Long-term debt                                                           155,000           177,000
Accrued interest payable                                                   4,100             5,408
Amounts due to trusts                                                     16,523            14,487
Dealer premiums payable                                                    4,682             3,663
Current and deferred income taxes payable                                 11,613             9,740
Other payables and accrued expenses                                        5,900             5,576
                                                                       ---------         ---------

Total Liabilities                                                        444,212           368,109
                                                                       ---------         ---------

Commitment and Contingencies                                                 -                 -

Shareholders' Equity
--------------------
Preferred Stock, without par value, authorized
  10,000,000 shares; none issued and outstanding                             -                 -

Class A Common Stock, without par value, authorized
  30,000,000 shares; 5,816,024 shares issued and outstanding
  at September 30, 2000 and June 30, 2000                                 58,632            58,632

Class B Common Stock, without par value, authorized
  20,000,000 shares; 7,461,608 shares issued and outstanding
  at September 30, 2000 and June 30, 2000                                    -                 -

Accumulated other comprehensive earnings, net of income taxes              4,003             3,564
Retained earnings                                                         50,842            47,833
                                                                       ---------         ---------

Total Shareholders' Equity                                               113,477           110,029
                                                                       ---------         ---------

 Total Liabilities and Shareholders' Equity                            $ 557,689         $ 478,138
                                                                       =========         =========
</TABLE>

See accompanying notes to consolidated condensed financial statements.


<PAGE>

<TABLE>
<CAPTION>
Union Acceptance Corporation and Subsidiaries
Consolidated Condensed Statements of Earnings
(Dollars in thousands, except share data)
(Unaudited)

                                                                  Three Months Ended
                                                                    September 30,
                                                          -----------------------------------
                                                               2000                1999
                                                          ----------------    ---------------


<S>                                                              <C>                 <C>
Interest on receivables held for sale                            $ 14,371            $ 8,145
Retained interest and other                                         7,300              5,728
                                                          ----------------    ---------------

   Total interest income                                           21,671             13,873
Interest expense                                                   11,041              6,564
                                                          ----------------    ---------------

   Net interest margin                                             10,630              7,309
Provision for estimated credit losses                                 975                750
                                                          ----------------    ---------------
   Net interest margin after provision
     for estimated credit losses                                    9,655              6,559
                                                          ----------------    ---------------

Gain on sales of receivables, net                                   7,867              6,530
Loss on interest rate swaps on securitized receivables             (5,350)                 -
Loss on interest rate swaps on held for sale receivables           (2,440)                 -
Servicing fees                                                      6,719              6,068
Late charges and other fees                                         1,755              1,505
                                                          ----------------    ---------------

  Other revenues                                                    8,551             14,103
                                                          ----------------    ---------------

Salaries and benefits                                               7,918              6,927
Other general and administrative expenses                           5,512              4,914
                                                          ----------------    ---------------

  Total operating expenses                                         13,430             11,841
                                                          ----------------    ---------------

Earnings before provision for income taxes                          4,776              8,821
Provision for income taxes                                          1,767              3,402
                                                          ----------------    ---------------

Net earnings                                                      $ 3,009            $ 5,419
                                                          ================    ===============

 Net earnings per common share (basic and diluted)                 $ 0.23             $ 0.41
                                                          ================    ===============

Basic weighted average number of common
  shares outstanding                                           13,277,632         13,250,660

  Common stock options                                             38,256             44,886
                                                          ----------------    ---------------

Diluted weighted average number of common
  shares outstanding                                           13,315,888         13,295,546
                                                          ================    ===============
</TABLE>

See accompanying notes to consolidated condensed financial statements.

<PAGE>
<TABLE>
<CAPTION>

Union Acceptance Corporation and Subsidiaries
Consolidated Condensed Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
                                                                                  Three Months Ended
                                                                                     September 30,
                                                                      ------------------------------------
                                                                            2000                 1999
                                                                      ---------------      ---------------

Cash flows from operating activities:
<S>                                                                          <C>                  <C>
   Net earnings                                                              $ 3,009              $ 5,419
    Adjustments to reconcile net earnings to net cash
      from operating activities:
         Increase in receivables held for sale, net of liquidations         (563,153)            (330,869)
         Dealer premiums paid, net on receivables held for sale              (15,198)              (9,812)
         Proceeds from securitization of receivables held for sale           499,999              364,792
         Gain on sales of receivables                                        (11,072)              (7,369)
         Impairment of retained interest in securitized assets                     -                  240
         Accretion of discount on retained interest in securitized assets     (7,017)              (5,172)
         Provision for estimated credit losses                                   975                  750
         Amortization and depreciation                                         1,663                  904
         Restricted cash                                                       2,633                  311
         Other assets and accrued interest receivable                         (1,237)               1,321
         Amounts due to trusts                                                 2,036                 (445)
         Other payables and accrued expenses                                     889               (5,584)
                                                                      ---------------      ---------------
                 Net cash provided by (used in) operating activities         (86,473)              14,486
                                                                      ---------------      ---------------

Cash flows from investing activities:
   Collections on retained interest in securitized assets
    and change in spread accounts and accelerated principal                   14,742               23,743
   Capital expenditures                                                         (270)                (560)
                                                                      ---------------      ---------------
                 Net cash provided by investing activities                    14,472               23,183
                                                                      ---------------      ---------------

Cash flows from financing activities:
   Principal payment on long-term debt                                       (22,000)             (22,000)
   Stock options exercised                                                       -                     12
   Net change in warehouse credit facilities                                  94,159              (15,685)
   Payment of borrowing fees                                                    (525)                (446)
                                                                      ---------------      ---------------
                 Net cash provided by (used in) financing activities          71,634              (38,119)
                                                                      ---------------      ---------------

Change in cash and cash equivalents                                             (367)                (450)

Cash and cash equivalents, beginning of period                                14,792                8,088
                                                                      ---------------      ---------------

Cash and cash equivalents, end of period                                    $ 14,425              $ 7,638
                                                                      ===============      ===============

Supplemental disclosures of cash flow information:
Income taxes paid                                                               $154              $ 7,439
Interest paid                                                                $11,570              $ 9,782
</TABLE>

See accompanying notes to consolidated condensed financial statements.

<PAGE>

<TABLE>
<CAPTION>

Union Acceptance Corporation and Subsidiaries
Consolidated Condensed Statement of Shareholders' Equity
For the Three Months Ended September 30, 2000
(Dollars in thousands, except per share data)
(Unaudited)



                                       Number of Common Stock                 Accumulated
                                         Shares Outstanding                      Other                         Total
                                      --------------------------  Common     Comprehensive      Retained    Shareholders'
                                        Class A       Class B      Stock         Earnings       Earnings       Equity
                                      -------------------------------------------------------------------------------------

<S>                                    <C>           <C>         <C>          <C>               <C>          <C>
Balance at June 30, 2000               5,816,024     7,461,608   $58,632      $ 3,564           $ 47,833     $ 110,029

Comprehensive earnings:
  Net earnings                               -             -         -            -                3,009         3,009
  Net unrealized gain on retained
     interest in securitized assets          -             -         -            691                -             691
  Income taxes related to unrealized
    gain in securitized assets               -             -         -           (252)               -            (252)
                                                                                                             --------------
Total comprehensive earnings                                                                                     3,448

                                      -------------------------------------------------------------------------------------
Balance at September 30, 2000          5,816,024     7,461,608   $58,632      $ 4,003           $ 50,842     $ 113,477
                                      =====================================================================================


</TABLE>

See accompanying notes to consolidated condensed financial statements.

<PAGE>


Union Acceptance Corporation and Subsidiaries
Notes to Consolidated Condensed Financial Statements
For the Three Months Ended September 30, 2000 and 1999
(Unaudited)

Note 1 - Basis of Presentation

         The  foregoing   consolidated   condensed   financial   statements  are
unaudited.  However, in the opinion of management, all adjustments necessary for
a fair  presentation  of the results of the interim  period  presented have been
included.  All adjustments are of a normal and recurring nature. Results for any
interim period are not necessarily  indicative of results to be expected for the
year. The consolidated  condensed  financial  statements include the accounts of
Union Acceptance  Corporation  ("UAC") and its subsidiaries  (collectively,  the
"Company").

         The  consolidated  condensed  interim  financial  statements  have been
prepared  in  accordance  with Form 10-Q  specifications  and  therefore  do not
include  all  information  and  footnotes  normally  shown in  annual  financial
statements.  A summary of the Company's  significant  accounting policies is set
forth in "Note 1" of the "Notes to  Consolidated  Financial  Statements"  in the
Company's  Annual Report on Form 10-K for the year ended June 30, 2000.  Certain
amounts for the prior  period have been  reclassified  to conform to the current
period presentation.

Note 2 - Retained Interest in Securitized Assets

         Retained  Interest  in  Securitized  Assets  ("Retained  Interest")  is
recorded as an "available for sale" security and is recorded at fair value.  The
associated  unrealized  gains and losses  attributable to changes in fair value,
net of income taxes are recorded as a separate component of shareholders' equity
("accumulated other comprehensive  earnings").  Other than temporary  impairment
charges  are  recorded  through  earnings  as a  component  of  gain  on sale of
receivables, net.

         The  average of the  interest  rates  received on  receivables  exceeds
the interest rates paid on securities issued in the securitization. Accordingly,
Retained Interest is a significant asset of the Company. In determining the fair
value  of  the  Retained   Interest,   the  Company  must  estimate  the  future
prepayments,   rates  of  gross   credit   losses  and  credit  loss   severity,
delinquencies  and  prepayments,  as they  impact  the  amount and timing of the
estimated cash flows. The Company estimates prepayments by evaluating historical
prepayment performance of comparable receivables and the impact of trends in the
economy. The Company has used annual prepayment estimates ranging from 21.88% to
28.00% on Tier I receivables  and 21.00% on Tier II receivables at September 30,
2000. The Company  estimates  gross credit losses and credit loss severity using
available  historical  loss data for  comparable  receivables  and the  specific
characteristics  of the receivables  purchased by the Company.  The Company used
net credit loss  assumptions of 4.00% to 6.24% on Tier I receivables  and 12.00%
on Tier II receivables,  as a percentage of the original  principal balance over
the life of the receivables to value Retained Interest at September 30, 2000.

         The  Company  determines  the  estimated  fair  value  of its  Retained
Interest by  discounting  the expected  cash flows  released from the Trust (the
cash  out  method)  using  a  discount  rate  which  the  Company   believes  is
commensurate  with the risks  involved.  The Company used tiered  discount rates
based  on a  pool's  specific  risk  factors  up to 900  basis  points  over the
applicable U.S.  Treasury Rate. The Company utilized discount rates ranging from
9.07% to 15.00% on Tier I receivables  and 14.05% on Tier II  receivables on the
estimated  cash  flows to be  released  from the  Spread  Account  to value  the
Retained Interest at September 30, 2000. The weighted average discount rate used
to value Retained  Interest at September 30, 2000 was 13.52%  compared to 13.78%
at June 30, 2000.

         In July 2000, the  Emerging  Issues  Task Force ("EITF") finalized  the
provisions  of EITF  Issue  No.  99-20,  "Recognition  of  Interest  Income  and
Impairment  of  Purchased  and  Retained  Beneficial  Interests  in  Securitized
Financial Assets",  ("EITF 99-20").  EITF 99-20 sets forth rules for recognizing
interest  income and  determining  when  securities must be written down to fair
value because of other than temporary  impairments.  EITF 99-20 will require the
"prospective  method" of adjusting the  recognition of interest  income when the
anticipated  cash flows have either  increased or  decreased.  Anticipated  cash
flows can change as the result of factors  such as  prepayment  rates and credit
losses.  Under the provisions of EITF 99-20, an other than temporary  impairment
must be recorded when the  anticipated  cash flows have decreased since the last
estimate and the fair value of the  Retained  Interest is less than the carrying
value.


<PAGE>
Union Acceptance Corporation and Subsidiaries
Notes to Consolidated Condensed Financial Statements
For the Three Months Ended September 30, 2000 and 1999
(Unaudited)

         The Company  currently  applies  certain  provisions  of EITF Issue No.
93-18 "Recognition of Impairment for an Investment in a Collateralized  Mortgage
Obligation Instrument or in a Mortgage-Backed  Interest-Only Certificate" ("EITF
93-18") regarding impairment. EITF 99-20 will no longer allow for measurement of
other than temporary  impairments  based on fair values  discounted at risk free
rates.

         The  effective  date for EITF 99-20 is January  1, 2001,  with  earlier
adoption  permitted.  Any write-down  associated with the implementation of EITF
99-20  would be  reported  as a  "cumulative  effect of a change  in  accounting
principle" and would be reported on a prospective basis. The Company anticipates
adopting the provision of EITF 99-20 as of January 1, 2001.  The Company has not
evaluated the impact of this change.

<TABLE>
<CAPTION>
Retained Interest in Securitized Assets is as follows (in thousands) at:

                                                September 30,    June 30,
                                                    2000           2000
                                                --------------------------
<S>                                             <C>            <C>
Estimated gross interest spread from
  receivables, net of estimated
  prepayments and fees                          $  312,061     $  287,661
Estimated dealer premium rebates refundable         17,435         18,133
Estimated credit losses on securitized
  receivables                                     (126,250)      (119,003)
Accelerated Principal (1)                           28,823         24,082
Spread accounts                                     63,772         58,663
Discount to present value                          (69,982)       (61,105)
                                                --------------------------
 Total Retained Interest in Securitized Assets  $  225,859     $  208,431
                                                ==========     ===========
Outstanding balance of securitized receivables  $2,895,305     $2,676,655
Estimated credit losses as a percentage of      ==========     ===========
  securitized receivables serviced                    4.36%          4.45%

(1)  Also referred to as "turbo".


</TABLE>

<PAGE>



Union Acceptance Corporation and Subsidiaries
Notes to Consolidated Condensed Financial Statements
For the Three Months Ended September 30, 2000 and 1999
(Unaudited)

Note 3 - Segment Information

         The  Company  has a  single  reportable  segment  which  is  acquiring,
securitizing and servicing  retail  automobile  installment  sales contracts and
installment  loan  agreements  originated by dealerships  affiliated  with major
domestic and foreign  automobile  manufacturers.  The single segment is based on
management's   approach  to  operating  decisions,   assessing  performance  and
reporting financial information.

Note 4 - Earnings Per Share

         Options  to  purchase  shares of common  stock  are  excluded  from the
calculation  of Earnings Per Share ("EPS")  assuming  dilution when the exercise
prices of these options are greater than the average  market price of the common
share during the period.  The  following  chart  indicates the numbers of shares
which were  excluded  from the  calculation  of EPS  assuming  dilution  for the
periods indicated:

                               Three Months Ended
                                 September 30,
                         -----------------------------
                            2000              1999
                         -----------    --------------

                          766,875          398,077

Note 5 - Current Accounting Pronouncements

     In  September  2000,  the  Financial   Accounting  Standards  Board  issued
Statement  of  Accounting  Standards  No  140,  "Accounting  for  Transfers  and
Servicing of Financial  Assets and  Extinguishments  of Liabilities"  ("SFAS No.
140").  SFAS No. 140 replaces  Statement of Accounting  Standard No. 125,  which
bears the same title,  ("SFAS No. 125"). SFAS No. 140 is effective for transfers
and servicing of financial assets and  extinguishments of liabilities  occurring
after March 31, 2001. Other provisions of the statement are effective for fiscal
years  ended  after  December  15,  2000  and  include   additional   disclosure
requirements  and  changes  related  the  recognition  and  reclassification  of
collateral. The Company has not evaluated the impact of this change.


<PAGE>


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

Results of Operations

         Acquisition Volume.  The Company currently  acquires  receivables in 40
states from over 5,200  manufacturer-franchised  auto  dealerships.  The Company
focuses its efforts on acquiring receivables on late model used and, to a lesser
extent,  new  automobiles  made to  purchasers  who exhibit a  favorable  credit
profile ("Tier I"). Total  receivable  acquisitions  were $576.4 million for the
quarter  ended  September 30, 2000,  compared to $450.2  million for the quarter
ended June 30,  2000,  and $330.3  million  for the same  quarter of last fiscal
year.  The Company  believes the  increase in  receivables  acquisitions  is the
result of better  dealer  service,  primarily due to an increase in staffing for
nights and weekends to better handle the volume,  an increase in active dealers,
and a decrease  in  competition.  The  Company  believes  that the  purchase  of
automobiles  by  consumers  and the  financing  of these  purchases is seasonal;
therefore,  the Company expects  receivable  acquisitions  for the quarter ended
December  31, 2000 will be lower than that of the quarter  ended  September  30,
2000. See - "Discussion of  Forward-Looking  Statements".  The Company's primary
focus remains on acquiring  high quality,  profitable  receivables.  The Company
believes that its increased  emphasis on growing existing markets will result in
future  increased  acquisition  volume.  See -  "Discussion  of  Forward-Looking
Statements".

         Gross and Net Spreads.  The gross and net spreads on the first  quarter
securitization  of fiscal 2001 were 6.67% and 4.67% compared to 7.09% and 6.20%,
respectively, over the same quarter of last fiscal year. Gross spread is defined
as the difference  between the weighted average receivable rate and the weighted
average  certificate  rate.  Net spread is defined as the gross  spread,  net of
upfront costs,  servicing fees,  ongoing credit  enhancement fees, trustee fees,
and the economic  hedging gains or losses.  During June 2000,  the Company began
migrating to a risk based pricing model which attempts to price the acquisitions
based on perceived  risks such as credit risk,  age of the car,  length of terms
and advance over the vehicle's book value.  The risk based pricing model rewards
those customers with better credit quality with lower rates, which in turn could
potentially lower the Company's net spread.

         Net  spreads  are  currently   targeted  between  5.00%  and  5.50%  on
securitizations  for the  remaining  three  quarters  of fiscal  2001.  Although
management believes these targeted net spreads can be achieved, material factors
affecting the net spreads are difficult to predict and could cause  management's
projections to be materially inaccurate. These include current market conditions
with respect to interest rates and demand for asset-backed  securities generally
and for securities  issued in  securitizations  sponsored by the Company.  See -
"Discussion of Forward-Looking Statements".

         Portfolio Performance. The Company saw an increase in net credit losses
during the quarter ended September 30, 2000, compared to the quarters ended June
30, 2000 and September 30, 1999.  As shown in the following  tables,  Tier I net
credit losses totaled 2.11% for the quarter ended  September 30, 2000,  compared
to 2.05% and 1.97% for the quarters  ended June 30, 2000 and September 30, 1999,
respectively.  Delinquency  on the  Tier I  automobile  portfolio  was  3.13% at
September  30, 2000,  compared to 2.82% and 3.18% at June 30, 2000 and September
30, 1999,  respectively.  Recoveries as a percentage of gross charge-offs on the
Tier I portfolio were 41.01% for the quarter ended September 30, 2000,  compared
to 41.45% and 41.12% for the  quarters  ended June 30,  2000 and  September  30,
1999, respectively.

         Notwithstanding modest increases during the quarter ended September 30,
2000,   delinquency  and  credit  loss   percentages  are  within   management's
expectations and continue to exhibit relative stability.  The Company attributes
the overall strength of the portfolio to strong underwriting  guidelines,  based
on improved  risk-based  portfolio  analysis,  and focused  collection  efforts.
Overall  recovery  percentages  have been relatively  stable over the past year,
bolstered in part by the significantly higher recovery rates the Company is able
to realize by disposing of repossessed  vehicles throughout its retail operation
rather than at auction.  Approximately 15% of repossessed  automobiles were sold
at the Company's retail operations during the quarter ended September 30, 2000.

         Provisions are made for estimated net credit losses in conjunction with
each  receivable  sale. The current  assumption  utilized in the gain on sale of
receivables calculation for estimated net credit losses on the fiscal 2001 first
quarter  securitization  was 4.60% over the life of the pool and  included  only
Tier I  receivables  compared  to 4.50%  over the life of the pool on the fiscal
2000  first  quarter  securitization  which  included  both  Tier I and  Tier II
receivables.  Estimated  net  credit  losses  as  a  percentage  of  securitized
receivables  serviced (inherent in Retained Interest) was 4.36% at September 30,
2000,  compared  to 4.45% and 4.57% at June 30,  2000 and  September  30,  1999,
respectively.


<PAGE>



         Certain information  concerning the Company's experience  pertaining to
net credit losses and delinquencies on the Tier I fixed rate retail  automobile,
light  truck  and van  receivables  serviced  by the  Company  is  shown  in the
following  tables.  There can be no  assurance  that  future net credit loss and
delinquency  experience  on  receivables  will be  comparable  to that set forth
below. See "Discussion of Forward-Looking Statements".
<TABLE>
<CAPTION>

                                                                    Tier I Credit Loss Experience
                                                                      For the Three Months Ended
                                     ---------------------------------------------------------------------------------------------
                                     ---------------------------------------------------------------------------------------------

                                          September 30, 2000              June 30, 2000                    September 30, 1999
                                     -------------------------- --------------------------------  --------------------------------
                                                                        (Dollars in thousands)

                                       Number of                     Number of                        Number of
                                      Receivables      Amount       Receivables        Amount       Receivables       Amount
                                      -----------      ------       -----------        ------       -----------       ------
<S>                                    <C>           <C>               <C>            <C>               <C>         <C>
Average servicing portfolio            246,406       $3,031,640        231,176        $2,771,197        216,508     $2,515,461


Gross charge-offs                        2,306       $   27,099          2,099        $   24,311          2,003     $   21,088
Recoveries                                               11,112                           10,076                         8,671
                                                     ----------                       ----------                    ----------
  Net charge-offs                                    $   15,987                       $   14,235                    $   12,417
                                                     ==========                       ==========                    ==========

Gross charge-offs as a percentage
  of average servicing portfolio (1)     3.74%            3.58%          3.63%             3.51%          3.70%          3.35%
Recoveries as a percentage of
  gross charge-offs                                      41.01%                           41.45%                        41.12%
Net charge-offs as a percentage
  of average servicing portfolio (1)                      2.11%                            2.05%                         1.97%
    (1) Annualized

</TABLE>
<TABLE>
<CAPTION>

                                                            Tier I Delinquency Experience
                          ---------------------------------------------------------------------------------------------------

                                At September, 2000                At June 30, 2000               At September 30, 1999
                          -------------------------------- -------------------------------  ---------------------------------
                                                                (Dollars in thousands)

                             Number of                         Number of                      Number of
                           Receivables         Amount         Receivables      Amount        Receivables         Amount
<S>                            <C>           <C>                <C>          <C>                 <C>           <C>
Servicing portfolio            252,293       $3,133,025         235,732      $2,848,150          217,296       $ 2,530,654
Delinquencies:
  30-59 days                     5,120         $ 56,184           4,204        $ 45,442            4,714          $ 50,734
  60-89 days                     2,482           29,062           2,176          25,250            1,955            20,439
  90 days or more                1,158           12,918             886           9,710              875             9,291
                          ------------- ---------------- --------------- ---------------  --------------- -----------------
Total delinquencies              8,760         $ 98,164           7,266        $ 80,402            7,544          $ 80,464
                          ============= ================ =============== ===============  =============== =================
Delinquency as a percentage
  of servicing portfolio         3.47%            3.13%           3.08%           2.82%            3.47%             3.18%

</TABLE>

         Net earnings are summarized in the table below. Net earnings  decreased
44.5% for the quarter ended  September  30, 2000,  compared to the quarter ended
September  30,  1999.  The  decrease  over the same quarter of the prior year is
primarily  due to lower net spreads and the loss on interest  rate swaps on held
for  sale  receivables.  The  loss on  interest  rate  swaps  on held  for  sale
receivables is the result of the  implementation  of a new accounting  standard,
Statement of Financial  Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS No. 133") during the first quarter of
fiscal  2001.  SFAS No. 133 is further  discussed  below in the "Gain on sale of
receivables,  net" section.  The decrease was partially offset by an increase in
net interest  margin after  provision for  estimated  credit  losses,  which was
primarily the result of the higher average held for sale portfolio.

                                                 Three Months
                                              Ended September 30,
                            ----------------------------------------------------
                                 2000                                1999
                            ----------------                    ----------------
                              (Dollars in thousands, except per share amounts)

Net Income                    $ 3,009                             $ 5,419
Net Earnings Per Share        $  0.23                             $  0.41
  (basic and diluted)


         Interest on receivables  held for sale increased 76.4% to $14.4 million
for the quarter  ended  September  30,  2000,  compared to $8.1  million for the
quarter ended  September 30, 1999. The increase over the prior year related to a
higher  average held for sale  portfolio of $409.4 million for the quarter ended
September 30, 2000,  compared to $239.0 million for the quarter ended  September
30, 1999.

         Retained  interest and other interest  income  increased  27.4% to $7.3
million for the quarter ended  September 30, 2000,  compared to $5.7 million for
the quarter  ended  September  30,  1999.  The  discount  component  of Retained
Interest  increased at June 30, 1999 as a result of the Company  increasing  the
discount rate used to record the gain on sale of  receivables  during the fourth
quarter of fiscal 1999.  As a result,  more  Securitizations  discounted  at the
higher rate are being  accreted into income  during the quarter ended  September
30, 2000 than in the quarter ended September 30, 1999. The individual components
of Retained interest and other interest income are shown in the following table.

                                         Three Months
                                      Ended September 30,
                                    2000                1999
                               ---------------     ---------------
                                          (In thousands)

Discount accretion                    $ 7,068             $ 5,371
Other interest income                     232                 357
                               ---------------     ---------------
                                      $ 7,300             $ 5,728



         Interest expense increased 68.2% to $11.0 million for the quarter ended
September 30, 2000, compared to $6.6 million for the quarter ended September 30,
1999. The increase is the result of higher warehouse borrowing needs as a result
of an increase in the average  receivables  held for sale balances caused by the
increase in  acquisition  volume  previously  discussed  and was offset by lower
long-term debt interest expense due to the $22 million principal payment made on
the Senior debt made in the first quarter of fiscal 2001.

         Provision for estimated  credit losses  increased 30.0% to $975,000 for
the quarter ended September 30, 2000, compared to $750,000 for the quarter ended
September 30, 1999. The increase is due to the higher average  receivables  held
for sale during the quarter  ended  September  30, 2000  compared to the quarter
ended September 30, 1999.

         Gain on sale of  receivables,  net and Loss on  interest  rate swaps on
securitized receivables.  The gain on sale of receivables,  net, increased 20.5%
to $7.9 for the quarter ended  September 30, 2000,  compared to $6.5 million for
the same period of fiscal  2000.  The  accounting  treatment  for the  Company's
derivative  activity  changed  during the first  quarter  of fiscal  2001 and is
discussed in more detail  below in the "Loss on interest  rate swaps on held for
sale receivables" section. As a result, the Gain on sale of receivables, net for
the quarter ended  September  30, 2000 is not  comparable to the gain on sale of
receivables,  net for the quarter ended  September 30, 1999.  Historically,  the
gain or loss on interest rate swaps on  securitized  receivables  and other than
temporary  impairments  have been included as components of the Gain on sales of
receivables,  net in the income  statement.  Beginning with the first quarter of
fiscal 2001,  the Gain on sale of  receivables,  net will no longer  reflect the
gain or loss on interest  rate swaps on  securitized  receivables,  rather,  the
economic  hedging gain or loss will be shown  separately in the income statement
as "Gain  (loss)  on  interest  rate  swaps  on  securitized  receivables."  The
following  chart  summarizes  the  individual  components of the gain on sale of
receivables.  The comparable lower net gain for the quarter was primarily due to
lower spreads in the quarter ended September 30, 2000 securitization than in the
same quarter of fiscal 2000. The receivables  sold in the  securitizations  were
$500.0  million for the quarter  ended  September  30, 2000,  compared to $364.8
million  for the  quarter  ended  September  30,  1999.  The  gain on  sales  of
receivables continues to be a significant element of the Company's net earnings.
The gain on sales of receivables is affected by several factors but is primarily
affected by the amount of receivables securitized,  the net spread, the level of
estimation for net credit losses and discount rate.

                                                  Fiscal Quarter ended
                                                      September 30,
                                        ------------------------------------
                                              2000                1999
                                        ----------------    ----------------

Gain on sales of receivables                    $ 7,867             $ 3,785
Hedging gain on securitized receivables             -                 2,985
Other than temporary impairments                    -                  (240)
                                        ----------------    ----------------
     Gain on sales of receivables, net            7,867               6,530

Loss on interest rate swaps on
  securitized receivables                        (5,350)                -
                                        ----------------    ----------------

     Net economic gain                          $ 2,517             $ 6,530
                                        ================    ================



<PAGE>



Set forth below is certain information relating to the first quarter fiscal 2001
and 2000 securitizations.

First Quarter Securitizations                                 Fiscal
                                                   -----------------------------
                                                      2001              2000
                                                      ----              ----

                                                    2000 - C          1999 - C

Amount securitized (in millions)                     $500.0            $364.8
Weighted average receivable rate                     13.57%            13.31%
Weighted average certificate rate                     6.90%             6.22%
Gross spread (1)                                      6.67%             7.09%
Net spread (2), (3)                                   4.67%             6.20%
Credit loss assumption                                4.60%             4.50%
Annual prepayment speed assumption                   25.00%            28.00%
Discount rate assumption                             15.10%            14.66%
Weighted average remaining maturity (in months)       69.5              71.1
Weighted average life (in years)                      2.08              1.95
Gain as a percentage of amount securitized (3)        0.50%             1.88%


(1)  Gross spread - difference  between the weighted average receivable rate and
     weighted average certificate rate.
(2)  Net spread - gross spread,  net of upfront costs,  servicing fees,  ongoing
     credit  enhancement  fees,  trustee fees, and the economic hedging gains or
     losses.
(3)  Includes  impact of the $5.4 million loss and $3.0 million gain on interest
     rate swaps on securitized receivables.

         Gain on sale of receivables,  net also includes charges,  if applicable
based on management's review, for other than temporary impairments. On a regular
basis, management reviews the fair value of the estimated recoverable cash flows
associated with the retained interest for other than temporary impairments. Some
of the factors  considered in this evaluation are discussed further in the Notes
to  Consolidated  Financial  Statements.  See  -  "Note  2 of  the  Consolidated
Condensed  Financial  Statements".  Based on management's review of the Retained
Interest,  there were no additional other than temporary impairments charges for
the first quarter ended September 30, 2000. See - "Discussion of Forward-Looking
Statements".

         Loss on interest rate swaps on held for sale receivables.  Beginning in
the first  quarter of fiscal  2001,  a new  accounting  standard,  SFAS No. 133,
became  effective  for the Company.  This new  standard  changes how the Company
recognizes its derivative  activity.  The only derivative  instruments  that the
Company  utilizes  relate  to  interest  rate  swaps  executed  solely  to hedge
receivable  acquisitions prior to securitization.  Management  believes that the
interest rate swaps are  effective in protecting  the Company from interest rate
fluctuations from origination through securitization and that these transactions
are typical in this industry.  However,  it has been  determined that under SFAS
No. 133, these transactions do not qualify for hedge accounting  treatment,  and
the Company's  derivatives  are therefore  required to be marked to market every
accounting period.

         Previously, the market value of these derivatives was not accounted for
until the corresponding  receivables were securitized and the derivatives closed
out. At that time, the gain or loss on the closed out  derivatives  was included
in the net  gain on sales  of  receivables  amount.  This  amount  will now be a
separate line item on the income  statement titled "Gain (loss) on interest rate
swaps on  securitized  receivables."  In  addition,  UAC will now be required to
reflect the market value of any  outstanding  derivatives  on its balance sheet,
and the  changes  in the  corresponding  value  will be  reported  in the income
statement as "Gain (loss) on interest rate swaps on held for sale  receivables."
Based on a notional  amount of $512.6  million,  this  amount was a loss of $2.4
million  at  September  30,  2000  and is  related  to  interest  rate  swaps on
receivables  held  for  sale,  most  of  which  should  be  securitized  in  the
securitization in the quarter ended December 31, 2000.  Although this accounting
change  may have a  significant  impact  on the  volatility  of period to period
earnings, SFAS No. 133 has no cash effect on the Company's business.

         Servicing  fees  increased  10.7% to $6.7 million for the quarter ended
September 30, 2000, compared to $6.1 million for the quarter ended September 30,
1999.  The  increase  was  related  to a higher  average  securitized  servicing
portfolio for the quarter  ended  September 30, 2000 compared to the same period
of the prior  fiscal year.  Servicing  fees  consist  primarily  of  contractual
servicing fees of 1.0% on Tier I securitizations.

         Late  charges and other fees  increased  16.6% to $1.8  million for the
quarter ended September 30, 2000, compared to $1.5 million for the quarter ended
September  30, 1999.  Other fees consist  primarily of late  charges,  the gross
profit from the dealership sales, and other fee income.

         Salaries and benefits  expense  increased 14.3% to $7.9 million for the
quarter  ended  September  30,  2000,  from $6.9  million for the quarter  ended
September  30,  1999.  The  increase  was  primarily  related to an  increase in
employees. The average full-time equivalents for the quarter ended September 30,
2000 was 660 compared to 538 for the quarter ended September 30, 1999.

         Other  general  and  administrative  expense  increased  12.2%  to $5.5
million for the quarter ended  September 30, 2000,  compared to $4.9 million for
the quarter ended September 30, 1999. Other operating expense includes occupancy
and equipment costs,  outside and professional  services,  receivable  expenses,
promotional  expenses,  travel,  office  supplies,  and other.  Total  operating
expenses  (including  salaries  and  benefits)  as a  percentage  of the average
servicing portfolio was 1.75% for the quarter ended September 30, 2000, compared
to 1.85% for the quarter ended September 30, 1999.

         Provision  for income  taxes  decreased  48.1% to $1.8  million for the
quarter ended September 30, 2000, compared to $3.4 million for the quarter ended
September 30, 1999. This is the result of the decrease in earnings before income
taxes and a decrease in the  effective  tax rate.  Beginning  July 1, 2000,  the
Company  decreased  the  effective  tax rate by 1.7% to 36.5% from 38.2% (before
permanent differences) to more accurately reflect the combined federal and state
tax  liability   resulting   from  the  Company's   operations  in  the  various
jurisdictions in which the Company does business.  The decrease in the effective
tax rate primarily  results from state tax savings as the Company  increases the
number of  securitizations  which are treated as secured financing  arrangements
under a debt for tax structure.

Financial Condition

         Receivables  held for sale,  net and servicing  portfolio.  Receivables
held for sale, net includes the principal  balance of receivables held for sale,
net of  unearned  discount  and  allowance  for  estimated  net  credit  losses,
receivables  in  process,  and prepaid  dealer  premiums.  Selected  information
regarding the  Receivables  held for sale,  net and the  servicing  portfolio at
September 30, 2000 and June 30, 2000 is summarized in the following table.

                                     September 30,                June 30,
                                         2000                       2000
                                  --------------------       -------------------
                                                  (In thousands)

Receivables held for sale, net         $   271,023               $   206,701
Allowance for net credit losses        $    (2,649)              $    (2,978)
Securitized assets serviced            $ 2,895,305               $ 2,676,655
Total servicing portfolio              $ 3,161,833               $ 2,881,115


         Retained interest in securitized assets ("Retained Interest"). Retained
Interest  increased  $17.5 million to $225.9 million at September 30, 2000, from
$208.4  million at June 30, 2000.  The Retained  Interest  balance  increased or
decreased by the amounts  capitalized  upon  consummation of the first quarters'
securitization   including   estimated  dealer  premium  rebates,   collections,
accretion of discount,  change in spread accounts,  impairment and net change in
unrealized  gain. The Company's  collections are the receipt of the net interest
spread.

The following table  illustrates the activity of Retained Interest for the three
months ended September 30, 2000 (in thousands):

Balance at June 30, 2000                                  $ 208,431

Amounts capitalized (including estimated dealer rebates)     24,462
Collections                                                 (24,592)
Accretion of discount                                         7,017
Change in spread accounts                                     5,109
Change in accelerated principal                               4,741
Net change in unrealized gain (loss)                            691
                                                        -------------
Balance at September 30, 2000                             $ 225,859
                                                        =============



<PAGE>

The following table illustrates the activity of the Spread account for the three
months ended September 30, 2000 (in thousands):

Balance at June 30, 2000                                  $  58,663

Excess cash flows deposited to spread accounts               14,918
Initial spread account deposits                               5,000
Interest earned on spread accounts                              954
Less:  excess cash flows released to the Company            (15,763)
                                                        -------------
Balance at September 30, 2000                             $  63,772
                                                        =============



         Allowance for net credit losses on securitized  receivables is included
as a component of Retained  Interest.  At  September  30,  2000,  the  allowance
related  to both  Tier I and  Tier II  securitized  receivables  totaled  $126.3
million,  or 4.36% of the total securitized  receivable  portfolio,  compared to
$119.0 million, or 4.45%, at June 30, 2000.  Impairment of Retained Interest, an
available-for-sale  security, is measured on a disaggregate (pool by pool) basis
in  accordance  with SFAS 115.  See  "Note 2 - Notes to  Consolidated  Condensed
Financial  Statements" for additional  discussions  regarding Retained Interest.
Also, see - "Discussion of Forward-Looking Statements".

         Amounts  due under  revolving  warehouse  credit facilities were $246.4
million at September 30, 2000,  compared to $152.2 million at June 30, 2000. The
increase  is a result  of  higher  acquisition  volume  after  the  close of the
securitization transaction in September 2000 compared to June 2000. In addition,
this increase was also the result of the Company not securitizing  approximately
$60 million of eligible receivables in the September 2000 securitization.

         Long-term debt was $155 million at September 30, 2000, compared to $177
million at June 30,  2000.  The  decrease  in  long-term  debt was a result of a
required principal payment on the Company's Senior Notes in August 2000 of $22.0
million.

         Current and deferred  income taxes  payable  totaled  $11.6  million at
September 30, 2000,  compared to $9.7 million at June 30, 2000.  The increase is
primarily the result of the tax liability  associated with current year earnings
and was partially offset by tax payments made during the quarter ended September
30, 2000.

Liquidity and Capital Resources

         Sources  and Uses of Cash in  Operations.  Net cash  used in  operating
activities  was $86.5  million for the three  months ended  September  30, 2000,
compared to cash provided by operating activities of $14.5 million for the three
months ended September 30, 1999. The change was primarily attributable to higher
receivable  acquisitions than receivables  securitized  during the quarter ended
September 30, 2000. Net cash provided by investing  activities was $14.5 million
and $23.2  million  for the three  months  ended  September  30,  2000 and 1999,
respectively.  The increase over prior period primarily  relates to the decrease
in the change in spread  accounts.  Net cash provided from financing  activities
for the three months ended September 30, 2000 was $71.6 million  compared to net
cash used in financing  activities of ($38.1) million for the three months ended
September  30,  1999.  The  primary  factor  for this  change  is the  increased
warehouse borrowings resulting from the higher acquisition of receivables in the
quarter ended  September  30, 2000  compared to the quarter ended  September 30,
1999.

         Derivative  financial  instruments.   Derivative  financial  instrument
transactions  may  represent  a source  or a use of cash  during a given  period
depending on the change in interest  rates. In the first quarter of fiscal 2001,
derivative financial instrument  transactions used cash of $5.9 million compared
to cash provided of $3.0 million during the first quarter of fiscal 2000.

         The Company has substantial capital requirements to support its ongoing
operations  and  anticipated  growth.  The  Company's  sources of liquidity  are
currently  funds  from  operations,  securitization  transactions  and  external
financing  including long-term debt and revolving  warehouse  credit facilities.
Historically, the Company has used the securitization of receivable pools as its
primary source of long-term funding.  In August 1999, the Company established an
additional  source of  liquidity  through a  securitization  arrangement  with a
commercial  paper  conduit.  This  facility has capacity of $500 million and was
fully utilized at September 2000. Securitization transactions enable the Company
to improve its  liquidity,  to recognize  gains from the sales of the receivable
pools while maintaining the servicing rights to the receivables,  and to control
interest  rate risk by matching the repayment of amounts due to investors in the
securitizations with the actual cash flows from the securitized assets.  Between
securitization  transactions,  the Company  relies  primarily  on the  revolving
warehouse  credit  facilities  to  fund  ongoing  receivable   acquisitions  not
including dealer premiums.  In addition to receivable  acquisition  funding, the
Company  also  requires  substantial  capital  on an  ongoing  basis to fund the
advances of dealer premiums,  securitization  costs,  servicing  obligations and
other cash requirements  previously  described.  The Company's ability to borrow
under revolving  warehouse  credit facilities  is dependent  upon its compliance
with the terms and conditions thereof. The Company's ability to obtain successor
facilities  or  similar  financing  will  depend on,  among  other  things,  the
willingness  of financial  institutions  to  participate  in funding  automobile
financing  business  and  the  Company's  financial  condition  and  results  of
operations.   Moreover,  the  Company's  growth  may  be  inhibited,   at  least
temporarily,  if the Company is not able to obtain  additional  funding  through
these or other  facilities,  or if it is unable to  satisfy  the  conditions  to
borrowing   under  revolving    warehouse   credit   facilities.   The   Company
consistently  assesses its long-term receivable funding arrangements with a view
to optimizing cash flows and reducing costs. The Company has several options for
funding including, but not limited to, a public asset-backed  securitization,  a
sale into a commercial  paper facility,  a private sale, or temporarily  holding
the  receivables.  The Company  continues  to  evaluate  market  conditions  and
available  liquidity and could decide to alter the timing of its securitizations
in the future depending on the Company's cash position and available  short-term
funding.

         Warehouse   facilities.   The  Company  has  Credit   Facilities   with
independent  financial  institutions  for a  total  of  $750.0  million  to fund
receivable  acquisitions.  A $350  million  Credit  Facility  and a $200 million
Credit Facility are insured by surety bond providers while a $200 million Credit
Facility is not insured.  At September 30, 2000,  $246.4 million of the capacity
was utilized,  and an additional  $21.3 million was available to borrow based on
the outstanding principal balance of eligible receivables. At June 30, 2000, and
September  30,  1999,  $152.2  million and $169.8  million of the  capacity  was
utilized,  and an  additional  $47.1  million and $54.1 million was available to
borrow  based on the  outstanding  principal  balance of  eligible  receivables,
respectively.  The Credit Facilities generally have a term of one year. Selected
summary information about the Credit Facilities is shown below:


 Credit Facility                  Outstanding               Expiration
    Capacity                 at September 30, 2000             Date
----------------             ---------------------          ----------
  (in millions)
      $ 350                        $246.4                    September 2001
      $ 200                         None                       March 2001
      $ 200                         None                       August 2001


         Working  capital line. In June 2000, the Company  established a working
capital line of credit for $15.0  million.  This line of credit is unsecured and
is available to fund short-term cash flow needs of the Company. The facility has
a one year term,  and the entire  amount was  available for use at September 30,
2000. This facility expires in June 2001.


         Long-term debt. The Company issued $110.0 million of 8.53% Senior Notes
due August 1, 2002, in connection  with the Company's  initial public  offering.
Interest on the Notes is payable  semiannually,  and pricinpal payments of $22.0
million  began on August  1,  1998 and are due on  August  1. The  Notes  have a
current  private rating by Fitch of B+. In April 1996,  the Company  completed a
private placement of $46.0 million of 9.99% Senior  Subordinated Notes due March
30, 2003,  with interest  payable  quarterly and principal due at maturity.  The
Notes have a current  private  rating by Fitch of B-. In March 1997, the Company
issued $65.0  million of Senior  Notes due  December  27,  2002.  The Notes were
issued as "Series A" in the principal  amount of $50.0 million at 7.75% interest
and  "Series B" in the  principal  amount of $15.0  million  at 7.97%  interest.
Interest on the Notes is payable  semiannually,  and a principal  payment is due
March 15,  2002,  in the  amount  equal to  approximately  33 1/3% of the stated
original balance. The Notes have a current private rating by Fitch of B+.


         The Company's credit agreements, among other things, require compliance
with  monthly  and  quarterly  financial  maintenance  tests  and  restrict  the
Company's ability to create liens, incur additional indebtedness,  sell or merge
assets and make investments. The Company is in compliance with all covenants and
restrictions imposed by the terms of indebtedness.

         Based on current cash flow  projections,  management  believes that the
Company's existing capital resources,  the revolving warehouse credit facilities
described above,  future earnings,  expected growth in receivable  acquisitions,
and periodic  securitization of receivables should provide the necessary capital
and liquidity for its operations  through the end of the fiscal year. The period
during which its existing capital resources will continue to be sufficient will,
however, be affected by the factors described above affecting the Company's cash
requirements.  A number of these factors are difficult to predict,  particularly
including the cash effect of hedging  transactions,  the availability of outside
credit enhancement in securitizations or other financing  transactions and other
factors  affecting  the net cash provided by  securitizations.  Depending on the
Company's  ongoing  cash  and  liquidity  requirements,  market  conditions  and
investor  interest,  the  Company  may seek to issue  additional  debt or equity
securities in the near term. The current Fitch ratings on the Company's existing
long-term  debt may have an adverse affect on its  ability to obtain or its cost
of additional debt securities.  The sale of additional equity, including Class A
Common  Stock  or  preferred  stock,  would  dilute  the  interests  of  current
shareholders. See - "Discussion of Forward-Looking Statements".


<PAGE>




Discussion of Forward-Looking Statements

         The above  discussions  and notes to consolidated  condensed  financial
statements contain forward-looking  statements made by the Company regarding its
results of  operations,  effects of changes in  accounting  policies,  cash flow
needs and liquidity,  receivable  acquisition volume, target spreads,  potential
credit losses,  recovery rates,  prepayment rates,  servicing income,  and other
aspects of its business.  Similar forward-looking  statements may be made by the
Company  from  time  to  time.  In  particular,  the  Company's  gain on sale of
receivables  and  retained  interest in  securitized  assets are reported on the
basis  of  significant   estimates  of  future   portfolio   performance.   Such
forward-looking  statements  are subject to a number of  important  factors that
cannot be predicted  with  certainty and which could cause such  forward-looking
statements  to be  materially  inaccurate.  Such factors  include,  for example,
demand for new and used autos, competition,  and consumer credit and delinquency
trends. See the "Discussion of Forward-Looking  Information" under "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in the
Company's  Annual  Report on Form 10-K for  fiscal  2000  which is  incorporated
herein by this reference.


<PAGE>




Item 3.  Quantitative and Qualitative Disclosures About Market Risk
-------  ----------------------------------------------------------

         The Company's  sources for  short-term  funds  generally  have variable
rates of interest,  and its receivable  portfolio bears interest at fixed rates.
The Company  therefore  bears interest rate risk on  receivables  until they are
securitized and employs an economic  hedging strategy to mitigate this risk. The
Company uses an economic  hedging  strategy that  primarily  consists of forward
interest rate swaps having a maturity  approximating the average maturity of the
acquisition  volume during the relevant period. At such time as a Securitization
is committed,  the interest rate swaps are  terminated.  The Company's  econimic
hedging   strategy  is  an  integral  part  of  its  practice  of   periodically
securitizing  receivables.  Prior to March 1999, as part of the economic hedging
strategy,  the Company  used an  economic  hedging  vehicle  that  included  the
execution of short sales of U.S. Treasury Notes having a maturity  approximating
the average  maturity of the receivable  acquisition  volume during the relevant
period. In addition,  the commercial paper conduit pursuant to which the Company
Securitized  $500.0 million in  receivables in September  2000, may from time to
time in the  future,  provide  for  issuance  of a note  bearing  interest  at a
floating  rate  with the  resulting  interest  rate  risk  covered  by a related
interest rate swap arrangement. There is no assurance that these strategies will
completely  offset changes in interest  rates.  In particular,  such  strategies
depend on management's  estimates of receivable acquisition volume and timing of
its  Securitizations.  The  Company  realizes  a gain  on its  economic  hedging
transactions  during periods of increasing interest rates and realizes a loss on
such transactions  during periods of decreasing interest rates. Prior to July 1,
2000, the economic hedging gain or loss substantially offset changes in interest
rates as seen by  reporting  a lower  or  higher  gain on sales of  receivables,
respectively.  Also, prior to July, 1, 2000,  recognition of unrealized gains or
losses is deferred until the sale of receivables  during the  Securitization and
on the date of the sale,  deferred  hedging gains and losses are recognized as a
component of the Gain (Loss) on Sales of  Receivables.  Beginning  July 1, 2000,
both the Gain on interest rate swaps on securitized  receivables and the Gain on
interest rate swaps on held for sale receivables will be reflected in the income
statement.  At September 30, 2000, the Company had an unrealized hedging loss on
forward   interest  rate  swaps  of  $1.9  million  based  on  notional  amounts
outstanding  of $512.6  million.  The fair value of long-term  debt increases or
decreases  as market  interest  rates are  reduced or  increased,  respectively.
Effective  July 1, 2000,  the Company  adopted the  provisions  of  Statement of
Financial Accounting  Standards No. 133 "Accounting for Derivatives  Instruments
and Hedging Activities" ("SFAS No. 133").

         The following  table presents the principal cash repayments and related
weighted  average  interest rates by maturity date for the current variable rate
and long-term debt at September 30, 2000.

                              Nine months
                                ended June
                                30, 2001    2002       2003   Total   Fair Value
                              --------------------------------------------------
                                          (Dollars in thousands)
                                          ----------------------

Amounts due under warehouse
  facility                      $246,394   $   -   $    -    $ 246,39   $246,394
   Weighted average variable
     rate                          8.16%       -        -       8.16%

Long-term debt                  $    -   $43,667  $111,333   $155,000   $145,968
   Weighted average fixed rate       -     8.14%     8.86%      8.66%



<PAGE>



Sensitivity analysis on Retained Interest

         The Company  bears the primary risk of loss due to credit losses in its
servicing portfolio.  Credit loss rates are impacted by general economic factors
that affect  customers'  ability to  continue  to make timely  payments on their
indebtedness.  Prepayments on receivables in the servicing  portfolio reduce the
size of the  portfolio and reduce the Company's  servicing  income.  The gain on
sales of receivables in connection with each securitization  transaction and the
amount of Retained Interest  recognized in each transaction  reflect  deductions
for estimates of future defaults and prepayments. The carrying value of Retained
Interest may be adjusted  periodically to reflect  differences between estimated
and actual  net  credit  losses and  prepayments  on past  Securitizations.  The
Company does not believe  fluctuations in interest rates  materially  affect the
rate of prepayments on receivables.

         At September 30, 2000, key economic  assumptions and the sensitivity of
the current  fair value of Retained  Interest to  immediate  10% and 20% adverse
changes in assumed economics is as follows:
<TABLE>
<CAPTION>

Amounts as of September 30, 2000                        Tier I               Tier II               Total
<S>                                                   <C>                     <C>                <C>
Fair value of retained interest (1)                   $ 233,360               $ 2,056            $ 235,416

Prepayment speed assumption (annual rate)            21.88% - 28.00%           21.00%

Impact on fair value of 10% adverse change            $ 226,419               $ 2,040            $ 228,459
Impact on fair value of 20% adverse change            $ 213,400               $ 2,024            $ 215,424


Net loss rate assumption (pool life rate)             4.00% - 6.24%            12.00%

Impact on fair value of 10% adverse change            $ 209,183               $ 1,730            $ 210,913
Impact on fair value of 20% adverse change            $ 184,768               $ 1,409            $ 186,177


Discount rate assumption (annual rate)                9.07% - 15.00%           14.05%

Impact on fair value of 10% adverse change            $ 227,190               $ 2,013            $ 229,203
Impact on fair value of 20% adverse change            $ 221,314               $ 1,971            $ 223,285
</TABLE>


(1)  Retained  Interest on the balance  sheet is lower than the total fair value
included in this  analysis.  The difference  primarily  relates to the inventory
value of repossessed  autos that have not been sold.  This amount is included in
Retained  Interest  as part of the  allowance  for  estimated  credit  losses on
securitized receivables but not included in the total fair value.

These  sensitivities  are hypothetical  and should be used with caution.  As the
figures  indicate,  any change in fair value  based on a  particular  percentage
variation in assumptions cannot be extrapolated  because the relationship of the
change  in fair  value is not  linear.  Also,  in this  table,  the  effect of a
variation in a particular  assumption on the fair value of the retained interest
is calculated  independent  from any change in another  assumption;  in reality,
changes in one factor may result in changes in another,  which might  magnify or
counteract the sensitivities. See "Discussion of Forward-Looking Statements."


<PAGE>

Part II. Other Information
--------------------------

Item 6.  Exhibits and Reports on Form 8-K
-------  --------------------------------

               Exhibit 10.1 - Amendment  No. 1 to Union  Acceptance  Corporation
               Incentive Stock Plan dated as of July 26, 2000.

               Exhibit 27 - Financial Data Schedule

         (b) Reports on Form 8-K

               The Company filed no reports on Form 8-K during the quarter ended
               September 30, 2000.


<PAGE>




Signatures

         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.

                                         Union Acceptance Corporation

November xx, 2000                        By:      /S/ John M. Stainbrook
                                                  ------------------------------
                                         John M. Stainbrook
                                         President and Chief Executive Officer

November xx, 2000                        By:      /S/ Rick A. Brown
                                                  ------------------------------
                                         Rick A. Brown
                                         Treasurer and Chief Financial Officer