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 March 31, 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 May 5, 2000

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

<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
         March 31, 2000 and June 30, 1999                                     3

         Consolidated Condensed Statements of Earnings
         for the Three and Nine Months Ended March 31, 2000 and 1999          4

         Consolidated Condensed Statements of Cash Flows for the
         Nine Months Ended March 31, 2000 and 1999                            5

         Consolidated Condensed Statement of Shareholders' Equity for the
         Nine Months Ended March 31, 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          20

Part II. OTHER INFORMATION                                                   22

         Signatures                                                          23




<PAGE>

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

                                                                     March 31,      June 30,
Assets                                                                 2000           1999
                                                                     --------       --------
<S>                                                                  <C>            <C>
Cash and cash equivalents                                            $  9,381       $  8,088
Restricted cash                                                        14,692         12,215
Receivables held for sale, net                                        302,525        267,316
Retained interest in securitized assets                               194,692        191,029
Accrued interest receivable                                             2,493          2,035
Property, equipment, and leasehold improvements, net                    9,962          8,375
Other assets                                                           22,340         25,868

Total Assets                                                         $556,085       $514,926
                                                                     ========       ========

Liabilities and Shareholders' Equity

Liabilities
Amounts due under warehouse facilities                               $246,691       $185,500
Long-term debt                                                        177,000        199,000
Accrued interest payable                                                2,474          5,287
Amounts due to trusts                                                  13,897         13,152
Dealer premiums payable                                                 2,370          2,564
Current and deferred income taxes payable                               5,441         16,022
Other payables and accrued expenses                                     5,130          3,922
                                                                     --------       --------

Total Liabilities                                                     453,003        425,447
                                                                     --------       --------

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 and 5,099,344 shares issued and
 outstanding at March 31, 2000 and June 30, 1999, respectively         58,632         58,452

 Class B Common Stock, without par value, authorized
 20,000,000 shares; 7,461,608 and 8,150,266 shares issued and
 outstanding at March 31, 2000 and June 30, 1999, respectively             --             --

Accumulated other comprehensive earnings, net of income taxes           2,771            199
Retained earnings                                                      41,679         30,828
                                                                     --------       --------

Total Shareholders' Equity                                           103,082         89,479
                                                                     --------       --------

Total Liabilities and Shareholders' Equity                           $556,085       $514,926
                                                                     ========       ========
</TABLE>


See accompanying notes to consolidated condensed financial statements.


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

<TABLE>
<CAPTION>
                                                          Three Months Ended                        Nine Months Ended
                                                              March 31,                                 March 31,
                                                      ------------------------------    ------------------------------------------
                                                        2000              1999                 2000                   1999
                                                      ------------------------------    ------------------------------------------

<S>                                                        <C>              <C>                     <C>                   <C>
Interest on receivables held for sale                      $8,221           $ 8,087                 $23,050               $23,276
Retained interest and other                                 6,704             4,875                  18,874                15,702
                                                      ------------------------------    ------------------------------------------

 Total interest income                                     14,925            12,962                  41,924                38,978
Interest expense                                            6,805             6,996                  19,548                20,597
                                                      ------------------------------    ------------------------------------------

 Net interest margin                                        8,120             5,966                  22,376                18,381
Provision for estimated credit losses                         840             1,225                   2,255                 4,825
                                                      ------------------------------    ------------------------------------------
 Net interest margin after provision
 for estimated credit losses                                7,280             4,741                  20,121                13,556
                                                      ------------------------------    ------------------------------------------

Gain on sales of receivables, net                           2,754             6,386                  10,545                13,179
Servicing fees                                              6,217             5,601                  18,473                16,023
Late charges and other fees                                 1,667             1,442                   4,680                 3,821
                                                      ------------------------------    ------------------------------------------

Other revenues                                             10,638            13,429                  33,698                33,023
                                                      ------------------------------    ------------------------------------------

Salaries and benefits                                       7,354             6,328                  21,018                17,451
Other general and administrative expenses                   5,215             4,913                  15,122                14,090
                                                      ------------------------------    ------------------------------------------

Total operating expenses                                   12,569            11,241                  36,140                31,541
                                                      ------------------------------    ------------------------------------------

Earnings before provision for income taxes                  5,349             6,929                  17,679                15,038
Provision for income taxes                                  2,065             2,665                   6,828                 5,794
                                                      ------------------------------    ------------------------------------------

Net earnings                                               $3,284           $ 4,264                 $10,851               $ 9,244
                                                      ==============================    ==========================================

 Net earnings per common share (basic and diluted)         $ 0.25            $ 0.32                   $0.82                $ 0.70

Basic weighted average number of common
shares outstanding                                     13,277,632        13,249,260              13,264,175            13,238,944

Common stock options                                       16,682            27,870                  34,520                 7,302
                                                      ------------------------------    ------------------------------------------

Diluted weighted average number of common
shares outstanding                                     13,294,314        13,277,130              13,298,695            13,246,246
                                                      ==============================    ==========================================

</TABLE>

See accompanying notes to consolidated condensed financial statements.



<PAGE>

Union Acceptance Corporation and Subsidiaries
Consolidated Condensed Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
                                                                                             Nine Months Ended
                                                                                                 March 31,
                                                                                  ----------------------------------------
                                                                                       2000                    1999
                                                                                  ---------------         ----------------
Cash flows from operating activities:
<S>                                                                                     <C>                        <C>
    Net earnings                                                                        $ 10,851                   $9,244
       Adjustments to reconcile net earnings to net cash
       from operating activities:
              Increase in receivables held for sale, net of liquidations                (988,171)              (1,073,788)
              Dealer premiums paid, net on receivables held for sale                     (24,516)                 (40,178)
              Proceeds from securitization of receivables held for sale                  950,206                  947,838
              Gain on sales of receivables                                               (19,907)                 (30,772)
              Proceeds on sale of interest-only strip                                          -                    2,847
              Impairment of retained interest in securitized assets                        4,243                    9,464
              Accretion of discount on retained interest in securitized assets           (17,784)                 (13,992)
              Provision for estimated credit losses                                        2,255                    4,825
              Amortization and depreciation                                                2,471                    3,576
              Restricted cash                                                             (2,476)                   5,456
              Other assets and accrued interest receivable                                 1,422                   (7,106)
              Amounts due to trusts                                                          745                   (2,387)
              Other payables and accrued expenses                                        (12,082)                   8,864
                                                                                  ---------------         ----------------
                          Net cash from operating activities                             (92,743)                (176,109)
                                                                                  ---------------         ----------------

Cash flows from investing activities:
    Collections on retained interest in securitized assets
       and change in spread accounts                                                      57,663                   36,173
    Capital expenditures                                                                  (2,465)                  (1,590)
                                                                                  ---------------         ----------------
                          Net cash from investing activities                              55,198                   34,583
                                                                                  ---------------         ----------------

Cash flows from financing activities:
    Principal payment on long-term debt                                                  (22,000)                 (22,000)
    Stock options exercised                                                                   93                        -
    Net change in warehouse credit facilities                                             61,191                   97,253
    Payment of borrowing fees                                                               (446)                    (102)
                                                                                  ---------------         ----------------
                          Net cash from financing activities                              38,838                   75,151
                                                                                  ---------------         ----------------

Change in cash and cash equivalents                                                        1,293                  (66,375)

Cash and cash equivalents, beginning of period                                             8,088                   75,612
                                                                                  ---------------         ----------------

Cash and cash equivalents, end of period                                                 $ 9,381                   $9,237
                                                                                  ===============         ================

Supplemental disclosures of cash flow information:
Income taxes paid                                                                       $ 19,297                    $ 171
Interest paid                                                                           $ 21,858                 $ 24,457
</TABLE>


See accompanying notes to consolidated condensed financial statements.
<PAGE>

Union Acceptance Corporation and Subsidiaries
Consolidated Condensed Statement of Shareholders' Equity
For the Nine Months Ended March 31, 2000
(Dollars in thousands, except per share data)
(Unaudited)

<TABLE>
<CAPTION>

                                         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, 1999                  5,099,344       8,150,266        $58,452            $199      $ 30,828        $ 89,479

Comprehensive earnings:
Net earnings                                      -               -              -               -        10,851          10,851
Net unrealized gain on retained
 interest in securitized assets                   -               -              -           4,133             -           4,133
Income taxes related to unrealized
gain in securitized assets                        -               -              -         (1,561)             -         (1,561)
                                                                                                                   --------------
Total comprehensive earnings                                                                                              13,423

Grants of common stock                       10,550               -             75               -             -              75

Stock options exercised                      17,472               -             93               -             -              93

Other                                             -               -             12               -             -              12

Conversion of Class B
 Common Stock into
 Class A Common Stock                       688,658       (688,658)              -               -             -               -
                                     --------------------------------------------------------------------------------------------
Balance at March 31, 2000                 5,816,024       7,461,608        $58,632         $ 2,771      $ 41,679        $103,082
                                     ============================================================================================
</TABLE>




See accompanying notes to consolidated condensed financial statements.





<PAGE>



Union Acceptance Corporation and Subsidiaries
Notes to Consolidated Condensed Financial Statements
For the Nine Months Ended March 31, 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.

         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, 1999.  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 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.

         In determining  the fair value of the Retained  Interest in Securitized
Assets ("Retained Interest"),  the Company must estimate the future prepayments,
rates of gross credit losses and credit loss  severity,  and  delinquencies,  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 22.32% to 28.00% and 10.73% to
20.50% on Tier I and Tier II receivables,  respectively,  at March 31, 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  estimated  net
credit  losses  ranging  from  4.00% to 6.58% and 12.00% to 16.16% on Tier I and
Tier II  receivables,  respectively,  as a percentage of the original  principal
balance over the life of the receivables to value Retained Interest at March 31,
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  ranging  from  9.25% to 15.55%  and 11.25% to 16.41% on Tier I and Tier II
receivables, respectively, at March 31, 2000. The weighted average discount rate
used to value Retained  Interest at March 31, 2000 was 13.98% compared to 12.83%
at June 30, 1999.


<PAGE>



Union Acceptance Corporation and Subsidiaries
Notes to Consolidated Condensed Financial Statements
For the Nine Months Ended March 31, 2000 and 1999
(Unaudited)

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


                                                           March 31,           June 30,
                                                             2000                1999
                                                         -----------         -----------
Estimated gross interest spread from receivables,
<S>                                                      <C>                 <C>
  net of estimated prepayments and fees                  $   277,183         $   248,687
Estimated dealer premium rebates refundable                   18,464              22,923
Estimated credit losses on securitized receivables          (105,916)           (104,448)
Spread accounts                                               57,071              69,921
Discount to present value                                    (52,110)            (46,054)
                                                         -----------         -----------
Total Retained Interest in Securitized Assets            $   194,692         $   191,029
                                                         ===========         ===========

Outstanding balance of securitized receivables           $ 2,411,047         $ 2,256,415
                                                         ===========         ===========
Estimated credit losses as a percentage of
securitized receivables serviced                                4.39%               4.63%
</TABLE>




Note 3 - Retained Interest and Other Interest Income

         Retained  interest and other  interest  income  primarily  includes the
discount  accretion  recognized  on Retained  Interest,  the discount  accretion
related to the servicing asset,  interest earned on cash collection  accounts on
all securitization  transactions  before January 1, 1997, and interest earned on
cash and cash equivalents.

Note 4 - Segment Information

         The Company adopted Statement of Financial Accounting Standards No. 131
"Disclosures  about  Segments of an Enterprise  and Related  Information  ("SFAS
131")  effective  June 30,  1999.  SFAS 131  provided  new  guidance  on segment
reporting.  The Company  determined it has a single reportable  segment which is
acquiring,  securitizing  and  servicing  retail  automobile  installment  sales
contracts  originated by dealerships  affiliated with major domestic and foreign
automobile   manufacturers.   The  single  segment  was   determined   based  on
management's   approach  to  operating  decisions,   assessing  performance  and
reporting financial information.

Note 5 - 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              Nine Months Ended
                   March 31,                        March 31,
          -----------------------------    ---------------------------
              2000            1999            2000           1999
          -------------    ------------    ------------   ------------
            439,911          362,145         422,073        382,713

<PAGE>



Union Acceptance Corporation and Subsidiaries
Notes to Consolidated Condensed Financial Statements
For the Nine Months Ended March 31, 2000 and 1999

(Unaudited)

Note 6 - Current Accounting Pronouncements

         In June 1998, the Financial Accounting Standards Board issued Statement
of  Financial   Accounting   Standards  No.  133,   "Accounting  for  Derivative
Instruments and Hedging Activities." The Statement, as amended, is effective for
fiscal years beginning after June 15, 2000,  with earlier  application  allowed.
Management is currently  assessing the impact,  if any, of this Statement on the
financial condition and operations of the Company upon adoption.


<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 38
states from over 4,600  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 $395.6 million for the
quarter ended March 31, 2000,  compared to $263.8  million for the quarter ended
December 31, 1999,  and $321.9 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,  and an increase in active  dealers.  The
Company had  receivable  acquisitions  of $119.9 million for the month of April.
The  Company's  primary  focus  remains on acquiring  high  quality,  profitable
receivables  and plans to continue its expansion  into the  northeastern  states
during the fourth quarter.  The Company believes that its increased  emphasis on
growing  existing  markets  and its  planned  expansion  will  result  in future
increased acquisition volume. See - "Discussion of Forward-Looking Statements".

         Gross and Net Spreads.  The gross and net spreads on the third  quarter
securitization  of fiscal 2000 were 5.88% and 4.94% compared to 7.19% and 6.16%,
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 on the asset-backed  securities.  Net spread is defined
as gross spread less servicing fees,  upfront costs,  ongoing credit enhancement
and trustee fees, and hedging gains or losses.

         Net spreads are currently targeted at 5.00% to 5.50% on securitizations
for the quarter ended June 30, 2000. 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 a stabilization  of net credit
losses during the three  quarters ended  September 30, 1999, but  experienced an
increase for the quarters  ended March 31, 2000 and December 31, 1999.  As shown
in the following tables,  Tier I net credit losses totaled 2.30% for the quarter
ended  March 31,  2000,  compared  to 2.40% and  1.97%  for the  quarters  ended
December 31, 1999 and March 31, 1999, respectively. Tier I net credit losses for
the nine  months  ended March 31, 2000 were 2.23% which was lower than 2.29% for
the nine  months  ended March 31,  1999.  Delinquency  on the Tier I  automobile
portfolio  was 2.73% at March 31, 2000,  compared to 3.33% and 2.63% at December
31, 1999 and March 31, 1999,  respectively.  Recoveries as a percentage of gross
charge-offs  on the Tier I portfolio  increased to 40.91% for the quarter  ended
March 31, 2000,  compared to 38.87% and 39.93% for the quarters  ended  December
31, 1999 and March 31, 1999, respectively.  This increase in recoveries over the
prior year is  primarily  due to an increase  in the retail sale of  repossessed
vehicles at the Company's new car franchised  dealership in Indianapolis for the
quarter ended March 31, 2000,  compared to the quarter ended March 31, 1999, and
the increased  focus on  recoveries.  This method of disposing of  repossessions
along with  stricter  monitoring  of the  repossession  and resale  process  may
increase the recovery rate over time. Recovery rates for repossessed automobiles
sold by the Company's  retail operation are  significantly  higher than recovery
rates on vehicles sold at auction.  Approximately 19% of repossessed automobiles
were sold at the Company's  retail operation during the three months ended March
31,  2000,  compared to  approximately  18% for the three months ended March 31,
1999.  For those  automobiles  sold at retail during the quarter ended March 31,
2000, the net proceeds received were  approximately 53% of the percentage of the
gross charge-off amount. See - "Discussion of Forward-Looking Statements".


<PAGE>



         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 2000 third
quarter  securitization  was 4.50% over the life of the pool and  included  only
Tier I  receivables.  Estimated net credit losses as a percentage of securitized
receivables  serviced  (inherent  in Retained  Interest)  was 4.39% at March 31,
2000,  compared  to 4.47% and 4.60% at  December  31,  1999 and March 31,  1999,
respectively.

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

                                            March 31, 2000                December 31, 1999                March 31, 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           222,413    $ 2,619,461         217,695       $ 2,537,094      206,174         $2,329,127

Gross charge-offs                       2,214        $25,467           2,232           $24,948        1,841            $19,139
Recoveries                                            10,417                             9,698                           7,643
                                                 ------------                  ----------------                ----------------
Net charge-offs                                      $15,050                           $15,250                         $11,496
                                                 ============                  ================                ================

Gross charge-offs as a percentage
of average servicing portfolio (1)      3.98%          3.89%           4.10%             3.93%        3.57%              3.29%
Recoveries as a percentage of
gross charge-offs                                     40.91%                            38.87%                          39.93%
Net charge-offs as a percentage
of average servicing portfolio (1)                     2.30%                             2.40%                           1.97%
</TABLE>

(1) Annualized

<TABLE>
<CAPTION>
                                                           For the Nine Months Ended
                                      --------------------------------------------------------------------
                                                  March 31,                           March 31,
                                                    2000                                1999
                                      ----------------------------------  --------------------------------
                                                             (Dollars in thousands)

                                        Number of                           Number of
                                       Receivables          Amount         Receivables        Amount
                                       -----------          ------         -----------        ------
<S>                                      <C>             <C>                 <C>           <C>
Average servicing portfolio              218,872         $ 2,557,339         199,072       $ 2,217,348

Gross charge-offs                          6,449             $71,504           5,923           $62,129
Recoveries                                                    28,787                            24,098
                                                    -----------------                  ----------------
Net charge-offs                                              $42,717                           $38,031
                                                    =================                  ================

Gross charge-offs as a percentage
of average servicing portfolio (1)         3.93%               3.73%           3.97%             3.74%
Recoveries as a percentage
of gross charge-offs                                          40.26%                            38.79%
Net charge-offs as a percentage
of average servicing portfolio (1)                             2.23%                             2.29%
</TABLE>


(1) Annualized


<PAGE>

<TABLE>
<CAPTION>


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

                                     At March 31, 2000               At December 31, 1999               At March 31, 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                  225,458       $2,672,470         217,904       $2,540,391         207,705        $2,355,418
Delinquencies:
30-59 days                             3,577         $ 39,441           4,636          $49,988           3,650          $ 37,890
60-89 days                             1,978           23,070           2,202           24,505           1,633            17,279
90 days or more                          957           10,524             944           10,151             646             6,818
                               --------------  ---------------  -------------- ----------------  -------------- -----------------
Total delinquencies                    6,512         $ 73,035           7,782          $84,644           5,929          $ 61,987
                               ==============  ===============  ============== ================  ============== =================
Delinquency as a percentage
of servicing portfolio                 2.89%            2.73%           3.57%            3.33%           2.85%             2.63%

</TABLE>


         Net earnings are summarized in the table below.  Net earning  decreased
23.0%, for the quarter ended March 31, 2000, compared to the quarter ended March
31, 1999. Net earnings increased 17.4% for the nine months ended March 31, 2000,
compared to the nine months  ended March 31, 1999.  The  decrease  over the same
quarter  of the  prior  year  is  primarily  due to a  lower  gain  on  sale  of
receivables,  net of  impairments.  The  decrease  was  partially  offset  by an
increase in net interest margin after provision for estimated credit losses. The
increase  in the net  earnings  for the nine  months  ended  March 31,  2000 was
primarily related to the increase in the net interest margin and the decrease in
the  provision  for  estimated  credit  losses over the same period of the prior
fiscal year.

<TABLE>
<CAPTION>

                                        Three Months                             Nine Months
                                       Ended March 31,                          Ended March 31,
                               ----------------------------------       -----------------------------------
                                   2000                1999                  2000                1999
                               --------------      --------------       ---------------      --------------
                                            (Dollars in thousands, except per share amounts)

<S>                              <C>                 <C>                  <C>                  <C>
Net Income                       $ 3,284             $ 4,264              $ 10,851             $ 9,244
Net Earnings Per Share           $  0.25             $  0.32              $   0.82             $  0.70
(basic and diluted)
</TABLE>

         Net  interest  margin  after  provision  for  estimated  credit  losses
increased  53.5% to $7.3 million and 48.4% to $20.1  million for the quarter and
nine months  ended March 31,  2000,  respectively,  compared to $4.7 million and
$13.6 million for the  corresponding  periods  ended March 31, 1999.  During the
fourth quarter of fiscal 1999,  the Company  increased the discount rate used in
the  gain on sale  calculation  which  resulted  in a  higher  initial  discount
recorded for each sale on a prospective  basis. The discount  accretion was $2.0
million higher in the quarter ended March 31, 2000 compared to the quarter ended
March 31, 1999. Additionally,  a lower provision for estimated credit losses was
recorded in the third quarter of fiscal 2000 compared to the same quarter of the
prior year. The increase for the nine months ended March 31, 2000 as compared to
the previous  fiscal period was primarily due to a decrease in the provision for
estimated  credit losses and an increase in the discount  accretion  included in
retained interest and other interest income.

         Interest  on  receivables  held for sale,  net  increased  1.7% to $8.2
million  and  decreased  1.0% to $23.1  million  for the quarter and nine months
ended March 31, 2000,  respectively,  compared to $8.1 million and $23.3 million
for the same periods of fiscal 1999. The increase over the prior year related to
a higher  average held for sale  portfolio for the quarter ended March 31, 2000,
compared to the quarter ended March 31, 1999 and the decrease for the prior nine
months  related to a lower  average held for sale  portfolio for the nine months
ended March 31, 2000 compared to the same period ended March 31, 1999.

         Retained  interest and other interest  income  increased  37.5% to $6.7
million and 20.2% to $18.9  million for the quarter and nine months  ended March
31,  2000,  respectively,  compared to $4.9  million  and $15.7  million for the
corresponding  periods ended March 31, 1999. The discount  component of Retained
Interest  increased at June 30, 1998 by  implementing  the "cash out" method and
again at June 30, 1999 by  increasing  the discount rate used to record the gain
on sale of  receivables  during  the  fourth  quarter  of fiscal  1999.  (A more
detailed discussion can be found in the Company's Annual Report on Form 10-K for
fiscal 1999).  The resulting effect during the current period was an increase in
the amount of the discount  accreted into income.  The individual  components of
Retained interest and other interest income are shown in the following table.

<TABLE>
<CAPTION>


                                  Three Months                     Nine Months
                                  Ended March 31,                 Ended March 31,
                                2000            1999            2000           1999
                            -------------   -------------   -------------   ------------
                                                   (In thousands)

<S>                              <C>             <C>             <C>            <C>
Discount accretion               $ 6,438         $ 4,445         $17,922        $14,266
Other interest income                266             430             952          1,436
                            -------------   -------------   -------------   ------------
                                 $ 6,704         $ 4,875         $18,874        $15,702
</TABLE>

         Interest  expense  decreased  2.7% to $6.8  million  and  7.6% to $19.5
million  for the quarter and nine  months  ended March 31,  2000,  respectively,
compared to $7.0 million and $20.6 million for the  corresponding  periods ended
March 31, 1999.  These  decreases were  primarily the result of lower  long-term
debt  interest  expense due to the second  principal  payment made on the senior
debt in August 1999. This decrease in long-term  interest  expense was offset by
higher  warehouse  borrowing  needs as a result  of an  increase  in  receivable
acquisitions  for both the  quarter  and nine  months  ended  March 31,  2000 as
compared to the quarter and nine months ended March 31, 1999.

         Provision for estimated  credit losses  decreased 31.4% to $840,000 and
53.3% to $2.3  million for the quarter  and nine  months  ended March 31,  2000,
respectively,  compared to $1.2 million and $4.8 million,  respectively, for the
same periods of the fiscal 1999. The decrease is due to continued improvement in
the held for sale  portfolio  and a smaller  portfolio  of Tier II and  modified
receivables held on the balance sheet.

         Gain on sales of  receivables,  net  decreased  59.6% and 20.0% for the
quarter and nine months ended March 31, 2000, respectively. 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, and the level
of  estimation  for net credit  losses.  The  components of the gain on sales of
receivable, net are:

<TABLE>
<CAPTION>


                                               Three Months                             Nine Months
                                              Ended March 31,                          Ended March 31,
                                     ----------------------------------       -----------------------------------
                                         2000                 1999                 2000                1999
                                     --------------       -------------       ---------------      --------------
                                                                  (In thousands)
<S>                                      <C>                <C>                   <C>                 <C>
Gain on sale of receivables              $ 2,754            $ 10,679              $ 14,788            $ 22,643
Impairments                                                   (4,293)               (4,243)             (9,464)
                                     ------------       -------------       ---------------      --------------
Gain on sale of receivables, net         $ 2,754             $ 6,386              $ 10,545            $ 13,179
</TABLE>


         The receivables sold in the securitizations were $282.7 million for the
quarter ended March 31, 2000,  compared to $320.5  million for the quarter ended
March 31, 1999. The decrease in the  securitization  transaction  gain primarily
relates to a lower net spread for the third  quarter of fiscal 2000 gain on sale
compared to the gain on sale  recorded  in the same  period of the prior  fiscal
year. The receivables sold in the securitization for the quarter ended March 31,
2000 primarily included  receivable  acquisitions for the months of November and
December 1999 and January 2000. The receivables sold in the  securitization  for
the quarter ended March 31, 1999 primarily included receivable  acquisitions for
the months of November and December of 1998 and January 1999.

         Set forth below is certain  information  relating to the third  quarter
fiscal 2000 and 1999 securitizations.

Third Quarter Securitizations                                 Fiscal
                                                -------------------------------
                                                     2000               1999
                                                     ----               ----

                                                   2000 - A           1999 - A

Amount securitized (in millions)                    $282.7             $320.5
Weighted average receivable rate                    13.08%             12.99%
Weighted average certificate rate                   7.20%              5.80%
Gross spread (1)                                    5.88%              7.19%
Net spread (2)                                      4.94%              6.16%
Credit loss assumption                              4.50%              4.50%
Annual prepayment speed assumption                  28.00%             28.00%
Discount rate assumption                            15.61%             9.84%
Weighted average remaining maturity (in months)      68.9               71.5
Weighted average life (in years)                     1.99               1.99
Gain as a percentage of amount securitized          0.99%              3.38%

(1)  Gross spread - difference  between the weighted average receivable rate and
     weighted average certificate rate on the asset-backed securities.

(2)  Net spread - gross  spread less  servicing  fees,  upfront  costs,  ongoing
     credit enhancement and trustee fees, and hedging gain or losses.

     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 as of the Retained
Interest,  there were no additional other than temporary impairments charges for
the  quarter  ended  March  31,  2000.  See  -  "Discussion  of  Forward-Looking
Statements".

         Servicing  fees  increased  11.0% to $6.2  million  and  15.3% to $18.5
million  for the  quarter  and nine  months  ended  March,  2000,  respectively,
compared to $5.6 million and $16.0 million for the quarter and nine months ended
March 31,  1999,  respectively.  The  increase  was related to a higher  average
securitized  servicing portfolio for the quarter and nine months ended March 31,
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  20.4% to $1.7 million and 22.5%
to $4.7 million for the quarter and nine months  ended March 31, 2000,  compared
to $1.4 million and $3.8 million for the  corresponding  periods of fiscal 1999.
Other  fees  consist  primarily  of late  charges,  the  gross  profit  from the
dealership sales, and other fee income.

         Salaries and benefits expense increased 16.2% to $7.4 million and 20.4%
to $21.0  million  for the  quarter  and  nine  months  ended  March  31,  2000,
respectively,  from $6.3 million and $17.5 million for the corresponding periods
ended March 31,  1999.  The  increase  was  primarily  related to an increase in
full-time  equivalent  employees.  The  average  full-time  equivalents  for the
quarter  and nine months  ended  March 31, 2000 were 597 and 569,  respectively,
compared to 522 and 530 for the same periods of fiscal 1999.

         Other general and administrative expense increased 6.2% to $5.2 million
and 7.3% to $15.1  million for the quarter and nine months ended March 31, 2000,
respectively, compared to $4.9 million and $14.1 million for the same periods of
fiscal 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 were 1.89% and
1.85% for the  quarter  and nine  months  ended  March 31,  2000,  respectively,
compared to 1.88% and 1.84% for the same periods of fiscal 1999 and continues to
be below the industry average.

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 servicing  portfolio at March
31, 2000 and June 30, 1999 is summarized in the following table.

                                          March 31,             June 30,
                                            2000                  1999
                                     --------------------   ------------------
                                                    (In thousands)

Receivables held for sale, net           $ 302,525                $267,316
Allowance for net credit losses             $2,898                  $2,754
Securitized assets serviced             $2,411,047              $2,256,415
Total servicing portfolio               $2,710,105              $2,519,070

         Retained interest in securitized assets ("Retained Interest"). Retained
Interest increased $3.7 million to $194.7 million at March 31, 2000, from $191.0
million at June 30, 1999. The Retained  Interest balance  increased or decreased
by the  amounts  capitalized  upon  consummation  of the first  three  quarters'
securitizations   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.


<PAGE>

The following table  illustrates the activity of Retained  Interest for the nine
months ended March 31, 2000 (in thousands):

Balance at June 30, 1999                                            $191,029

Amounts capitalized (including estimated dealer rebates)              43,652
Collections                                                         (44,813)
Accretion of discount                                                 17,784
Change in spread accounts                                           (12,850)
Impairment                                                           (4,243)
Net change in unrealized gain (loss)                                  4,133
                                                                    ---------
Balance at March 31, 2000                                           $194,692
                                                                    =========

         Allowance for net credit losses on securitized  receivables is included
as a component of Retained Interest. At March 31, 2000, the allowance related to
both Tier I and Tier II securitized receivables totaled $105.9 million, or 4.39%
of the total securitized  receivable  portfolio,  compared to $104.4 million, or
4.63%, at June 30, 1999. The Company's assumptions for valuing Retained Interest
on a "cash out" basis at March 31, 2000,  include the Company's latest estimates
for net  credit  losses of 4.00% to 6.58% on Tier I  receivables  and  12.00% to
16.16% on Tier II receivables as a percentage of original principal balance over
the life of  receivables,  annual  prepayment  estimates  ranging from 22.32% to
28.00% on Tier I receivables  and 10.73% to 20.50% on Tier II  receivables,  and
discount rates ranging from 9.25% to 15.55% on Tier I receivables  and 11.25% to
16.41% on Tier II receivables.  The weighted average discount rate used to value
Retained  Interest at March 31,  2000 was 13.98%  compared to 12.83% at June 30,
1999.  Impairment  of Retained  Interest,  an  available-for-sale  security,  is
measured on a disaggregate (pool by pool) basis in accordance with SFAS 115. See
- "Discussion of Forward-Looking Statements".

         Amounts  due under  revolving  warehouse  credit  facility  were $246.7
million at March 31,  2000,  compared to $185.5  million at June 30,  1999.  The
increase  is a result  of  higher  acquisition  volume  after  the  close of the
securitization  transaction in the March quarter compared to the June quarter of
last year.

         Long-term  debt was $177  million at March 31,  2000,  compared to $199
million at June 30,  1999.  The  decrease  in  long-term  debt was a result of a
required principal payment on the Company's Senior Notes in August 1999 of $22.0
million.

         Current and deferred income taxes payable totaled $5.4 million at March
31, 2000,  compared to $16.0 million at June 30, 1999. The decrease is primarily
the  result of tax  payments  made  during  the first  two  quarters,  which are
partially  offset by an increase in the tax  liability  associated  with current
year earnings.

Liquidity and Capital Resources

         Sources  and Uses of Cash in  Operations.  Net cash  used in  operating
activities  decreased to $92.7 million for the nine months ended March 31, 2000,
from net cash used in operating activities of $176.1 million for the nine months
ended March 31, 1999. The decrease was primarily  attributable  to a decrease in
receivables   securitized  relative  to  receivables  acquired.  Net  cash  from
investing  activities  was $55.2  million and $34.6  million for the nine months
ended  March 31,  2000 and 1999,  respectively.  The  increase  over  prior year
primarily  relates to higher  collections  on  Retained  Interest  and change in
spread  accounts due to lower net credit losses and the release of the 1995B and
1995C spread accounts of  approximately  $13.8 million due to  repurchasing  the
remaining receivables from these securitizations.

         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 three quarters of fiscal
2000, derivative financial instrument  transactions provided a source of cash of
$5.0 million  compared to a use of cash of $4.5  million  during the first three
quarters of fiscal 1999.

         Financing  Activities.  Net cash from financing activities for the nine
months  ended  March  31,  2000 was  $38.8  million  compared  to net cash  from
financing  activities of $75.1 million for the nine months ended March 31, 1999.
The primary factor for this change is the net change in the warehouse borrowings
since the beginning of the  applicable  nine month  period.  The net increase in
warehouse borrowings for the nine months ended March 31, 2000 was lower than the
net increase in warehouse borrowings for the same period ended March 31, 1999.

         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 the revolving warehouse credit facility.
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  which will be available for future use as management
deems appropriate.  This facility,  originally  established at $250 million, was
increased  to $375  million  in March  2000.  All of the  existing  capacity  is
currently available.  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 facility 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 the
revolving  warehouse  credit  facility 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  the  revolving   warehouse   credit   facility.   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 the 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  facility.  The Company has  borrowing  arrangements  with an
independent  financial  institution  for a $500.0  million  revolving  warehouse
credit  facility  that is  insured  by a surety  bond  provider  to fund  Tier I
receivable  acquisitions.  At March 31, 2000, $246.7 million of the capacity was
utilized,  and an additional  $39.0 million was available to borrow based on the
outstanding  principal  balance of eligible  receivables.  At June 30, 1999, and
March 31, 1999,  $185.5 million and $170.5 million of the capacity was utilized,
and an additional  $67.2 million and $54.5 million was available to borrow based
on the outstanding principal balance of eligible receivables, respectively.

         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 facility
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 at least the next twelve  months.  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 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".

Year 2000 Compliance

         All mission  critical  systems  were  monitored  and tested  during the
December 31st through January 2nd weekend.  Three known issues have arisen since
the rollover  weekend.  The first two were identified and corrected  without any
outages or service  delays.  The third issue centered  around custom code on two
non-mission critical download files that slipped through testing. Once the issue
was identified and corrected, normal operation was restored. There were two days
of incomplete files with limited impact. There were also concerns related to the
impact of the leap year on February  29, 2000.  As with the year 2000  rollover,
the Company did not experience any significant  rollover problems related to the
leap year.

         The replacement or remedied costs for year 2000 compliance  issues with
the Company was estimated to be less than $100,000, which the Company recognized
as  incurred.  This  estimated  cost was mostly due to  software  upgrades  that
include new  features  which were  combined  with Year 2000  corrections.  See -
"Discussion of Forward-Looking Statements".

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  1999  which is  incorporated
herein by this reference.


<PAGE>




Item 3.  Quantitative and Qualitative Disclosures About Market Risk

         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  securitization.  For
example,  if net credit  losses  increased or decreased by 100 basis points on a
$300.0 million  securitization,  the gain on sale would result in a reduction or
an increase of the Gain (Loss) on Sales of  Receivables  by  approximately  $3.0
million pre-tax, before consideration of discounting.  The same 100 basis points
increase or decrease  would result in a reduction or an increase of the Retained
Interest of approximately  $24.0 million,  before  consideration of discounting,
based on a securitized  receivable  portfolio of $2.4 billion at March 31, 2000.
The forgoing  examples are developed  utilizing the cash flow model  employed by
management  to  calculate  the fair value of Retained  Interest by changing  the
credit loss assumption as described.  The Company does not believe  fluctuations
in interest rates materially affect the rate of prepayments on receivables.

         The  Company's  sources  of  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 derivative financial  instruments to mitigate this risk.
The Company uses a hedging strategy that primarily  consists of the execution of
forward interest rate swaps having a maturity approximating the average maturity
of the receivable  production during the relevant period.  There is no assurance
that this  strategy  will  completely  offset  changes  in  interest  rates.  In
particular,  such  strategy  depends on  management's  estimates  of  receivable
acquisition  volume and timing of its  securitizations.  The Company  realizes a
gain on its hedging transactions during periods of increasing interest rates and
widening swap spreads and realizes a loss on such transactions during periods of
decreasing interest rates and tightening swap spreads.  The hedging gain or loss
should  substantially  offset  changes in  interest  rates as seen by a lower or
higher  reported  gain on sales of  receivables,  respectively.  Recognition  of
unrealized gains or losses is deferred until the sale of receivables  during the
securitization.  On the date of the sale,  deferred hedging gains and losses are
recognized as a component of Gain (Loss) on Sales of  Receivables.  Increases or
decreases in interest rates reduce or increase the fair value of long-term debt,
respectively.  At March 31, 2000, the Company had an unrealized  hedging loss on
forward interest rate swaps of $413,000 based on notional amounts outstanding of
$426.1 million.


<PAGE>



         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 March 31, 2000.
<TABLE>
<CAPTION>


                                             Three months      2001        2002         2003         Total      Fair Value
                                            ended June 30,
                                                 2000
                                                                         (Dollars in thousands)

<S>                                          <C>                     <C>        <C>           <C>    <C>            <C>
Amounts due under warehouse facility         $ 246,691               $-         $ -           $ -    $ 246,691      $246,691
 Weighted average variable rate                  5.13%

Long-term debt                                      $-         $ 22,000     $43,667      $111,333    $ 177,000      $163,513
 Weighted average fixed rate                      0.00%            8.53%       8.14%         8.86%        8.64%
</TABLE>

Sensitivity analysis on Retained Interest

         At March 31, 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 March 31, 2000                          Tier I               Tier II              Total

<S>                                                   <C>                   <C>                <C>
Fair value of retained interest (1)                   $197,897,761          $3,828,996         $ 201,726,757

Prepayment speed assumption (annual rate)            22.32% - 28.00%     10.73% - 20.50%

Impact on fair value of 10% adverse change            $192,267,728          $3,804,433         $ 196,072,161
Impact on fair value of 20% adverse change            $186,924,911          $3,780,484         $ 190,705,395


Net loss rate assumption (pool life rate)             4.00% - 6.58%      12.00% - 16.16%

Impact on fair value of 10% adverse change            $176,273,897          $2,978,536         $ 179,252,433
Impact on fair value of 20% adverse change            $154,535,999          $2,154,260         $ 156,690,259


Discount rate assumption (annual rate)                9.25% - 15.55%         11.25% - 16.41%

Impact on fair value of 10% adverse change            $192,980,899          $3,753,057         $ 196,733,956
Impact on fair value of 20% adverse change            $188,299,896          $3,679,689         $ 191,979,585

-------------------------------------------------------------------------------------------------------------
</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 27 -  Financial Data Schedule

         (b)  Reports on Form 8-K

                  The  Company  filed no reports on Form 8-K during the  quarter
                  ended March 31, 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

May 12, 2000                        By:  /S/ John M. Stainbrook
                                         ----------------------
                                         John M. Stainbrook
                                         President and Chief Executive Officer

May 12, 2000                        By:  /S/ Rick A. Brown
                                         -----------------
                                         Rick A. Brown
                                         Treasurer and Chief Financial Officer