<PAGE>   1
================================================================================


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                 ---------------

                                    FORM 10-Q
                                 ---------------

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

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999

                                       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: 28050

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

                 DELAWARE                                     33-0577635
      (State or other jurisdiction of                      (I.R.S. Employer
       incorporation or organization)                     Identification No.)

                           Onyx Acceptance Corporation
                            27051 Towne Centre Drive
                            Foothill Ranch, Ca 92610
                                 (949) 465-3900
          (Address and telephone number of principal executive offices)

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

   Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                               YES [X]     NO [ ]

   As of May 14, 1999 there were 6,171,034 shares of registrant's Common Stock,
par value $.01 per share outstanding.

================================================================================




                                       1
<PAGE>   2

                  ONYX ACCEPTANCE CORPORATION AND SUBSIDIARIES

                     INDEX TO QUARTERLY REPORT ON FORM 10-Q


<TABLE>
<CAPTION>
                                                                                                      PAGE
                                                                                                      ----
<S>      <C>                                                                                           <C>
PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

         Condensed Consolidated Statements of Financial Condition at March 31, 1999 and
           December 31, 1998........................................................................    3
         Condensed Consolidated Statements of Income for the three months ended
           March 31, 1999 and March 31, 1998........................................................    4
         Condensed Consolidated Statements of Cash Flows for the three months ended
           March 31, 1999 and March 31, 1998........................................................    5
         Notes to Condensed Consolidated Financial Statements.......................................    6

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations......    8

Item 3. Quantitative and Qualitative Disclosures about Market Risk..................................   15

PART II. OTHER INFORMATION

Item 5.  Other Information..........................................................................   15

Item 6.  Exhibits and Reports on Form 8-K...........................................................   22

SIGNATURES..........................................................................................   23

EXHIBIT INDEX.......................................................................................   24
</TABLE>


                                       2
<PAGE>   3



PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

                         ONYX ACCEPTANCE CORPORATION AND SUBSIDIARIES

                   CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

<TABLE>
<CAPTION>
                                                                     MARCH 31,         DECEMBER 31,
                                                                        1999               1998
                                                                    ------------       ------------
                            ASSETS                                  (UNAUDITED)
<S>                                                                 <C>                <C>         
Cash & cash equivalents .....................................       $  5,432,252       $  1,928,991
Credit enhancement assets ...................................        119,310,537        112,953,193
Contracts held for sale (Net of allowance) ..................        191,561,098        152,760,781
Other assets ................................................          9,446,375          7,778,759
                                                                    ------------       ------------
           Total assets .....................................       $325,750,262       $275,421,724
                                                                    ============       ============

                         LIABILITIES

Accounts payable ............................................       $ 21,410,213       $ 10,959,913
Debt ........................................................        244,995,708        209,600,061
Other liabilities ...........................................         13,347,892         11,038,029
                                                                    ------------       ------------
          Total liabilities .................................        279,753,813        231,598,003

                           EQUITY

Common stock
  Par value $.01 per share; authorized 15,000,000 shares;
    issued and outstanding 6,171,034 as of March 31, 1999
    and December 31, 1998 ...................................             61,710             61,710
Paid in capital .............................................         37,839,151         37,839,151
Retained earnings ...........................................          8,095,588          5,922,860
                                                                    ------------       ------------
           Total equity .....................................         45,996,449         43,823,721
                                                                    ------------       ------------
           Total liabilities and equity .....................       $325,750,262       $275,421,724
                                                                    ============       ============
</TABLE>


See the accompanying notes to the condensed consolidated financial statements.





                                       3
<PAGE>   4



                  ONYX ACCEPTANCE CORPORATION AND SUBSIDIARIES

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                              THREE MONTHS ENDED MARCH 31,
                                              -----------------------------
                                                  1999             1998
                                              -----------       -----------
                                              (UNAUDITED)
<S>                                           <C>               <C>        
REVENUES:
Interest income .......................       $ 5,766,369       $ 4,480,550
Interest expense ......................         4,235,200         2,820,986
                                              -----------       -----------
Net interest income ...................         1,531,169         1,659,564

Gain on sale of contracts .............        12,327,584         8,151,110
Service fee income ....................         5,709,353         1,968,641

Total Revenues ........................        19,568,106        11,779,315

EXPENSES:
    Provision for credit losses .......           499,914           306,988
    Salaries and benefits .............         9,247,925         5,941,169
    Depreciation ......................           709,583           426,982
    Occupancy .........................           829,524           372,441
    General and administrative expenses         4,567,096         3,462,744
                                              -----------       -----------
Total Expenses ........................        15,854,042        10,510,324
                                              -----------       -----------
Net Income before Taxes ...............         3,714,064         1,268,991
    Income Taxes ......................         1,541,336           526,631
                                              -----------       -----------
Net Income after Taxes ................       $ 2,172,728       $   742,360
                                              ===========       ===========

Net Income per share - Basic ..........       $      0.35       $      0.12
Net Income per share - Diluted ........       $      0.34       $      0.12

Basic Shares Outstanding ..............         6,171,034         6,024,820
Diluted Shares Outstanding ............         6,414,445         6,420,551
</TABLE>


See the accompanying notes to the condensed consolidated financial statements.




                                       4
<PAGE>   5



                  ONYX ACCEPTANCE CORPORATION AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                   THREE MONTHS ENDED MARCH 31,
                                                                ----------------------------------
                                                                    1999                 1998
                                                                -------------        -------------
                                                                 (UNAUDITED)
<S>                                                             <C>                  <C>           
OPERATING ACTIVITIES:

Net cash used in operating activities ...................       $ (29,764,514)       $ (29,236,094)

INVESTING ACTIVITIES:
     Purchases of property and equipment ................          (2,025,893)            (678,605)
                                                                -------------        -------------
Cash used in investing activities .......................          (2,025,893)            (678,605)

FINANCING ACTIVITIES:
     Proceeds from exercise of options/warrants .........                  --                4,553
     Payments on capital lease obligations ..............            (101,979)            (140,589)
     Payments on excess servicing  line of credit .......          (7,653,046)          (3,548,732)
     Proceeds from drawdown on excess servicing
       line of credit ...................................           9,000,000            6,000,000
     Paydown of warehouse lines related to securitization
       and sale .........................................        (299,000,000)        (184,006,000)
     Proceeds from warehouse lines ......................         333,048,693          205,360,997
     Proceeds from subordinated debt ....................                  --           10,000,000
     Payments in other loans ............................                  --              (83,774)
                                                                -------------        -------------
Net cash provided by financing activities ...............          35,293,668           33,586,455
                                                                -------------        -------------
              Increase in cash and cash equivalents .....           3,503,261            3,671,756

Cash and cash equivalents at beginning of period ........           1,928,991              991,010
                                                                -------------        -------------
Cash and cash equivalents at end of period ..............       $   5,432,252        $   4,662,766
                                                                =============        =============

Supplemental Disclosures of Cash Flow
  Information:

Interest paid ...........................................       $   4,059,110        $   2,826,407
Capital lease additions .................................       $          --        $      86,786
</TABLE>


See the accompanying notes to the condensed consolidated financial statements.






                                       5
<PAGE>   6



                  ONYX ACCEPTANCE CORPORATION AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                   (UNAUDITED)

NOTE 1 - BASIS OF PRESENTATION

   The condensed consolidated financial statements included herein are unaudited
and have been prepared by the Company in accordance with generally accepted
accounting principles for interim financial reporting and Securities and
Exchange Commission regulations. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to the
regulations. In the opinion of management, the financial statements reflect all
adjustments (of a normal and recurring nature) which are necessary to present
fairly the financial position, results of operations and cash flows for the
interim periods. Operating results for the three months ended March 31, 1999 are
not necessarily indicative of the results that may be expected for the year
ending December 31, 1999. The condensed consolidated financial statements should
be read in conjunction with the audited financial statements and footnotes
thereto for the year ended December 31, 1998 included in the Company's 1998
Annual Report on Form 10-K.

   USE OF ESTIMATES

   In conformity with generally accepted accounting principles, management
utilizes assumptions and estimates that affect the reported value of credit
enhancement assets and the gain on sale of contracts. Such assumptions include,
but are not limited to, estimates of loan prepayments, defaults, recovery rates
and present value discount rates. The Company uses a combination of its own
historical experience, industry statistics and expectation of future performance
to determine such estimates. Actual results may differ from the Company's
estimates due to numerous factors both within and beyond the control of Company
management. Changes in these factors could require the Company to revise its
assumptions concerning the amount of voluntary prepayments, the frequency and or
severity of defaults and the recovery rates associated with the disposition of
repossessed vehicles.

NOTE 2 - CONTRACTS HELD FOR SALE

   Contracts held for sale consisted of the following:

<TABLE>
<CAPTION>
                                             MARCH 31,            DECEMBER 31,
                                                1999                  1998
                                           -------------          -------------
<S>                                        <C>                    <C>          
Contracts held for sale ..........         $ 200,835,569          $ 160,386,439
Less unearned interest ...........           (10,203,304)            (8,434,206)
                                           -------------          -------------
                                             190,632,265            151,952,233
Allowance for credit losses ......            (1,245,581)            (1,052,178)
Dealer participation .............             2,174,414              1,860,726
                                           -------------          -------------
Total ............................         $ 191,561,098          $ 152,760,781
                                           =============          =============
</TABLE>

NOTE 3 -- CREDIT ENHANCEMENT ASSETS

   SFAS 125 requires that following a transfer of financial assets, an entity is
to recognize the assets it controls and the liabilities it has incurred, and
derecognize assets for which control has been surrendered and liabilities that
have been extinguished.

   Credit enhancement assets consisted of the following:

<TABLE>
<CAPTION>
                                      MARCH 31,         DECEMBER 31,
                                         1999               1998
                                     ------------       ------------
<S>                                  <C>                <C>         
            Trust receivable ....    $  3,712,501       $  3,712,501
            RISA ................     115,598,036        109,240,692
                                     ------------       ------------
                 Total ..........    $119,310,537       $112,953,193
                                     ============       ============
</TABLE>

   Retained interest in securitized assets ("RISA") is capitalized upon
securitization of contracts and represent the present value of the estimated
future earnings to be received by the Company from the excess spread created in
securitization transactions. Excess spread



                                       6
<PAGE>   7

is calculated by taking the difference between the coupon rate of the contracts
sold and the certificate rate paid to the investors less contractually specified
servicing and guarantor fees and projected credit losses, after giving effect to
estimated prepayments.

   Prepayment and credit loss assumptions are utilized to project future
earnings and are based on historical experience. Credit losses are estimated
using cumulative loss frequency and severity estimates by management. All
assumptions are evaluated each quarter and adjusted, if appropriate, to reflect
the actual performance of the contracts.

   Future earnings are discounted at a rate management believes to be
representative of market at the time of securitization. The balance of RISA is
amortized against actual excess spread income earned on a monthly basis over the
expected repayment life of the underlying contracts. RISA is classified in a
manner similar to available for sale securities and as such is marked to market
each quarter. Market value changes are calculated by discounting the remaining
projected excess spread using a current market discount rate. Any changes in the
market value of the RISA is reported as a separate component of shareholders'
equity as an unrealized gain or loss, net of deferred taxes. As of March 31,
1999 the market value of RISA approximated cost. The Company retains the rights
to service all contracts it securitizes.

   The following table presents the balances and activity for RISA:

<TABLE>
<CAPTION>
                                       MARCH 31,          DECEMBER 31,
                                          1999                1998
                                     -------------        -------------
<S>                                  <C>                  <C>          
            Beginning Balance ....   $ 109,240,692        $  64,357,850
            Additions ............      23,459,379           80,632,733
            Amortization .........     (17,102,035)         (35,749,891)
                                     -------------        -------------
            Ending Balance ......    $ 115,598,036        $ 109,240,692
                                     =============        =============
</TABLE>

   In initially valuing the RISA, the Company establishes an off balance sheet
allowance for expected future credit losses. The allowance is based upon
historical experience and management's estimate of future performance regarding
credit losses. The amount is reviewed periodically and adjustments are made if
actual experience or other factors indicate that future performance may differ
from management's prior estimates.

   The following table presents the estimated future undiscounted retained
interest earnings to be received from securitizations. Estimated future
undiscounted RISA earnings are calculated by taking the difference between the
coupon rate of the contracts sold and the certificate rate paid to the
investors, less the contractually specified servicing fee of 1.0% and guarantor
fees, after giving effect to estimated prepayments and assuming no losses. To
arrive at the RISA, this amount is reduced by the off balance sheet allowance
established for potential future losses and by discounting to present value.

<TABLE>
<CAPTION>
                                                             MARCH 31,         DECEMBER 31,
                                                                1999               1998
                                                           --------------     --------------
<S>                                                        <C>                <C>           
        Estimated net undiscounted RISA earnings ....      $  193,278,192     $  176,600,869
        Off balance sheet allowance for losses ......         (59,286,672)       (51,009,542)
        Discount to present value ...................         (18,393,484)       (16,350,635)
                                                           --------------     --------------
        Retained interest in securitized assets .....      $  115,598,036     $  109,240,692
                                                           ==============     ==============
        Outstanding balance of contracts sold
          through securitizations ...................      $1,342,146,137     $1,183,157,096
</TABLE>





                                       7
<PAGE>   8

NOTE 4 - NET INCOME PER SHARE

   The following table sets forth the computation of basic and diluted net
income per share ("EPS"):

<TABLE>
<CAPTION>
                                                            THREE MONTHS ENDED
                                                                 MARCH 31,
                                                        --------------------------
                                                           1999            1998
                                                        ----------      ----------
<S>                                                     <C>             <C>       
       Net Income ................................      $2,172,728      $  742,360
                                                        ==========      ==========

       Weighted average shares outstanding .......       6,171,034       6,024,820
       Net effect of dilutive stock
         options/warrants ........................         243,411         395,731
       Diluted weighted average shares outstanding       6,414,445       6,420,551

       Net income per share:

       Basic EPS .................................      $     0.35      $     0.12
                                                        ==========      ==========
       Diluted EPS ...............................      $     0.34      $     0.12
                                                        ==========      ==========
</TABLE>

NOTE 5 - NEW PRONOUNCEMENTS

   In June 1998, the FASB issued Statement of Financial Accounting Standards No.
133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS
133"). SFAS 133 establishes accounting and reporting standards for derivative
contracts, and for hedging activities. The new standard requires that all
derivatives be recognized as either assets or liabilities in the consolidated
statements of financial condition and that those instruments be measured at fair
value. If certain conditions are met, a derivative may be specifically
designated as a hedging instrument. The accounting for changes in the fair value
of a derivative (that is, unrealized gains and losses) depends on the intended
use of the derivative and the resulting designation. The statement is effective
in the first quarter of year 2000. The Company is presently assessing the effect
of SFAS 133 on the consolidated financial statements of the Company.

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

                                    OVERVIEW

   Onyx Acceptance Corporation ("Onyx" or the "Company") is a specialized
consumer finance company engaged in the purchase, securitization and servicing
of motor vehicle retail installment contracts originated by franchised and
select independent automobile dealerships, and to a lesser extent, the
origination or purchase of motor vehicle loans on a direct basis through its
subsidiaries, to consumers throughout the United States (collectively the
"Contracts"). The Company focuses its efforts on acquiring Contracts
collateralized by late model used and, to a lesser extent, new motor vehicles,
entered into with purchasers whom the Company believes have a favorable credit
profile.

   The Company generates revenues primarily through the purchase, origination,
warehousing, subsequent securitization and ongoing servicing of Contracts. The
Company earns net interest income on Contracts held during the warehousing
period. Upon the securitization and sale of Contracts, the Company recognizes a
gain on sale of Contracts, receives future servicing cash flows and earns
servicing fees from the trusts over the life of the related securitization.

                              RESULTS OF OPERATIONS

NET INTEREST INCOME

   Net interest income is the difference between the rate earned on Contracts
and the interest costs associated with the Company's borrowings. Net interest
income totaled $1.5 million for the three months ended March 31, 1999 compared
to $1.7 million for the same period in 1998. The reduction in net interest
income was due primarily to an increase in the ratio of the Company's total debt
to Contracts held for sale for the period ending March 31, 1999, as compared to
the same period in 1998.



                                       8
<PAGE>   9

    Prior to securitizing Contracts, the Company earns interest income on its
Contracts, pays interest on funds used to purchase the Contracts and absorbs any
credit losses. After securitization, the net earnings are recorded as retained
interest income as a component of servicing income.

GAIN ON SALE OF CONTRACTS

   The Company recorded a gain on sale of Contracts of $12.3 million for the
three months ended March 31, 1999, compared to $8.2 million for the same period
of 1998. The increase in the gain on sale is primarily the result of an increase
in Contracts sold. Contracts sold during the first quarter of 1999 totaled $310
million compared to a combined sale and securitization of $188 million during
the same period of 1998. Net interest rate spreads, inclusive of all costs,
increased to 3.44% for the first quarter 1999 securitization vs. 3.40% for the
securitization completed in the first quarter 1998. Interest rate spread is
affected by product mix, general market conditions and overall market interest
rates. The risks inherent in interest rate fluctuations are reduced through
hedging activities. To protect against changes in interest rates, the Company
may hedge Contracts prior to their securitization with forward interest rate
swap agreements. Gains or losses on these forward interest rate swap agreements
are included as part of the basis of the underlying Contracts and recognized
when the Contracts are securitized.

SERVICE FEE INCOME

    Service fee income includes retained interest income, contractual servicing
income and other fee income. Retained interest income represents excess spread
earned on securitized loans less any losses not absorbed by the off balance
sheet allowance for losses. Retained interest income is dependent upon the
average excess spread on the Contracts sold and the size of the serviced
portfolio. Changes in the amount of prepayments and credit losses may also
affect the amount and timing of retained interest income. Contractual service
fee income is earned at a rate of 1% per annum on the outstanding balance of
Contracts securitized. Other fee income consists primarily of documentation
fees, late charges and deferment fees and is dependent on the number of
Contracts originated and the size of the servicing portfolio. Increased
competition may also affect the amount of other fee income that the Company may
earn when originating or servicing Contracts.

    Service fee income increased to $5.7 million during the first quarter of
1999 from $2.0 million during the same period in 1998, due primarily to higher
amounts of contractual service fees, late fees, and document fees related to the
growth in the servicing portfolio.

PROVISION FOR CREDIT LOSSES

    The Company maintains an allowance for credit losses to cover anticipated
losses for Contracts held for sale. The allowance for credit losses is increased
by charging the provision for credit losses and decreased by actual losses on
the Contracts held for sale or by the reduction of the amount of Contracts held
for sale. The level of the allowance is based principally on the outstanding
balance of Contracts held for sale and the historical loss trends for the period
of time the loans are held before being sold in a securitization. When the
Company sells Contracts in a securitization transaction, it reduces its
allowance for credit losses and factors potential losses into its calculation of
gain on sale. The Company believes that the allowance for credit losses is
currently adequate to absorb potential losses. The provision for credit losses
totaled $499,914 for the quarter ended March 31, 1999 compared to $306,988 for
the same period in 1998. Provision for credit losses consists of net credit
losses incurred during the period plus future provision for losses reserved
against the net changes in Contracts held for sale during the period. Net credit
losses accounted for $310,925 during the first quarter of 1999 compared to
$197,676 in the first quarter of 1998. The increase in net credit losses was due
to an increase in the average Contracts held for sale in the period. Future
provisions totaled $188,989 and $109,312 for the first quarter of 1999 and 1998
respectively. Contracts held for sale increased to $191.6 million for the first
quarter of 1999 versus $152.8 million for the first quarter of 1998.

OPERATING EXPENSES

    Total operating expenses were $15.4 million for the three months ended March
31, 1999 compared to $10.2 million for the same period in 1998. The increase in
total operating expenses is primarily attributable to an increase in the amount
of Contracts serviced by the Company. The serviced portfolio increased to $1.5
billion at March 31, 1999 from $884.7 million at March 31, 1998.



                                       9
<PAGE>   10

    The Company incurred salary and benefit expenses of $9.2 million during the
first quarter of 1999 compared with $5.9 million for the first quarter of 1998,
an increase of 55.9%. This increase is attributable to the incremental staffing
requirements related to the expansion of operations and the growth of the
servicing portfolio. The number of employees at the Company increased from 403
at March 31, 1998 to 607 at March 31, 1999.

    Depreciation expenses increased to $709,583 for the three months ended March
31, 1999 compared to $426,982 for the same period of 1998 as the Company
continued to invest in technology and infrastructure. Expansion into new states
and the relocation of the Company's corporate headquarters resulted in an
increase in occupancy costs to $829,524 for the three months ending March 31,
1999 from $372,441 in the like period in 1998. General and administrative
expenses increased to $4.6 million in the first quarter of 1999 from $3.5
million in the first quarter of 1998, due primarily to an increase in the dollar
amount of the servicing portfolio.

INCOME TAXES

    The Company files federal and state tax returns. The effective tax rates for
March 31, 1999 and 1998 were 41.5%.

                               FINANCIAL CONDITION

CONTRACTS HELD FOR SALE

    Contracts held for sale totaled $191.6 million at March 31, 1999, compared
to $152.8 million at December 31, 1998. The balance in the held for sale
portfolio is largely dependent upon the timing of the origination and
securitization of Contracts. The Company completed a securitization transaction
of $310 million during the first quarter of 1999 compared to a combined
securitization and sale of $188 million during the first quarter of 1998. The
Company plans to continue to securitize Contracts on a regular basis.

    The following table illustrates the changes in the Company's Contract
acquisition volume, securitization activity and servicing portfolio during the
past five fiscal quarters:

                    SELECTED QUARTERLY FINANCIAL INFORMATION

<TABLE>
<CAPTION>
                                                                             FOR THE QUARTERS ENDED
                                                            ------------------------------------------------------------
                                                            MAR. 31,   JUNE 30,     SEPT. 30,     DEC. 31,     MAR. 31,
                                                              1998        1998         1998         1998         1999
                                                            --------   ----------   ----------   ----------   ----------
                                                                               (DOLLARS IN THOUSANDS)
<S>                                                         <C>        <C>          <C>          <C>          <C>       
       Contracts purchased/originated during period ....    $218,204   $  229,660   $  286,470   $  304,200   $  357,757
       Average monthly volume during period ............      72,735       76,553       95,490      101,400      119,252
       Gain on sale of Contracts .......................       8,151        8,083        9,677       10,506       12,328
       Contracts securitized during period .............     173,000      208,759      250,000      280,000      310,000
       Contracts sold during period ....................      15,000            0            0            0            0
       Servicing portfolio at period end ...............     884,692    1,009,246    1,176,153    1,345,961    1,542,612
</TABLE>

                                  ASSET QUALITY

   The Company monitors and attempts to minimize delinquencies and losses
through timely collections and the use of a predictive dialing system. At March
31, 1999, delinquencies represented 2.08% of the amount of Contracts in its
servicing portfolio compared to 1.77% at March 31, 1998, and 2.83% at December
31, 1998. Net charge-offs as a percentage of the average servicing portfolio
were 1.73% for the quarter ended March 31, 1999, compared to 1.84% for the same
period in 1998. The levels of delinquencies at March 31, 1999, increased over
March 31, 1998, primarily due to the relocation of the collection and customer
service areas in conjunction with the relocation of the corporate headquarters
in December of 1998.

   Management has increased its off balance sheet reserves as a percentage of
the average serviced portfolio sold. Reserves have increased from 3.96% at March
31, 1998, to 4.42% at March 31, 1999. Off balance sheet reserves are those
reserves established and maintained on Contracts sold to the grantor and owner
trusts in connection with securitized Contracts.



                                       10
<PAGE>   11

                  DELINQUENCY EXPERIENCE OF SERVICING PORTFOLIO


<TABLE>
<CAPTION>
                                                        MARCH 31,                 DECEMBER 31,
                                                          1999                        1998
                                               -----------------------      -----------------------
                                                 AMOUNT          NO.          AMOUNT          NO.
                                               ----------      -------      ----------      -------
                                                        (DOLLARS IN THOUSANDS)
<S>                                            <C>             <C>          <C>             <C>    
       Servicing portfolio ...............     $1,542,612      151,037      $1,345,961      131,862
       Delinquencies(1)(2)
                    31-59 days ...........         19,282        2,049          26,410        2,766
                    60-89 days ...........          6,747          711           6,876          691
                    90+ days .............          5,987          543           4,790          455
                                               ----------      -------      ----------      -------
       Total .............................     $   32,016        3,303      $   38,076        3,912
                                               ==========      =======      ==========      =======
       Total delinquencies as a percent of
       Servicing portfolio ...............           2.08%        2.19%           2.83%        2.97%
</TABLE>

(1) Delinquencies include principal amounts only.

(2) The period of delinquency is based on the number of days payments are
    contractually past due.


                   LOAN LOSS EXPERIENCE OF SERVICING PORTFOLIO

<TABLE>
<CAPTION>
                                                  FOR THE THREE MONTHS ENDED
                                                           MARCH 31,
                                                  --------------------------
                                                      1999           1998
                                                   ----------      --------
                                                    (DOLLARS IN THOUSANDS)
<S>                                                <C>             <C>     
       Period end Contracts outstanding ......     $1,542,612      $884,692
       Average servicing portfolio(1) ........     $1,435,409      $815,922
       Number of gross charge-offs ...........          1,307           818
       Gross charge-offs .....................     $    7,040      $  4,458
       Net charge-offs(2) ....................     $    6,221      $  3,762
       Annualized net charge-offs as a percent
         of average Servicing portfolio ......           1.73%         1.84%
</TABLE>

(1) Average is based on daily balances.

(2) Net charge-offs are gross charge-offs minus recoveries of Contracts
    previously charged off.





                                       11
<PAGE>   12

     THE FOLLOWING TABLE ILLUSTRATES THE MONTHLY PERFORMANCE OF EACH OF THE
SECURITIZED POOLS OUTSTANDING FOR THE PERIOD FROM THE DATE OF SECURITIZATION
THROUGH MARCH 31,1999:

<TABLE>
<CAPTION>
   Month        96-1  96-2  96-3   96-4  97-1  97-2  97-3  97-4  98-1  98-A  98-B  98-C  99-A
   -----        ----  ----  ----   ----  ----- ----  ----  ----  ----  ----  ----  ----  ----
<S>             <C>   <C>   <C>    <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>  
     1          0.00% 0.01% 0.00%  0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
     2          0.03% 0.07% 0.02%  0.02% 0.00% 0.00% 0.00% 0.00% 0.01% 0.01% 0.00% 0.02% 0.00%
     3          0.05% 0.20% 0.07%  0.05% 0.03% 0.02% 0.02% 0.01% 0.02% 0.03% 0.02% 0.02%
     4          0.11% 0.33% 0.16%  0.14% 0.06% 0.07% 0.09% 0.04% 0.08% 0.07% 0.08% 0.04%
     5          0.23% 0.46% 0.43%  0.24% 0.13% 0.22% 0.13% 0.11% 0.14% 0.14% 0.19% 0.15%
     6          0.40% 0.78% 0.54%  0.38% 0.26% 0.32% 0.24% 0.20% 0.24% 0.23% 0.33%
     7          0.69% 0.98% 0.74%  0.53% 0.37% 0.59% 0.36% 0.28% 0.40% 0.37% 0.45%
     8          0.82% 1.15% 0.97%  0.81% 0.52% 0.80% 0.47% 0.43% 0.53% 0.55%
     9          0.93% 1.39% 1.13%  0.98% 0.60% 0.91% 0.62% 0.55% 0.68% 0.73%
     10         1.15% 1.52% 1.32%  1.18% 0.76% 1.07% 0.73% 0.72% 0.85% 1.03%
     11         1.25% 1.69% 1.47%  1.43% 0.92% 1.26% 0.81% 0.87% 1.04%
     12         1.47% 1.94% 1.60%  1.63% 1.02% 1.42% 0.94% 0.95% 1.20%
     13         1.65% 2.08% 1.77%  1.73% 1.13% 1.58% 1.10% 1.08% 1.33%
     14         1.79% 2.34% 1.94%  1.87% 1.23% 1.68% 1.23% 1.19%
     15         2.02% 2.52% 2.09%  2.07% 1.40% 1.80% 1.38% 1.36%
     16         2.25% 2.76% 2.27%  2.23% 1.56% 1.97% 1.58% 1.42%
     17         2.43% 2.89% 2.42%  2.33% 1.68% 2.10% 1.68%
     18         2.59% 3.10% 2.57%  2.49% 1.75% 2.23% 1.77%
     19         2.77% 3.14% 2.70%  2.62% 1.85% 2.35% 1.91%
     20         2.93% 3.30% 2.83%  2.73% 1.92% 2.48%
     21         3.06% 3.47% 2.94%  2.84% 1.98% 2.59%
     22         3.15% 3.60% 3.00%  2.93% 2.09% 2.72%
     23         3.21% 3.70% 3.08%  3.02% 2.17% 
     24         3.28% 3.81% 3.17%  3.10% 2.22%
     25         3.40% 3.93% 3.28%  3.22% 2.31%
     26         3.43% 4.06% 3.38%  3.29%
     27         3.55% 4.13% 3.43%  3.39%
     28         3.60% 4.22% 3.54%  3.46%
     29         3.73% 4.23% 3.59%
     30         3.75% 4.29% 3.69%
     31         3.79% 4.31% 3.77%
     32         3.85% 4.33%
     33         3.88% 4.37%
     34         3.90% 4.39%
     35         3.94% 4.39%
     36         3.94%
     37         3.94%
     38         3.99%
</TABLE>


                                       12
<PAGE>   13

                         LIQUIDITY AND CAPITAL RESOURCES

   The Company requires substantial cash and capital resources to operate its
business. Its primary uses of cash include: (i) acquisition of Contracts; (ii)
payments of dealer participation; (iii) securitization costs, (iv) settlements
of hedging transactions; (v) operating expenses; and (vi) interest expense. The
capital resources available to the Company include: (i) interest income during
the warehousing period; (ii) servicing fees; (iii) releases from spread
accounts; (iv) settlements of hedging transactions; (v) sales of Contracts in
securitizations; and (vi) borrowings under its credit facilities. Management
believes that the resources available to the Company provide the needed capital
to fund the expansion of the Company, Contract purchases, and investments in
origination and servicing capabilities.

   Cash used in operating activities was $29.8 million for the three months
ended March 31, 1999, compared to $29.2 million used in the three months ended
March 31, 1998. The increase in Contract purchases was partially offset by the
increase in the first quarter securitization, causing a minimal change in cash
used in operating activities over the prior period. Cash used in investing
activities was $2.0 million for the quarter ended March 31, 1999, compared to
$678,605 for the quarter ended March 31, 1998. A reduction in the use of the
Company's capital lease lines coupled with the relocation of the Company's
corporate headquarters contributed to the increase in investing activities. Cash
provided by financing activities was $35.3 million for the quarter ended March
31, 1999, compared to $33.6 million for the quarter ended March 31, 1998.
Proceeds from the use of the Company's warehouse lines contributed to the change
in cash provided by financing activities.

   CP Facility. As of March 31, 1999, the Company was party to a $375 million
auto loan warehousing program (the "CP Facility"), with Triple-A One Funding
("Triple A"). The CP Facility is used to fund the purchase or origination of
Contracts. Triple-A is a rated commercial paper asset-backed conduit lender
sponsored by MBIA Insurance Corporation, ("MBIA"). MBIA provides credit
enhancement to Triple-A by issuing a financial guarantee insurance policy
covering all principal and interest obligations owed by the Company related to
borrowings under the CP Facility. The Company pledges Contracts as collateral to
borrow from Triple-A. The CP Facility term, as amended, was renewed for a
three-year period ending in September 2001, subject to the annual renewal of a
liquidity facility provided by several financial institutions. After maturity in
September 2001, the CP Facility is subject to annual renewals upon mutual
consent of the parties.

   The Merrill Line. The Company has a $100 million line with Merrill Lynch
Mortgage Capital, Inc. ("MLMCI"), (the "Merrill Line") which provides funding
for the purchase or origination of Contracts and is used in concert with the CP
Facility the Company currently has in place. The Merrill Line has been renewed
for a term of one year and currently matures in February 2000.

   The Residual Lines. Onyx Acceptance Funding Corporation, ("Fundco") has two
$50 million residual facilities with MLMCI and Salomon Smith Barney Realty
Corporation, ("SBRC"), respectively, (the "Residual Lines"). The Residual Lines
are used by the Company to finance operating requirements. The lines utilize a
collateral based formula that sets borrowing availability to a percentage of the
value of excess cash flow to be received from certain securitizations, and, with
respect to the MLMCI facility, a percentage of the amount of the Merrill Line
outstanding on a quarterly basis. The facility provided by MLMCI has been
renewed and currently matures in February 2000; the facility provided by SBRC
currently matures in September 1999.

   Revolving Facility. As of March 31, 1999, the Company was party to a
collateralized revolving line of credit, ("Revolving Facility"), with a lending
group for up to $45 million, for working capital and other expenditures for
which the Company's CP Facility and Merrill Line are not available. Under the
Revolving Facility, currently maturing in June 1999, the Company may borrow and
repay during the two-year revolving period up to $45 million.



                                       13
<PAGE>   14

   The facilities and lines above contain affirmative, negative and financial
covenants typical of such credit facilities. The Company was in compliance with
these covenants as of March 31, 1999.

   Hedging and Interest Rate Risk Management. The Company employs a hedging
strategy that is intended to minimize the risk of interest rate fluctuations and
which historically has involved the execution of forward interest rate swaps or
use of a pre-funding structure for the Company's securitizations. The Company is
not required to maintain collateral on the outstanding hedging program.

   Securitization. Regular securitizations are an integral part of the Company's
business plan because they allow the Company to increase its liquidity, provide
for redeployment of its capital and reduce risks associated with interest rate
fluctuations. The Company has developed a securitization program that involves
selling interests in pools of its Contracts to investors through the public
issuance of AAA/Aaa rated asset-backed securities. The Company completed a
AAA/Aaa rated publicly underwritten asset-backed securitization in the amount of
$310 million during the first quarter of 1999.

   The net proceeds of these securitizations were used to pay down outstanding
indebtedness incurred under the Company's credit facilities to purchase
contracts, thereby creating availability for the purchase of additional
Contracts. Since 1994, the Company has securitized $2.3 billion of its Contracts
in 15 separate transactions. In each of its securitizations, the Company has
sold its Contracts to a newly formed grantor or owner trust which issued
pass-through certificates or notes in an amount equal to the aggregate principal
balance of the Contracts.

   To improve the level of profitability from the sale of securitized Contracts,
the Company arranges for credit enhancement to achieve an improved credit rating
on the asset-backed securities issued. This credit enhancement has taken the
form of a financial guaranty issued by MBIA, which issues a financial guaranty
insurance policy (the "Financial Guarantee Insurance Policy") insuring the
payment of principal and interest due on the asset-backed securities.

   The Company receives servicing fees for its duties relating to the accounting
for and collection of the Contracts. In addition, the Company is entitled to the
future servicing cash flows. Generally, the Company sells the Contracts at face
value and without recourse, except that certain representations and warranties
with respect to the Contracts are provided by the Company as the servicer and
Onyx Acceptance Financial Corporation ("OAFC") as the seller to the trusts.

   Gains on sale of Contracts in securitizations provide a significant portion
of the Company's revenues. Several factors affect the Company's ability to
complete securitizations of its Contracts, including conditions in the
securities markets generally, conditions in the asset-backed securities market
specifically, the credit quality of the Company's portfolio of Contracts and the
Company's ability to obtain credit enhancement.

                                    YEAR 2000

   The Company is substantially dependent on its and third party computer
systems, business applications and other information technology systems ("IT
systems"), due to the nature of its consumer finance business and the increasing
number of electronic transactions in the industry. Historically, many IT systems
were developed to recognize the year as a two-digit number, with the digits "00"
being recognized as the year 1900. The year 2000 presents a number of potential
problems for such systems, including potentially significant processing errors
or failures. Given the Company's reliance on its computer systems, the Company's
results of operations and cash flows could be materially adversely affected by
any significant errors or failures.

   The Company has developed and is in the midst of executing a comprehensive
plan designed to address the "Year 2000" issue for its in house and third party
IT applications. Last year, the Company completed a detailed risk assessment of
its various in house and third party computer systems, business applications and
other affected systems, formulated a plan for specific remediation efforts and
began certain of such remediation efforts. The Company assembled survey data
from third party vendors and certain other parties with which the Company
communicates electronically to determine the compliance efforts being undertaken
by these parties and to assess the Company's potential exposure to any
non-compliant systems operated by these parties. During the third quarter of
1999, the Company expects to continue and complete its remediation efforts and
to undertake internal testing of its in house and third party systems and
applications.

   The Company currently estimates that its costs related to Year 2000
compliance remediation for Company-owned IT systems and applications will be
approximately $450,000 in 1999. The amount expected to be expended during 1999
represents approximately 9%



                                       14
<PAGE>   15

of the Company's IT budget. By the third quarter of 1999, the Company expects to
undergo third party review of its Year 2000 remediation efforts. This third
party review will include an assessment of the procedures undertaken by the
Company as well as a computer software test of selected portions of the
Company's computer code. The Company currently expects that its Year 2000
remediation efforts will be completed during the third quarter of 1999. The
Company expenses Year 2000 remediation costs as incurred. The Company believes
that it has an effective plan in place to resolve the Year 2000 issue in a
timely manner. As noted above, the Company has not yet completed all necessary
processes of its Year 2000 plan. The Company plans to continuously monitor the
status of completion of its Year 2000 plan and, based on such information, will
develop contingency plans as necessary.

   In the event that the Company does not complete any additional phases of its
plan, the Company may be unable to perform its key operating activities, such as
the purchase of loans and the invoicing, collecting and application of obligor
repayments. The Company could be subject to litigation for computer systems
failure, such as improper application of repayments and resulting incorrect
credit reporting to credit bureaus. In addition, disruptions in the economy
generally resulting from Year 2000 issues could also materially adversely affect
the Company. The amount of potential liability and lost revenue cannot
reasonably be estimated at this time.


                          NEW ACCOUNTING PRONOUNCEMENTS

   In June 1998, the FASB issued Statement of Financial Accounting Standards No.
133 "Accounting for Derivative Instruments and Hedging Activities" ("SFAS No.
133"). SFAS No. 133 establishes the accounting and reporting standards for
derivative instruments, and for hedging activities. It requires that an entity
recognizes all derivatives as either assets or liabilities in the statement of
financial position and measures those instruments at fair value.

   The Company is presently assessing the presentation and effect of SFAS No.
133 on the financial statements of the Company.

   SFAS No. 133 is effective in the first quarter of 2000.

Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

   Because the Company's funding strategy is dependent upon the issuance of
interest-bearing securities and the incurrence of debt, fluctuations in interest
rates impact the Company's profitability. As a result, the Company employs
various hedging strategies to limit certain risks of interest rate fluctuations.
See "Management's Discussion and Analysis -- Interest Rate Exposure and Hedging"
and "Risk Factors -- We are Subject to Interest Rate Fluctuations" and Note 5
included in the Company's 1998 Annual Report on Form 10-K for additional
information regarding such market risks.

PART II. OTHER INFORMATION






                                       15
<PAGE>   16

Item 5. Other Information.

FORWARD LOOKING STATEMENTS

   The preceding Management's Discussion and Analysis of the Company's Financial
Condition and Results of Operations contain certain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995,
which provides a new "safe harbor" for these types of statements. This Quarterly
Report on Form 10-Q contains forward-looking statements which reflect the
current views of Onyx Acceptance Corporation with respect to future events and
financial performance. These forward looking statements are subject to certain
risks and uncertainties, including those identified below which could cause
actual results to differ materially from historical results or those
anticipated. Forward-looking terminology can be identified by the use of terms
such as "may," "will," "expect," "anticipate," "estimate," "should" or
"continue" or the negative thereof or other variations thereon or comparable
terminology. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of their dates. Onyx Acceptance
Corporation undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise. The following factors could cause actual results to differ
materially from historical results or those anticipated: (1) the level of demand
for auto contracts, which is affected by such external factors as the level of
interest rates, the strength of the various segments of the economy, debt burden
held by the consumer and demographics of the lending markets of Onyx Acceptance
Corporation; (2) continued dealer relationships; (3) fluctuations between
consumer interest rates and the cost of funds; (4) federal and state regulation
of auto lending operations; (5) competition within the consumer lending
industry; (6) the availability and cost of securitization transactions and (7)
the availability and cost of warehouse and residual financing.

RISK FACTORS

   You should carefully consider the following risks in your evaluation of us
and our common stock. The risks and uncertainties described below are not the
only ones facing our company. Additional risks and uncertainties, including but
not limited to credit, economic, competitive, governmental and financial factors
affecting our operations, markets, financial products, and services and other
factors discussed in our filings with the Securities and Exchange Commission,
may also adversely impact and impair our business. If any of these risks
actually occur, our business, results of operations, cash flows or financial
condition would likely suffer. In such case, the trading price of our common
stock could decline, and you may lose all or part of the money you paid to buy
our common stock.

WE NEED SUBSTANTIAL LIQUIDITY.

   We require a substantial amount of liquidity to operate our business. Among
other things, we use such liquidity to:

   o  acquire Contracts;

   o  pay dealer participation;

   o  pay securitization costs and fund spread accounts;

   o  settle hedge transactions;

   o  satisfy working capital requirements and pay operating expenses; and

   o  pay interest expense.

   A substantial portion of our revenues in any period is represented by gain on
sale of Contracts generated by a securitization in such period but the cash
underlying such revenues is received over the life of the Contracts. In
addition, cash paid by us for dealer participation is not recovered at the time
of securitizations, but over the life of the Contract.

   We have operated and expect to continue to operate on a negative cash flow
basis and expect to do so in the future as long as the volume of Contract
purchases continues to grow. We have historically funded these negative
operating cash flows principally through borrowings from financial institutions,
sales of equity securities and sales of subordinated notes. We cannot assure
you, however, that



                                       16
<PAGE>   17

(1) we will have access to the capital markets in the future for equity, debt
issuances or securitizations, or (2) financing through borrowings or other means
will be available on acceptable terms to satisfy our cash requirements. If we
are unable to access the capital markets or obtain acceptable financing, our
results of operations, financial condition and cash flows would be materially
and adversely affected. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Capital Resources."

WE DEPEND ON WAREHOUSE FINANCING.

   We depend on warehousing facilities with financial institutions to finance
the purchase or origination of Contracts pending securitization. See
"Business--Financing and Sale of Contracts." Our business strategy requires that
such financing continue to be available during the warehousing period.

   Whether the CP Facility continues to be available to us depends on, among
other things, whether we maintain a target net yield for the Contracts financed
under the CP Facility and comply with certain financial covenants contained in
the sale and servicing agreement between us, as seller, and our wholly-owned
special purpose finance subsidiary, OAFC, as purchaser. These financial
covenants include:

   o  a minimum ratio of net worth to total assets;

   o  a maximum ratio of credit enhancement assets to tangible net worth;

   o  earnings before interest, depreciation and taxes coverage ratio; and

   o  minimum cash on hand.

   We also have a warehouse line of credit with Merrill Lynch. Whether the
Merrill Line continues to be available to us depends on whether we meet certain
debt to equity ratios and minimum equity requirements.

   We cannot assure you that our CP Facility or Merrill Line will be available
to us or that it will be available on favorable terms. If we are unable to
arrange new warehousing credit facilities or extend our existing credit
facilities when they expire, our results of operations, financial condition and
cash flows could be materially and adversely affected.

WE DEPEND ON RESIDUAL FINANCING.

   When we sell our Contracts in securitizations, we receive cash and a residual
interest in the securitized assets ("RISA"). The RISA represents the future cash
flows to be generated by the Contracts in excess of the interest paid on the
securities issued in the securitization and other costs of servicing the
Contracts and completing the securitization. (See "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Securitizations"). We
use the RISA from each securitization as collateral to borrow cash to finance
our operations. The amount of cash advanced by our lenders under our residual
lines of credit depends on a collateral formula that is determined in large part
by how well our securitized Contracts perform. If our portfolio of securitized
Contracts experienced higher delinquency and loss ratios than expected, then the
amount of money we could borrow under the residual lines would be reduced. The
reduction in availability under these residual lines could materially and
adversely affect our operations, financial condition and cash flows.

   Whether our Revolving Facility continues to be available to us depends on,
among other things, whether we meet financial covenants that are substantially
similar to those of the CP Facility, except that leverage is measured as the
ratio of net worth plus subordinated debt to total liabilities plus net worth.
Additionally, we are subject, under the documentation governing the Residual
Lines, to minimum net worth and subordinated debt plus net worth tests, a
limitation on quarterly operating losses and covenants restricting
delinquencies, losses, prepayments and net yields of Contracts included in a
securitization. The loss of access to the Revolving Facility or the Residual
Lines could materially and adversely affect our operations, financial condition
and cash flows.

WE DEPEND ON SECURITIZATIONS TO GENERATE REVENUE.



                                       17
<PAGE>   18

   We rely significantly upon securitizations to generate cash proceeds for
repayment of our warehouse credit facilities and to create availability to
purchase additional Contracts. Further, gain on sale of Contracts generated by
our securitizations represents a significant portion of our revenues. Our
ability to complete securitizations of our Contracts is affected by the
following factors, among other things:

   o  conditions in the securities markets generally;

   o  conditions in the asset-backed securities market specifically;

   o  the credit quality of our portfolio of Contracts; and

   o  our ability to obtain credit enhancement.

   If we were unable to profitably securitize a sufficient number of our
Contracts in a particular financial reporting period, then our revenues for such
period could decline and could result in lower income or a loss for such period.
In addition, unanticipated delays in closing a securitization could also
increase our interest rate risk by increasing the warehousing period for our
Contracts. See "Management's Discussion and Analysis of Results of Operations
and Financial Condition--Liquidity and Capital Resources," and "Business
Financing and Sale of Contracts."

WE DEPEND ON CREDIT ENHANCEMENT.

   From inception through March 31, 1999, each of our securitizations has
utilized credit enhancement in the form of a financial guarantee insurance
policy issued by MBIA, or its predecessor in order to achieve "AAA/Aaa" ratings.
This form of credit enhancement reduces the costs of the securitizations
relative to alternative forms of credit enhancements currently available to us.
MBIA is not required to insure future securitizations and we are not restricted
in our ability to obtain credit enhancement from providers other than MBIA or to
use other forms of credit enhancement. We cannot assure you that:

   o  we will be able to continue to obtain credit enhancement in any form from
      MBIA;

   o  we will be able to obtain credit enhancement from any other provider of
      credit enhancement on acceptable terms; or

   o  future securitizations will be similarly rated.

   We also rely on MBIA's financial guarantee insurance policy to reduce our
borrowing cost under the CP Facility. If MBIA's credit rating is downgraded or
if it withdraws our credit enhancement, we could be subject to higher interest
costs for our future securitizations and financing costs during the warehousing
period. Such events could have a material adverse effect on our results of
operations, financial condition and cash flows.

WE ARE SUBJECT TO INTEREST RATE FLUCTUATIONS.

   Our profitability is largely determined by the difference, or "spread,"
between the effective rate of interest received by us on the Contracts acquired
and the interest rates payable under our credit facilities during the
warehousing period and for certificates issued in securitizations.

   Several factors affect our ability to manage interest rate risk. First, the
Contracts are purchased or originated at fixed interest rates, while amounts
borrowed under our credit facilities bear interest at variable rates that are
subject to frequent adjustment to reflect prevailing rates for short-term
borrowings. Our policy is to increase the buy rates we issue to dealerships or
to increase rates we use to solicit consumers for Contracts in response to
increases in our cost of funds during the warehousing period. However, there is
generally a time lag before such increased borrowing costs can be offset by
increases in the buy rates for Contracts and, in certain instances, the rates
charged by our competitors may limit our ability to pass through our increased
costs of warehousing financing.

   Second, the spread can be adversely affected after a Contract is purchased or
originated and while it is held during the warehousing period by increases in
the prevailing rates in the commercial paper markets. While the CP Facility
permits us to select



                                       18
<PAGE>   19

maturities of up to 270 days for commercial paper issued under the CP Facility,
if we selected a shorter maturity or had a delay in completing a securitization,
we would face this risk.

   Third, the interest rate demanded by investors in securitizations is a
function of prevailing market rates for comparable transactions and the general
interest rate environment. Because the Contracts purchased or originated by us
have fixed rates, we bear the risk of spreads narrowing because of interest-rate
increases during the period from the date the Contracts are purchased until the
pricing of our securitization of such Contracts. We employ a hedging strategy
that is intended to minimize this risk and which historically has involved the
execution of forward interest rate swaps or use of a pre-funding structure for
our securitizations. However, we cannot assure you that this strategy will
consistently or completely offset adverse interest-rate movements during the
warehousing period or that we will not sustain losses on hedging transactions.
Our hedging strategy requires estimates by management of monthly Contract
acquisition volume and timing of our securitizations. If such estimates are
materially inaccurate, then our gains on sales of Contracts, results of
operations and cash flows could be materially and adversely affected.

   We also have exposure to interest rate fluctuations under the Residual Lines.
The interest rates are based on a LIBOR and Prime Rate. The LIBOR lines reset
each month while the Prime Rate line is reset at any change in the Prime rates.
In periods of increasing interest rates, our cash flows, results of operations
and financial condition could be adversely affected.

   In addition, we have some interest rate exposure to falling interest rates to
the extent that the interest rates charged on Contracts sold in a securitization
with a pre-funding structure decline below the rates prevailing at the time that
the securitization prices. Such a rate decline would reduce the interest rate
spread because the interest rate on the notes and/or the certificates would
remain fixed. In time, this would negatively impact the gains on sale of
Contracts and our results of operations and cash flows.

WE WILL BE ADVERSELY AFFECTED WHEN CONTRACTS ARE PREPAID OR DEFAULTED.

   Our results of operations, financial condition, cash flows, and liquidity
depend, to a material extent, on the performance of Contracts purchased,
originated, warehoused, and securitized by us. A portion of the Contracts
acquired by us may default or prepay during the warehousing period. We bear the
risk of losses resulting from payment defaults during the warehousing period. In
the event of payment default, the collateral value of the financed vehicle may
not cover the outstanding Contract balance and costs of recovery. We maintain an
allowance for credit losses on Contracts held during the warehousing period
which reflects management's estimates of anticipated credit losses during such
period. If the allowance is inadequate, then we would recognize as an expense
the losses in excess of such allowance and our results of operations could be
adversely affected. In addition, under the terms of the CP Facility, we are not
able to borrow against defaulted Contracts.

   Our servicing income can also be adversely affected by prepayment of or
defaults under Contracts in the servicing portfolio. Our contractual servicing
revenue is based on a percentage of the outstanding principal balance of such
Contracts. Thus, if Contracts are prepaid or charged-off, then our servicing
revenue will decline to the extent of such prepaid or charged-off Contracts.

   The gain on sale of Contracts recognized by us in each securitization and the
value of the retained interest in securitized assets ("RISA") in each
transaction reflects management's estimate of future credit losses and
prepayments for the Contracts included in such securitization. If actual rates
of credit loss or prepayments, or both, on such Contracts exceed those
estimated, the value of the RISA would be impaired. We periodically review our
credit loss and prepayment assumptions relative to the performance of the
securitized Contracts and to market conditions. In this event, our results of
operations and liquidity could be adversely affected if credit loss or
prepayment levels on securitized Contracts substantially exceed anticipated
levels. If necessary, we would write-down the value of the RISA through a
reduction to servicing fee income. Further, any write down of RISA would reduce
the amount available to us under our residual lines, thus requiring us to pay
down amounts outstanding under the facilities or provide additional collateral
to cure the borrowing base deficiency.

WE WILL BE ADVERSELY AFFECTED IF WE LOSE SERVICING RIGHTS.

   Our results of operations, financial condition and cash flows would be
materially and adversely affected if any of the following were to occur:

   o  loss of the servicing rights under our sale and servicing agreement for
      the CP Facility;



                                       19
<PAGE>   20

   o  loss of the servicing rights under the applicable pooling and servicing or
      sale and servicing agreement of a grantor trust and owner trust,
      respectively; or

   o  a trigger event that would block release of future servicing cash flows
      from the grantor trusts' or owner trusts' respective spread accounts.

   We are entitled to receive servicing income only while we act as servicer
under the applicable sales and servicing agreement or pooling and servicing
agreement for securitized Contracts. Under the CP Facility, our right to act as
servicer can be terminated by MBIA, as program manager, upon the occurrence of
certain events.

OUR QUARTERLY EARNINGS MAY FLUCTUATE.

   Our revenues and losses have fluctuated in the past and are expected to
fluctuate in the future principally as a result of the following factors:

   o  the timing and size of our securitizations;

   o  variations in the volume of our Contract acquisitions;

   o  the interest rate spread between our cost of funds and the average
      interest rate of purchased Contracts;

   o  the effectiveness of our hedging strategies; and

   o  the investor rate for securitizations.

   Any significant decrease in our quarterly revenues could have a material
adverse effect on our results of operations, financial condition and cash flows.

WE DEPEND ON KEY PERSONNEL.

   Our future operating results depend in significant part upon the continued
service of our key senior management personnel, none of whom is bound by an
employment agreement. Our future operating results also depend in part upon our
ability to attract and retain qualified management, technical, and sales and
support personnel for our operations. Competition for such personnel is intense.
We cannot assure you that we will be successful in attracting or retaining such
personnel. The loss of any key employee, the failure of any key employee to
perform in his or her current position or our inability to attract and retain
skilled employees, as needed, could materially and adversely affect our results
of operations, financial condition and cash flows. We presently maintain a key
man life insurance policy on John W. Hall, our president and chief executive
officer, in the amount of $3 million.

OUR INDUSTRY IS HIGHLY COMPETITIVE.

   Competition in the field of financing retail motor vehicle sales is intense.
The automobile finance market is highly fragmented and historically has been
serviced by a variety of financial entities including the captive finance
affiliates of major automotive manufacturers, banks, savings associations,
independent finance companies, credit unions and leasing companies. Several of
these competitors have greater financial resources than we do. Many of these
competitors also have long-standing relationships with automobile dealerships
and offer dealerships or their customers other forms of financing or services
not provided by us. Our ability to compete successfully depends largely upon our
relationships with dealerships and the willingness of dealerships to offer those
Contracts that meet our underwriting criteria to us for purchase. We cannot
assure you that we will be able to continue to compete successfully in the
markets we serve.

WE MAY BE HARMED BY ADVERSE ECONOMIC CONDITIONS.

   We are a motor vehicle consumer auto finance company whose activities are
dependent upon the sale of motor vehicles. Our ability to continue to acquire
Contracts in the markets in which we operate and to expand into additional
markets is dependent upon the overall level of sales of new and used motor
vehicles in those markets. A prolonged downturn in the sale of new and used
motor



                                       20
<PAGE>   21

vehicles, whether nationwide or in the California markets, could have an adverse
impact upon us, our results of operations and our ability to implement our
business strategy. See "Business--Competition."

   The automobile industry generally is sensitive to adverse economic conditions
both nationwide and in California. Periods of rising interest rates, reduced
economic activity or higher rates of unemployment generally result in a
reduction in the rate of sales of motor vehicles and higher default rates on
motor vehicle loans. We cannot assure you that such economic conditions will not
occur, or that such conditions will not result in severe reductions in our
revenues or the cash flows available to us to permit us to remain current on our
credit facilities. See "Risk Factors--We Need Substantial Liquidity."

WE ARE SUBJECT TO MANY REGULATIONS.

   Our business is subject to numerous federal and state consumer protection
laws and regulations, which, among other things:

   o  require us to obtain and maintain certain licenses and qualifications;

   o  limit the interest rates, fees and other charges we are allowed to charge;

   o  limit or prescribe certain other terms of our Contracts;

   o  require specific disclosures; and

   o  define our rights to repossess and sell collateral.

   We believe that we are in compliance in all material respects with all such
laws and regulations, and that such laws and regulations have had no material
adverse effect on our ability to operate our business. However, we will be
materially and adversely affected if we fail to comply with:

   o  applicable laws and regulations;

   o  changes in existing laws or regulations;

   o  changes in the interpretation of existing laws or regulations; or

   o  any additional laws or regulations that may be enacted in the future.

WE MAY HAVE COMPUTER PROBLEMS RELATED TO THE YEAR 2000.

   Because of the nature of our consumer finance business and the increasing
number of electronic transactions in this industry, we have come to rely heavily
on our and third party computer systems, business applications and other
information technology systems ("IT systems"). Historically, many IT systems
were developed to recognize the year as a two-digit number, with the digit "00"
being recognized as the year 1900. The year 2000 presents a number of potential
problems for such systems, including potentially significant processing errors
or failure. Given our reliance on computer systems, our results of operations
and cash flows could be materially adversely affected by any significant errors
or failures. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations--Year 2000 Compliance."



                                       21
<PAGE>   22



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

(a) Exhibits

<TABLE>
<CAPTION>
   EXHIBIT NO.    EXHIBIT TITLE
   -----------    -------------
<S>               <C>
      *3.4        Certificate of Incorporation of the Company.

      *3.5        Bylaws of the Company.

      10.118      Amendment No. Two to the Amended and Restated Onyx Warehouse
                  Facility effective as of March 30, 1999 by and among Onyx
                  Acceptance Corporation, Onyx Acceptance Financial Corporation,
                  Triple-A One Funding Corporation, Capital Market Assurance
                  Corporation, CapMAC Financial Services, Inc. and MBIA
                  Insurance Corporation.

      21.1        Subsidiaries of the Registrant.

      27.1        Financial Data Schedule.
</TABLE>

------------
   *  Incorporated by reference from the Company's Registration Statement on
      Form S-1 (Registration No. 333-680)

(b) Reports on Form 8-K

    None.











                                       22
<PAGE>   23

                                   SIGNATURE

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

                                        ONYX ACCEPTANCE CORPORATION

                                        By: /s/  JOHN W. HALL           
                                            -----------------------------------
                                            John W. Hall
                                            President and Principal
                                            Executive Officer

Date: May 14, 1999

                                        By: /s/  DON P. DUFFY           
                                            -----------------------------------
                                            Don P. Duffy
                                            Executive Vice President and
                                            Principal Financial Officer
Date: May 14, 1999


                                       23
<PAGE>   24

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
 EXHIBIT NO.                      DESCRIPTION                                         PAGE
 -----------                      -----------                                         ----
<S>            <C>                   
   10.118      Amendment No. Two to the Amended and Restated Onyx Warehouse
               Facility effective as of March 30, 1999 by and among Onyx
               Acceptance Corporation, Onyx Acceptance Financial Corporation,
               Triple-A One Funding Corporation, Capital Market Assurance
               Corporation, CapMAC Financial Services, Inc. and MBIA Insurance
               Corporation.

   21.1        Subsidiaries of the Registrant.................................

   27.1        Financial Data Schedule........................................
</TABLE>


                                       24