<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 SEPTEMBER 30, 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 [ ]     NO [X]

        As of November 4, 1999, there were 6,177,804 shares of registrant's
Common Stock, par value $.01 per share outstanding.

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

<PAGE>   2

                           ONYX ACCEPTANCE CORPORATION

                     INDEX TO QUARTERLY REPORT ON FORM 10-Q

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

Item 1. Financial Statements

        Condensed Consolidated Statements of Financial Condition at
            September 30, 1999 and December 31, 1998.....................   3

        Condensed Consolidated Statements of Income for the three and
            nine months ended September 30, 1999 and September 30, 1998..   4

        Consolidated Statements of Common Stock and Stockholders'
            Equity at September 30, 1999 and December 31, 1998...........   5

        Condensed Consolidated Statements of Cash Flows for the nine
            months ended September 30, 1999 and September 30, 1998.......   6

        Notes to Condensed Consolidated Financial Statements.............   7

Item 2. Management's Discussion and Analysis of Financial Condition
          and Results of Operations......................................   9

Item 3. Quantitative and Qualitative Disclosures about Market Risk.......  16

PART II. OTHER INFORMATION

Item 5. Other Information................................................  17

Item 6. Exhibits and Reports on Form 8-K.................................  23

SIGNATURES...............................................................  24

EXHIBIT INDEX
</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>
                                                        SEPTEMBER 30,    DECEMBER 31,
                                                            1999            1998
                                                        -------------   -------------
                     ASSETS                              (UNAUDITED)
<S>                                                     <C>             <C>
Cash and cash equivalents .......................       $   4,787,831   $   1,928,991
Credit enhancement assets .......................         130,900,443     112,953,193
Contracts held for sale (net of allowance) ......         195,535,962     152,760,781
Other assets ....................................          11,070,086       7,778,759
                                                        -------------   -------------
          Total assets ..........................       $ 342,294,322   $ 275,421,724
                                                        =============   =============

                  LIABILITIES

Accounts payable ................................       $  16,911,952   $  10,959,913
Debt ............................................         255,071,383     209,600,061
Other liabilities ...............................          19,602,844      11,038,029
                                                        -------------   -------------
          Total liabilities .....................         291,586,179     231,598,003

                    EQUITY

Common stock
  Par value $.01 per share; authorized 15,000,000
   shares; issued and outstanding 6,177,804 as of
   September 30, 1999 and 6,171,034 as of
   December 31, 1998 ............................              61,778          61,710
Paid in capital .................................          37,892,071      37,839,151
Retained earnings ...............................          13,084,689       5,922,860
Accumulated other comprehensive loss, net
   of tax .......................................            (330,395)             --
                                                        -------------   -------------
           Total equity .........................          50,708,143      43,823,721
                                                        -------------   -------------
           Total liabilities and equity .........       $ 342,294,322   $ 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                   NINE MONTHS ENDED
                                             SEPTEMBER 30,                       SEPTEMBER 30,
                                     -----------------------------       -----------------------------
                                         1999              1998              1999              1998
                                     -----------       -----------       -----------       -----------
                                              (UNAUDITED)                         (UNAUDITED)
<S>                                  <C>               <C>               <C>               <C>
REVENUES:
Interest income .................    $ 7,153,382       $ 7,001,062       $19,642,344       $16,703,145
Interest expense ................      5,487,589         4,213,990        14,053,421        10,651,700
                                     -----------       -----------       -----------       -----------
Net interest income .............      1,665,793         2,787,072         5,588,923         6,051,445

Gain on sale of contracts .......     13,723,258         9,676,893        40,520,626        25,911,096
Service fee income ..............      8,237,101         4,007,969        19,757,636        10,015,975

Total revenues ..................     23,626,152        16,471,934        65,867,185        41,978,516

EXPENSES:
Provision for credit losses .....        203,579           597,957           952,560         1,229,764
Salaries and benefits ...........     10,325,902         7,216,960        29,567,166        19,492,705
Depreciation ....................        953,902           565,600         2,510,463         1,307,918
Occupancy .......................        822,111           500,371         2,484,771         1,315,224
General and administrative
  expenses.......................      6,892,601         4,595,279        18,109,783        12,496,254
                                     -----------       -----------       -----------       -----------
Total expenses ..................     19,198,095        13,476,167        53,624,743        35,841,865
                                     -----------       -----------       -----------       -----------
Net income before taxes .........      4,428,057         2,995,767        12,242,442         6,136,651
Income taxes ....................      1,837,644         1,243,243         5,080,613         2,546,709
                                     -----------       -----------       -----------       -----------
Net income after taxes ..........    $ 2,590,413       $ 1,752,524       $ 7,161,829       $ 3,589,942
                                     ===========       ===========       ===========       ===========

Net income per share - Basic ....    $      0.42       $      0.28       $      1.16       $      0.59
Net income per share - Diluted...    $      0.39       $      0.27       $      1.10       $      0.56

Basic shares outstanding ........      6,175,817         6,162,374         6,172,628         6,093,198
Diluted shares outstanding ......      6,656,463         6,381,882         6,527,643         6,445,412
</TABLE>

 See the accompanying notes to the condensed consolidated financial statements.

                                       4

<PAGE>   5

                  ONYX ACCEPTANCE CORPORATION AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>

                                                                           ACCUMULATED
                                                             ADDITIONAL   COMPREHENSIVE       RETAINED
                                                                PAID        LOSS NET          EARNINGS
                                SHARES        COMMON STOCK   IN CAPITAL      OF TAX           (DEFICIT)        TOTAL
                               ---------      ------------   -----------  -------------      -----------    -----------
<S>                            <C>            <C>            <C>          <C>                <C>            <C>
BALANCE, DECEMBER 31, 1997     6,017,635        $ 60,176     $37,810,158                     $ (152,924)    $37,717,410
Issuance of common stock         153,399           1,534          28,993                                         30,527
Net income                                                                                    6,075,784       6,075,784
                               ---------        --------     -----------  -------------      ----------     -----------
BALANCE, DECEMBER 31, 1998     6,171,034          61,710      37,839,151                      5,922,860      43,823,721
Issuance of common stock           6,770              68          52,920                                         52,988
Comprehensive income:

Unrealized losses in
securitized assets, net of
tax of $229,597                                                             $(330,395)                         (330,395)

Net income                                                                                    7,161,829       7,161,829
                               ---------        --------     -----------    ---------       -----------     -----------
Total comprehensive income                                                  $(330,395)      $ 7,161,829     $ 6,831,434
                               ---------        --------     -----------    ---------       -----------     -----------
BALANCE, SEPTEMBER 30, 1999    6,177,804        $ 61,778     $37,892,071    $(330,395)      $13,084,689     $50,708,143
                               =========        ========     ===========    =========       ===========     ===========
</TABLE>

 See the accompanying notes to the condensed consolidated financial statements.

                                       5


<PAGE>   6

                  ONYX ACCEPTANCE CORPORATION AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                            NINE MONTHS ENDED SEPTEMBER 30,
                                                         --------------------------------------
                                                              1999                    1998
                                                         ---------------        ---------------
                                                                      (UNAUDITED)
<S>                                                      <C>                    <C>
OPERATING ACTIVITIES:
  Net cash used in operating activities ..........       $   (37,386,541)       $   (76,587,801)

INVESTING ACTIVITIES:
  Purchases of property and equipment ............            (5,002,155)            (2,411,692)
                                                         ---------------        ---------------
                                                              (5,002,155)            (2,411,692)
                                                         ---------------        ---------------
FINANCING ACTIVITIES:
  Proceeds from exercise of options/warrants .....                52,989                 32,981
  Payments on capital lease obligations ..........              (276,775)              (473,577)
  Payments on excess servicing line of credit ....           (27,117,539)           (10,027,900)
  Proceeds from drawdown on excess servicing
    line of credit ...............................            34,257,170             26,000,000
  Paydown of warehouse lines related to
    securitization and sale ......................        (1,026,000,000)          (624,456,000)
  Proceeds from warehouse lines ..................         1,063,485,007            682,956,181
  Proceeds from subordinated debt ................                     0             10,000,000
  Proceeds from other loans
  Proceeds from (payments on) other loans.........               846,684               (251,321)
                                                         ---------------        ---------------
  Net cash provided by financing activities ......            45,247,536             83,780,364
                                                         ---------------        ---------------
    Increase in cash and cash equivalents ........             2,858,840              4,780,871

Cash and cash equivalents at beginning of period               1,928,991                991,010
                                                         ---------------        ---------------
Cash and cash equivalents at end of period .....         $     4,787,831        $     5,771,881
                                                         ===============        ===============
</TABLE>

 See the accompanying notes to the condensed consolidated financial statements.

                                       6


<PAGE>   7

                  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 and nine
months ended September 30, 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 as amended on Form
10K/A, and Forms 10-Q for the quarters ended March 31, 1999, and June 30, 1999.


        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>
                                  SEPTEMBER 30,         DECEMBER 31,
                                      1999                  1998
                                  -------------        -------------
<S>                               <C>                  <C>
Contracts held for sale ......    $ 202,240,294        $ 160,386,439
Less unearned interest .......       (6,985,060)          (8,434,206)
                                  -------------        -------------
                                    195,255,234          151,952,233
Allowance for credit losses...       (1,276,276)          (1,052,178)
Dealer participation .........        1,557,004            1,860,726
                                  -------------        -------------
    Total ....................    $ 195,535,962        $ 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>
                                        SEPTEMBER 30,      DECEMBER 31,
                                            1999               1998
                                        ------------       ------------
<S>                                     <C>                <C>
Trust receivable ....................   $  5,712,501       $  3,712,501
RISA ................................    125,187,942        109,240,692
                                        ------------       ------------
    Total ...........................   $130,900,443       $112,953,193
                                        ============       ============
</TABLE>

                                       7


<PAGE>   8

        Trust receivable represents servicer advances and initial deposits to
the spread accounts.

        Retained interest in securitized assets ("RISA") is capitalized upon
securitization of contracts and represents the present value of the estimated
future earnings to be received by the Company from the excess spread created in
securitization transactions. Excess spread 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 financial
guarantee insurance premiums and projected credit losses, after giving effect to
estimated prepayments. During 1999 and 1998, the Company utilized prepayment
rates of 1.75% ABS in computing RISA. Original cumulative net credit loss
assumptions utilized for 1999 and 1998 securitization transactions ranged from
3.5% to 4.0%. The Company used a discount rate during 1999 and 1998 of 350 to
450 basis points over the certificate rates paid to investors at the time of
securitization in discounting future earnings.

        RISA is classified in a manner similar to available for sale securities
and as such is marked to market each quarter. The Company is not aware of an
active market for the purchase or sale of RISA, and accordingly, the Company
determines the estimated fair value of the RISA 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. Any changes
in the market value of RISA are reported as a separate component of
shareholders' equity as an unrealized gain or loss, net of deferred taxes.

        The following table presents the balances and activity of RISA for the
nine and twelve-month period ended September 1999 and December 1998
respectively:

<TABLE>
<CAPTION>
                               SEPTEMBER 30,         DECEMBER 31,
                                   1999                  1998
                               -------------        -------------
<S>                            <C>                  <C>
Beginning Balance ..........   $ 109,240,692        $  64,357,850
Additions ..................      73,011,652           80,632,733
Amortization ...............     (56,504,410)         (35,749,891)
Change in unrealized
  gain/loss on securities
  available for sale .......        (559,992)                  --
                               -------------        -------------
Ending Balance .............   $ 125,187,942        $ 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 rates paid to the investors, less the
contractually specified servicing fee of 1.0% and financial guarantee insurance
premiums, 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>
                                                SEPTEMBER 30,          DECEMBER 31,
                                                    1999                   1998
                                               --------------        ---------------
<S>                                            <C>                    <C>
Estimated net undiscounted RISA earnings...    $  224,025,166        $  176,600,869
Off balance sheet allowance for losses.....       (76,601,346)          (51,009,542)
Discount to present value .................       (22,235,878)          (16,350,635)
                                               --------------        --------------
Retained interest in securitized assets....    $  125,187,942        $  109,240,692
                                               ==============        ==============
Outstanding balance of contracts sold
  through securitizations .................    $1,721,926,813        $1,183,157,096
                                               ==============        ==============
</TABLE>


                                       8


<PAGE>   9

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                 NINE MONTHS ENDED
                                                 SEPTEMBER 30,                     SEPTEMBER 30,
                                          ---------------------------       ---------------------------
                                             1999             1998             1999             1998
                                          ----------       ----------       ----------       ----------
<S>                                       <C>              <C>              <C>              <C>
Net income ............................   $2,590,413       $1,752,524       $7,161,829       $3,589,942

Weighted average shares outstanding....    6,175,817        6,162,374        6,172,628        6,093,198
Net effect of dilutive stock
  options/warrants ....................      480,646          219,508          355,015          352,214
Diluted weighted average shares
  outstanding .........................    6,656,463        6,381,882        6,527,643        6,445,412

Net income per share:

Basic EPS .............................         0.42             0.28             1.16             0.59
Diluted EPS ...........................         0.39             0.27             1.10             0.56
</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 2001. The Company is presently
assessing the effect of SFAS 133 on the consolidated financial statements of the
Company.

NOTE 6 - CONTINGENCIES

        The Company is party to various legal proceedings similar to actions
brought against other companies in the motor vehicle finance industry, which are
or may or may not be covered under insurance policies it holds. The Company
vigorously defends such proceedings; however, there is no assurance as to the
results. Based upon information presently available, the Company believes that
the final outcome of all such proceedings should not have a material adverse
effect upon the Company's results of operations, cash flows or financial
condition.

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 ("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. 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.


                                       9


<PAGE>   10

                              RESULTS OF OPERATIONS

        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.

NET INTEREST INCOME

        Net interest income is the difference between the interest income earned
on Contracts held for sale, and the interest costs associated with the Company's
borrowings during the warehouse period. Net interest income totaled $1.7 million
for the three months ended September 30, 1999 compared to $2.8 million for the
same period in 1998. For the nine months ended September 30, 1999, net interest
income was $5.6 million as compared to $6.1 million for the same period in 1998.
These decreases are primarily due to the lower amounts of average Contracts held
for sale during the warehouse period. The lower average warehouse balances were
the result of changes in the timing of the securitizations. In each of the 1999
securitizations, the Company elected to execute the securitization during the
second month of the quarter, rather than the third month as performed in each of
the transactions in 1998.

GAIN ON SALE OF CONTRACTS

        The Company recorded a gain on sale of Contracts of $13.7 million for
the three months ended September 30, 1999, compared to $9.7 million for the same
period in 1998. For the nine months ended September 30, 1999, the Company
recorded a gain on sale of $40.5 million compared to a gain on sale of $25.9
million for the same period in 1998. The increase in the gain on sale is
primarily the result of an increase in the amount of Contracts sold. Contracts
securitized during the three and nine month periods of 1999 totaled $400.0
million and $1.1 billion respectively, compared to a securitization of $250.0
million for the three month period ended September 1998, and a combined sale and
securitization of $646.8 million for the nine month period ended September 1998.
The net interest rate spread, inclusive of all costs, declined to 2.86% for the
third quarter 1999 securitization versus 3.18% for the securitization completed
in the third quarter of 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 hedges 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 Contracts 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 securitized Contracts 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 $8.2 million and $19.8 million for the
three and nine month period ending September 30, 1999, compared to $4.0 million
and $10.0 million for the same periods in 1998. These increases are due
primarily to higher amounts of contractual service fees, late fees and document
fees as a result of 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 adjusting the provision for credit losses to cover additional
Contracts originated and increases in loss estimates 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 Contracts 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


                                       10


<PAGE>   11

$203,579 and $952,560 for the three and nine month period ending September 30,
1999, compared to $597,957 and $1,229,764 for the same period in 1998. Provision
for credit losses consists of net credit losses incurred during the warehousing
period plus future provision for losses reserved against the net changes in
Contracts held for sale during the period. Net credit losses accounted for
$251,680 and $728,616 during the three and nine month period ending September
30, 1999, compared to $182,358 and $631,345 for the same periods in 1998. Future
provisions totaled ($48,101) and $223,944 for the three and nine month period
ending September 30, 1999, compared to $415,599 and $598,419 for the same period
in 1998. The negative future provision for the third quarter of 1999 was caused
by the reduction in Contracts held for sale. Contracts held for sale decreased
to $195.3 million at September 30, 1999 versus $206.4 million at June 30, 1999.

OPERATING EXPENSES

        Total operating expenses were $19.2 million for the three months ended
September 30, 1999 compared to $13.5 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 $1.9 billion at September 30, 1999 from $1.2 billion at September
30, 1998. Total operating expenses for the nine-month period ending September
30, 1999 were $53.6 million compared to $35.8 million for the same period in
1998.

        The Company incurred salary and benefit expenses of $10.3 million during
the third quarter of 1999 compared with $7.2 million for the third quarter of
1998, an increase of approximately 43%. 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 499 at September 30, 1998 to 683 at September 30, 1999. Salary
and benefit expenses for the nine-month period ended September 30, 1999 were
$29.6 million compared to $19.5 million for the nine months ending September 30,
1998.

        Depreciation expenses increased to $953,902 and $2.5 million for the
three and nine months ended September 30, 1999 compared to $565,600 and $1.3
million for the same periods of 1998, as the Company continued to invest in
technology and infrastructure. Continued expansion into new markets resulted in
an increase in occupancy costs to $822,111 for the three months ending September
30, 1999 from $500,371 in the like period in 1998. General and administrative
expenses increased to $6.9 million in the third quarter of 1999, from $4.6
million in the third quarter of 1998. Higher expenses are primarily due 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 September 30, 1999 and 1998 were 41.5%.

                               FINANCIAL CONDITION

CONTRACTS HELD FOR SALE

        Contracts held for sale totaled $195.3 million at September 30, 1999,
compared to $152.0 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 $400.0 million during the third quarter of 1999 compared to a securitization
of $250.0 million during the third quarter of 1998. The Company plans to
continue to securitize Contracts on a regular basis.


                                       11

<PAGE>   12
        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
                                                   --------------------------------------------------------------------
                                                    SEPT. 30,      DEC. 31,       MAR. 31,      JUNE 30,      SEPT. 30,
                                                      1998           1998           1999          1999          1999
                                                   ----------     ----------     ----------    ----------    ----------
                                                                          (DOLLARS IN THOUSANDS)
<S>                                                <C>            <C>            <C>           <C>           <C>
Contracts purchased/originated during period...    $  286,470     $  304,200     $  357,757    $  374,075    $  398,802
Average monthly volume during period ..........        95,490        101,400        119,252       124,691       132,934
Gain on sale of Contracts .....................         9,677         10,506         12,328        14,470        13,723
Contracts securitized during period ...........       250,000        280,000        310,000       350,000       400,000
Servicing portfolio at period end .............     1,176,153      1,345,961      1,542,612     1,729,338     1,924,881
</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
September 30, 1999, delinquencies represented 2.68% of the amount of Contracts
in its servicing portfolio compared to 2.83% at December 31, 1998. Net
charge-offs as a percentage of the average servicing portfolio were 1.80% for
the quarter ended September 30, 1999, compared to 1.72% for the same period in
1998.

        Off balance sheet reserves at September 30, 1999 were 4.45% versus 4.31%
at December 31, 1998. Off balance sheet reserves are those reserves established
and maintained on Contracts sold to the grantor and owner trusts in connection
with securitized Contracts.

                  DELINQUENCY EXPERIENCE OF SERVICING PORTFOLIO

<TABLE>
<CAPTION>
                               SEPTEMBER 30, 1999          DECEMBER 31, 1998
                            -----------------------     -----------------------
                              AMOUNT          NO.         AMOUNT          NO.
                            ----------      -------     ----------      -------
                                            (DOLLARS IN THOUSANDS)
<S>                         <C>             <C>         <C>             <C>
Servicing portfolio ....    $1,924,881     $189,062     $1,345,961     $131,862
Delinquencies(1)(2)
  31-59 days............        29,324        3,067         26,410        2,766
  60-89 days............        11,219        1,141          6,876          691
  90+ days..............        10,992        1,068          4,790          455
                            ----------     --------     ----------     --------
Total ..................    $   51,535     $  5,276     $   38,076     $  3,912
                            ==========     ========     ==========     ========
Total delinquencies as a
  percent of servicing
  portfolio.............          2.68%        2.79%          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    FOR THE NINE MONTHS ENDED
                                                  SEPTEMBER 30,                SEPTEMBER 30,
                                           -------------------------     -------------------------
                                              1999           1998          1999            1998
                                           ----------     ----------     ----------     ----------
                                                            (DOLLARS IN THOUSANDS)
<S>                                        <C>            <C>            <C>            <C>
Period end contracts outstanding ......... $1,924,881     $1,176,153     $1,924,881     $1,176,153
Average servicing portfolio(1) ........... $1,824,799     $1,083,919     $1,629,779     $  945,077
Number of gross charge-offs ..............      1,646            984          4,508          2,740
Gross charge-offs ........................ $    9,426     $    5,453     $   24,528     $   14,827
Net charge-offs(2) ....................... $    8,198     $    4,659     $   21,373     $   12,576
Annualized net charge-offs as a
  percent of average Servicing portfolio..       1.80%          1.72%          1.75%          1.77%
</TABLE>

------------
(1) Average is based on daily balances.

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


                                       12

<PAGE>   13

        THE FOLLOWING TABLE ILLUSTRATES THE MONTHLY PERFORMANCE OF EACH OF THE
SECURITIZED POOLS OUTSTANDING FOR THE PERIOD FROM THE DATE OF SECURITIZATION
THROUGH SEPTEMBER 30, 1999:

<TABLE>
<CAPTION>

        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    99-B     99-C
        ----     ----    ----    ----    ----    ----   ----    ----    ----   ----    ----    ----   ----    ----     ----
<S>     <C>      <C>     <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%   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%   0.00%    0.01%

    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%  0.02%   0.03%

    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%  0.05%   0.07%

    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%  0.11%   0.14%

    6   0.40%    0.78%   0.54%   0.38%   0.26%   0.32%  0.24%   0.20%   0.24%  0.23%   0.33%   0.27%  0.21%

    7   0.69%    0.98%   0.74%   0.53%   0.37%   0.59%  0.36%   0.28%   0.40%  0.37%   0.45%   0.46%  0.35%

    8   0.82%    1.15%   0.97%   0.81%   0.52%   0.80%  0.47%   0.43%   0.53%  0.42%   0.61%   0.57%  0.49%

    9   0.93%    1.39%   1.13%   0.98%   0.60%   0.91%  0.62%   0.55%   0.68%  0.51%   0.82%   0.74%

   10   1.15%    1.52%   1.32%   1.18%   0.76%   1.07%  0.73%   0.72%   0.85%  0.70%   0.95%   0.94%

   11   1.25%    1.69%   1.47%   1.43%   0.92%   1.26%  0.81%   0.87%   1.04%  0.85%   1.10%   1.12%

   12   1.47%    1.94%   1.60%   1.63%   1.02%   1.42%  0.94%   0.95%   1.20%  1.01%   1.20%

   13   1.65%    2.08%   1.77%   1.73%   1.13%   1.58%  1.10%   1.08%   1.33%  1.17%   1.36%

   14   1.79%    2.34%   1.94%   1.87%   1.23%   1.68%  1.23%   1.19%   1.46%  1.37%

   15   2.02%    2.52%   2.09%   2.07%   1.40%   1.80%  1.38%   1.36%   1.61%  1.48%

   16   2.25%    2.76%   2.27%   2.23%   1.56%   1.97%  1.58%   1.42%   1.71%  1.59%

   17   2.43%    2.89%   2.42%   2.33%   1.68%   2.10%  1.68%   1.52%   1.88%

   18   2.59%    3.10%   2.57%   2.49%   1.75%   2.23%  1.77%   1.64%   2.01%

   19   2.77%    3.14%   2.70%   2.62%   1.85%   2.35%  1.91%   1.75%   2.17%

   20   2.93%    3.30%   2.83%   2.73%   1.92%   2.48%  2.04%   1.85%

   21   3.06%    3.47%   2.94%   2.84%   1.98%   2.59%  2.11%   1.97%

   22   3.15%    3.60%   3.00%   2.93%   2.09%   2.72%  2.20%   2.08%

   23   3.21%    3.70%   3.08%   3.02%   2.17%   2.81%  2.31%

   24   3.28%    3.81%   3.17%   3.10%   2.22%   2.85%  2.41%

   25   3.40%    3.93%   3.28%   3.22%   2.31%   2.93%  2.51%

   26   3.43%    4.06%   3.38%   3.29%   2.38%   2.96%

   27   3.55%    4.13%   3.43%   3.39%   2.44%   3.09%

   28   3.60%    4.22%   3.54%   3.46%   2.50%   3.17%

   29   3.73%    4.23%   3.59%   3.58%   2.55%

   30   3.75%    4.29%   3.69%   3.61%   2.63%

   31   3.79%    4.31%   3.77%   3.64%   2.67%

   32   3.85%    4.33%   3.75%   3.72%

   33   3.88%    4.37%   3.77%   3.74%

   34   3.90%    4.39%   3.79%   3.77%

   35   3.94%    4.39%   3.81%

   36   3.94%    4.42%   3.83%

   37   3.94%    4.42%   3.84%

   38   3.97%    4.43%

   39   3.99%    4.45%

   40   3.96%    4.46%

   41   3.96%    4.45%

   42   3.95%

   43   3.96%

   44   3.94%

   45   3.97%
</TABLE>

                                       13


<PAGE>   14

                         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 $37.4 million for the nine months
ended September 30, 1999, compared to $76.6 million used in the nine months
ended September 30, 1998. The decrease in cash used in operating activities was
primarily due to an increase in accounts payable. Cash used in investing
activities was $5.0 million for the nine months ended September 30, 1999,
compared to $2.4 million for the nine months ended September 30, 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 $45.2 million
for the nine months ended September 30, 1999, compared to $83.8 million for the
nine months ended September 30, 1998 Higher spread account cash releases from
securitization trusts combined with a lower net change in Contracts held for
sale during 1999 versus 1998 reduced the requirement for financing sources. The
Company also issued $10.0 million in subordinated debt during the previous year.

        CP Facilities. As of September 30, 1999, the Company was party to two
auto loan warehousing programs (the "CP Facilities"), one a $375 million
facility with Triple-A One Funding Corporation ("Triple-A"), the other a $150
million facility with Park Avenue Receivables Corporation ("Parco"). Two of the
Company's special purpose subsidiaries, Onyx Acceptance Financial Corporation
("Finco" for the Triple-A One Facility) and newly created Onyx Acceptance
Receivables Corporation ("Recco" for the Parco Facility), are the borrowers
under the CP Facilities. The CP Facilities are used to fund the purchase or
origination of Contracts. Triple-A and Parco are both rated commercial paper
asset-backed conduits sponsored by MBIA Insurance Corporation ("MBIA") and the
Chase Manhattan Bank ("Chase"), respectively. MBIA provides credit enhancement
for both facilities by issuing financial guarantee insurance policies covering
all principal and interest obligations owed for the borrowings under the
facilities. The Company pledges its Contracts held for sale to borrow from
Triple-A and from Parco. The liquidity facility supporting Triple-A was renewed
in September for another year; the three-year term of the Triple-A facility, now
in its second year and expiring in September 2001, is subject to the annual
renewal of the liquidity facility. The Parco facility was executed in August
1999, and has a one-year term.

        The Merrill Line. A subsidiary of the Company, Onyx Acceptance Funding
Corporation ("Fundco"), has an uncommitted $100 million line (the "Merrill
Line"), with Merrill Lynch Mortgage Capital, Inc. ("MLMCI"), which provides
warehouse funding for the purchase or origination of Contracts and is used in
concert with the CP Facilities the Company currently has in place. The Merrill
Line currently matures in February 2000.


                                       14


<PAGE>   15

        The Residual Lines. Fundco has two residual facilities. During July,
Fundco renegotiated its facility with MLMCI. As a result, the facility was
reduced to $10.0 million and is now a committed facility. In addition, the
facility is now a stand-alone line not related to the Merrill line. Fundco has a
$50 million line with Salomon Smith Barney Realty Corporation ("SBRC"). (the
"SBRC Line" and together with the facility with MLMCI, 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
based on a percentage of the value of excess cash flow to be received from
certain securitizations. The facility provided by MLMCI currently matures in
February 2000. Each loan under SBRC Line matures one year after the date of the
loan; the Company expects each loan to be renewed at term.

        Excess Servicing Facility. The Company is party to a collateralized loan
("Excess Servicing Facility") with a lending group for up to $45 million, which
was used for working capital and other expenditures. The Excess Servicing
Facility matured in June 1999. This line is now in the amortization period and
all cash flows from the underlying securitizations, which are collateral, are
being used to repay the outstanding principal balance.

        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 September 30, 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 three AAA/Aaa rated publicly underwritten asset-backed
securitizations in the amount of $1.1 billion during the first nine months 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 $3.0 billion of its Contracts
in 17 separate transactions. In each of its securitizations, the Company has
sold its Contracts to a newly formed grantor or owner trust, which issued
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 ultimate payment of principal and the timely payment of 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.


                                       15


<PAGE>   16

                                    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 ("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. The Company
completed its remediation efforts during the third quarter of 1999 and is
currently continuing the 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% of the Company's IT budget. The Company currently
expects that its Year 2000 testing will be completed during the fourth quarter
of 1999. The Company expenses Year 2000 testing 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 2001.

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 -- Hedging and Interest Rate Risk
Management" and "Risk Factors -- We are Subject to Interest Rate Fluctuations."


                                       16


<PAGE>   17

PART II. OTHER INFORMATION

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 consumers 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 CASH RESOURCES.

        We require a substantial amount of cash resources to operate our
business. Among other things, we use such sources 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 acquisition of subordinated indebtedness. We
cannot assure you,


                                       17


<PAGE>   18

however, that (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. Our
business strategy requires that such financing continue to be available during
the warehousing period.

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

        o a minimum ratio of net worth plus subordinated debt 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.

        Fundco has a warehouse line of credit with MLMCI, 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 Facilities or the Merrill Line will be
available to us or that they will be available on favorable terms. If we are
unable to arrange new warehousing credit facilities or extend our existing
credit facilities when they come due, 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--Securitization").
We generally 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 Excess Servicing Facility avoids default or an acceleration
depends on, among other things, whether we meet financial covenants that are
substantially similar to those of the CP Facilities. 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 CP Facilities or the Residual Lines could materially and adversely
affect our operations, financial condition and cash flows.

WE DEPEND ON SECURITIZATIONS TO GENERATE REVENUE.

        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


                                       18


<PAGE>   19

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."

WE DEPEND ON CREDIT ENHANCEMENT.

        From inception through September 30, 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 financial guarantee insurance policies to reduce
our borrowing cost under the CP Facilities. 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 securities 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 all or most of
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
Facilities permit us to select maturities of up to 270 days for commercial paper
issued under the CP Facilities, if we selected a shorter maturity or had a delay
in completing a securitization we would face this risk.


                                       19


<PAGE>   20

        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 LIBOR. The LIBOR lines reset each month.
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 Facilities and the
Merrill Line, 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 materially 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 agreements
          for the CP Facilities;

        o loss of the servicing rights under the applicable pooling and
          servicing or sale and servicing agreement of a grantor trust or 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.


                                       20


<PAGE>   21

        We are entitled to receive servicing income only while we act as
servicer under the applicable sale and servicing agreement or pooling and
servicing agreement for securitized Contracts. Under the CP Facilities, our
right to act as servicer can be terminated by MBIA 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 vehicles, whether nationwide or in the California markets, could have
a material adverse impact upon us, our results of operations and our ability to
implement our business strategy.


                                       21


<PAGE>   22

        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 Contracts. 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 Cash Resources."

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 ARE SUBJECT TO LITIGATION RISKS.

        We are party to various legal proceedings, similar to actions brought
against other companies in the motor vehicle finance industry. While we intend
to vigorously defend ourselves in such proceedings, there is a chance that our
results of operation and cash flows could be materially adversely affected by
unfavorable outcomes.

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 own 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."


                                       22

<PAGE>   23

ITEM 6.  EXHIBITS AND REPORTS OF FORM 8-K

(a) Exhibits

    EXHIBIT NO.       EXHIBIT TITLE
    -----------       -------------
       *3.4           Certificate of Incorporation of the Company.

       *3.5           Bylaws of the Company.

       10.103(a)      Second Amendment to Master Assignment Agreement between
                      Onyx Acceptance Funding Corporation and Merrill Lynch
                      Mortgage Capital Inc. dated July 7, 1999.

       10.104(a)      Second Amendment to Loan Agreement and Pledge and Security
                      Agreement by and among Onyx Acceptance Corporation, State
                      Street Bank and Trust Company, BankBoston, and The
                      Travelers Insurance Company dated August 9, 1999.

       10.105(a)      First Amendment to Loan Agreement and Confirmation of
                      Pledge and Security Agreement by and among Onyx Acceptance
                      Corporation, State Street Bank and Trust Company,
                      BankBoston, and The Travelers Insurance Company dated June
                      29, 1999.

       10.119         Sale and Servicing Agreement between Onyx Acceptance
                      Corporation as Seller and Servicer and Onyx Acceptance
                      Receivables Corporation, as Purchaser, dated August 9,
                      1999

       10.120         Security Agreement between Onyx Acceptance Receivables
                      Corporation and The Chase Manhattan Bank as Funding Agent,
                      dated August 9, 1999

       10.121         Subordinated Security Agreement between Onyx Acceptance
                      Receivables Corporation, and Onyx Acceptance Corporation,
                      dated August 9, 1999

       10.122         Asset Purchase Agreement among Park Avenue Receivables
                      Corporation, The Chase Manhattan Bank and Onyx Acceptance
                      Receivables Corporation, dated August 9, 1999

       10.123         Funding Agreement among Onyx Acceptance Receivables
                      Corporation, Park Avenue Receivables Corporation and The
                      Chase Manhattan Bank, dated August 9, 1999

       21.1           Subsidiaries of the Registrant.

       27.1           Financial Data Schedule.

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

   (b)  Reports on Form 8-K

        None.


                                       23

<PAGE>   24

                                    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: November 4, 1999

                                           By: /s/  DON P. DUFFY
                                               ---------------------------------
                                               Don P. Duffy
                                               Executive Vice President and
                                               Principal Financial Officer
Date: November 4, 1999


                                       24

<PAGE>   25

                                 EXHIBIT INDEX

    EXHIBIT NO.       EXHIBIT TITLE
    -----------       -------------
       *3.4           Certificate of Incorporation of the Company.

       *3.5           Bylaws of the Company.

       10.103(a)      Second Amendment to Master Assignment Agreement between
                      Onyx Acceptance Funding Corporation and Merrill Lynch
                      Mortgage Capital Inc. dated July 7, 1999.

       10.104(a)      Second Amendment to Loan Agreement and Pledge and Security
                      Agreement by and among Onyx Acceptance Corporation, State
                      Street Bank and Trust Company, BankBoston, and The
                      Travelers Insurance Company dated August 9, 1999.

       10.105(a)      First Amendment to Loan Agreement and Confirmation of
                      Pledge and Security Agreement by and among Onyx Acceptance
                      Corporation, State Street Bank and Trust Company,
                      BankBoston, and The Travelers Insurance Company dated June
                      29, 1999.

       10.119         Sale and Servicing Agreement between Onyx Acceptance
                      Corporation as Seller and Servicer and Onyx Acceptance
                      Receivables Corporation, as Purchaser, dated August 9,
                      1999

       10.120         Security Agreement between Onyx Acceptance Receivables
                      Corporation and The Chase Manhattan Bank as Funding Agent,
                      dated August 9, 1999

       10.121         Subordinated Security Agreement between Onyx Acceptance
                      Receivables Corporation, and Onyx Acceptance Corporation,
                      dated August 9, 1999

       10.122         Asset Purchase Agreement among Park Avenue Receivables
                      Corporation, The Chase Manhattan Bank and Onyx Acceptance
                      Receivables Corporation, dated August 9, 1999

       10.123         Funding Agreement among Onyx Acceptance Receivables
                      Corporation, Park Avenue Receivables Corporation and The
                      Chase Manhattan Bank, dated August 9, 1999

       21.1           Subsidiaries of the Registrant.

       27.1           Financial Data Schedule.

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