<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 JUNE 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 [X]   NO [ ]

         As of August 13, 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>                                                                                   <C>
PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

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

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

         Condensed Consolidated Statements of Cash Flows for the six months ended
         June 30, 1999 and June 30, 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 4.  Submission of Matters to a Vote of Security Holders.............................       16

Item 5.  Other Information...............................................................       16

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

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

EXHIBIT INDEX............................................................................       25
</TABLE>


                                       2

<PAGE>   3

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                  ONYX ACCEPTANCE CORPORATION AND SUBSIDIARIES

            CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

                                     ASSETS

<TABLE>
<CAPTION>
                                                         JUNE 30,        DECEMBER 31,
                                                           1999              1998
                                                       ------------      ------------
                                                       (UNAUDITED)
<S>                                                   <C>                <C>
Cash and cash equivalents .......................      $  7,190,558      $  1,928,991
Credit enhancement assets .......................       126,103,156       112,953,193
Contracts held for sale (Net of allowance) ......       207,187,854       152,760,781
Other assets ....................................        10,896,401         7,778,759
                                                       ------------      ------------
           Total assets .........................      $351,377,969      $275,421,724
                                                       ============      ============

                                   LIABILITIES

Accounts payable ................................      $ 23,442,196      $ 10,959,913
Debt ............................................       263,746,054       209,600,061
Other liabilities ...............................        15,794,584        11,038,029
                                                       ------------      ------------
          Total liabilities .....................       302,982,834       231,598,003

                                     EQUITY

Common stock
  Par value $.01 per share; authorized 15,000,000
    shares; issued and outstanding 6,171,034 as
    of June 30, 1999 and December 31, 1998 ......            61,710            61,710
Paid in capital .................................        37,839,151        37,839,151
Retained earnings ...............................        10,494,274         5,922,860
                                                       ------------      ------------
           Total equity .........................        48,395,135        43,823,721
                                                       ------------      ------------

           Total liabilities and equity .........      $351,377,969      $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 JUNE 30,          SIX MONTHS ENDED JUNE 30,
                                      -----------------------------       -----------------------------
                                         1999               1998             1999              1998
                                      -----------       -----------       -----------       -----------
                                               (UNAUDITED)                         (UNAUDITED)
<S>                                   <C>               <C>               <C>               <C>
REVENUES:
Interest income ...............       $ 6,722,593       $ 5,221,533       $12,488,962       $ 9,702,083
Interest expense ..............         4,330,633         3,616,724         8,565,833         6,437,710
                                      -----------       -----------       -----------       -----------
Net interest income ...........         2,391,960         1,604,809         3,923,129         3,264,373

Gain on sale of contracts .....        14,469,784         8,083,093        26,797,368        16,234,203
Service fee income ............         5,811,182         4,039,365        11,520,535         6,008,006
                                      -----------       -----------       -----------       -----------

Total Revenues ................        22,672,926        13,727,267        42,241,032        25,506,582
                                      -----------       -----------       -----------       -----------

EXPENSES:
    Provision for credit losses           249,068           324,819           748,982           631,807
    Salaries and benefits .....         9,993,337         6,334,576        19,241,263        12,275,745
    Depreciation ..............           846,978           499,356         1,556,561           926,338
    Occupancy .................           833,136           442,412         1,662,660           814,853
    General and administrative
      expenses.................         6,650,087         4,254,211        11,217,183         7,716,955
                                      -----------       -----------       -----------       -----------
Total Expenses ................        18,572,606        11,855,374        34,426,649        22,365,698
                                      -----------       -----------       -----------       -----------
Net Income before Taxes .......         4,100,320         1,871,893         7,814,383         3,140,884
    Income Taxes ..............         1,701,633           776,835         3,242,969         1,303,466
                                      -----------       -----------       -----------       -----------
Net Income after Taxes ........       $ 2,398,687       $ 1,095,058       $ 4,571,414       $ 1,837,418
                                      ===========       ===========       ===========       ===========

Net Income per share - Basic ..       $      0.39       $      0.18       $      0.74       $      0.30
Net Income per share - Diluted        $      0.37       $      0.17       $      0.71       $      0.28

Basic Shares Outstanding ......         6,171,034         6,092,400         6,171,034         6,058,610
Diluted Shares Outstanding ....         6,512,022         6,533,804         6,463,234         6,477,178
</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>
                                                               SIX MONTHS ENDED JUNE 30,
                                                          -----------------------------------
                                                              1999                  1998
                                                          -------------         -------------
                                                                      (UNAUDITED)
<S>                                                       <C>                   <C>
OPERATING ACTIVITIES:
Net cash used in operating activities ............        $ (45,050,555)        $ (50,305,625)

INVESTING ACTIVITIES:
     Purchases of property and equipment .........           (3,640,548)           (1,582,662)
                                                          -------------         -------------
Cash used in investing activities ................           (3,640,548)           (1,582,662)
                                                          -------------         -------------

FINANCING ACTIVITIES:
     Proceeds from exercise of options/warrants ..                   --                23,960
     Payments on capital lease obligations .......             (193,323)             (271,939)
     Payments on excess servicing line of credit .          (20,307,997)          (21,650,000)
     Proceeds from drawdown on excess servicing
       line of credit ............................           24,257,170             4,972,101
     Paydown of warehouse lines related to
       securitization and sale ...................         (639,000,000)         (362,006,000)
     Proceeds from warehouse lines ...............          688,232,575           420,654,572
     Proceeds from subordinated debt .............                   --            10,000,000
     Proceeds from other loans ...................            1,039,895                    --
     Payments on other loans .....................              (75,650)             (167,548)
                                                          -------------         -------------
Net cash provided by financing activities ........           53,952,670            51,555,146
                                                          -------------         -------------
              Increase (decrease) in cash and cash
                equivalents ......................            5,261,567              (333,141)

Cash and cash equivalents at beginning of period .            1,928,991               991,010
                                                          -------------         -------------
Cash and cash equivalents at end of period .......        $   7,190,558         $     657,869
                                                          =============         =============

Supplemental Disclosures of Cash Flow Information:

Interest paid ....................................        $   8,150,595         $   6,241,210
Capital lease additions ..........................                   --         $      97,628
</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 and six
months ended June 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, and the 10-Q for the
quarter ended March 31, 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>
                                                      JUNE 30,         DECEMBER 31,
                                                        1999               1998
                                                   -------------       ------------
<S>                                                <C>                 <C>
Contracts held for sale........................... $ 214,999,114       $160,386,439
Less unearned interest............................    (8,638,250)        (8,434,206)
                                                    ------------       ------------
                                                     206,360,864        151,952,233
Allowance for credit losses.......................    (1,324,224)        (1,052,178)
Dealer participation..............................     2,151,214          1,860,726
                                                   -------------       ------------
    Total......................................... $ 207,187,854       $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>
                               JUNE 30,       DECEMBER 31,
                                1999             1998
                            --------------   --------------
<S>                         <C>               <C>
Trust receivable........    $   3,712,501     $  3,712,501
RISA....................      122,390,655      109,240,692
                            -------------     ------------
          Total.........    $ 126,103,156     $112,953,193
                            =============     ============
</TABLE>


                                       6

<PAGE>   7

         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 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 RISA is reported as a separate component of shareholders' equity
as an unrealized gain or loss, net of deferred taxes. As of June 30, 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 of RISA for the
six and twelve month period ended June 1999 and December 1998 respectively:

<TABLE>
<CAPTION>
                                      JUNE 30,       DECEMBER 31,
                                       1999             1998
                                    ------------     ------------
<S>                                 <C>              <C>
         Beginning Balance.....     $109,240,692     $ 64,357,850
         Additions.............       51,590,572       80,632,733
         Amortization..........      (38,440,609)     (35,749,891)
                                    ------------     ------------
         Ending Balance........     $122,390,655     $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>
                                                 JUNE 30,          DECEMBER 31,
                                                  1999                1998
                                              ----------------   ---------------
<S>                                           <C>                <C>
Estimated net undiscounted RISA earnings      $  205,181,314     $  176,600,869
Off balance sheet allowance for losses..         (63,630,562)       (51,009,542)
Discount to present value...............         (19,160,097)       (16,350,635)
                                              ---------------    ---------------
Retained interest in securitized assets.      $  122,390,655     $  109,240,692
                                              ==============     ==============
Outstanding balance of contracts sold
through securitizations................       $1,514,290,154     $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                     SIX MONTHS ENDED
                                                        JUNE 30,                              JUNE 30,
                                              -----------------------------        -----------------------------
                                                  1999              1998               1999              1998
                                              -----------       -----------        -----------       -----------
<S>                                           <C>               <C>                <C>               <C>
Net Income.............................       $ 2,398,687       $ 1,095,058        $ 4,571,414       $ 1,837,418
                                              ===========       ===========        ===========       ===========

Weighted average shares outstanding....         6,171,034         6,092,400          6,171,034         6,058,610
Net effect of dilutive stock
  options/warrants.....................           340,988           441,404            292,200           418,568
Diluted weighted average shares
  outstanding..........................         6,512,022         6,533,804          6,463,234         6,477,178

Net income per share:

Basic EPS..............................       $      0.39       $      0.18        $      0.74       $      0.30
                                              ===========       ===========        ===========       ===========
Diluted EPS............................       $      0.37       $      0.17        $      0.71       $      0.28
                                              ===========       ===========        ===========       ===========
</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 be 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 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

         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.


                                       8

<PAGE>   9
         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 $2.4 million for the three months ended June 30, 1999
compared to $1.6 million for the same period in 1998. For the six months ended
June 30, 1999, net interest income was $3.9 million as compared to $3.3 million
for the same period in 1998. These increases are primarily due to the higher
amounts of average Contracts held for sale during the warehousing period.

GAIN ON SALE OF CONTRACTS

         The Company recorded a gain on sale of Contracts of $14.5 million for
the three months ended June 30, 1999, compared to $8.1 million for the same
period of 1998. For the six months ended June 30, 1999, the Company recorded a
gain on sale of $26.8 million compared to a gain on sale of $16.2 million for
the same period in 1998. The increase in the gain on sale is primarily the
result of an increase in Contracts sold. Contracts sold during the three and six
month periods of 1999 totaled $350.0 million and $660.0 million respectively,
compared to securitizations of $208.8 million and $381.8 million for the same
periods in 1998. Net interest rate spreads, inclusive of all costs, increased to
3.44% and 3.54% for the first and second quarters 1999 securitization vs. 3.40%
and 3.34% for the securitizations completed in the first and second quarters 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 $5.8 million and $11.5 million for the
three and six month period ending June 30, 1999, compared to $4.0 million and
$6.0 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 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 $249,068 and $748,982 for the three and six month period ending June 30,
1999, compared to $324,819 and $631,807 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 warehousing period. Net credit losses accounted for $174,783
and $485,708 during the three and six month period ending June 30, 1999,
compared to $251,311 and $448,987 for the same period in 1998. Future provisions
totaled $74,285 and $263,274 for the three and six month period ending June 30,
1999, compared to $73,508 and $182,820 for the same period in 1998. Contracts
held for sale increased to $207.2 million at June 30, 1999 versus $101.1 million
at June 30, 1998.


                                       9

<PAGE>   10
OPERATING EXPENSES

         Total operating expenses were $18.6 million for the three months ended
June 30, 1999 compared to $11.9 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 $1.7 billion at June 30, 1999 from $1.0 billion at June 30, 1998.
Total operating expenses for the six month period ending June 30, 1999 were
$34.4 million compared to $22.4 million for the same period in 1998.

         The Company incurred salary and benefit expenses of $10.0 million
during the second quarter of 1999 compared with $6.3 million for the second
quarter of 1998, an increase of approximately 58%. 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 449 at June 30, 1998 to 656 at June 30, 1999. Salary and
benefit expenses for the six month period ended June 30, 1999 were $19.2 million
compared to $12.3 million for the six months ending June 30, 1998.

         Depreciation expenses increased to $0.8 million and $1.6 million for
the three and six months ended June 30, 1999 compared to $0.5 million and $0.9
million for the same period 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 $0.8 million for the three months ending June
30, 1999 from $0.4 million in the like period in 1998. General and
administrative expenses increased to $6.7 million in the second quarter of 1999
from $4.3 million in the second 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 June 30, 1999 and 1998 were 41.5%.

                               FINANCIAL CONDITION

CONTRACTS HELD FOR SALE

         Contracts held for sale totaled $207.2 million at June 30, 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 $350.0 million during the second quarter of 1999 compared to a securitization
of $208.8 million during the second 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
                                          -----------------------------------------------------------------
                                           JUNE 30,     SEPT. 30,     DEC. 31,       MAR. 31,     JUNE 30,
                                            1998          1998          1998           1999         1999
                                         ----------    ---------     ----------    ----------    ----------
                                                               (DOLLARS IN THOUSANDS)
<S>                                      <C>           <C>           <C>           <C>           <C>
Contracts purchased/originated during
  period ............................    $  229,660    $  286,470    $  304,200    $  357,757    $  374,075
Average monthly volume during period         76,553        95,490       101,400       119,252       124,691
Gain on sale of Contracts ...........         8,083         9,677        10,506        12,328        14,470
Contracts securitized during period .       208,759       250,000       280,000       310,000       350,000
Servicing portfolio at period end ...     1,009,246     1,176,153     1,345,961     1,542,612     1,729,338
</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 June
30, 1999, delinquencies represented 2.13% of the amount of Contracts in its
servicing portfolio compared to 1.49% at June 30, 1998, and 2.83% at December
31, 1998. Net charge-offs as a percentage of the average servicing portfolio
were 1.71% for the quarter ended June 30, 1999, compared to 1.78% for the same
period in 1998.


                                       10

<PAGE>   11

    Off balance sheet reserves at June 30, 1999 were 4.20% 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>
                                        JUNE 30,               DECEMBER 31,
                                         1999                     1998
                                  --------------------    ---------------------
                                   AMOUNT         NO.       AMOUNT         NO.
                                 ----------    -------    ----------    -------
                                              (DOLLARS IN THOUSANDS)
<S>                              <C>           <C>        <C>           <C>
Servicing portfolio ..........   $1,729,338    169,309    $1,345,961    131,862
Delinquencies(1)(2)
             31-59 days ......       21,800      2,294        26,410      2,766
             60-89 days ......        7,891        783         6,876        691
             90+ days ........        7,130        673         4,790        455
                                 ----------    -------    ----------    -------
Total ........................   $   36,821      3,750    $   38,076      3,912
                                 ==========    =======    ==========    =======
Total delinquencies as a
  percent of servicing
  portfolio...................        2.13%      2.21%         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 SIX MONTHS ENDED
                                              JUNE 30,                        JUNE 30,
                                     --------------------------      --------------------------
                                        1999            1998           1999             1998
                                     ----------      ----------      ----------      ----------
                                                       (DOLLARS IN THOUSANDS)
<S>                                  <C>             <C>             <C>             <C>
Period end Contracts outstanding     $1,719,338      $1,009,246      $1,719,338      $1,009,246
Average servicing portfolio(1) .     $1,629,129      $  935,391      $1,532,269      $  875,657
Number of gross charge-offs ....          1,555             938           2,862           1,756
Gross charge-offs ..............     $    8,062      $    4,917      $   15,102      $    9,375
Net charge-offs(2) .............     $    6,954      $    4,155      $   13,175      $    7,917
Annualized net charge-offs as a
  percent of average servicing
  portfolio ....................           1.71%           1.78%           1.72%           1.81%
</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 JUNE 30,1999:

<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   99-B
    -----       -----  -----    -----    -----    -----   -----    -----    -----    -----    -----  -----   -----   -----  -----
<S>             <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%
      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%
      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%
      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%
      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%
      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%
      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%
      8         0.82%  1.15%    0.97%    0.81%    0.52%   0.80%    0.47%    0.43%    0.53%    0.55%  0.61%   0.57%
      9         0.93%  1.39%    1.13%    0.98%    0.60%   0.91%    0.62%    0.55%    0.68%    0.73%  0.82%
     10         1.15%  1.52%    1.32%    1.18%    0.76%   1.07%    0.73%    0.72%    0.85%    1.03%  0.95%
     11         1.25%  1.69%    1.47%    1.43%    0.92%   1.26%    0.81%    0.87%    1.04%    1.28%
     12         1.47%  1.94%    1.60%    1.63%    1.02%   1.42%    0.94%    0.95%    1.20%    1.54%
     13         1.65%  2.08%    1.77%    1.73%    1.13%   1.58%    1.10%    1.08%    1.33%    1.77%
     14         1.79%  2.34%    1.94%    1.87%    1.23%   1.68%    1.23%    1.19%    1.46%
     15         2.02%  2.52%    2.09%    2.07%    1.40%   1.80%    1.38%    1.36%    1.61%
     16         2.25%  2.76%    2.27%    2.23%    1.56%   1.97%    1.58%    1.42%    1.71%
     17         2.43%  2.89%    2.42%    2.33%    1.68%   2.10%    1.68%    1.52%
     18         2.59%  3.10%    2.57%    2.49%    1.75%   2.23%    1.77%    1.64%
     19         2.77%  3.14%    2.70%    2.62%    1.85%   2.35%    1.91%    1.75%
     20         2.93%  3.30%    2.83%    2.73%    1.92%   2.48%    2.04%
     21         3.06%  3.47%    2.94%    2.84%    1.98%   2.59%    2.11%
     22         3.15%  3.60%    3.00%    2.93%    2.09%   2.72%    2.20%
     23         3.21%  3.70%    3.08%    3.02%    2.17%   2.81%
     24         3.28%  3.81%    3.17%    3.10%    2.22%   2.85%
     25         3.40%  3.93%    3.28%    3.22%    2.31%   2.93%
     26         3.43%  4.06%    3.38%    3.29%    2.38%
     27         3.55%  4.13%    3.43%    3.39%    2.44%
     28         3.60%  4.22%    3.54%    3.46%    2.50%
     29         3.73%  4.23%    3.59%    3.58%
     30         3.75%  4.29%    3.69%    3.61%
     31         3.79%  4.31%    3.77%    3.64%
     32         3.85%  4.33%    3.75%
     33         3.88%  4.37%    3.77%
     34         3.90%  4.39%    3.79%
     35         3.94%  4.39%
     36         3.94%  4.42%
     37         3.94%  4.42%
     38         3.97%  4.43%
     39         3.99%
     40         3.99%
     41         3.96%
</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 $45.1 million for the six months
ended June 30, 1999, compared to $50.3 million used in the six months ended June
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 $3.6
million for the six months ended June 30, 1999, compared to $1.6 million for the
six months ended June 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 $54.0 million for the six months ended June 30, 1999, compared to
$51.6 million for the six months ended June 30, 1998. Proceeds from the use of
the Company's warehouse and excess servicing lines contributed to the change in
cash provided by financing activities.

         CP Facility. As of June 30, 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 residual facilities. During July, the Company 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. The Company has a $50 million line with 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. The facility provided by MLMCI has been renewed and currently
matures in February 2000; the facility provided by SBRC currently matures in
September 1999. The Company expects this line to be renewed for an additional
year.

         Excess Servicing Facility. The Company is party to a collateralized
loan ("Excess Servicing 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


                                       13


<PAGE>   14
available. Under the Excess Servicing Facility, that matured in June 1999, the
Company could borrow and repay during the two-year revolving period up to $45
million. 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 June 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 two AAA/Aaa rated publicly underwritten asset-backed
securitizations in the amount of $660 million during the first six 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 $2.6 billion of its Contracts
in 16 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 inhouse
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. By the end of
the third quarter of 1999, the Company expects to continue and complete its
remediation efforts and to undertake internal testing of its inhouse and third
party systems and applications.


                                       14


<PAGE>   15

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


                                       15

<PAGE>   16

PART II. OTHER INFORMATION

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         The Company held its Annual Meeting of Stockholders on May 27, 1999
(the "Meeting"). At the Meeting, the stockholders were asked to vote on the
election of a director and to ratify the appointment of the Company's
independent auditors.

1. Election of Directors.

   The stockholders approved the Company's director nominee, Bradford Jones, to
   serve for a three year term expiring at the Annual Meeting in the year 2002.


                                    VOTES FOR    VOTES AGAINST    ABSTENTIONS
                                    ---------    -------------    -----------
   THE VOTING WENT AS FOLLOWS:      3,777,370         0               800


   In addition, there were 1,146,968 broker non-votes.

2. Appointment of independent auditors.

   The Company's proposal to ratify the appointment of PricewaterhouseCoopers
   LLP as the Company's independent auditors for the fiscal year ending December
   31, 1999 was also approved by the stockholders.


                                    VOTES FOR    VOTES AGAINST    ABSTENTIONS
                                    ---------    -------------    -----------
  THE VOTING WENT AS FOLLOWS:       3,775,770        1,700            700

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.


                                       16

<PAGE>   17

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 (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.


                                       17


<PAGE>   18
         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 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--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 Excess Servicing 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 Excess Servicing Facility 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 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 June 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;


                                       18

<PAGE>   19
         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 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
Facility permits us to select 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 lines are 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.


                                       19


<PAGE>   20

         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;

         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.

         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.


                                       20


<PAGE>   21

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. 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.


                                       21


<PAGE>   22

         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 against such proceeding there is a chance that
our results of operations 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 Compliance."



                                       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.

       10.105(a)      First Amendment to Loan Agreement and Confirmation of
                      Pledge and Security Agreement dated June 29, 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.



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<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: August 13, 1999

                                           By:  /s/ DON P. DUFFY
                                                --------------------------------
                                                Don P. Duffy
                                                Executive Vice President and
                                                Principal Financial Officer
Date: August 13, 1999



                                       24

<PAGE>   25

                                  EXHIBIT INDEX

    EXHIBIT NO.       EXHIBIT TITLE
    -----------       -------------
       10.105(a)      First Amendment to Loan Agreement and Confirmation of
                      Pledge and Security Agreement dated June 29, 1999.

       21.1           Subsidiaries of the Registrant.

       27.1           Financial Data Schedule.