<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, 1998

                                       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.)


                       8001 IRVINE CENTER DRIVE, 5TH FLOOR

                                IRVINE, CA. 92618

                                 (949) 790-5400

          (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 November 10, 1998, there were 6,168,754 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, 1998 and 
            December 31, 1997 ............................................................................ 3

         Condensed Consolidated Statements of Income for the three months and nine months ended
            September 30, 1998 and September 30, 1997 .................................................... 4

         Condensed Consolidated Statements of Cash Flows for the nine months ended 
            September 30, 1998, and September 30, 1997.................................................... 5

         Notes to Condensed Consolidated Financial Statements ............................................ 6
Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations ........... 8

PART II. OTHER INFORMATION
Item 5.  Other Information ...............................................................................16
Item 6.  Exhibits and Reports on Form 8-K ................................................................21
SIGNATURES ...............................................................................................22
EXHIBIT INDEX ............................................................................................23
</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,
                                                          1998                 1997
                                                      ------------         ------------
                                                       (UNAUDITED)
<S>                                                   <C>                  <C>         
ASSETS 
Cash & cash equivalents...........................    $  5,771,881         $    991,010
Trust receivables ................................      33,943,061           27,628,619
Contracts held for sale (Net of allowance) .......     125,345,160           64,342,309

Retained interest in securitized assets ..........      72,715,609           48,838,815
Other assets .....................................       6,475,773            4,767,490
                                                      ------------         ------------
    Total assets .................................    $244,251,484         $146,568,243
                                                      ============         ============


LIABILITIES

Accounts payable .................................    $ 12,881,739         $  8,458,147
Debt .............................................     174,977,933           91,508,209
Other liabilities ................................      11,692,430            6,046,395
                                                      ------------         ------------

    Total liabilities ............................     199,552,102          106,012,751


EQUITY

Common stock
  Par value $.01 per share; authorized
    15,000,000 shares; issued and outstanding
    6,168,754 as of September 30, 1998 and
    issued and outstanding 6,017,635 as of
    December 31, 1997 ............................          61,687               60,176
Paid in capital ..................................      37,841,627           37,810,158
Retained earnings ................................       6,796,068            2,685,158
                                                      ------------         ------------
    Total equity .................................      44,699,382           40,555,492
                                                      ------------         ------------
    Total liabilities and equity .................    $244,251,484         $146,568,243
                                                      ============         ============
</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 SEPTEMBER 30,   NINE MONTHS ENDED SEPTEMBER 30,
                                  --------------------------------   -------------------------------
                                        1998            1997              1998            1997
                                    -----------      -----------      -----------      -----------
                                             (UNAUDITED)                       (UNAUDITED)
<S>                                 <C>              <C>              <C>              <C>        
REVENUES:
Finance Revenue .................   $ 7,001,062      $ 3,659,736      $16,703,145      $ 8,807,440
Interest Expense ................     4,213,990        2,096,118       10,651,700        4,981,310
                                    -----------      -----------      -----------      -----------
Net Finance Revenue .............     2,787,072        1,563,618        6,051,445        3,826,130
Provision for Credit Losses .....       597,957          100,045        1,229,764          604,639
                                    -----------      -----------      -----------      -----------
Net Finance Revenue after
Provision for Credit Losses .....     2,189,115        1,463,573        4,821,681        3,221,491

Gain on Sale of Contracts .......    11,031,440        6,937,574       29,104,633       15,013,786
Service Fee Income ..............     2,960,356        1,049,636        7,718,625        6,644,991

EXPENSES:
    Salaries and Benefits .......     7,216,960        4,644,626       19,492,705       12,389,370
    Depreciation ................       565,600          349,515        1,307,918          810,316
    Occupancy ...................       500,371          386,517        1,315,224        1,043,791
    General and Administrative
    Expenses.....................     4,595,279        2,943,706       12,496,254        7,343,420
                                    -----------      -----------      -----------      -----------
Total Expenses ..................    12,878,210        8,324,364       34,612,101       21,586,897
                                    -----------      -----------      -----------      -----------
Net Income before Taxes .........     3,302,701        1,126,419        7,032,838        3,293,371
    Income Taxes ................     1,373,923          468,590        2,921,931        1,369,887
                                    -----------      -----------      -----------      -----------
Net Income after Taxes ..........   $ 1,928,778      $   657,829      $ 4,110,907      $ 1,923,484
                                    ===========      ===========      ===========      ===========

Net Income per share - Basic ....   $      0.31      $      0.11      $      0.67      $      0.32

Net Income per share - Diluted ..   $      0.30      $      0.10      $      0.64      $      0.30

Basic Shares Outstanding ........     6,162,374        6,016,471        6,093,198        5,994,696
Diluted Shares Outstanding ......     6,381,882        6,379,802        6,445,412        6,386,216
</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>
                                                               NINE MONTHS ENDED SEPTEMBER 30,
                                                              -------------------------------- 
                                                                   1998               1997
                                                              -------------      ------------- 
                                                                         (UNAUDITED)
<S>                                                           <C>                <C>           
 Net cash used in operating activities .....................  $ (76,587,801)     $ (57,483,979)

 INVESTING ACTIVITIES:
      Purchases of property and equipment ..................     (2,411,692)        (1,451,371)
                                                              -------------      ------------- 
               Cash used in investing activities ...........     (2,411,692)        (1,451,371)


 FINANCING ACTIVITIES:
      Proceeds from exercise of options/warrants ...........         32,981             57,562

      Payments on capital lease obligations ................       (473,577)          (370,952)
      Proceeds from drawdown on excess
      servicing line of credit, net ........................     15,972,101         18,500,000


      Paydown of warehouse lines related
      to securitization and sale ...........................   (624,456,000)      (340,500,000)

      Proceeds from warehouse lines ........................    682,956,181        382,497,213
      Proceeds from subordinated debt ......................     10,000,000                  0
      Payments in other loans ..............................       (251,322)          (251,320)
                                                              -------------      -------------
               Net cash provided by financing activities ...     83,780,364         59,932,503
                                                              -------------      -------------
               Increase in cash and cash equivalents .......      4,780,871            997,153

 Cash and cash equivalents at beginning of period ..........        991,010            603,028
                                                              -------------      -------------
               Cash and cash equivalents at end of period ..  $   5,771,881      $   1,600,181
                                                              =============      =============

 SUPPLEMENTAL DISCLOSURES OF CASH FLOW
   INFORMATION:

 Interest paid .............................................  $  10,453,649      $   4,818,269
 Capital lease additions ...................................  $     132,577      $     383,139
</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 nine
months ended September 30, 1998 are not necessarily indicative of the results
that may be expected for the year ending December 31, 1998. The condensed
consolidated financial statements should be read in conjunction with the audited
financial statements and footnotes thereto for the year ended December 31, 1997
included in the Company's 1997 Annual Report on Form 10-K and the 10-Q for the
quarters ended June 30, 1998 and March 31, 1998.

     USE OF ESTIMATES

     In conformity with generally accepted accounting principles, management
utilizes assumptions and estimates that affect the reported value of retained
interest in securitized 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,
                                            1998                  1997
                                       -------------          -------------
<S>                                    <C>                    <C>          
   Contracts held for sale .........   $ 134,678,766          $  71,216,278
   Less unearned interest ..........      10,097,204              7,835,794
                                       -------------          -------------
                                         124,581,562             63,380,484
   Allowance for credit losses .....        (915,323)              (316,902)

   Dealer participation ............       1,678,921              1,278,727
                                       -------------          -------------
   Total ...........................   $ 125,345,160          $  64,342,309
                                       =============          =============
</TABLE>


NOTE 3 - RETAINED INTEREST IN SECURITIZED ASSETS


     Retained interest in securitized assets ("RISA") capitalized upon
securitization of Contracts 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, industry statistics and
expectation of future performance. All assumptions are evaluated each quarter
and adjusted, if appropriate, to reflect the actual performance of the
Contracts.


                                       6
<PAGE>   7

     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 retained interest income earned on a monthly basis over
the expected repayment life of the underlying Contracts. RISA is classified in a
manner similar to available for sale securities and as such is marked to market
each quarter. Market value changes are calculated by discounting the remaining
projected excess spread using a current market discount rate. Any changes in the
market value of the RISA are reported as a separate component of other
comprehensive income as an unrealized gain or loss, net of deferred taxes. As of
September 30, 1998 the market value of RISA approximated cost. The Company
retains the rights to service all Contracts it securitizes.

     The Company is currently using securitization assumptions that are
consistent with its historical performance, industry statistics and expectation
of future performance. These assumptions are an ABS prepayment speed of 1.75%,
an annualized net credit loss rate of 2.0% and a discount rate of 3.50% over the
pass-through rate.

     The following table presents the balances and activity for RISA:

<TABLE>
<CAPTION>
                                   SEPTEMBER 30,         DECEMBER 31,
                                       1998                  1997
                                   ------------          ------------
<S>                                <C>                   <C>         
         Beginning balance ....    $ 48,838,815          $ 29,632,039
         Additions ............      56,678,824            45,940,000
         Amortization .........     (32,802,030)          (26,733,224)
                                   ------------          ------------
         Ending balance .......    $ 72,715,609          $ 48,838,815
                                   ============          ============
</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 net undiscounted retained
interest earnings to be received from securitizations. Estimated net
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>
                                                 SEPTEMBER 30,        DECEMBER 31,
                                                     1998                 1997
                                                --------------        ------------
<S>                                             <C>                   <C>         
Estimated net undiscounted RISA earnings ....   $  120,312,317        $ 78,579,178
Off balance sheet allowance for losses ......       40,570,184          24,787,037
Discount to present value ...................        7,026,524           4,953,326
                                                --------------        ------------
Retained interest in securitized assets .....   $   72,715,609        $ 48,838,815
Outstanding balance of Contracts
     sold through securitizations ...........   $1,039,551,336        $693,896,100
</TABLE>


     Management believes that the off balance sheet allowance for losses is
currently adequate to absorb potential losses in the securitized portfolio.


                                       7
<PAGE>   8

NOTE 4 - EARNINGS PER SHARE

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

<TABLE>
<CAPTION>
                                                    THREE MONTHS ENDED             NINE MONTHS ENDED
                                                       SEPTEMBER 30,                 SEPTEMBER 30,
                                                 -------------------------     -------------------------
                                                    1998           1997           1998           1997
                                                 ----------     ----------     ----------     ----------
<S>                                              <C>            <C>            <C>            <C>       
Net Income ....................................  $1,928,778     $  657,829     $4,110,907     $1,923,484
                                                 ==========     ==========     ==========     ==========

Weighted average shares outstanding ...........   6,162,374      6,016,471      6,093,198      5,994,696

Net effect of dilutive stock
  Options/warrants ............................     219,508        363,331        352,214        391,520
Diluted weighted average shares outstanding ...   6,381,882      6,379,802      6,445,412      6,386,216


Net income per share:

Basic EPS .....................................  $     0.31     $     0.11     $     0.67     $     0.32
                                                 ==========     ==========     ==========     ==========
Diluted EPS ...................................  $     0.30     $     0.10     $     0.64     $     0.30
                                                 ==========     ==========     ==========     ==========
</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
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 as 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 for fiscal years beginning after June 15, 1998.



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

OVERVIEW

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

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

                              RESULTS OF OPERATIONS

NET FINANCE REVENUE

     Net finance revenue is the difference between the rate earned on Contracts
and the interest costs associated with the Company's borrowings. Net finance
revenue totaled $2.8 million for the three months ended September 30, 1998
compared to $1.6 million for the same period in 1997. For the nine months ended
September 30, 1998, net finance revenue was $6.1 million as compared to $3.8
million for the same period in 1997. These increases are due to the higher
amounts of average Contracts held for sale during the period. 


                                       8
<PAGE>   9

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

PROVISION FOR CREDIT LOSSES

     The Company maintains an allowance for credit losses to cover anticipated
losses for Contracts held for sale. The allowance for credit losses is increased
by charging the provision for credit losses and decreased by actual losses on
the Contracts held for sale or by the reduction of the amount of Contracts held
for sale. The level of the allowance is based principally on the outstanding
balance of Contracts held for sale and the historical loss trends for the period
of time the loans are held before being sold in a securitization. When the
Company sells Contracts in a securitization transaction, it reduces its
allowance for credit losses and factors potential losses into its calculation of
gain on sale. The Company believes that the allowance for credit losses is
currently adequate to absorb potential losses. The provision for credit losses
totaled $597,957 for the quarter ended September 30, 1998 compared to $100,045
for the same period in 1997. Provision for credit losses consists of net credit
losses incurred during the period plus future provision for losses reserved
against the net changes in Contracts held for sale during the period. Net credit
losses accounted for $182,358 during the third quarter of 1998 compared to
$125,590 in the third quarter of 1997. The increase in net credit losses was due
to an increase in the average Contracts held for sale in the period. Future
provisions totaled $415,599 and $(25,545) for the third quarter of 1998 and 1997
respectively. Contracts held for sale increased by $24.3 million for the third
quarter of 1998 versus a $4.7 million decrease for the third quarter of 1997.
Provision for credit losses for the nine month period ended September 30, 1998
were $1.2 million compared to $604,639 for the period ended September 30, 1997.
At September 30, 1998, Contracts held for sale were $125.3 million compared to
$64.3 million at December 31, 1997.

GAIN ON SALE OF CONTRACTS

     The Company recorded a gain on sale of Contracts of $11.0 million for the
three months ended September 30, 1998 compared to $6.9 million for the same
period of 1997. The increase in the gain on sale is primarily the result of an
increase in Contracts sold. For the nine months ended September 30, 1998, the
Company recorded a gain on sale of $29.1 million compared to a gain on sale of
$15.0 million for the same period in 1997. Contracts sold during the third
quarter of 1998 totaled $250.0 million compared to $149.6 million during the
same period of 1997. Net interest rate spreads, inclusive of all costs,
decreased to 2.64% for the third quarter 1998 securitization vs. 2.70% for the
securitization completed in the third quarter 1997. Interest rate spread is
affected by product mix, general market conditions and overall market interest
rates. The risks inherent in interest rate fluctuation are reduced through
hedging activities. To protect against changes in interest rates, the Company
may hedge Contracts prior to their securitization with forward interest rate
swap agreements. Gains or losses on these forward interest rate swap agreements
are included as part of the basis of the underlying Contracts and recognized
when the Contracts are securitized.


SERVICING INCOME

     Servicing fee income includes retained interest income, contractual
servicing income and other fee income. Retained interest income represents
excess spread earned on securitized loans less any losses not absorbed by the
off balance sheet allowance for losses. Retained interest income is dependent
upon the average excess spread on the Contracts sold and the size of the
serviced portfolio. Changes in the amount of prepayments and credit losses may
also affect the amount and timing of retained interest income. Contractual
servicing 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 dollar amount outstanding. Increased competition
may also affect the amount of other fee income that the Company may earn when
originating or servicing Contracts.

     Servicing fee income increased to $3.0 million during the third quarter of
1998 from $1.0 million during the same period in 1997 due primarily to higher
contractual service fees related to the growth in the servicing portfolio.
Servicing fee income for the nine month period ended September 30, 1998 was $7.7
million compared to $6.6 million for the like period in 1997.


                                       9
<PAGE>   10

OPERATING EXPENSES

     Total operating expenses were $12.9 million for the three months ended
September 30, 1998 compared to $8.3 million for the same period in 1997. 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 $1.2 billion at September 30, 1998 from $649.6 million at September
30, 1997. Total operating expenses for the nine month period ending September
30, 1998 were $34.6 million compared to $21.6 million for the same period in
1997.

     The Company incurred salary and benefit expenses of $7.2 million during the
third quarter of 1998 compared with $4.6 million for the third quarter of 1997,
an increase of 56.5%. 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 302
at September 30, 1997 to 499 at September 30, 1998. Salary and benefit expenses
for the nine month period ended September 30, 1998 were $19.5 million compared
to $12.4 million for the nine months ending September 30, 1997.

     Depreciation expenses increased to $565,600 for the three months ended
September 30, 1998 compared to $349,515 for the same period of 1997 as the
Company continued to invest in technology and infrastructure. Expansion into new
states resulted in an increase in occupancy costs to $500,371 for the three
months ending September 30, 1998 from $386,517 in the like period in 1997.
General and administrative expenses increased to $4.6 million in the third
quarter of 1998 from $2.9 million in the third quarter of 1997, 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 the three months and nine months ended September 30, 1998 and 1997 were
41.6%.

                               FINANCIAL CONDITION

CONTRACTS HELD FOR SALE

     Contracts held for sale totaled $125.3 million at September 30, 1998
compared to $64.3 million at December 31, 1997. The balance in the held for sale
portfolio is largely dependent upon the timing of the origination and
securitization of Contracts. The Company completed securitization transactions
of $631.8 million and a whole loan sale of $15.0 million during the nine months
of 1998. The Company plans to continue to securitize Contracts on a regular
basis.

TRUST RECEIVABLES

     The excess cash flow generated by Contracts sold to trusts is deposited
into spread accounts by the trustee under the terms of the securitization
transactions. The excess spread is released to the Company after the spread
accounts reach a predetermined funding level. Amounts due from trusts represent
funds due to the Company not yet released from the spread accounts. The amounts
due from trusts at September 30, 1998 were $33.9 million as compared with $27.6
million at year-end 1997. The increase in accounts due from trusts is a result
of the increased amount of loans sold.


                                       10
<PAGE>   11

     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,
                                                         1997          1997          1998           1998            1998
                                                       --------      --------      --------      ----------      ----------
                                                                            (DOLLARS IN THOUSANDS)
<S>                                                    <C>           <C>           <C>           <C>             <C>       
     Contracts purchased/originated during period ..   $152,334      $182,310      $218,204      $  229,660      $  286,470
     Average monthly volume during period ..........     50,778        60,770        72,735          76,553          95,490
     Gain on sale of Contracts .....................      6,938         7,809         8,667           9,406          11,031
     Contracts securitized during period ...........    149,600       166,000       173,000         208,759         250,000
     Contracts sold during period ..................          0             0        15,000               0               0
     Servicing portfolio at period end .............    649,563       757,277       884,692       1,009,246       1,176,153
</TABLE>


     ASSET QUALITY

     With the continued expansion of the Company in the eastern United States
and the significant growth in the existing branches, the Company undertook a
project to centralize and improve its servicing and collection process. The
Company believes that a centralized group is efficient and effective, and
assures that collection practices and policies are applied consistently
throughout the Company. Management continues to rely on the use of current
technology such as predictive dialers utilizing automated processing for
contacting delinquent borrowers, including a payment system that allows
electronic payment on delinquent accounts to be applied the same day as the
contact with the borrower. Over the past few quarters, management has focused on
the hiring, training and retention of a centralized collection staff. During the
third quarter of 1998 the Company continued to realize some of the benefits of
the centralization and training of the collection department. At September 30,
1998, delinquencies for the servicing portfolio represented 2.02% of the amount
of Contracts in the Company's servicing portfolio or $23.8 million as compared
to 2.51% at December 31, 1997 or $19.0 million. Loan losses for the servicing
portfolio as a percentage of average serviced loans outstanding decreased to
1.72% during the quarter compared to 2.16% for the third quarter of 1997.

                  DELINQUENCY EXPERIENCE OF SERVICING PORTFOLIO


<TABLE>
<CAPTION>
                                            SEPTEMBER 30, 1998            DECEMBER 31, 1997
                                         ------------------------       ---------------------
                                           AMOUNT           NO.          AMOUNT          NO.
                                         ----------       -------       --------       ------
                                                          (DOLLARS IN THOUSANDS)
<S>                                      <C>              <C>           <C>            <C>   
     Servicing portfolio .............   $1,176,153       115,151       $757,277       73,502
     Delinquencies(1)(2)
                  31-59 days .........       15,565         1,643         11,902        1,211
                  60-89 days .........        4,114           413          3,370          346
                  90+ days ...........        4,103           383          3,743          316
                                         ----------       -------       --------       ------
     Total ...........................   $   23,781         2,439       $ 19,015        1,873
     Total delinquencies as a
     percent of Servicing portfolio ..         2.02%         2.12%          2.51%        2.55%
</TABLE>

(1)  Delinquencies include principal amounts only.

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


                                       11
<PAGE>   12

                   LOAN LOSS EXPERIENCE OF SERVICING PORTFOLIO

<TABLE>
<CAPTION>
                                                 FOR THE NINE MONTH PERIOD         FOR THE QUARTERS ENDED
                                                     ENDED SEPTEMBER 30,                SEPTEMBER 30,      
                                                 --------------------------      --------------------------
                                                    1998            1997            1998            1997
                                                 ----------      ----------      ----------      ----------
                                                                   (DOLLARS IN THOUSANDS)
<S>                                              <C>             <C>             <C>             <C>       
     Period end Contracts outstanding ......     $1,176,153      $  649,563      $1,176,153      $  649,563
     Average servicing portfolio(1) ........     $  945,077      $  518,898      $1,083,919      $  606,412
     Number of gross charge-offs ...........          2,740           1,466             984             603
     Gross charge-offs .....................        $14,827          $8,987          $5,453          $3,679
     Net charge-offs .......................        $12,576          $7,881          $4,659          $3,270
     Annualized net charge-offs as a percent
       of average Servicing portfolio ......           1.77%           2.03%           1.72%           2.16%
</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, 1998:


<TABLE>
<CAPTION>
MONTH    95-1    96-1    96-2    96-3    96-4    97-1    97-2    97-3    97-4    98-1    98-A    98-B
-----    ----    ----    ----    ----    ----    ----    ----    ----    ----    ----    ----    ----
<S>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>  
    1   0.00%   0.00%   0.01%   0.00%   0.00%   0.00%   0.00%   0.00%   0.00%   0.00%   0.00%   0.00%
    2   0.01%   0.03%   0.07%   0.02%   0.02%   0.00%   0.00%   0.00%   0.00%   0.01%   0.01%
    3   0.02%   0.05%   0.20%   0.07%   0.05%   0.03%   0.02%   0.02%   0.01%   0.02%   0.03%
    4   0.02%   0.11%   0.33%   0.16%   0.14%   0.06%   0.07%   0.09%   0.04%   0.08%   0.07%
    5   0.05%   0.23%   0.46%   0.43%   0.24%   0.13%   0.22%   0.13%   0.11%   0.14%
    6   0.06%   0.40%   0.78%   0.54%   0.38%   0.26%   0.32%   0.24%   0.20%   0.24%
    7   0.08%   0.69%   0.98%   0.74%   0.53%   0.37%   0.59%   0.36%   0.28%   0.40%
    8   0.10%   0.82%   1.15%   0.97%   0.81%   0.52%   0.80%   0.47%   0.43%
    9   0.21%   0.93%   1.39%   1.13%   0.98%   0.60%   0.91%   0.62%   0.55%
   10   0.24%   1.15%   1.52%   1.32%   1.18%   0.76%   1.07%   0.73%   0.72%
   11   0.29%   1.25%   1.69%   1.47%   1.43%   0.92%   1.26%   0.81%
   12   0.41%   1.47%   1.94%   1.60%   1.63%   1.02%   1.42%   0.94%
   13   0.55%   1.65%   2.08%   1.77%   1.73%   1.13%   1.58%   1.10%
   14   0.70%   1.79%   2.34%   1.94%   1.87%   1.23%   1.68%
   15   0.83%   2.02%   2.52%   2.09%   2.07%   1.40%   1.80%
   16   0.98%   2.25%   2.76%   2.27%   2.23%   1.56%   1.97%
   17   1.06%   2.43%   2.89%   2.42%   2.33%   1.68%
   18   1.11%   2.59%   3.10%   2.57%   2.49%   1.75%
   19   1.27%   2.77%   3.14%   2.70%   2.62%   1.85%
   20   1.37%   2.93%   3.30%   2.83%   2.73%
   21   1.41%   3.06%   3.47%   2.94%   2.84%
   22   1.54%   3.15%   3.60%   3.00%   2.93%
   23   1.59%   3.21%   3.70%   3.08%
   24   1.69%   3.28%   3.81%   3.17%
   25   1.76%   3.40%   3.93%   3.28%
   26   1.83%   3.43%   4.06%
   27   1.86%   3.55%   4.13%
   28   1.97%   3.60%   4.22%
   29   2.01%   3.73%   4.23%
   30   2.08%   3.75%
   31   2.13%   3.79%
   32   2.16%   3.85%
   33   2.26%   3.88%
   34   2.27%
   35   2.28%
   36   2.28%
   37   2.30%
   38   2.28%
   39   2.28%
   40   2.26%
   41   2.26%
   42   2.25%
</TABLE>


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.


                                       13
<PAGE>   14

     Cash used in operating activities was $76.6 million for the nine months
ended September 30, 1998, compared to $57.5 million used in the nine months
ended September 30, 1997. The increase in cash used in operating activities was
attributable to the fact that for the nine month period ended September 30,
1998, Contract purchases exceeded Contracts sold in sales and securitizations by
$87.6 million. Cash used in investing activities was $2.4 million for the
quarter ended September 30, 1998 compared to $1.5 million for the quarter ended
September 30, 1997. A reduction in the use of the Company's capital lease lines
contributed to the increase in investing activities. Cash provided by financing
activities was $83.8 million for the quarter ended September 30, 1998, compared
to $59.9 million for the quarter ended September 30, 1997. Proceeds from
subordinated debt along with an increase in the issuance of commercial paper,
net of pay downs related to securitization and sale, contributed to the change
in cash provided by financing activities.

     Warehouse Lines

     The Company's wholly owned special purpose subsidiary, Onyx Acceptance
Financial Corporation ("OAFC"), is party to a $325 million auto loan warehouse
program (the "CP Facility") with Triple-A One Funding Corporation ("Triple-A").
Triple-A is a commercial paper asset-backed conduit lender sponsored by MBIA
Insurance Corporation ("MBIA"). This facility provides funds to purchase
Contracts and was increased during the third quarter from $245 million to $325
million. The advance rate to OAFC is 98% of adjusted eligible principal balance
of each Contract. This lending facility was extended in the third quarter and
will expire in September 2001.

     The Company, through another finance subsidiary, Onyx Acceptance Funding
Corporation ("Fundco") holds a $100 million line with Merrill Lynch Mortgage
Capital, Inc. ("MLMCI") (the "Merrill Line") which provides funding for the
purchase and origination of Contracts. The Merrill Line provides an advance rate
of approximately 95% of the principal balance of the Contracts that are used for
collateral. The interest rate is based on LIBOR. The Merrill Line has a term of
one year and matures in February 1999.

     Residual Facilities

     The Company has a $45 million residual facility with State Street Bank,
BankBoston, and The Travelers Insurance Company (the "Residual Facility") under
which the Company may (subject to borrowing base availability) borrow for
working capital purposes. Under the term of the Residual Facility, the available
borrowings are determined by a collateral based formula of a percentage of the
value of the excess cash flow to be received from certain securitizations and
trust receivables. The Residual Facility converts from revolving loans to
fully-amortizing two-year term loans on June 12, 1999 or earlier, upon the
occurrence of certain "credit triggers".

     Fundco has two $50 million residual facilities with MLMCI and Salomon
Brothers Realty Corp., ("SBRC") respectively, (the "Residual Lines "). The
Residual Lines are used by the Company to finance operating requirements. The
amounts available for borrowing under each line are determined using a
collateral based formula of a percentage of the value of excess cash flow to be
received from certain securitizations, and, with respect to the MLMCI facility,
a percentage of the amount of the Merrill Line outstanding on a quarterly basis.
The interest rates are based on LIBOR and the Residual Lines have a term of one
year. The facility provided by MLMCI matures in February 1999; the facility
provided by SBRC matures in September 1999.

     The Company during the first quarter of 1998, completed a $10.0 million
subordinated debt offering. The term of the debt is for two years ending
February 27, 2000, with an option by the Company to extend the term by three
years during which the loan would fully amortize. The debt bears a fixed
interest rate of 9.5%.

SECURITIZATIONS AND LOAN SALES.

     In September, 1998, the Company consummated a securitization in the amount
of $250.0 million compared to $149.6 million in the third quarter of 1997. The
dollar weighted average investor rate for the third quarter 1998 securitization
was 5.78% and a net interest rate spread inclusive of all costs of 2.64% as
compared to a dollar weighted average investor rate of 6.35% and a net interest
rate spread inclusive of all costs of 2.70% for the securitization completed in
the third quarter 1997. For the nine month period ended September 30, 1998, the
Company securitized and sold a total of $646.8 million of Contracts. Of this
total, $631.8 million were securitized, while $15.0 million were sold on a whole
loan basis, with servicing retained. For the nine months ended September 30,
1998, the Company recorded a gain on sale of $29.1 million on total sales and
securitizations of $646.8 million as compared to a gain on sale of $15.0 million
with securitizations totaling $361.3 million for the first nine months of 1997.


                                       14
<PAGE>   15

     The Contracts originated and held by the Company during the warehousing
period are all fixed rate and accordingly, the Company has exposure to changes
in interest rates. The Company is able through the use of varying maturities on
advances from the CP Facility to lock in rates during the warehousing period,
when in management's judgment it is appropriate, to mitigate interest rate
exposure. Further, the Company often employs a hedging strategy which primarily
includes the execution of forward interest rate swaps. These hedges are entered
into by the Company in numbers and amounts which generally correspond to the
anticipated principal amount of the related securitization or whole loan sale.
As of September 30, 1998, the Company had executed forward interest rate swaps
of $160 million, which become effective November 27, 1998.

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 failure. Given the Company's reliance on its computer systems, the Company's
results of operations 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. Earlier this year, the Company completed a detailed risk
assessment of its various in house and third party computer systems, business
applications and other affected systems, formulated a plan for specific
remediation efforts and began certain of such remediation efforts. The Company
assembled survey data from third party vendors and certain other parties with
which the Company communicates electronically to determine the compliance
efforts being undertaken by these parties and to assess the Company's potential
exposure to any non-compliant systems operated by these parties. During the
remainder of 1998 and the first quarter of 1999, the Company expects to continue
and complete its remediation efforts and to undertake internal testing of its in
house and third party systems and applications.

The Company currently estimates that its costs related to year 2000 compliance
remediation for Company-owned IT systems and applications will be approximately
$300,000 in 1998 and approximately $150,000 in 1999. The amount expected to be
expended during 1998 represents approximately 15% of the Company's IT systems
budget. As of September 30, 1998, the Company had expended approximately
$200,000 for remediation of its IT software systems and applications. By the
second 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 by
the second quarter of 1999. The Company expenses year 2000 remediation costs as
incurred and expects to fund these costs through cash flow from operations.

The Company's most critical operating system is the loan accounting system which
is maintained by a third party vendor. The Company is included in a user task
force that provides input to the vendor for the year 2000 project. The changes
to the loan accounting system were substantially complete by September 30, 1998
and the system is undergoing testing by the service bureau. The testing should
be completed by December 31, 1998. The Company is developing a testing plan and
will be provided a testing system under a separate environment to allow the
Company to test the system during the first quarter of 1999. In addition, the
user task force is also testing the system during the first quarter of 1999. The
service bureau is confident that the changes to the system will be tested and in
production by the end of the second quarter of 1999. The Company does not at
this time see any issues with the timing or the proposed changes to the system.
Based on the survey data and other information compiled by the Company to date,
the Company has not identified any other third parties that the Company expects
will suffer year 2000 related problems likely to have a significant adverse
effect on the Company's operations. However, many of these third parties are
currently in the process of implementing the critical portions of their own year
2000 compliance measures. As a result, at the current time the Company does not
have sufficient information to determine whether its external relationships will
be materially adversely affected by the year 2000 compliance problems.

The Company is currently formulating detailed contingency plans in the event
that its various systems and applications do not achieve year 2000 compliance in
a timely fashion. The contingency plans are focused on identifying potential
failure scenarios for the Company's IT systems and those of third parties with
which the Company interacts and on ensuring the continuation of critical


                                       15
<PAGE>   16

business operations. The Company currently expects that this contingency
planning will be completed by the end of 1998. During the first half of 1999,
the Company expects to integrate each of these contingency plans into a
Company-wide contingency plan.


If the Company's year 2000 issues were not completely resolved prior to the end
of 1999, the Company could be subject to a number of potential consequences,
including among others, an inability to timely and accurately process and
collect payments from customers and originate Contracts in a timely manner. The
Company is attempting to limit its exposure to year 2000 issues by closely
monitoring its own year 2000 remediation efforts, assessing the year 2000
compliance efforts of various third parties with which it interacts and
developing contingency plans addressing potential problems that could have a
material adverse effect on the Company's results of operations. Although the
Company intends to put into place programs and procedures designed to mitigate
the aforementioned risks, there can be no assurances that all potential problems
may be mitigated by these procedures.

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 for fiscal years beginning after June 15, 1998.

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
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

     Except for the historical information contained herein, the matters
discussed in this Quarterly Report are forward-looking statements which involve
risk and uncertainties, including but not limited to economic, competitive and
governmental factors affecting the Company's operations and other factors
discussed in the Company's periodic filings with the Securities and Exchange
Commission.


                                       16
<PAGE>   17

     Liquidity. The Company requires substantial cash to implement its business
strategy, including cash to: (i) acquire Contracts; (ii) pay dealer
participation; (iii) pay securitization costs ; (iv) settle hedge transactions;
(v) satisfy working capital requirements ; and (vi) pay interest expense. These
cash requirements increase as the Company's volume of purchases or originations
of Contracts increases. A substantial portion of the Company's revenues in any
period is represented by gain on sale of Contracts in such period but the cash
underlying such revenues is received over the life of the Contracts. In
addition, cash paid by the Company for dealer participation is not recovered at
the time of securitizations, but over the life of the Contract. The Company has
operated and expects to continue to operate on a negative cash flow basis as
long as the volume of Contract purchases continues to grow. The Company has
historically funded these negative operating cash flows principally through
borrowings from financial institutions, sales of equity securities and sales of
subordinated notes. No assurance can be given, however, that the Company will
have access to the capital markets in the future for equity or debt issuances or
for securitizations, or that financing through borrowings or other means will be
available on acceptable terms to satisfy the Company's cash requirements to
implement its business strategy.

     The Company's inability to access the capital markets or obtain acceptable
financing could have a material adverse effect on the Company's results of
operations and financial condition.

     Dependence on Warehouse and Residual Financing. The Company depends on
warehousing facilities with financial institutions to finance the purchase or
origination of Contracts pending securitization. The Company's wholly owned
special purpose subsidiary, Onyx Acceptance Financial Corporation ("OAFC"), is
party to a $325 million auto loan warehouse program (the "CP Facility") with
Triple-A One Funding Corporation ("Triple-A"). Triple-A is a commercial paper
asset-backed conduit lender sponsored by MBIA Insurance Corporation ("MBIA").
This facility provides funds to purchase Contracts and was increased during the
third quarter from $245 million to $325 million. The advance rate to OAFC is 98%
of adjusted eligible principal balance of each Contract. This loan term was
extended in the third quarter and will expire in September 2001.

     The Company, through another finance subsidiary, Onyx Acceptance Funding
Corporation ("Fundco") holds a $100 million line with Merrill Lynch Mortgage
Capital, Inc. ("MLMCI") (the "Merrill Line") which provides funding for the
purchase and origination of Contracts. The Merrill Line provides an advance rate
of approximately 95% of the principal balance of the Contracts that are used for
collateral. The interest rate is based on LIBOR and has a term of one year and
matures in February 1999.

     The Company has a $45 million residual facility with State Street Bank,
BankBoston, and The Travelers Insurance Company (the "Residual Facility") under
which the Company may (subject to borrowing base availability) borrow for
working capital purposes. Under the term of the Residual Facility, the available
borrowings are determined by a collateral based formula of a percentage of the
value of the excess cash flow to be received from certain securitizations and
trust receivables. The Residual Facility converts from revolving loans to
fully-amortizing two-year term loans in June 1999 or earlier upon the occurrence
of certain "credit triggers".

     Fundco has two $50 million residual facilities with MLMCI and SBRC
respectively, (the "Residual Lines "). The Residual Lines are used by the
Company to finance operating requirements. The amounts available for borrowing
under each line are determined using a collateral based formula of a percentage
of the value of excess cash flow to be received from certain securitizations,
and, with respect to the MLMCI facility, a percentage of the amount of the
Merrill Line outstanding on a quarterly basis. The interest rates are based on
LIBOR and the Residual Lines have a term of one year. The facility provided by
MLMCI matures in February 1999; the facility provided by SBRC matures in
September 1999.

     The Company's business strategy will require continued availability of
financing during the warehousing period. There can be no assurance that such
financing will be available to the Company on favorable terms. The inability of
the Company to arrange new warehousing credit facilities or to extend its
existing credit facilities when they expire would have a material adverse effect
on the Company's results of operations and financial condition.

     The continued availability of the CP Facility is subject to, among other
things, maintenance of a target net yield, and compliance by the Company with
certain financial covenants contained in the sale and servicing agreement
between the Company, as seller, and the Company's wholly owned special purpose
finance subsidiary, OAFC as purchaser of contracts held for sale. These
covenants include a minimum ratio of net worth to total assets, minimum net
yield, ratio of RISA plus trust receivables to tangible net worth, minimum cash
on hand and minimum earnings coverage. All covenants are tested quarterly except
for minimum net yield and net cash on hand, which are tested monthly.


                                       17
<PAGE>   18

     The continued availability of the Residual Facility is subject to, among
other things, substantially similar financial covenants 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, and is tested at quarter
end. Additionally, the Company is subject under the documentation governing the
Residual Facility, 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 continued availability of the Merrill Line and the Residual
Lines are subject to certain financial covenants, which are primarily dependent
upon the net worth of the Company.

     Dependence on Securitization Program. The Company relies significantly upon
securitizations to generate cash proceeds for repayment of its credit facilities
and to create availability to purchase additional Contracts. Further, gain on
sale of Contracts generated by the Company's securitizations represents 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. If the Company
were unable to profitably securitize a sufficient number of its Contracts in a
particular financial reporting period, then the Company's revenues for such
period would decline and could result in lower income or a loss for such period.
In addition, unanticipated delays in closing a securitization could also
increase the Company's interest rate risk by increasing the warehousing period
for its Contracts.

     Dependence on Credit Enhancement. Since inception, through September 30,
1998 each of the Company's securitizations has utilized credit enhancement in
the form of a financial guarantee insurance policy issued by MBIA, or a
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 the Company. MBIA is not
required to insure future securitizations nor is the Company restricted in its
ability to obtain credit enhancement from providers other than MBIA or to use
other forms of credit enhancement. There can be no assurance that the Company
will be able to obtain credit enhancement in any form from MBIA or any other
provider of credit enhancement on acceptable terms or that future
securitizations will be similarly rated. The Company also relies on MBIA's
financial guarantee insurance policy to reduce its borrowing cost under the
"A-1/P-1" rated CP Facility. A downgrading of MBIA's credit rating or MBIA's
withdrawal of credit enhancement could result in higher interest costs for
future Company securitizations and financing costs during the warehousing
period. Such events could have a material adverse effect on the Company's
results of operations and financial condition.

     Interest Rate Risk. The Company's profitability is largely determined by
the difference, or "spread," between the effective rate of interest received on
the Contracts acquired by the Company and the interest rates payable under its
credit facilities during the warehousing period or for securities issued in
securitizations. Several factors affect the Company's ability to manage interest
rate risk. First, the Contracts are purchased at fixed interest rates, while
amounts borrowed under the Company's credit facilities bear interest at variable
rates that are subject to frequent adjustment to reflect prevailing rates for
short-term borrowings. The Company's policy is to increase the buy rates it
posts with dealerships or to increase rates it uses to solicit to consumers for
Contracts in response to increases in its 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 its competitors may limit the Company's ability
to pass through its increased costs of warehousing financing. Second, the spread
can be adversely affected after a Contract is purchased and while it is held
during the warehousing period by increases in the prevailing rates in the
commercial paper markets. The CP Facility permits the Company to select
maturities of up to 270 days for commercial paper issued under the CP Facility.
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 by the Company have fixed
rates, the Company bears the risk of spreads narrowing because of interest-rate
increases during the period from the date the Contracts are purchased until the
closing of its securitization of such Contracts. The Company employs a hedging
strategy that is intended to minimize this risk which historically has involved
the execution of forward interest rate swaps or the use of a pre-funding
structure for its securitizations. There can be no assurance, however, that this
strategy will consistently or completely offset adverse interest-rate movements
during the warehousing period or that the Company will not sustain losses on
hedging transactions. The Company's hedging strategy requires estimates by
management of monthly Contract acquisition volume and timing of its
securitizations. If such estimates are materially inaccurate, then the Company's
gains on sales of Contracts and results of operations could be adversely
affected. In addition, 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 closed the Company has
some interest rate exposure to falling interest rates during the pre-funding
period. Such a rate decline would reduce the interest rate spread because the
interest rate on the 


                                       18
<PAGE>   19

securities would remain fixed. This, in time, would negatively impact the gains
on sale of Contracts and the Company's results of operations.

     Default and Prepayment Risk. The Company's results of operations, financial
condition and liquidity depend, to a material extent, on the performance of
Contracts purchased and warehoused by the Company. A portion of the Contracts
acquired by the Company may default or prepay during the warehousing period. The
Company bears 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. The Company maintains 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 the Company would recognize as an expense the losses in excess of such
allowance and results of operations could be adversely affected. In addition,
under the terms of the CP Facility, the Company will not be able to borrow
against defaulted Contracts.

     Prepayment or default of Contracts in the servicing portfolio can also
adversely affect the Company's servicing income. The Company's contractual
servicing revenue is based on a percentage of the outstanding balance of such
Contracts. Thus, if Contracts are prepaid or charged-off, then the Company's
servicing revenue will decline to the extent of such prepaid or charged-off
Contracts.

     The gain on sale of Contracts recognized by the Company in each
securitization and the value of the RISA in each transaction reflects
management's estimate of future credit losses and prepayments for the Contracts
included in that securitization. If actual rates of credit loss or prepayments,
or both, on such Contracts exceeded those estimated, the value of the RISA would
be impaired. The Company periodically reviews its credit loss and prepayment
assumptions relative to the performance of the securitized Contracts and to
market conditions. If necessary, the Company would adjust the value of the RISA
by making a charge to servicing fee income. However, the Company's results of
operations and liquidity could be adversely affected if credit loss or
prepayment levels on securitized Contracts substantially exceeded anticipated
levels. Further, any write down of RISA would reduce the amount available to the
Company under the Residual Facility or Residual Lines, possibly requiring the
Company to pay down amounts outstanding under the Residual Facility or Residual
Lines or provide additional collateral to cure a potential borrowing base
deficiency.

     Loss of Servicing Rights and Suspension of Future Servicing Cash Flows. The
Company is entitled to receive servicing income only while it acts as servicer
for Contracts during the warehousing period and under the servicing agreement
for securitized Contracts. Any loss of the servicing rights would have a
material adverse effect on the Company's operations and financial condition.

     The Company's right to act as servicer can be terminated by MBIA, as
program manager, on Contracts funded by the CP Facility, upon the occurrence of
certain servicer termination events (as defined in the sale and servicing
agreement). Servicer termination events include material misrepresentations or
material breaches of warranties or covenants by Onyx or OAFC, including the
financial covenants of Onyx contained in the sale and servicing agreement.

     The Company's loss of the servicing rights under the Company's sale and
servicing agreements, the sale and servicing agreements under the owner trusts
or the pooling and servicing under the grantor trusts, or the occurrence of a
trigger event that would block release of future servicing cash flows from the
trusts' spread accounts would have a material adverse effect on the Company's
results of operations and financial condition.

     Variable Quarterly Earnings. The Company's revenues and losses have
fluctuated in the past and are expected to fluctuate in the future principally
as a result of the timing and size of its securitizations. Several factors
affecting the Company's business can cause significant variations in its
quarterly results of operations. In particular, variations in the volume of the
Company's Contract acquisitions, the interest rate spreads between the Company's
cost of funds and the average interest rate of purchased Contracts, the
effectiveness of the Company's hedging strategies, the certificate rate for
securitizations, and the timing and size of securitizations, can result in
significant increases or decreases in the Company's revenues from quarter to
quarter. Any significant decrease in the Company's quarterly revenues could have
a material adverse effect on the Company's results of operations and its
financial condition.

     Dependence on Key Personnel. The Company's future operating results depend
in significant part upon the continued service of its key senior management
personnel, none of whom is bound by an employment agreement. The Company's
future operating results also depend in part upon its ability to attract and
retain qualified management, technical, and sales and support personnel for its
operations. Competition for such personnel is intense, and there can be no
assurance that the Company 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 


                                       19
<PAGE>   20

the Company's inability to attract and retain skilled employees, as needed,
could materially adversely affect the Company's results of operations and
financial condition. The Company presently maintains a key man life insurance
policy on John W. Hall in the amount of $3 million.

     Competition. Competition in the field of financing retail motor vehicles
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
the Company and may have a significantly lower cost of funds. 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 the Company. Furthermore, during the past two years, a number of
automobile finance companies have completed public offerings of common stock,
the proceeds from which are to be used, at least in part, to fund expansion and
finance increased purchases of Contracts. However, in 1996 and 1997, many of
these auto finance companies experienced significant liquidity and performance
challenges due to the intense competition. The Company's ability to compete
successfully depends largely upon its relationships with dealerships and the
willingness of dealerships to offer those Contracts that meet the Company's
underwriting criteria to the Company for purchase. There can be no assurance
that the Company will be able to continue to compete successfully in the markets
it serves.

     The Effect of Adverse Economic Conditions. The Company is a motor vehicle
consumer auto finance company whose activities are dependent upon the sale of
motor vehicles. The ability of the Company to continue to acquire Contracts in
the markets in which it operates 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 the Company, the results of its operations and its ability to
implement its business strategy.

     The automobile industry generally is sensitive to adverse economic
conditions both nationwide and in California. Periods of rising interest rates
reduce economic activity, and 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. There can be no assurance that such economic conditions
will not occur, or that such conditions will not result in such severe
reductions in the Company's revenues or cash flows available to the Company to
permit the Company to remain current on its credit facilities.

   Regulation. The Company's business is subject to numerous federal and state
consumer protection laws and regulations, which, among other things: (i) require
the Company to obtain and maintain certain licenses and qualifications; (ii)
limit the interest rates, fees and other charges the Company is allowed to
charge; (iii) limit or prescribe certain other terms of the Company's Contracts;
(iv) require specific disclosures; and (v) define the Company's rights to
repossess and sell collateral. The Company believes it is 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 the Company's ability to
operate its business. However, the Company's failure to comply with applicable
laws and regulations, changes in existing laws or regulations, or in the
interpretation thereof, or the promulgation of any additional laws or
regulations could have a material adverse effect on the Company's results of
operations and financial condition.


                                       20
<PAGE>   21

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

(a) Exhibits

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

      *3.5        Bylaws of the Company.

      10.106      Amended and Restated Sale and Servicing Agreement between Onyx
                  Acceptance Corporation and Onyx Acceptance Financial
                  Corporation dated as of September 4, 1998.

      10.107      Amended and Restated Triple-A One Funding Corporation Credit
                  Agreement between and among Onyx Acceptance Financial
                  Corporation, Triple-A One Funding Corporation, CapMAC
                  Financial Services, Inc. and Capital Markets Assurance
                  Corporation dated as of September 4, 1998.

      10.108      Amended and Restated Triple-A One Funding Corporation Security
                  Agreement between and among Onyx Acceptance Financial
                  Corporation, Triple-A One Funding Corporation and Capital
                  Markets Assurance Corporation dated as of September 4, 1998. 

      10.109      Amended and Restated Subordinated Security Agreement between
                  Onyx Acceptance Corporation and Onyx Acceptance Financial
                  Corporation dated as of September 4, 1998.

      10.110      Amended and Restated Insurance and Indemnity Agreement between
                  and among Onyx Acceptance Corporation, Capital Markets
                  Assurance Corporation, Onyx Acceptance Financial Corporation
                  and Triple-A One Funding Corporation dated as of September 4,
                  1998.

      10.111      Master Loan Agreement Between Onyx Acceptance Funding
                  Corporation and Salomon Brothers Realty Corp. Dated September
                  3, 1998

      21.1        Subsidiaries of the Registrant.

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

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

(b) Reports on Form 8-K

    None.


                                       21
<PAGE>   22

                                    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 13, 1998

                                          By: /s/  DON P. DUFFY
                                              ----------------------------------
                                              Don P. Duffy
                                              Executive Vice President and
                                              Principal Financial Officer
Date:    November 13, 1998


                                       22
<PAGE>   23

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT NO.                           DESCRIPTION                                         PAGE
----------                            -----------                                         ----
<S>            <C>                                                                        <C>
  10.106       Amended and Restated Sale and Servicing Agreement between Onyx
               Acceptance Corporation and Onyx Acceptance Financial Corporation
               dated as of September 4, 1998.

  10.107       Amended and Restated Triple-A One Funding Corporation Credit
               Agreement between and among Onyx Acceptance Financial
               Corporation, Triple-A One Funding Corporation, CapMAC Financial
               Services, Inc. and Capital Markets Assurance Corporation dated as
               of September 4, 1998.

  10.108       Amended and Restated Triple-A One Funding Corporation Security
               Agreement between and among Onyx Acceptance Financial
               Corporation, Triple-A One Funding Corporation and Capital Markets
               Assurance Corporation dated as of September 4, 1998.

  10.109       Amended and Restated Subordinated Security Agreement between Onyx
               Acceptance Corporation and Onyx Acceptance Financial Corporation
               dated as of September 4, 1998.

  10.110       Amended and Restated Insurance and Indemnity Agreement between
               and among Onyx Acceptance Corporation, Capital Markets Assurance
               Corporation, Onyx Acceptance Financial Corporation and Triple-A
               One Funding Corporation dated as of September 4, 1998.

  10.111       Master Loan Agreement Between Onyx Acceptance Funding Corporation
               and Salomon Brothers Realty Corp. Dated September 3, 1998

   21.1        Subsidiaries of the Registrant

   27.1        Financial Data Schedule
</TABLE>

  
                                     23