<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-Q/A

(Mark One)

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

                  For the quarterly period ended June 30, 1997

                                       OR

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

           For the transition period from ___________ to ____________

                         Commission file number 0-22067

                       NATIONAL AUTO FINANCE COMPANY, INC.
             (Exact name of registrant as specified in its charter)


          DELAWARE                                         65-0688619
-----------------------------------------              -------------------
(State or other jurisdiction of                        (IRS Employer
incorporation or organization)                         Identification No.)


      621 N.W. 53rd  Street, Suite 200,
           Boca Raton, Florida                                33487
-----------------------------------------              -------------------
(Address of principal executive offices)                    (Zip Code)

                                 (561) 997-2413
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

                                    No Change
              ----------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)


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 [ ]

There were 7,026,000 shares of common stock, $.01 par value outstanding as of
August 13, 1997.




                                       1
<PAGE>   2


                       NATIONAL AUTO FINANCE COMPANY, INC.

                               INDEX TO FORM 10-Q

<TABLE>
<CAPTION>

PART I.  FINANCIAL INFORMATION

     <S>                                                                                       <C>
     Item 1.  Financial Statements (unaudited)...............................................   4

              Consolidated Balance Sheets:
                  June 30, 1997 and December 31, 1996........................................   4

              Consolidated Statements of Operations:
                  Three and Six Months Ended June 30, 1997 and 1996..........................   5

              Consolidated Statement of Stockholders' Equity as of June 30, 1997.............   6

              Consolidated Statements of Cash Flows:
                  Six Months Ended June 30, 1997 and 1996....................................   7

              Notes to Consolidated Financial Statements.....................................   9

     Item 2.  Management's Discussion and Analysis of Financial Condition
                 and Results of Operations...................................................  14

PART II.  OTHER INFORMATION

     Item 4.  Submission of Matters to a Vote of Security Holders............................  23

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

     SIGNATURE    ...........................................................................  24

     EXHIBIT INDEX...........................................................................  25

              Exhibit 11.  Computation of Earnings Per Common Share..........................  26

              Exhibit 27.  Financial Data Schedule...........................................  27
</TABLE>

                                       2

<PAGE>   3


FORWARD-LOOKING STATEMENTS

When used in this Quarterly Report on Form 10-Q or future filings by the Company
(as defined below) with the Securities and Exchange Commission (the
"Commission"), in the Company's press releases or other public or stockholder
communications, or in oral statements made with the approval of an authorized
executive officer, the words or phrases "will likely result," "are expected to,"
"will continue," "is anticipated," "estimate," "project" or similar expressions
are intended to identify "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. The Company wishes to caution
readers not to place undue reliance on any such forward-looking statements,
which speak only as of the date made, and to advise readers that various
factors, including regional and national economic conditions, substantial
changes in levels of market interest rates, credit and other risks of lending
and investment activities and competitive and regulatory factors could affect
the Company's financial performance and could cause the Company's actual results
for future periods to differ materially from those anticipated or projected.

The Company does not undertake and specifically disclaims any obligation to
update any forward-looking statements to reflect the occurrence of anticipated
or unanticipated events or circumstances after the date of such statements.

                                       3
<PAGE>   4


Part I.

Item 1.  Financial Statements.

                       NATIONAL AUTO FINANCE COMPANY, INC.
                     Consolidated Balance Sheets (unaudited)
                       June 30, 1997 and December 31, 1996
                             (dollars in thousands)


<TABLE>
<CAPTION>
                                                                                    June 30,     December 31,
                                                                                    --------     ------------
                                                                                      1997           1996
                                                                                    --------     ------------  
<S>                                                                                 <C>              <C>
ASSETS:
Cash and cash equivalents                                                           $  2,847         $  5,066
Retained interest in securitizations                                                  31,353           23,404
Loans, net                                                                             4,228               --
Fixed assets, net                                                                      1,016              515
Deferred financing costs                                                               1,000            1,849
Other assets                                                                           1,992              367
                                                                                    --------         --------
     Total assets                                                                   $ 42,436         $ 31,201
                                                                                    ========         ========

LIABILITIES:
Accounts payable and accrued expenses                                               $  2,545         $  1,771
Due to National Auto Finance Corporation                                                  --              178
Deferred income taxes                                                                  5,084               --
Accrued interest payable--related parties                                                 39              144
Accrued interest payable--senior subordinated notes                                      200              339
Junior subordinated notes--related parties                                             2,012            7,218
Senior subordinated notes                                                             12,000           12,000
                                                                                    --------         --------
     Total liabilities                                                                21,880           21,650
                                                                                    --------         --------

Mandatorily redeemable preferred stock series A - $.01 par value, $1,000 stated
   value; 1,000,000 shares authorized; 2,295 shares outstanding; redeemable in
     January 2005, stated at redemption value                                          2,335               --

STOCKHOLDERS' EQUITY:
Common stock - $0.01 par value; 20,000,000
   shares authorized; 7,026,000 shares outstanding                                        70               --
Paid in capital                                                                       19,207               --
Accumulated deficit                                                                   (1,056)              --
Equity of predecessor entity                                                                            9,551
                                                                                    --------         --------
     Total stockholders' equity                                                       18,221            9,551
                                                                                    --------         --------

Total liabilities, mandatorily redeemable preferred
   stock and stockholders' equity                                                   $ 42,436         $ 31,201
                                                                                    ========         ========
</TABLE>


See accompanying notes to the consolidated financial statements.

                                       4
<PAGE>   5


                       NATIONAL AUTO FINANCE COMPANY, INC.
                Consolidated Statements of Operations (unaudited)
            For the Three and Six Months Ended June 30, 1997 and 1996
                  (dollars in thousands, except per share data)

<TABLE>
<CAPTION>
                                                    Three Months Ended            Six Months Ended
                                                         June 30,                      June 30,
                                                 ------------------------      ----------------------
                                                    1997            1996         1997           1996
                                                 --------         -------      -------        -------
<S>                                               <C>         <C>             <C>             <C>    
REVENUE:
Securitization related income                     $ 4,119         $ 2,856      $ 6,171        $ 5,253
Servicing income                                      838             187        1,375            328
Interest income                                       202               3          369              6
Other income                                           93              (2)         134             48
                                                  -------          -------     -------        -------
     Total revenue                                  5,252            3,044       8,049          5,635
                                                  -------          -------     -------        -------

EXPENSES:
Interest expense                                      345              154         760            304
Salaries and employee benefits                      1,671              841       2,995          1,502
Direct loan acquisition expenses                      865              371       1,566            710
Servicing expenses                                    763              258       1,375            480
Depreciation and amortization                         214               97         393            193
Other operating expenses                            1,069              457       1,822            778
                                                  -------          -------     -------        -------
     Total expenses                                 4,927            2,178       8,911          3,967
                                                  -------          -------     -------        -------

Income (loss) before income taxes                     325              866        (862)         1,668
Income taxes (benefit)                                125              327(1)     (332)           628(1)
                                                  -------          -------     -------        -------
Net income (loss) before taxes from
  reorganization of partnership                       200              539        (530)         1,040
Income taxes from reorganization of
  Partnership                                          --               --       5,416             --
                                                  -------          -------     -------        -------
     Net income (loss)                                200              539      (5,946)(2)      1,040
                                                  -------          -------     -------        -------

Less preferred stock dividends                         41               --          67             --
                                                  -------          -------     -------        -------

Net income (loss) available for common
  shareholders                                    $   159          $   539     $(6,013)       $ 1,040
                                                  =======          =======     =======        =======

Loss per share as adjusted                                                     $ (0.86)(2)
                                                                               =======

Loss per share                                    $  0.02                      $ (0.09)(3) 
                                                  =======                      =======

Pro forma earnings per share                                       $  0.13                    $  0.25
                                                                   =======                    =======

Weighted average shares and share equivalents       7,026                       6,976
                                                  =======                     =======

Pro forma shares outstanding                                         4,230                      4,230
                                                                   =======                    =======
</TABLE>

(1)  Pro forma income taxes for the three-month period ended June 30, 1996 and
     the six month period ended June 30, 1996, respectively, calculated as if
     the Company had operated as a "C" corporation.
(2)  Includes the effects of a one-time, non-cash charge for deferred income
     taxes arising from the reorganization of the Company from a partnership
     form to a taxable corporate form in connection with the Company's initial
     public offering in January 1997.
(3)  Excludes the effect of the charge noted in (2) above.


See accompanying notes to the consolidated financial statements.

                                       5
<PAGE>   6

                       NATIONAL AUTO FINANCE COMPANY, INC.
           Consolidated Statement of Stockholders' Equity (unaudited)
                     For the Six Months Ended June 30, 1997
                             (dollars in thousands)


<TABLE>
<CAPTION>
                                                                               Retained       Equity of
                                                     Common         Paid in    Earnings      Predecessor
                                                      Stock         Capital    (Deficit)       Entity         Total
                                                      -----         -------    ---------       ------         -----

<S>                                                  <C>             <C>       <C>           <C>              <C> 
Balance as of December 31, 1996                                                                 9,551         9,551
     Net income from January 1, 1997 through
       Reorganization on January 29, 1997                                                         526           526
     Assets retained by partnership                                                               (31)          (31)
                                                                                            ---------     ---------
     Balance as of January 29, 1997                                                            10,046        10,046

     Exchange of predecessor equity for stock
       in connection with Reorganization on
       January 29, 1997                                  42           7,709                   (10,046)(1)    (2,295)

     Issuance of 496,000 shares of common stock
       in exchange for deferred interest on Senior
       Subordinated Notes                                 5             164                                     169

     Deferred income taxes recorded in connection
       with Reorganization                                           (5,416)                                 (5,416)

     Issuance of 2,300,000 shares of common stock in
       initial public offering, net of costs             23          16,817                                  16,840

     Dividends on mandatorily redeemable
       preferred stock                                                  (67)                                    (67)

     Net loss subsequent to Reorganization                                        (1,056)                    (1,056)
                                                  ---------       ---------     --------     --------      --------

     Balance as of June 30, 1997                         70          19,207       (1,056)           0        18,221
                                                  =========       =========     ========     ========      ========
</TABLE>

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

(1)  $2,295 of such amount was attributed to mandatorily redeemable preferred
     stock.


See accompanying notes to the consolidated financial statements.

                                       6


<PAGE>   7


                       NATIONAL AUTO FINANCE COMPANY, INC.
                Consolidated Statements of Cash Flows (unaudited)
                 For the Six Months Ended June 30, 1997 and 1996
                             (dollars in thousands)


<TABLE>
<CAPTION>
                                                                                Six Months Ended
                                                                                   June 30,
                                                                             ----------------------
                                                                               1997          1996
                                                                             --------      --------   

<S>                                                                          <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income (loss)                                                       $ (5,946)     $  1,040
ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO NET CASH USED IN OPERATING
ACTIVITIES:
     Securitization related income                                             (6,171)       (5,253)
     Depreciation                                                                  90           192
     Provision for credit losses                                                  313            --
     Purchases of loans held for sale                                         (77,509)      (31,202)
     Proceeds from transfer of loans to master trust                           73,045        31,202
     Cash flows from retained interest released to Company                      4,941         1,753
     Cash deposits to spread accounts                                          (6,819)           --
     Amortization of deferred financing costs                                      74            75
     Amortization of deferred placement costs                                     163            57
CHANGES IN OTHER ASSETS AND LIABILITIES:
     Other assets                                                              (1,625)         (207)
     Accounts payable and accrued expenses                                        774           217
     Accrued interest payable--related parties                                   (105)          280
     Accrued interest payable--senior subordinated debt                          (139)           --
     Income taxes                                                               5,084           628
                                                                             --------      --------
         Net cash used in operating activities                                (13,830)       (1,218)

CASH FLOWS FROM INVESTING ACTIVITIES:
     Fixed assets purchased                                                      (593)          (36)
                                                                             --------      --------
         Net cash used in investing activities                                   (593)          (36)

CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from junior subordinated notes-related parties                       --           590
     Principal payments on junior subordinated
       notes-related parties                                                   (5,206)         (590)
     Payment of preferred stock dividends                                         (27)           --
     Proceeds from initial public offering                                     17,615            --
     Preferred equity partners' contribution                                       --           849
     Due to National Auto Finance Corporation                                    (178)           --
                                                                             --------      --------
         Net cash provided by financing activities                             12,204           849
                                                                             --------      --------

Net decrease in cash and cash equivalents                                      (2,219)         (405)

Cash and cash equivalents at beginning of period                                5,066           824
                                                                             --------      --------

Cash and cash equivalents at end of period                                   $  2,847      $    419
                                                                             ========      ========
</TABLE>

                                       7

<PAGE>   8



                       NATIONAL AUTO FINANCE COMPANY, INC.
                Consolidated Statements of Cash Flows (unaudited)
                 For the Six Months Ended June 30, 1997 and 1996
                             (dollars in thousands)

<TABLE>
<CAPTION>
                                                                                  Six Months Ended
                                                                                      June 30,
                                                                              --------------------------
                                                                               1997               1996
                                                                              --------           -------
<S>                                                                          <C>                 <C>
NON-CASH FINANCING ACTIVITIES:
   Offering costs deferred in 1996 transferred to paid-in-capital             $    775           $     0
     in 1997
   Accrued preferred stock dividends                                                41                 0
   Conversion of accrued interest on senior subordinated debt to
     Common Stock and paid-in-capital                                              169                 0
   Conversion of partners' capital to preferred stock                            2,295                 0
   Conversion of partnership capital to common stock
     and paid-in-capital                                                         7,225                 0
   Deferred income taxes from Reorganization included in net loss
     considered paid-in-capital                                                  5,416                 0
   Income earned in 1997 prior to Reorganization included in
     paid-in-capital                                                               526                 0
</TABLE>


See accompanying notes to the consolidated financial statements.

                                       8

<PAGE>   9


                       NATIONAL AUTO FINANCE COMPANY, INC.
                 Notes to the Consolidated Financial Statements
                                  June 30, 1997
                                   (unaudited)


(1)  BASIS OF PRESENTATION

     The financial statements presented herein, to the extent that they relate
     to periods (i) prior to January 29, 1997, are the consolidated financial
     statements of the National Auto Partnership and the ACCH Partnership, and
     (ii) after January 29, 1997 are the financial statements of National Auto
     Finance Company, Inc., and subsidiaries (the "Company").

     The accompanying unaudited interim financial statements have been prepared
     pursuant to the rules and regulations for reporting on Form 10-Q.
     Accordingly, certain information and footnotes required by generally
     accepted accounting principles for complete financial statements are not
     included herein. The interim statements should be read in conjunction with
     the financial statements and notes thereto included in the Company's latest
     Annual Report on Form 10-K (capitalized terms used herein and not defined
     shall have the meanings ascribed to them in such Form 10-K).

     Interim statements are subject to possible adjustments in connection with
     the annual audit of the Company's accounts for the full year 1997; in the
     Company's opinion, all adjustments necessary for a fair presentation of
     these interim statements have been included and are of a normal and
     recurring nature. The results for the interim periods are not necessarily
     indicative of results for a full year. Certain amounts in the 1996
     financial statements have been reclassified to conform with current
     financial statement presentation.

     In conjunction with the reorganization from a partnership form to a taxable
     corporate form, the Company adopted the provisions of Statement of
     Financial Accounting Standards No. 109, "Accounting for Income Taxes"
     ("SFAS No. 109"). Under the asset and liability method of SFAS No. 109,
     deferred tax assets and liabilities are recognized for the future tax
     consequences attributable to differences between the financial statement
     carrying amounts of existing assets and liabilities and their respective
     tax bases and operating loss and tax credit carryforwards. Deferred tax
     assets and liabilities are measured using enacted tax rates expected to
     apply to taxable income in the years in which those temporary differences
     are expected to be recovered or settled. The effect on deferred tax
     liabilities of a change in tax rates was recognized in income in the three
     month period ended March 31, 1997. The cumulative effect of this change in
     accounting for income taxes was a non-cash charge of $5.4 million recorded
     in the first quarter.

     In June 1996, the Financial Accounting Standards Board ("FASB") issued
     Statement of Financial Accounting Standards No. 125, "Accounting for
     Transfers and Servicing of Financial Assets and Extinguishments of
     Liabilities" ("SFAS No. 125"). This statement specifies when financial
     assets and liabilities are to be removed from an entity's financial
     statements, the accounting for servicing assets and liabilities, and the
     accounting for assets that can be contractually prepaid in such a way that
     the holder would not recover substantially all of its recorded investment.
     Under SFAS No. 125, an entity recognizes only assets it controls and
     liabilities it has incurred, discontinues recognition of assets only when
     control has been surrendered and discontinues recognition of liabilities
     only when they have been extinguished. SFAS No. 125 requires that the
     selling entity continue to carry retained interests relating to assets it
     no longer recognizes. Such retained interests are based on the relative
     fair values of the retained interests of the subject assets at the date of
     transfer. The Company refers to such retained interests as "Retained
     Interest in Securitizations", consisting of several components including
     the "excess spread receivable" ("Excess Spread Receivable" or the "ESR").
     Retained interests are recorded at fair value and periodically measured in
     the same manner as investments classified as available for sale or trading
     under Statement of Financial Accounting Standards No. 115. Effective
     January 1, 1997, the Company adopted SFAS No. 125.

     Loans that are purchased by the Company are sold on a daily basis in a
     two-step securitization program described below. Securitization related
     income or loss is recognized (1) upon transfer of Loans to the Master Trust
     based upon the amount of cash received upon transfer of such Loans
     generally equal to the Company's purchase price of the Loan and (2) an
     estimate of the Company's residual interest in the Master Trust (which
     constitute a portion of Retained Interest in Securitizations). The value of
     the Company's residual interest in the Master Trust is determined by
     estimating the fair value of amounts to be received from the Master Trust
     and the

                                       9
<PAGE>   10

     subsequent "Permanent Securitizations"

     The Retained Interest in Securitizations is classified as a trading
     security for financial reporting purposes with changes in fair value either
     credited or charged to the statement of operations.

     The Company is aware of a limited market for the purchase or sale of its
     Over-Collateralization Accounts (a portion of its Retained Interest in
     Securitizations), but is not aware of an active market for the purchase or
     sale of the other components of its Retained Interest in Securitizations
     (ESR's and Cash Spread Accounts) and accordingly, the Company has
     determined the estimated fair value of the Retained Interest in
     Securitizations at June 30, 1997 by the following process:

     1.  The Company has estimated the timing and amount of cash flows to be
         received from Loans transferred to each securitization trust based upon
         assumptions relating to estimate of defaults, loss severity,
         prepayments and normal principal and interest amortization "cash-in";

     2.  The Company has calculated the timing and amount of the total remaining
         principal and interest to be paid to the securitization investors given
         the assumptions noted above and the contractual requirements of each
         securitization;

     3.  The Company has estimated the total amount to be paid by each
         securitization trust for servicing, insurance and other costs and the
         timing of such payments;

     4.  The estimated cash payments described in (2) and (3) above have been
         subtracted from the estimated cash-in to determine the estimated Excess
         Spread Receivable (ESR) for each month.

     5.  The Company has estimated the required Cash Spread Account balance for
         each securitization trust for each period given the requirements of
         each trust and the impact of the assumptions noted above. The Company
         has then calculated the amount of Excess Spread Receivable to be added
         to the Cash Spread Account or the amount of Cash Spread Account to be
         released to the Company each month.

     6.  The estimated amount of cash available to the Company as described in
         (5), represents the Company's estimate of the "cash-out" of the
         securitization.

     7.  The fair value of cash-out over the remaining life of the
         securitization has been determined by discounting the estimated
         cash-out at a rate management believes an investor would require for a
         stream of cash flows with similar cash risk characteristics.

     8.  The Company has compared the fair value of the cash-out for each
         securitization trust to the Retained Interest in Securitizations for
         each securitization trust. Adjustments to fair value or impairments are
         charged to securitization related income (loss).

     In February  1997, the FASB issued Statement of Financial Accounting
     Standards  No. 128, "Earnings Per Share"("SFAS  No. 128").  SFAS No. 128
     is effective for financial  statements  issued for periods ending after
     December  15, 1997.  SFAS No. 128 establishes standards for computing and 
     presenting earnings per share ("EPS"), simplifies the standards previously
     found in Accounting Principles Board Opinion No. 15, "Earnings Per Share,"
     and makes them comparable to international EPS standards. The Company will
     begin disclosing EPS in accordance with SFAS No. 128 beginning with the
     year ended December 31, 1997.

     In June 1997, the FASB issued Statement of Financial Accounting Standards
     No. 130, "Reporting  Comprehensive Income" ("SFAS No. 130").  SFAS No. 130
     is effective for fiscal years beginning after December 15, 1997. SFAS 
     No. 130 establishes  standards for reporting and display of comprehensive
     income and its components in a full set of  general-purpose financial
     statements.  SFAS No. 130 requires that all items to be recognized under
     accounting  standards as components of comprehensive income be reported in
     a separate

                                       10

<PAGE>   11
     financial statement. Such statement will be presented by the Company
     beginning with the quarter ended March 31, 1998.

     In June 1997, the FASB issued Statement of Financial Accounting Standards
     No. 131, "Disclosure About Segments of an Enterprise and Related
     Information" ("SFAS No. 131"). SFAS No. 131 is effective for financial
     statements for periods beginning after December 15, 1997. SFAS No. 131
     establishes standards for the way that public business enterprises report
     information about operating segments, based upon how the enterprise defines
     such segments. The Company is required to report operating segment
     information, to the extent such segments are defined, beginning with the
     year ended December 31, 1998.

(2)  RETAINED INTEREST IN SECURITIZATIONS

     Retained Interest in Securitizations were as follows at June 30, 1997 and
     December 31, 1996:

<TABLE>
<CAPTION>
                                                            June 30,            December 31,
                                                              1997                 1996
                                                          -----------           ----------
                                                     (dollars in thousands)

<S>                                                       <C>                   <C>       
     Spread Accounts                                      $    11,333           $    8,221
     Excess Spread Receivable                                  20,020               15,183
                                                          -----------           ----------
                                                          $    31,353           $   23,404
                                                          ===========           ==========
</TABLE>

     Assumptions used to value the Retained Interests in Securitizations at June
     30, 1997 were as follows:
<TABLE>
<CAPTION>

<S>                                                                                    <C>  
     Weighted average cumulative net loss rate                                         9.00%
     Weighted average cumulative prepayment rate                                      20.64%
     Discount rate                                                                    11.00%
     Level of required Cash Spread Account                                     3.4% to 7.00%
     Rate of interest on Cash spread Account                                           5.50%
     Weighted average yield on Loans                                                  19.54%
</TABLE>

     In January 1995, the Company began using a revolving securitization
     facility pursuant to which the Company sells its Loans on a daily basis to
     a bankruptcy-remote special purpose subsidiary trust ("Funding Trust"),
     which in turn transfers such Loans to a bankruptcy-remote master trust (the
     "Master Trust"). The Company retains, through Funding Trust, certain
     residual interests in future excess cash flows from the Master Trust (the
     Excess Spread Receivable or ESR), in exchange for the transfer of Loans to
     the Master Trust.

     Periodically, the Master Trust refinances its Loans through the transfer of
     the Loans (and Company's retained interest or ESR) to separate permanent
     trusts. The payment of the principal and interest on those securities has
     been insured by a payment guaranty issued by Financial Security Assurance,
     Inc. ("FSA"). The proceeds of the transactions are used by the Master Trust
     to repay the financing of the Master Trust. The Master Trust then commences
     re-borrowing to finance its purchase of additional Loans from the Company
     through Funding Trust.

                                       11

<PAGE>   12


     During the six months ended June 30, 1997 and 1996, the following activity
     took place with respect to securitization:


<TABLE>
<CAPTION>
                                                                        June 30,
                                                                -------------------------
                                                                    1997           1996
                                                                -----------     ----------  
                                                                  (dollars in thousands)

<S>                                                             <C>              <C>
     Original customer principal balance of Loans sold,
       as of period end                                         $    75,005     $   32,953
                                                                ===========     ==========

     Securitization related income                              $     6,171     $    5,253
                                                                ===========     ==========

     Remaining principal balance of Loans sold since
       inception, as of period end                              $   127,094     $   53,534
                                                                ===========     ==========

     Weighted average coupon rate on Loans sold
       as of period end                                              19.54%         18.80%
                                                                ===========     ==========
</TABLE>

(3)  JUNIOR SUBORDINATED NOTES

     During 1994, 1995, and 1996, the Company received loans on a junior
     subordinated basis (the "Junior Subordinated Notes") from principal equity
     holders of National Auto Finance Company L.P., a Delaware limited
     partnership that was organized in October 1994 (the "National Auto
     Partnership") and certain affiliates. The Junior Subordinated Notes are
     payable on January 31, 2002, and accrue interest at 8% per annum. Interest
     expense recognized for this debt for the periods ending June 30, 1997 and
     1996 was $123,000 and $295,000, respectively.

(4)  SENIOR SUBORDINATED NOTES

     In August 1996, the Company completed a $12 million senior subordinated
     debt financing with J.P. Morgan Investment Management, Inc., acting on
     behalf of certain institutional investors (the "Morgan Group"), pursuant to
     which $12 million principal amount of senior subordinated notes (the
     "Senior Subordinated Notes"), were issued to the Morgan Group. The
     principal amount of the Senior Subordinated Notes is due in August 2001 and
     carries a 10% coupon payable quarterly. Prior to the consummation of the
     Company's public offering (the "Offering") of 2,300,000 shares of the
     Company's common stock, par value $.01 per share (the "Common Stock"),
     there was also an additional 3% deferred-interest coupon that accrued
     interest on a compounded basis and was payable in August 2006, but was
     converted into 470,000 shares of the Common Stock upon the consummation of
     the Offering. Through January 29, 1997, the date of the Offering, the
     Company accrued the additional 3% interest on the deferred-interest coupon,
     which amount totaled approximately $169,000 at January 29, 1997. On January
     29, 1997, upon the conversion of such coupon to equity, such amounts were
     accounted for as paid-in-capital of the Company. The Senior Subordinated
     Notes generally prohibit the payment of dividends on Common Stock following
     consummation of an initial public offering of Common Stock so long as any
     amount remains outstanding on such debt. Interest expense recognized for
     this debt for the period ended June 30, 1997 was $630,000.

(5)  STOCK OPTION PLAN

     In 1996, the Board of Directors of the Company adopted a share incentive
     plan (the "1996 Share Incentive Plan"). The 1996 Share Incentive Plan is
     intended to provide incentives which will attract, retain and motivate
     highly competent persons, each of whom will contribute to the success and
     future growth and profitability of the Company, as executive management,
     employees and directors of the Company and of any parent or subsidiary of
     the Company, by providing them the opportunity to acquire shares of Common
     Stock or to receive monetary payments based on the value of such shares
     pursuant to certain benefits contemplated by the 1996 Share

                                       12
 
<PAGE>   13

     Incentive Plan. Furthermore, the 1996 Share Incentive plan is intended to
     assist in aligning the interests of the Company's executive management, 
     employees and directors with those of its stockholders.

     The 1996 Share Incentive Plan provides for the granting of certain benefits
     in any one or a combination of (i) stock options, (ii) stock appreciation
     rights, (iii) stock awards, (iv) performance awards, and (v) stock units.
     The aggregate number of shares of Common Stock that may be subject to such
     benefits, including stock options, is 500,000 shares of Common Stock
     (subject to adjustment in the event of a merger, consolidation,
     reorganization, recapitalization, stock dividend, stock split, reverse
     stock split, split up, spin-off, combination of shares, exchange of shares,
     dividend in-kind or other like change in capital structure or
     distribution).

     Through the second quarter of 1997, stock options with respect to an
     aggregate of 275,000 shares of Common Stock have been granted to thirteen
     key employees and two directors at the fair market value at the date of
     grant. At June 30, 1997, exercise of such options was considered
     anti-dilutive to earnings per share, thus such options are excluded from
     the calculation of earnings per share. All employee stock options vest
     one-third immediately, one-third in 1998 and one-third in 1999, and
     director stock options vest in 1998. All stock options expire 10 years from
     the date of grant.

(6)  SUBSEQUENT EVENTS

     In July 1997, the National Auto Finance 1997-1 Trust (the "1997-1 Trust")
     was formed and the Master Trust refinanced approximately $73.5 million of
     its receivables in a public offering of asset-backed securities through
     their transfer by the Master Trust to the 1997-1 Trust, as part of a
     permanent securitization ("Permanent Securitization"). Payment of principal
     of, and interest on, the $66.9 million of the securities issued in that
     transaction is insured by payment guarantees issued by FSA, and such
     securities are rated AAA and Aaa by Standards & Poor's Rating Service and
     Moody's Investors Service, Inc., respectively. The proceeds of that
     Permanent Securitization transaction were used by the Master Trust to repay
     the then-outstanding balance of the variable funding (i.e., revolving)
     certificates bearing interest at floating rates ("Class B Certificates").
     Since such time, the Master Trust has issued additional Beneficial
     interests in Loans purchased by the Master Trust, as evidenced by the Class
     B Certificates, to finance its purchase of Loans from the Company. The
     Company expects additional Permanent Securitizations to be periodically
     consummated in the future in order to refinance amounts outstanding under
     such Class B Certificates.

                                       13
<PAGE>   14


                       NATIONAL AUTO FINANCE COMPANY, INC.
   Management's Discussion and Analysis of Financial Condition and Results of
                                   Operations
                                  June 30, 1997

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

The following management's discussion and analysis provides information
regarding the Company's financial condition as of June 30, 1997 compared to
December 31, 1996, and its results of operations for the three and six month
periods ended June 30, 1997 and 1996. This management's discussion and analysis
should be read in conjunction with (i) the Company's Financial Statements and
the related notes and (ii) the Company's Annual Report on Form 10-K with respect
to the fiscal year ended December 31, 1996. The ratios and percentages provided
below are calculated using detailed financial information contained in the
Company's Financial Statements, the notes thereto and the other financial data
included elsewhere in this report.

OVERVIEW

The Company is a specialized consumer finance company engaged in the purchase,
securitization and servicing of Loans originated by automobile dealers
("Dealers") for consumers with limited financial resources or past credit
problems ("Non-Prime Consumers"). The Company acquires Loans principally from
manufacturer-franchised Dealers in connection with their sale of new and used
automobiles. The Company also acquires seasoned portfolios of such Loans from
banks and other finance companies. Until the Company's Offering of Common Stock
on January 29, 1997, the Company operated as two limited partnerships. As such,
the income tax effects of all earnings or losses of the Company were passed
directly to the partners and no provision for income taxes was required.

The Company's plan of operation for the remainder of 1997 is to increase the
number of Loans that it purchases, securitizes and services by:


         1.   Utilizing its regional salespersons located in strategic
              geographic areas to market the Company's products and services
              directly to Dealers;

         2.   Continuing the implementation of the strategic referral and
              marketing alliance with First Union National Bank of North
              Carolina ("First Union") and certain of its national bank
              affiliates (the "First Union Strategic Alliance"), including the
              expansion throughout First Union's indirect auto finance division,
              which conducts business with Dealers in seven southeastern states
              and the District of Columbia, and five northeastern states (the
              "Northeastern Franchise");

         3.   Establishing strategic referral and marketing alliances with
              several smaller financial institutions and Dealer groups; and

         4.   Strategically purchasing portfolios of Non-Prime Consumer Loans
              from third party originators that meet the Company's strict
              underwriting criteria.

HISTORICAL DEVELOPMENT AND GROWTH

From the inception of the Company in October 1994 through January 16, 1995, the
primary source of revenue for the Company was net interest income on Loans
purchased by the Company. In January 1995, the Company began the securitized
warehousing of all of its Loans through daily sale (the "Revolving
Securitization") to the Master Trust. The Revolving Securitization was
implemented effective January 16, 1995. On that date, the Company sold to the
Master Trust 407 Loans (approximately $5 million in principal) that were
purchased by the Company from October 12, 1994 through January 16, 1995.
Thereafter, the Company commenced selling Loans purchased by it to the Master
Trust on a daily basis.

Periodically, the Master Trust refinances its Loans through the transfer of the
Loans to a separate permanent trust, which then securitizes the Loans (Permanent
Securitization). The Company retains a residual interest and a cash investment
in the Master Trust, and the various Permanent Securitizations, which are
reflected as retained interest in securitizations on the Company's balance
sheet. Since initiation of the Revolving Securitization, the Company's earnings
have been primarily attributable to the securitization income recognized on the
sale of Loans into the

                                       14
<PAGE>   15

                     NATIONAL AUTO FINANCE COMPANY, INC.
   Management's Discussion and Analysis of Financial Condition and Results of
                                   Operations
                                  June 30, 1997

Master Trust. For the six month period ended June 30, 1997, such securitization
related income accounted for approximately 77% of the Company's revenues.

COMPONENTS OF REVENUE AND EXPENSES

Revenues

In January, 1997, the Company adopted Statement of Financial Accounting
Standards (SFAS) NO. 125, "Accounting for Transfers and Servicing of Financial
Assets and Extinguishing of Liabilities' (SFAS No. 125) which the Company uses
to measure the fair value of its Retained Interest in Securitizations. The
Company derives revenues principally from the securitization related income it
records as a result of the SFAS No. 125 calculation.

The Company also receives monthly payments from the securitization trusts in
cash as a fee paid for the Company's servicing of Loans. Servicing income is
recognized as earned and typically offsets the direct expenses the Company
incurs in connection with the Servicing Portfolio. Finally, the Company also
earns interest income on its cash investments and from Loans it temporarily
holds for sale pending their securitization. Unlike many of its competitors, the
Company earns only a nominal amount of interest on Loans held for sale because
the Company securitizes substantially all of its Loans on a daily basis and,
therefore, generally recognizes a higher level of securitization related income
than such competitors.

Expenses

The Company's expenses consist of interest and operating expenses. Interest
expense is the interest incurred on notes to certain affiliates of the Company
and notes to certain institutional investors. Operating expenses consist
primarily of personnel, general and administrative and servicing expenses, in
addition to depreciation of capital expenditures for furniture and equipment
that is being recognized over five years on a straight-line basis.

RESULTS OF OPERATIONS

WHERE APPLICABLE, 1996 AMOUNTS USED FOR COMPARISON REFLECT PRO-FORMA INCOME
TAXES CALCULATED AS IF THE PREDECESSOR OF THE COMPANY HAD OPERATED AS A TAXABLE
ENTITY FOR THE COMPARABLE 1996 PERIOD.

THREE MONTH PERIOD ENDED JUNE 30, 1997, AS COMPARED TO THE THREE MONTH PERIOD
ENDED JUNE 30, 1996.

Income from Operations

The Company reported net income for the three month period ended June 30, 1997
of $159,000 compared to pro forma net income of $539,000 for the three month
period ended June 30, 1996.

Securitization Related Income

The Company's Loan purchasing and servicing activities expanded significantly
during the three month period ended June 30, 1997, as compared to the three
month period ended June 30, 1996. The Company purchased $31.2 million of
principal amount of Loans or 2,290 Loans from Dealers and $12.6 million of
principal amount of Loans from Dealers or 1,541 Loans were acquired through the
Company's Portfolio Acquisition Program ("PAC") during the three month period
ended June 30, 1997. Of these amounts, $39.2 million or 90% were subsequently
sold to the Master Trust. This compares to $18.0 million principal amount of
Loans purchased from Dealers or 1,453 Loans and $311,000 principal amount of
Loans or 33 Loans were acquired through PAC during the three month period ended
June 30, 1996, all of which were sold to the Master Trust.

For the three month periods ended June 30, 1997 and 1996 the Company recognized
securitization related income of $4.1 million and $2.9 million, respectively.
This increase was primarily the result of a 139% increase in the dollar volume
of Loans purchased for the three month period ended June 30, 1997, as compared
to the three month period ended June 30, 1996.

                                       15
<PAGE>   16

                     NATIONAL AUTO FINANCE COMPANY, INC.
   Management's Discussion and Analysis of Financial Condition and Results of
                                   Operations
                                  June 30, 1997

The table below sets forth certain information relating to the Company's Loan
purchasing activities, including the specific number and aggregate principal
amount of Loans purchased and the aggregate amount funded to Dealers:

<TABLE>
<CAPTION>
                                                                           Three Month Period Ended
                                                                                   June 30,
                                                                           --------------------------
                                                                              1997            1996   
                                                                           -----------    -----------
                                                                              (dollars in thousands)

<S>                                                                              <C>            <C>  
Number of Loans purchased from Dealers during period                             2,290          1,453
Number of Loans purchased as portfolios (PAC)                                    1,541             33
                                                                           -----------    -----------
     Total number of Loans purchased                                             3,831          1,486
                                                                           ===========    ===========

Principal balance of Loans from Dealers purchased during period            $    31,208    $    18,031
Principal balance of Loans in portfolios (PAC)                                  12,569            311
                                                                           -----------    -----------
     Total balance of Loans purchased                                      $    43,777    $    18,342
                                                                           ===========    ===========

Amount funded(1)                                                           $    42,600    $    17,332
                                                                           ===========    ===========
</TABLE>

----------------------------
(1)  Amount funded represents the price at which the Company purchases a Loan
     from a Dealer or other seller (i.e., the amount actually paid to a Dealer
     or other seller), calculated as the principal of the Loan purchased less a
     negotiated discount.

Other Income

The Company generated approximately $1.1 million of other income for the three
month period ended June 30, 1997, as compared to $188,000 for the three month
period ended June 30, 1996. The principal sources of the Company's other income
were $838,000 of servicing income and $295,000 of interest and miscellaneous
income for the three month period ended June 30, 1997, as compared to $187,000
and $1,000, respectively, for the three month period ended June 30, 1996.

Total  Expenses

The Company reported operating expenses of $4.9 million for the three month
period ended June 30, 1997, as compared to approximately $2.2 million for the
three month period ended June 30, 1996. These expenses consisted primarily of
subordinated note interest, personnel, loan acquisition, portfolio servicing and
other corporate operating expenses. Operating expenses, as a percentage of Loans
purchased, decreased from 11.9% as of June 30, 1996 to 11.3% as of June 30,
1997. Management currently expects that operating costs will rise throughout the
remainder of fiscal year 1997 as the result of anticipated growth in the number
of Loans purchased and serviced by the Company, and the hiring of additional
personnel in connection with the expansion of the First Union Strategic Alliance
to FUSF's Northeastern Franchise. In addition, operating costs will also
increase as the Company implements its own in-house servicing center in
Jacksonville, Florida. The Company has already hired 33 employees in its
in-house collections department (14 as of June 30, 1997), and expects to hire
more employees by the end of this year for both collections and servicing of
Loans. The Company intends to assume responsibility for collecting all of its
Loans by approximately October 1, 1997, and hopes to take over all servicing of
its Loans by the end of fiscal year 1997. To that end, the Company has leased
37,000 square feet of space in Jacksonville to house its servicing center, and
is temporarily leasing approximately 3,000 square feet of space until the
permanent space is ready for occupancy. Such increased operating expenses may
decrease the Company's operating margins and the Company's overall
profitability.

Salary and employee benefits for the three month period ended June 30, 1997 were
approximately $1.7 million, as compared to approximately $841,000 for the three
month period ended June 30, 1996. Personnel expenses consisted 

                                       16
<PAGE>   17

                     NATIONAL AUTO FINANCE COMPANY, INC.
   Management's Discussion and Analysis of Financial Condition and Results of
                                   Operations
                                  June 30, 1997

primarily of salaries and wages, performance incentives, employee benefits, and
payroll taxes. The Company's number of full-time employees increased from 57 as
of June 30, 1996, to 103 as of June 30, 1997.

Other operating expenses for the three month period ended June 30, 1997 were
approximately $1.1 million, as compared to approximately $457,000 for the three
month period ended June 30, 1996. These expenses consisted primarily of
telecommunications, travel, professional fees, insurance expenses, and
management information systems expenses.

Servicing expenses for the three month period ended June 30, 1997 were $763,000,
as compared to $258,000 for the three month period ended June 30, 1996.
Servicing expenses consist primarily of a monthly fee paid to an outside
servicer, Omni Financial Services of America ("World Omni"), for each active
Loan. Servicing fees paid to World Omni for the three month period ended June
30, 1997 were $638,000, as compared to $212,000 for the three month period ended
June 30, 1996. The increase in expenses primarily reflected the growth in the
amount of Loans purchased and serviced by the Company. The Company's total
serviced Loan portfolio as of June 30, 1997 was approximately $157.1 million, or
14,392 outstanding Loans, as compared to approximately $66.4 million, or 5,774
outstanding Loans as of June 30, 1996.

Interest expense for the three month period ended June 30, 1997 was $345,000, as
compared to $154,000 for the three month period ended June 30, 1996. This
increase is a result of the interest expense incurred with respect to the
Company's Senior Subordinated Notes and related Deferred Additional Interest
Notes. The Senior Subordinated Notes bear interest at a rate of 10% per annum.
The Company's Junior Subordinated Notes bear interest at a rate of 8% per annum.

SIX MONTH PERIOD ENDED JUNE 30, 1997, AS COMPARED TO THE SIX MONTH PERIOD ENDED
JUNE 30, 1996.

Income from Operations

The Company reported a net loss for the six month period ended June 30, 1997 of
$597,000, before a one-time non-cash deferred income tax charge to earnings of
$5.4 million, arising in the first quarter of 1997, which reflects a deferred
income tax liability arising from the reorganization of the Company's business
from a partnership form to a taxable corporate form in connection with the
Company's Offering in January 1997 compared to pro forma net income of $1.0
million for the six month period ended June 30, 1996.

Securitization Related Income

The Company's Loan purchasing and servicing operations expanded significantly
during the six month period ended June 30, 1997, as compared to the six month
period ended June 30, 1996. The Company purchased $59.2 million of principal
amount of Loans or 4,407 Loans from Dealers and $20.3 million principal amount
of Loans or 2,302 Loans were acquired through the Company's Portfolio
Acquisition Program during the six month period ended June 30, 1997. Of these
amounts, $75.0 million or 94% were subsequently sold to the Master Trust. This
compares to $32.6 million of principal amount of Loans or 2,638 Loans purchased
from Dealers and $311,000 principal amount of Loans or 33 Loans acquired through
PAC during the six month period ended June 30, 1996, all of which were sold to
the Master Trust.

For the six month periods ended June 30, 1997 and 1996 the Company recognized
securitization related income of $6.2 million and $5.3 million, respectively.
This increase was primarily the result of a 141% increase in the dollar volume
of Loans purchased for the six month period ended June 30, 1997, as compared to
the six month period ended June 30, 1996.

                                       17

<PAGE>   18
                     NATIONAL AUTO FINANCE COMPANY, INC.
   Management's Discussion and Analysis of Financial Condition and Results of
                                   Operations
                                  June 30, 1997




The table below set forth certain information relating to the Company's Loan 
purchasing activities, including the specific number and aggregate principal
amount of Loans purchased and the aggregate amount funded to Dealers:

<TABLE>
<CAPTION>
                                                                             Six Month Period Ended
                                                                                   June 30,
                                                                           --------------------------
                                                                              1997           1996
                                                                           -----------    -----------
                                                                            (dollars in thousands)

<S>                                                                              <C>            <C>  
Number of Loans purchased from Dealers during period                             4,407          2,638
Number of Loans purchased as portfolios (PAC)                                    2,302             33
                                                                           -----------    -----------
     Total number of Loans purchased                                             6,709          2,671
                                                                           ===========    ===========

Principal balance of Loans from Dealers purchased during period            $    59,217    $    32,642
Principal balance of Loans in portfolios (PAC)                                  20,332            311
                                                                           -----------    -----------
     Total balance of Loans purchased                                      $    79,549    $    32,953
                                                                           ===========    ===========

Amount funded(1)                                                           $    77,509    $    31,202
                                                                           ===========    ===========
</TABLE>

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

(1)  Amount funded represents the price at which the Company purchases a Loan
     from a Dealer or other seller (i.e., the amount actually paid to a Dealer
     or other seller), calculated as the principal of the Loan purchased less a
     negotiated discount.

Other Income

The Company generated approximately $1.9 million of other income for the six
month period ended June 30, 1997, as compare to $382,000 for the six month ended
June 30, 1996. The principal sources of the Company's other income were $1.4
million of servicing income and $503,000 of interest and miscellaneous income
for the six month period ended June 30, 1997, as compared to $328,000 and
$54,000, respectively, for the six month period ended June 30, 1996.

Total  Expenses

The Company reported operating expenses of $8.9 million for the six month period
ended June 30, 1997, as compared to $4.0 million for the six month period ended
June 30, 1996. These expenses consisted primarily of subordinated note interest,
personnel, Loan acquisition, portfolio servicing, and other corporate operating
expenses.

Salaries and benefits for the six month period ended June 30, 1997 were
approximately $3.0 million, as compared to approximately $1.5 million for the
six month period ended June 30, 1996.

Other operating expenses for the six month period ended June 30, 1997 were
approximately $1.8 million, as compared to approximately $778,000 for the six
month period ended June 30, 1996.

Servicing expenses for the six month period ended June 30, 1997 were $1.4
million as compared to $480,000 for the six month period ended June 30, 1996.
This represents a 0.34% increase in annualized servicing expenses as a
percentage of Loans serviced, from 1.44% as of June 30, 1996 to 1.75% as of June
30, 1997. Servicing fees paid to World Omni for the six month period ended June
30, 1997 were $1.1 million as compared to $395,000 for the six month period
ended June 30, 1996. The increase in expenses primarily reflected the growth in
the amount of Loans purchased and serviced by the Company.

                                       18

<PAGE>   19

                     NATIONAL AUTO FINANCE COMPANY, INC.
   Management's Discussion and Analysis of Financial Condition and Results of
                                   Operations
                                  June 30, 1997

Interest expense for the six month period ended June 30, 1997 was $760,000, as
compared to $304,000 for the six month period ended June 30, 1996. This increase
is a result of the interest expense incurred with respect to the Company's
Senior Subordinated Notes and related Deferred Additional Interest Notes.

FINANCIAL CONDITION

As of June 30, 1997, the Company had total assets of $42.4 million, as compared
to $31.2 million as of December 31, 1996. These assets consisted primarily of
cash, subordinated securities, investments and retained interests in
securitization trusts, and Loans held for sale, net of allowances for credit
losses.

As of June 30, 1997, the Company had cash and cash equivalents totaling
approximately $2.8 million. As of such date, the Company also had approximately
$3.0 million in cash balances held in restricted bank accounts, representing a
portion of the credit enhancement for the securitization trusts, which amount
was included in the total amount of the Company's investments and retained
interests in securitizations as of such date.

As of June 30, 1997, the Company retained approximately $20.0 million of Excess
Spread Receivables and approximately $11.3 million of Spread Accounts. These
assets represented 74% of the total assets of the Company as of such date. The
value of these assets would be reduced in the event of a material increase in
the Loan loss and prepayment experience relative to the amounts estimated by the
Company for such items at the time of the sale of the related Loans to the
Master Trust.

As of June 30, 1997, the principal amount owed by the Company on Junior
Subordinated Notes was approximately $2.0 million, which bear interest at an
annual rate of 8%.

LOAN LOSS AND DELINQUENCY EXPERIENCE

The Company regularly reviews the timing of losses and prepayments and the
adequacy of loss and prepayment reserves related to securitized Loans. The
reserve assumptions used for calculation of securitization related income are
set at levels considered to be sufficient to cover the cash flow impact to the
Company of expected future losses and prepayments on Loans. Changes in reserves
are based directly on the dollar value of the Loans transferred to the Master
Trust, historical loss and prepayment experience and, to a lesser extent,
current economic conditions and other factors that management deems relevant.
The Securitization Trusts' charge-off policy is based upon a Loan-by-Loan review
of delinquent accounts. A trust generally charges off a Loan at the time its
related collateral is liquidated, although certain Loans may be charged off
sooner if management determines them to be uncollectable.

The following table summarizes the Trusts' Loan losses and liquidation recovery
experience from the inception of the Company:

<TABLE>
<CAPTION>
                                                                             As of June 30,
                                                                       --------------------------
                                                                           1997           1996
                                                                       -----------    -----------
                                                                         (dollars in thousands)

<S>                                                                         <C>            <C>   
Aggregate number of Loans purchased                                         17,382         10,675
Aggregate principal balance of Loans purchased                         $   214,290    $   134,773
Principal balance of outstanding Loans                                 $   157,111    $   102,852
Number of outstanding Loans                                                 14,392          9,063

Gross charge-off principal balance (1)                                 $    14,946    $     7,760
Liquidation recoveries                                                      (7,583)        (4,232)
                                                                       ------------   ------------

Net charge-offs                                                        $     7,363    $     3,528
                                                                       ===========    ===========
Principal balance of Loans related to vehicles held in
     Inventory                                                         $     2,919    $     2,266
</TABLE>

                                       19
<PAGE>   20

                      NATIONAL AUTO FINANCE COMPANY, INC.
          Management's Discussion and Analysis of Financial Condition
                           and Results of Operations
                                  June 30, 1997

A Loan is considered to be delinquent if the borrower fails to make any payment
substantially in full by the due date as specified by the terms of the Loan. The
Company typically initiates contact with borrowers whose payments are not
received by the due date on the fifth day following the due date. The following
table summarizes the delinquency experience with respect to outstanding Loans
sold to the Master Trust:

<TABLE>
<CAPTION>
                                                                               As of June 30,
                                                                       --------------------------
                                                                           1997           1996
                                                                       -----------    -----------
                                                                          (dollars in thousands)

<S>                                                                    <C>            <C>        
Principal balance outstanding                                          $   157,111    $   102,852
Period of delinquency
     31 to 60 days                                                     $    10,232    $     6,104
     61 to 90 days                                                           3,191          1,596
     91 days or more, average                                                2,420            487
                                                                       -----------    -----------

Total delinquencies                                                    $    15,843    $     8,187
                                                                       ===========    ===========
Total delinquencies as a percentage of the current
     principal balance of outstanding Loans                                 10.08%          7.95%
                                                                       ===========    ===========
</TABLE>

Since October 1994, the Company has maintained, at its own expense, supplemental
vendor's single interest insurance that protects the Company's interest in Loan
collateral against uninsured physical damage (including total loss) and
instances where neither the vehicle nor the borrower can be found.

The Company monitors historical loss experience on an overall portfolio and on a
"static pool" basis. Loans sold to the Master Trust in each calendar month are
segregated into individual static pools. The Company considers a pool of Loans
to be "seasoned" when it has been aged for an average of 18 to 24 months. Actual
pool losses are then compared to the estimates for the net loss reserve for each
pool that were established at the pool's inception and adjustments for any
additional losses will be reflected in the current period earnings.

                                       20

<PAGE>   21

                      NATIONAL AUTO FINANCE COMPANY, INC.
          Management's Discussion and Analysis of Financial Condition
                           and Results of Operations
                                  June 30, 1997

The following tables summarize the vintage static pools of the Company's
Servicing Portfolio for all Loans purchased by the Company from inception
through the period ending March 31, 1997, and includes loss data through June
30, 1997:



<TABLE>
<CAPTION>
                                             4Q              1Q              2Q                3Q               4Q   
                                            1994            1995            1995              1995             1995  
                                            ----            ----            ----              ----             ----  
                                                                     (dollars in thousands)
<S>                                      <C>             <C>             <C>            <C>               <C>      
Number of Loans pur-
  chased during period         13,553         300            795              920            1,003              868


Number of outstanding
 Loans at end of
 period                        10,623         158            402              500              645              594


Principal balance of
 Loans purchased
 during period            170,546,706   3,819,645      9,704,263       11,237,718       13,674,781       11,378,599
                                              

Principal balance of
 Loans outstanding at
 end of period            114,572,705   1,266,230      3,016,157        4,046,276        6,272,519        5,978,476
</TABLE>                                                
      


<TABLE>
<CAPTION>
                                             1Q                2Q                3Q                4Q                 1Q
                                            1996              1996              1996              1996               1997 
                                            ----              ----              ----              ----               ---- 
                                                                        (dollars in thousands)
<S>                                       <C>               <C>              <C>                <C>              <C>
Number of Loans pur-
  chased during period                     1,185             1,486             1,866             2,252              2,878


Number of outstanding
 Loans at end of
 period                                      828             1,155             1,552             2,015              2,774


Principal balance of
 Loans purchased
 during period                        14,611,677        18,341,044        23,201,321        28,804,973         35,772,705
                              

Principal balance of
 Loans outstanding at
 end of period                         8,338,435        11,968,108        16,994,942        23,847,149         32,844,413
</TABLE>                                


<TABLE>
<CAPTION>
Cumulative
Net Loss %       4.32%     9.07%     9.15%      8.66%      7.10%      6.65%      5.80%      6.00%      3.65%      1.89%      0.23%

                            4Q        1Q         2Q         3Q         4Q         1Q         2Q         3Q         4Q         1Q

                           1994      1995       1995       1995       1995       1996       1996       1996       1996       1997
                           ----      ----       ----       ----       ----       ----       ----       ----       ----       ----


<S>                        <C>      <C>         <C>        <C>        <C>        <C>       <C>         <C>        <C>        <C>
 1                         0.00%     0.00%      0.00%      0.00%      0.00%      0.00%      0.00%      0.00%      0.00%      0.00%
 2                         0.00%     0.00%      0.00%      0.00%      0.00%      0.00%      0.00%      0.00%      0.00%      0.00%
 3                         0.00%     0.00%      0.00%      0.00%      0.05%      0.00%      0.00%      0.04%      0.00%      0.00%
 4                         0.00%     0.00%      0.00%      0.03%      0.17%      0.00%      0.00%      0.04%      0.01%      0.02%
 5                         0.00%     0.07%      0.10%      0.19%      0.21%      0.10%      0.10%      0.16%      0.00%      0.06%
 6                         0.05%     0.14%      0.27%      0.43%      0.70%      0.39%      0.32%      0.45%      0.25%      0.23%
 7                         0.05%     0.24%      0.67%      0.88%      0.96%      0.60%      0.64%      0.79%      0.61%
 8                         0.31%     0.86%      1.42%      1.24%      1.05%      0.80%      1.14%      1.06%      1.21%
 9                         0.47%     1.34%      1.98%      2.18%      1.57%      1.38%      1.73%      1.92%      1.89%
 10                        0.51%     1.70%      2.40%      2.35%      2.28%      1.81%      2.70%      2.59%
 11                        1.08%     1.73%      2.62%      2.70%      2.40%      2.00%      3.29%      3.36%
 12                        1.36%     2.52%      3.14%      3.11%      3.08%      2.43%      4.34%      3.65%
 13                        1.75%     3.04%      3.37%      3.60%      3.48%      3.35%      5.19%
 14                        1.72%     3.39%      3.71%      3.58%      3.69%      3.60%      5.58%
 15                        3.12%     3.90%      3.99%      4.13%      4.24%      4.42%      6.00%
 16                        3.21%     4.20%      4.27%      4.60%      4.58%      4.71%
 17                        3.80%     4.52%      4.49%      4.98%      5.36%      5.38%
 18                        4.45%     4.70%      5.01%      5.14%      5.52%      5.80%
 19                        4.55%     4.94%      5.35%      5.49%      6.09%
 20                        4.91%     5.18%      5.75%      4.89%      6.43%
 21                        4.91%     5.77%      6.13%      6.46%      6.65%
 22                        5.05%     5.75%      6.84%      6.76%
 23                        5.05%     6.24%      7.44%      7.02%
 24                        5.79%     6.34%      7.75%      7.10%
 25                        5.78%     7.01%      8.28%
 26                        6.20%     7.30%      8.52%
 27                        6.80%     7.65%      8.66%
 28                        7.15%     8.00%
 29                        7.49%     9.02%
 30                        8.06%     9.15%
 31                        8.23%
 32                        9.07%
</TABLE>

                                       21

<PAGE>   22

                      NATIONAL AUTO FINANCE COMPANY, INC.
          Management's Discussion and Analysis of Financial Condition
                           and Results of Operations
                                  June 30, 1997

LIQUIDITY AND CAPITAL RESOURCES

GENERAL

Since inception, the Company has funded its operations and the growth of its
Loan purchasing activities primarily through six principal sources of capital:
(i) cash flows from operating activities; (ii) proceeds from securitization
transactions; (iii) cash flows from servicing fees; (iv) proceeds from the
issuance of senior subordinated debt to institutional investors; (v) proceeds
from the issuance of junior subordinated debt to, and from the capital
contributions of, certain affiliates of the Company; and (vi) proceeds from the
Offering.

Net cash used in operating activities was $13.8 million during the six month
period ended June 30, 1997, compared to net cash used of $1.2 million during the
six month period ended June 30, 1996. Cash used for purchasing Loans was $77.5
million, an increase of $46.3 million, or 148%, over cash used for purchasing
Loans in the prior year's first six month period. Cash provided from the sale of
Loans to the Master Trust was $73.0 million, an increase of $41.8 million, or
134%, over cash provided from the sale of loans to the Master Trust in the prior
year's first six month period.

The Company's securitization financing activities are capital-intensive and will
require significant additional capital to fund the Company's required equity
commitment to the Revolving Securitization facility and related securitization
expenses as the Company's Loan purchasing activities grow in the future. The
Company has used the proceeds of the Offering, the Senior Subordinated Notes,
and the Junior Subordinated Notes to fund, among other things, the Company's
required equity commitment to the Revolving Securitizations.

The Company has experienced an acceleration in the use of its cash during the
second quarter of 1997 in excess of the cash requirements previously projected
by the Company. This acceleration is due, in large part, to six factors: (1) a
doubling of the Company's PAC volume for this fiscal year from the
originally-projected $20 million to the presently-projected $39.3 million; (2) a
greater than expected increase in the volume of Company-originated Loans; (3)
less than projected dealer discounts; (4) the implementation of the Company's
in-house servicing center and the costs associated with the corresponding
overlap of functions between that service center and World Omni's service
center; (5) an increase in the enhancement rate required as part of the 1997-1
Trust; and (6) a change in the dynamic credit support requirements of the
Company's securitization facilities has resulted in and may in the future result
in capital of the Company being maintained in the Spread Accounts of two of the
Permanent Securitizations. The net effect of these six factors is that the
Company will require in the fourth quarter of 1997 additional capital to fund
its operations. To that end, the Company is actively seeking to raise additional
capital in an amount sufficient to meet the Company's cash requirements and to
fund operations through the end of fiscal year 1998.

During the six month period ended June 30, 1997, cash used for initial deposits
to Spread Accounts was $6.8 million. Cash flows from retained interest released
to the Company for the six month period ended June 30, 1997 was $4.9 million, an
increase of $3.2 million, or 182%, over cash distributed from securitizations in
the prior year's period. Changes in the distributions from the various Spread
Accounts are impacted by the relative size and seasoning of the pools of sold
Loans that make up the Company's servicing portfolio.

The Company's management team possesses significant servicing, collections and
related management information systems expertise, which will assist the Company
in establishing its own internal servicing operation. As previously discussed,
the Company has begun the process of implementing an in-house servicing
operation. The Company has established a budget of $3.9 million for such
operation in 1997.

                                       22
<PAGE>   23

Part II - Other Information

Item 4.  Submission of Matters to a Vote of Security Holders

         (a)  On June 20, 1997, an annual meeting (the "Annual Meeting") of the
              Company's stockholders was held.

         (b)  At the Annual Meeting, Keith B. Stein and Peter Offermann were
              re-elected to the Company's Board of Directors. Further, Gary L.
              Shapiro, Roy E. Tipton and Morgan M. Schuessler continued to serve
              as members of the Company's Board of Directors. As previously
              reported on June 16, 1997, Edgar A. Otto resigned as a member of
              the Company's Board of Directors, and the Board of Directors, in
              accordance with the Company's by-laws, appointed Stephen Gurba to
              the Company's Board of Directors to fill the vacancy left by Mr.
              Otto's departure.

         (c)  The matters voted upon at the Annual Meeting included (1) the 
              election of Keith B. Stein and Peter Offermann to the Company's
              Board of Directors for terms of three years; and (2) a proposal to
              ratify the appointment of KPMG Peat Marwick LLP ("KPMG"), 
              independent public accountants, as the auditors for the Company
              for fiscal year 1997. A total of 6,845,544 shares were represented
              by proxy at the Annual Meeting, representing 97.4% of the 
              7,026,000 shares eligible to vote. 6,835,269 votes were cast in
              favor of electing both Keith B. Stein and Peter Offermann as 
              directors, 10,275 votes were withheld, and no votes were cast
              against them. Additionally, 6,831,944 votes were cast in favor of
              the ratification of KPMG as the Company's auditors, 9,400 votes
              were cast against, and 4,200 votes were abstained.

         (d ) Not applicable.

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

         (a)  Exhibits
<TABLE>
<CAPTION>

        <S>              <C>                                <C>   
         Number          Description                        Method of Filing
         ------          -----------                        ----------------
           11            Computation of Earnings            Filed with this document
                         Per Common Share
           27            Financial Data Schedule            Filed with this document
</TABLE>

         (b)  Reports on Form 8-K

              On April 29, 1997, the Company filed a Form 8-K announcing its
              earnings for the first quarter of 1997.

              On June 24, 1997, the Company filed a Form 8-K announcing that:

              1.      Morgan M. Schuessler was named a member of its Board of
                      Directors;

              2.      Jacksonville,  Florida was selected as the site for the
                      Company's loan servicing divisional headquarters; and

              3.      At the Company's Annual Meeting on June 20, 1997, (a)
                      Keith B. Stein and Peter Offermann were re-elected to the
                      Company's Board of Directors, (b) the Company accepted the
                      resignation of Edgar Otto as a member of its Board of
                      Directors, and (c) Stephen Gurba was unanimously appointed
                      to the Company's Board of Directors to fill the vacancy
                      left by Mr. Otto's resignation.

              No other reports on Form 8-K were filed in the second quarter of
              1997.

              On July 31, 1997, the Company filed a Form 8-K announcing its
              earnings for the second quarter of 1997.

                                       23

<PAGE>   24
                                   SIGNATURES


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


                                           NATIONAL AUTO FINANCE COMPANY, INC.

Date:  July 7, 1998                        /s/  KEITH B. STEIN
                                           -----------------------------------
                                           Keith B. Stein
                                           Chief Executive Officer


                                       24

<PAGE>   25


                                  EXHIBIT INDEX

<TABLE>
<CAPTION>

Exhibit
Number                     Description
-------                    -----------

<S>                       <C>
11                         Computation of Earnings Per Common Share

27                         Financial Data Schedule
</TABLE>


         





                                       25