UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549 FORM
10-Q (Mark One)x
  QUARTERLY REPORT PURSUANT
  TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.For quarterly period ended March 31, 2001ORo
  TRANSITION
  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For transition period from __________ to __________
  Commission File No. 0-12553PACCAR FINANCIAL CORP.(Exact name of
  Registrant as specified in its charter)Washington
  91-6029712(State or other
  jurisdiction of
  (I.R.S. Employer
  Identification No.)incorporation or
  organization)777 
  106th Avenue N.E., Bellevue, Washington
  98004(Address of Principal
  Executive Offices)
  (Zipcode)(425)
  468-7100Registrants telephone
  number, including area code: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 periods that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.
YesxNoo Indicate the number of shares outstanding
of each of the issuer's classes of common stock, as of the latest practicable
date: 145,000 shares at April 30, 2001. THE REGISTRANT IS A WHOLLY-OWNED
SUBSIDIARY OF PACCAR FINANCIAL SERVICES CORPORATION  AND MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS
(H)(1)(a) AND (b) OF FORM 10-Q AND IS, THEREFORE, FILING THIS FORM WITH THE
REDUCED DISCLOSURE FORMAT.   Item 1 Financial Statements

Form 10-QPACCAR Financial Corp.

BALANCE
SHEETS
(Millions of Dollars)

March 31,
  2001
  December 31,
  2000(Unaudited)ASSETSCash
  $6.6
  $12.6Finance and other receivables, net of
  allowance for losses of $65.4 ($65.4 in 2000)
  3,737.9
  3,955.5Loans to affiliate
  48.2
  53.3Equipment on operating leases, net of
  allowance for depreciation of $19.8 ($19.7 in 2000)
  52.1
  56.5Equipment held for sale
  24.3
  16.7Income taxes - current
  -
  6.5Other assets
  24.2
  24.8TOTAL
  ASSETS
  $3,893.3
  $4,125.9LIABILITIESAccounts payable and accrued expenses
  $98.8
  $80.0Payable for finance receivables acquired
  30.8
  34.6Advances from PACCAR Inc
  .4
  5.0Borrowings
  3,108.3
  3,311.8Income taxes - current and deferred
  153.7
  172.3TOTAL
  LIABILITIES
  3,392.0
  3,603.7STOCKHOLDER'S EQUITYPreferred stock, par value $100 per share
  6% noncumulative and nonvoting, 450,000 shares authorized, 310,000 shares
  issued and outstanding
  31.0
  31.0Common stock, par value $100 per share       200,000 shares authorized,
  145,000 shares issued and outstanding
  14.5
  14.5Paid-in capital
  87.8
  82.6Retained earnings
  397.3
  394.1Accumulated other comprehensive loss
  (29.3)
  -TOTAL
  STOCKHOLDER'S EQUITY
  501.3
  522.2TOTAL
  LIABILITIES AND STOCKHOLDER'S EQUITY
  $3,893.3
  $4,125.9See
accompanying notes.

Form
10-QPACCAR
Financial Corp.

STATEMENTS
OF INCOME AND RETAINED EARNINGS
(Millions of Dollars)

Three Months Ended March 31,2001
  2000*(Unaudited)INTEREST
  AND OTHER REVENUE
  $88.8
  $83.0Interest and other borrowing expense
  50.3
  45.1Depreciation related to operating leases
  2.8
  2.0Insurance claims and underwriting
  expenses
  2.0
  1.8Vehicle operating expense
  1.2
  1.4Selling, general and administrative
  expenses
  10.9
  11.2Provision for losses on receivables
  16.9
  6.7TOTAL
  EXPENSES
  84.1
  68.2INCOME
  BEFORE INCOME TAXES
  4.7
  14.8Federal and state income taxes
  1.9
  5.7NET
  INCOME BEFORE ACCOUNTING CHANGE
  2.8
  9.1Cumulative effect of accounting change
  (net of tax)
  .4
  -NET INCOME
  3.2
  9.1Retained earnings at beginning of period
  394.1
  361.1RETAINED
  EARNINGS AT END OF PERIOD
  $397.3
  $370.2





*The
three months ended March 31, 2000 Statement of Income and Retained Earnings has
been restated to reflect the business combination described in Note A.

Earnings
per share and dividends per share are not reported because PACCAR Financial
Corp. (the Company) is a wholly owned subsidiary of PACCAR Financial Services
Corporation.

See
accompanying notes.

Form
10-Q
PACCAR Financial Corp.

STATEMENTS
OF CASH FLOWS
(Millions of Dollars)

Three Months Ended
  March 31,2001
  2000*(Unaudited)OPERATING
  ACTIVITIES:Net income
  $3.2
  $9.1Items included in net income not
  affecting cash:Provision for losses on receivables
  16.9
  6.7Deferred tax provision
  (.7)
  .7Depreciation and amortization
  4.3
  3.3Decrease in payables and other
  (26.9)
  (20.2)NET
  CASH USED IN OPERATING ACTIVITIES
  (3.2)
  (.4)INVESTING
  ACTIVITIES:Finance and other receivables originated
  (234.8)
  (440.3)Collections on finance and other
  receivables
  317.0
  304.5Net decrease (increase) in wholesale
  receivables
  85.1
  (86.8)Acquisition of equipment
  (4.3)
  (7.6)Proceeds from disposal of equipment
  33.1
  6.9NET
  CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
  196.1
  (223.3)FINANCING
  ACTIVITIES:Net (decrease) increase in commercial
  paper and other short-term borrowings
  (13.1)
  146.5Proceeds from medium-term notes
  -
  195.0Payments on medium-term notes
  (189.5)
  (124.0)Net advances (to) from PACCAR Inc
  (1.5)
  3.9Capital contributions
  5.2
  6.2NET
  CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES
  (198.9)
  227.6NET
  (DECREASE) INCREASE IN CASH
  (6.0)
  3.9CASH
  AT BEGINNING OF PERIOD
  12.6
  6.5CASH
  AT END OF PERIOD
  $6.6
  $10.4*The
three months ended March 31, 2000 Statement of Cash Flow has been restated to
reflect the business combination described in Note A.

See
accompanying notes.

Form 10-Q
PACCAR Financial Corp.

NOTES TO FINANCIAL STATEMENTS(Millions of Dollars)

NOTE ABASIS OF PRESENTATION

The accompanying unaudited financial
statements have been prepared in accordance with the instructions to Form 10-Q
and Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. However, in the opinion of management, all
adjustments considered necessary for a fair presentation have been included.
For further information, refer to the financial statements and footnotes
included in PACCAR Financial Corp.'s (the "Company") Annual Report on
Form 10-K for the year ended December 31, 2000.

Effective May 1, 2000, PACCAR Inc
(PACCAR) transferred the stock of the Company to PACCAR Financial Services
Corporation (PFSC), a wholly owned subsidiary of PACCAR. In addition,
effective May 1, 2000, PACCAR Leasing Corporation, another wholly owned
subsidiary of PACCAR, was merged into the Company. The financial statements of
prior years have been restated to reflect the combination for all periods
presented.

Operating results for the three months
ended March 31, 2001, are not necessarily indicative of the results that may be
expected for the year ending December 31, 2001.

Certain prior year amounts have been
reclassified to conform to the 2001 presentation.

NOTE BACCOUNTING CHANGE

On January 1, 2001, the Company adopted
Statement of Financial Accounting Standard (SFAS) No. 133, Accounting for
Derivative Instruments and Hedging Activities. SFAS 133 establishes accounting
and reporting standards for derivative instruments, hedging activities and
related exposures. SFAS 133 requires that all derivatives be recognized as
either assets or liabilities at fair value. The Company does not enter into
derivative contracts for trading purposes. Derivatives are used only to hedge
the volatility arising from movements in interest and foreign currency rates.
If the derivative is designated as a fair value hedge, the changes in the fair
value of the hedge and of the hedged item are recognized and offset each other
in earnings. If the derivative is designated as a cash flow hedge, the
effective portions of changes in the fair value of the derivative are recorded
in Other Comprehensive Income (OCI) net of deferred taxes, and are recognized
in the income statement when the hedged item affects earnings. Ineffective
portions of changes in the fair value of cash flow hedges are recognized in
earnings of the period. A derivative formerly designated as a cash flow hedge
may lose hedge accounting treatment because it is terminated, is no longer
considered highly effective, or because a forecasted transaction is no longer
expected to occur. If any of these events should occur, the cumulative balance
of the change in fair value recorded in OCI is recognized immediately in
current earnings, and any further changes in fair value are recognized in
earnings of the period. In the cash flow statement, amounts related to
derivative activity are recognized in the period an actual cash flow occurs and
are classified as operating cash flows.

The adoption of SFAS 133 on January 1,
2001 resulted in a cumulative after tax increase to net income of $.4, net of
related income tax effects of $.3, and a cumulative after tax reduction to OCI
income of $14.6, net of related income tax effects of $9.2. If interest and
exchange rates remained constant, approximately $5.0 of the amount in OCI at
January 1, 2001 would be reclassified into earnings during the year ended
December 31, 2001. Hedge ineffectiveness for the three months ended March 31,
2001 was immaterial and no fair value hedges or cash flow hedges were
derecognized or terminated during the period. In the first three months of
2001,  $.4 of unrealized net gains were
realized and reclassified from OCI. Net gains from interest contracts were
recognized as a reduction in interest expense. The fair value of interest rate
contracts is recorded as Other assets or Accounts payable and accrued
expenses on the accompanying balance sheet.

NOTE COTHER COMPREHENSIVE INCOME

The components of other comprehensive
income, net of related tax, are as follows:

Three
  Months Ended March 31,2001
  2000(Unaudited)Net income
  $3.2
  $9.1Other comprehensive
  loss:Cumulative effect of accounting change
  for derivative contracts
  (14.6)
  -Unrealized net loss on derivative
  contracts
  (14.7)
  -Net other
  comprehensive loss
  (29.3)
  -Total comprehensive
  (loss) income
  ($26.1)
  $9.1NOTE
DTRANSACTIONS WITH PACCAR INC AND AFFILIATES

The Company and PACCAR are parties to a
Support Agreement which obligates PACCAR to provide, when required, financial
assistance to the Company to assure that the Company maintains a ratio of net
earnings available for fixed charges to fixed charges (as defined) of at least
1.25 to 1 at the end of any fiscal year. The Company did not meet the required
ratio in the first quarter of 2001. The Company will determine the amount of
any necessary PACCAR assistance at the end of the year. The required ratio for
the first quarter of 2000 was met without any assistance.

PFSC charges the Company for certain
administrative services it provides and certain services the Company receives
indirectly from PACCAR. These costs are charged to the Company based upon the
Company's specific use of the services at PFSCs and PACCARs cost. Management
considers these charges reasonable and not significantly different from the
costs that would be incurred if the Company were on a stand-alone basis. In
lieu of current year payment, PFSC recognizes certain of these administrative services
as an additional investment in the Company. The Company records the investment
as paid-in capital. The Company may elect to pay a dividend to PFSC for the
paid-in capital invested in prior years. No cash dividends were declared or
paid to PFSC during the first three months of 2001 or 2000.

Periodically, the Company borrows funds
from PACCAR and makes loans to PACCAR. Loans outstanding to PACCAR were $12.5
at March 31, 2001 and $9.6 at December 31, 2000. These loans are included in
Finance and other receivables on the accompanying balance sheet.  Loans outstanding from PACCAR were $.5 at
March 31, 2001 and $.6 at December 31, 2000. 
These loans are included in "Accounts payable and accrued
expenses" on the accompanying balance sheet.

PACCAR has issued letters of credit in
the amount of $4.9 on behalf of the Company to guarantee funds for payment to
insured franchisees and their customers for any future insurance losses.

The Company periodically loans funds to
certain foreign finance and leasing affiliates of PACCAR. These various
affiliates have Support Agreements with PACCAR, similar to the Companys
Support Agreement.

The foreign affiliates operate in the
United Kingdom, Netherlands, Canada and Australia, and any resulting currency
exposure is fully hedged. The foreign affiliates provide financing and leasing
of trucks and related equipment manufactured primarily by PACCAR and sold
through PACCARs independent dealer networks in the United Kingdom,
Netherlands, Canada and Australia. The Company will not make loans to the
foreign affiliates in excess of the equivalent of $200 United States dollars,
unless the amount in excess of such limits is guaranteed by PACCAR. The Company
periodically reviews the funding alternatives for these affiliates, and these
limits may be revised in the future. There was a total of $48.2 and $53.3 in
loans outstanding to a foreign affiliate operating in the United Kingdom at
March 31, 2001 and December 31, 2000, respectively, and no loans outstanding to
other foreign affiliates for either period.

NOTE
EPREFERRED STOCK

The Company's Articles of Incorporation
provide that the 6% noncumulative, nonvoting preferred stock (100% owned by
PFSC) is redeemable only at the option of the Company's Board of Directors.

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

Results of Operations

The Companys net income of $3.2 for the
first quarter of 2001 was 65% lower than its net income for the first quarter
of 2000. Interest and other revenue increased 7% to $88.8 in the first three
months of 2001 compared to the first three months of 2000 due to portfolio
growth and higher average interest rates. Selling, general and administrative
expenses of $10.9 decreased 3% from the first quarter of 2000 due to cost
control efforts. The increase in interest and other revenue and the decrease in
selling, general and administrative expenses were offset by higher interest
expenses and a higher provision for losses.

The provision for losses increased 153%
to $16.9 in the first quarter of 2001 from $6.7 in the first quarter of 2000
primarily due to credit losses. Credit losses increased to $16.9 in the first
quarter of 2001 from $3.1 in the first quarter of 2000.

The following table summarizes the
activity in the Company's allowance for losses on receivables and presents
related ratios:

Allowance for Losses
(Unaudited)Three Months Ended
  March 31,
  Year Ended December
  31, 20002001
  2000Balance
  at beginning of period
  $65.4
  $60.7
  $60.7Provision
  for losses
  16.9
  6.7
  36.4Net
  losses
  (16.9)
  (3.1)
  (31.7)Balance
  at end of period
  $65.4
  $64.3
  $65.4Ratios:Net losses to average
  net receivables and equipment on operating leases (annualized for March 31,
  2001 and 2000)
  1.76%
  .32%
  .80%Allowance for losses
  to period-end net contracts and equipment on operating leases
  1.72%
  1.67%
  1.63%Period-end retail
  contracts and leases past due (over 60 days) to year-end retail contracts and
  lease receivables
  3.71%
  1.29%
  3.35%For the three months ended March 31,
2001, net losses as a percent of average net receivables and equipment on
leases increased to 1.76% from .32% for the comparable period ended March 31,
2000. Receivables past due more than 60 days increased for the three months
ended March 31, 2001 to 3.71% from 3.35% and 1.29% at December 31, 2000 and
March 31, 2000, respectively. The Company continues to experience significantly
higher levels of past dues and repossessions due to higher fuel costs, lower
freight tonnage and a slowing economy that have reduced operating margins for
many truck operators. The increase in the number of repossessions and a higher
loss per repossession, due to declining used truck prices, are the primary
factors resulting in the increased credit losses. Management expects these
trends to continue or worsen, which could result in higher credit losses, until
economic conditions improve for truck operators. The level of the allowance for
losses reflects the risks inherent in the financing of commercial highway
transportation equipment.

Liquidity
and Capital Resources

For the three months
ended March 31, 2001, the Company continued to obtain funds primarily from
borrowings in the capital markets and collections on loans and leases and to a
lesser extent equity investments. The decrease in borrowings from the December
31, 2000 balance to $3.1 billion on March 31, 2001 is due to lower new lending
volume and a decrease in wholesale receivables.New
lending volume decreased 47% to $239 in the first quarter of 2001 from $448 in
the first quarter of 2000 due to lower PACCAR truck sales.

Since 1983, the
Company has registered senior debt securities under the Securities Act of 1933
for offering to the public. At March 31, 2001, there were $1.9 billion of such
securities available for issuance.

PART
IIOTHER INFORMATIONOther information on liquidity and sources of capital
  as presented in the Company's 2000 Annual Report on Form 10-K continues to be
  relevant.Item 3
  Quantitative and Qualitative Disclosures about Market
  RiskThere have been no material changes in the Companys
  market risk during the three months ended March 31, 2001.  For additional information, refer to Item
  7a of the Companys December 31, 2000 Annual Report on Form 10-K.Item 6
  Exhibits and Reports on Form 8-K(a)
  Exhibits filed as part of this report are listed in the
  accompanying Exhibit Index.(b)
  There were no reports on Form 8-K for the quarter ended
  March 31, 2001.SIGNATURESPursuant 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.

PACCAR
  Financial Corp.
  (Registrant)Date:  May 11, 2001
  BY:
  /s/ 
  Andrew J. WoldAndrew
  J. WoldPresident(Authorized
  Officer)BY:
  /s/ Barry E. PratherBarry
  E. PratherController(Chief
  Accounting Officer)



EXHIBIT
INDEX2
  Plan
  of Merger of PACCAR Leasing Corporation, a Delaware Corporation, and PACCAR
  Financial Corp., a Washington Corporation effective May 1, 2000 (incorporated
  by reference to Exhibit 2 to the Company's Quarterly Report on Form 10-Q
  dated August 11, 2000, File Number 0-12553).3.1
  Restated
  Articles of Incorporation of the Company, as amended (incorporated by
  reference to Exhibit 3.1 to the Company's Annual Report on Form 10-K dated
  March 26, 1985. Amendment incorporated by reference to Exhibit 19.1 to the
  Company's Quarterly Report on Form 10-Q dated August 13, 1985, File Number
  0-12553).3.2
  By-Laws
  of the Company, as amended (incorporated by reference to Exhibit 3.2 to the
  Company's Registration Statement on Form 10-Q dated October 20, 1983, File
  Number 0-12553).4.1
  Indenture
  for Senior Debt Securities dated as of December 1, 1983 and first
  Supplemental Indenture dated as of June 19, 1989 between the Company and
  Citibank, N.A. (incorporated by reference to Exhibit 4.1 to the Company's
  Annual Report on Form 10-K dated March 26, 1984, File Number 0-12553 and
  Exhibit 4.2 to the Company's Registration Statement on Form S-3 dated June 23,
  1989, Registration Number 33-29434).4.3
  Forms
  of Medium-Term Note, Series H (incorporated by reference to Exhibits 4.3A and
  4.3B to the Company's Registration Statement on Form S-3 dated March 11,
  1996, Registration Number 333-01623).Form
  of Letter of Representation among the Company, Citibank, N.A. and The
  Depository Trust Company, Series H (incorporated by reference to Exhibit 4.4
  to the Company's Registration Statement on Form S-3 dated March 11, 1996,
  Registration Number 333-01623).4.4
  Forms
  of Medium-Term Note, Series I (incorporated by reference to Exhibits 4.2A and
  4.2B to the Company's Registration Statement on Form S-3 dated September 10,
  1998, Registration Number 333-63153).Form
  of Letter of Representation among the Company, Citibank, N.A. and The
  Depository Trust Company, Series I (incorporated by reference to Exhibit 4.3
  to the Company's Registration Statement on Form S-3 dated September 10, 1998,
  Registration Number 333-63153).4.5
  Forms
  of Medium-Term Note, Series J (incorporated by reference to Exhibits 4.2A and
  4.2B to the Company's Registration Statement on Form S-3 dated March 2, 2000,
  Registration Number 333-31502).Form
  of Letter of Representation among the Company, Citibank, N.A. and The
  Depository Trust Company, Series J (incorporated by reference to Exhibit 4.3
  to the Company's Registration Statement on Form S-3 dated March 2, 2000,
  Registration Number 333-31502).10.1
  Support
  Agreement between the Company and PACCAR dated as of June 19, 1989  (incorporated by reference to Exhibit 28.1
  to the Company's Registration Statement on Form S-3 dated June 23, 1989,
  Registration Number 33-29434).

12.1
  Statement
  re computation of ratio of earnings to fixed charges of the Company pursuant
  to SEC reporting requirements for the three-month periods ended March 31,
  2001 and 2000.12.2
  Statement
  re computation of ratio of earnings to fixed charges of the Company pursuant
  to the Support Agreement between the Company and PACCAR for the three-month
  periods ended March 31, 2001 and 2000.12.3
  Statement
  re computation of ratio of earnings to fixed charges of PACCAR and
  subsidiaries pursuant to SEC reporting requirements for the three-month
  periods ended March 31, 2001 and 2000.Other
  exhibits listed in Item 601 of Regulation S-K are not applicable.