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                                    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, 1997

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

          For transition period from _______________ to _______________

                             Commission File No. 0-12553

                                PACCAR FINANCIAL CORP. 
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               (Exact name of Registrant as specified in its charter) 


               Washington                         91-6029712
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     (State or other jurisdiction of    (I.R.S. Employer Identiciation No.)
     incorporation or organization)


777 - 106th Avenue N.E., Bellevue, Washington                  98004
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  (Address of principal executive offices)                   (Zip Code)


Registrant's telephone number, including area code:            (206) 462-4100
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--------------------------------------------------------------------------------
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.  

                                   Yes  X   No
                                       -----   -----

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, 
1997.

THE REGISTRANT IS A WHOLLY-OWNED SUBSIDIARY OF PACCAR INC AND MEETS THE 
CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS (I)(1)(a) AND (b) OF FORM 10-Q 
AND IS, THEREFORE, FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT. 

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Item 1 FINANCIAL STATEMENTS
   
                                PACCAR Financial Corp.

                      STATEMENTS OF INCOME AND RETAINED EARNINGS
                                (Thousands of Dollars)
                                                            Three Months Ended
                                                                 March 31
                                                            1997        1996
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                                                               (Unaudited)


Interest and other income                                 $44,402      $43,783
Rentals on operating leases                                 2,520        3,080
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TOTAL FINANCE INCOME                                       46,922       46,863

Interest expense                                           24,608       24,675
Other borrowing expense                                       447          475
Depreciation expense related 
  to operating leases                                       2,006        2,474
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TOTAL FINANCE EXPENSES                                     27,061       27,624

FINANCE MARGIN                                             19,861       19,239

Insurance premiums earned                                   1,395        1,332
Insurance claims and underwriting expenses                  1,034          950
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INSURANCE MARGIN                                              361          382

Selling, general & 
  administrative expenses                                   5,994        6,094
Provision for losses on receivables                         1,484          375
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INCOME BEFORE INCOME TAXES                                 12,744       13,152
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 Federal and state income taxes                             4,962        5,117
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NET INCOME                                                  7,782        8,035
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 Retained earnings at beginning of period                 257,941      229,015
 Cash dividends paid                                       (2,654)      (2,933)
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RETAINED EARNINGS AT END OF PERIOD                       $263,069     $234,117
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Earnings per share and dividends per share are not reported because the 
Company is a wholly-owned subsidiary of PACCAR Inc.
   
   
See notes to financial statements.


                                         -2-

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                                PACCAR Financial Corp.
   
                                    BALANCE SHEETS
                                (Thousands of Dollars)
   
   
                                                         March 31    December 31
                                                           1997         1996*   
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                                                       (Unaudited)
ASSETS
  Cash                                                    $10,582      $13,154
   
  Net finance and other receivables                     2,090,061    2,095,961
  Allowance for losses                                    (35,970)     (36,000)
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                                                        2,054,091    2,059,961
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  Equipment on operating leases, net of
    allowance for depreciation of $18,056
    (1996--$18,628)                                        30,807       35,016
  Other assets                                             14,993       12,481
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TOTAL ASSETS                                           $2,110,473   $2,120,612
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LIABILITIES
  Accounts payable and accrued expenses                   $32,839      $56,092
  Payable for finance receivables acquired                  6,857       27,734
  Commercial paper and other short term borrowings        721,946      699,616
  Medium-term notes                                       963,000      964,000
  Income taxes - current and deferred                      65,536       60,117
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TOTAL LIABILITIES                                       1,790,178    1,807,559
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STOCKHOLDER'S EQUITY
 Preferred stock, par value $100 per share
   6% noncumulative and nonvoting
   450,000 shares authorized,
   310,000 shares issued and outstanding                   31,000       31,000
 Common stock, par value $100 per share
   200,000 shares authorized,
   145,000 shares issued and outstanding                   14,500       14,500
 Paid in capital                                           11,726        9,612
 Retained earnings                                        263,069      257,941
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TOTAL STOCKHOLDER'S EQUITY                                320,295      313,053
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TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY             $2,110,473   $2,120,612
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*The December 31, 1996 Balance Sheet has been derived from audited financial
statements.

   See notes to financial statements.


                                         -3-

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                                PACCAR Financial Corp.
   
                               STATEMENTS OF CASH FLOWS
                                (Thousands of Dollars)
                                                            Three Months Ended 
                                                                 March 31
                                                             1997         1996
--------------------------------------------------------------------------------
                                                                 (Unaudited)
OPERATING ACTIVITIES:

 Net income                                                $7,782       $8,035
 Items included in net income not
    affecting cash:
   Provision for losses on receivables                      1,484          375
   Decrease in deferred taxes payable                      (2,763)      (3,653)
   Depreciation and amortization                            3,202        3,531
 Decrease in payables, 
   income taxes and other                                  (8,032)      (6,164)
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NET CASH PROVIDED BY
OPERATING ACTIVITIES                                        1,673        2,124
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INVESTING ACTIVITIES:

 Finance and other receivables acquired                  (280,560)    (281,918)
 Collections on finance and other receivables             238,396      227,488
 Net decrease in wholesale receivables                     13,753       22,259
 Proceeds from disposal of equipment                        3,375        4,388
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NET CASH USED IN
INVESTING ACTIVITIES                                      (25,036)     (27,783)
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FINANCING ACTIVITIES:

 Net increase in commercial paper
   and other short term borrowings                         22,331       12,839
 Proceeds from medium-term notes                          105,000      125,000
 Payments of medium-term notes                           (106,000)    (110,500)
 Additions to paid in capital                               2,114        1,240
 Payment of cash dividend                                  (2,654)      (2,933)
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NET CASH PROVIDED BY
FINANCING ACTIVITIES                                       20,791       25,646
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NET DECREASE IN CASH                                       (2,572)         (13)

CASH AT BEGINNING OF PERIOD                                13,154        5,967
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CASH AT END OF PERIOD                                     $10,582       $5,954
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   See notes to financial statements.


                                         -4-


<PAGE>
 
                                PACCAR Financial Corp.
   
                            NOTES TO FINANCIAL STATEMENTS
   
   
NOTE A--BASIS OF PRESENTATION
   
The accompanying unaudited financial statements have been prepared in 
accordance with the instructions to Form 10-Q and 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 (consisting of normal recurring accruals) 
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, 1996.  
   
NOTE B--TRANSACTIONS WITH PACCAR INC
   
The Company has a Support Agreement with PACCAR Inc which requires, among 
other provisions, that PACCAR Inc provide financial assistance as necessary 
to assure that the ratio of earnings to fixed charges (as defined) of the 
Company will not fall below a level of 1.25 to 1 for a full fiscal year.  The 
ratio for the three-month period ended March 31, 1997 was 1.60 to 1 (see 
Exhibit 12.2).  
   
PACCAR Inc charges the Company for certain administrative services it 
provides. These costs are charged to the Company based upon the Company's 
specific use of the services and PACCAR Inc'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 
payment, PACCAR Inc recognizes certain of these administrative services as an 
additional investment in the Company.  The Company records the investment as 
paid-in capital.  The Company pays a dividend to PACCAR Inc for the paid-in 
capital invested in the prior year.  Cash dividends of $2.7 million and $2.9 
million were paid to PACCAR Inc in the quarters ended March 31, 1997 and 
1996, respectively.
   
Occasionally, the Company borrows funds from PACCAR Inc and makes 
market-rate, short-term loans to PACCAR Inc. At March 31, 1997 and 1996, the 
Company had  no outstanding loans from or to PACCAR Inc.
   
NOTE C--PREFERRED STOCK
   
The Company's Articles of Incorporation provide that the 6% noncumulative, 
nonvoting preferred stock (100% owned by PACCAR Inc) is redeemable only at 
the option of the Company's Board of Directors. 

                                         -5-

<PAGE>

    
Item 2    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
          RESULTS OF OPERATIONS 
   
RESULTS OF OPERATIONS
     
The finance margin improved to $19.9 million from $19.2 million in 1996 due 
to slightly higher (1%) average receivables and a higher margin rate on the 
receivables.  Although rate competition remains intense for new business, the 
margin rate improved due to reduced financial leverage of the Company.
     
Selling, general and administrative expenses declined 2% from the 1996 level 
because of ongoing cost controls.  The provision for losses increased from 
$.4 million in 1996 to $1.5 million in 1997 as a result of higher net credit 
losses. Accounts past due over 30 days for the Company have increased to 2.4% 
from 1.5% and 1.7% at March 31, 1996, and December 31, 1996, respectively.  
Both the higher past dues ratios and higher credit losses in 1997 reflected a 
more difficult operating environment, particularly in the used truck market.
While credit losses have increased in 1997, losses as a ratio to average 
receivables outstanding remain low in comparison to historic trends.  At 
March 31, 1997, the allowance for losses was 1.70% of earning assets compared 
to 1.70% at December 31, 1996 and 1.72% at March 31, 1996.  The level of the 
allowance reflects the risks inherent in the financing of commercial highway 
transportation equipment.
     
As a result of the foregoing factors, net income for the first quarter of 
1997 declined to $7.8 million from $8.0 million for the first quarter of 1996.
   
   
LIQUIDITY AND CAPITAL RESOURCES

During first quarter 1997, the Company funded its portfolio growth primarily 
through the issuance of commercial paper, which increased $22.3 million from 
December 1996.  Cash decreased due principally to the timing of month-end 
payments. 
   
In order to minimize exposure to fluctuations in interest rates, the Company 
seeks to borrow funds or enter into interest rate contracts with interest 
rate characteristics similar to the characteristics of its receivables and 
leases. Other considerations which affect the Company's funding operations 
include the amount of fixed and variable rate receivables, the maturity 
schedule of existing debt, the availability of desired debt maturities and 
the level of interest rates.
   
As of March 31, 1997, the Company and PACCAR Inc together maintained unused 
bank lines of credit of $445 million which are largely used to support the 
Company's commercial paper borrowings.
   
Other information on liquidity and sources of capital as presented in the 
Company's 1996 Annual Report on Form 10-K continues to be relevant.
   
   
   
   
                              PART II--OTHER INFORMATION
   
   
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, 1997.


                                         -6-

<PAGE>
 
   
   
                                PACCAR Financial Corp.

                                      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.
   
   
   
   

                                               PACCAR Financial Corp. 
                                                        (Registrant) 
 
 
 
 
 
 
 
 
 Date:  May 9, 1997                        BY: /S/T. R. Morton 
                                               ----------------------------- 
                                               T. R. Morton 
                                               President 
                                               (Authorized Officer) 
 
 
 
 
 
                                           BY: /S/ M. T. Barkley 
                                               ----------------------------- 
                                               M. T. Barkley 
                                               Controller 
                                               (Chief Accounting Officer) 


                                         -7-


<PAGE>
 
 
                                PACCAR Financial Corp.
                                    EXHIBIT INDEX
   
   
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 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 F (incorporated by reference to 
     Exhibits 4.3A, 4.3B and 4.3C to the Company's Registration Statement on 
     Form S-3 dated May 26, 1992, Registration Number 33-48118).
   
     Form of Letter of Representation among the Company, Citibank, N.A. and the 
     Depository Trust Company, Series F (incorporated by reference to Exhibit 
     4.4 to the Company's Registration Statement on Form S-3 dated May 26, 
     1992, Registration Number 33-48118).
   
4.4  Forms of Medium-Term Note, Series G (incorporated by reference to 
     Exhibits 4.3A and 4.3B to the Company's Registration Statement on Form 
     S-3 dated December 8, 1993, Registration Number 33-51335).
   
     Form of Letter of Representation among the Company, Citibank, N.A. and 
     the Depository Trust Company, Series G (incorporated by reference to 
     Exhibit 4.4 to the Company's Registration Statement on Form S-3 dated 
     December 8, 1993, Registration Number 33-51335).
   
4.5  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).
   
10.1 Support Agreement between the Company and PACCAR Inc 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, 1997 and 1996.
     
12.2 Statement re computation of ratio of earnings to fixed charges of the 
     Company pursuant to the Support Agreement with PACCAR Inc for the 
     three-month periods ended March 31, 1997 and 1996.

                                         -8-

<PAGE>

 
                                PACCAR Financial Corp.
                                    EXHIBIT INDEX
     
     
12.3 Statement re computation of ratio of earnings to fixed charges of PACCAR 
     Inc and subsidiaries pursuant to SEC reporting requirements for the 
     three-month periods ended March 31, 1997 and 1996.
   
27   Financial Data Schedule for Article 5 of Regulation S-X, Item 601(c) for 
     the three-month period ended March 31, 1997.
   
Other exhibits listed in Item 601 of Regulation S-K are not applicable.


















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