<PAGE>

                                  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 September 30, 1996

                                       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 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 Identification No.)
        incorporation or organization)

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

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

--------------------------------------------------------------------------------
              (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
                                     ---      ---

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 October 31,
1996.

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

Item 1 FINANCIAL STATEMENTS

                             PACCAR Financial Corp.

                   STATEMENTS OF INCOME AND RETAINED EARNINGS
                             (Thousands of Dollars)
<TABLE>
<CAPTION>

                                                                           Three Months Ended            Nine Months Ended
                                                                              September 30                 September 30
                                                                          1996           1995           1996           1995
-----------------------------------------------------------------------------------------------------------------------------
                                                                               (Unaudited)                  (Unaudited)
<S>                                                                     <C>            <C>            <C>            <C>

Interest and other income                                               $ 44,025       $ 41,470       $131,664       $118,414
Rentals on operating leases                                                2,939          3,188          8,946          9,819
-----------------------------------------------------------------------------------------------------------------------------
TOTAL FINANCE INCOME                                                      46,964         44,658        140,610        128,233

Interest expense                                                          24,552         23,055         73,786         65,119
Other borrowing expense                                                      419            378          1,325          1,137
Depreciation expense related to operating leases                           2,333          2,562          7,181          7,828
-----------------------------------------------------------------------------------------------------------------------------
TOTAL FINANCE EXPENSES                                                    27,304         25,995         82,292         74,084

FINANCE MARGIN                                                            19,660         18,663         58,318         54,149

Insurance premiums earned                                                  1,405          1,123          4,110          3,089
Insurance claims and underwriting expenses                                   976            969          2,906          2,787
-----------------------------------------------------------------------------------------------------------------------------

INSURANCE MARGIN                                                             429            154          1,204            302

Selling, general and administrative expenses                               6,025          5,559         18,055         17,456
Provision for losses on receivables                                          931          1,178          2,211          3,140
-----------------------------------------------------------------------------------------------------------------------------

INCOME BEFORE INCOME TAXES                                                13,133         12,080         39,256         33,855

Federal and state income taxes                                             5,115          4,859         15,284         13,627
-----------------------------------------------------------------------------------------------------------------------------

NET INCOME                                                                 8,018          7,221         23,972         20,228

Retained earnings at beginning of period                                 242,036        214,101        229,015        203,809
Cash dividends paid                                                            -              -         (2,933)        (2,715)
-----------------------------------------------------------------------------------------------------------------------------

RETAINED EARNINGS AT END OF PERIOD                                      $250,054       $221,322       $250,054       $221,322
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------

</TABLE>


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-
<PAGE>

                             PACCAR Financial Corp.

                                 BALANCE SHEETS
                             (Thousands of Dollars)

                                                   September 30     December 31
                                                       1996            1995*
-------------------------------------------------------------------------------
                                                   (Unaudited)
ASSETS
Cash                                               $    11,006     $     5,967

Net finance and other receivables                    2,034,569       2,051,135
Allowance for losses                                   (35,875)        (35,790)
------------------------------------------------------------------------------
                                                     1,998,694       2,015,345

Equipment on operating leases, net of allowance
  for depreciation of $20,688 (1995--$20,889)           33,702          40,905
Other assets                                            12,009          12,188
------------------------------------------------------------------------------

TOTAL ASSETS                                        $2,055,411      $2,074,405
------------------------------------------------------------------------------

LIABILITIES
Accounts payable and accrued expenses                  $30,474         $36,461
Payable for finance receivables acquired                 9,160          34,504
Commercial paper and other short-term borrowings       688,629         657,856
Medium-term notes                                      962,400         999,500
Income taxes-current & deferred                         60,099          64,613
------------------------------------------------------------------------------

TOTAL LIABILITIES                                    1,750,762       1,792,934
------------------------------------------------------------------------------

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                                          9,095           6,956
Retained earnings                                      250,054         229,015
------------------------------------------------------------------------------

TOTAL STOCKHOLDER'S EQUITY                             304,649         281,471
------------------------------------------------------------------------------

TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY          $2,055,411      $2,074,405
------------------------------------------------------------------------------
------------------------------------------------------------------------------

*The December 31, 1995 Balance Sheet has been derived from audited financial
statements.

See notes to financial statements.


                                       -3-
<PAGE>

                             PACCAR Financial Corp.

                            STATEMENTS OF CASH FLOWS
                             (Thousands of Dollars)

                                                         Nine Months Ended
                                                           September 30
                                                       1996            1995
------------------------------------------------------------------------------
                                                            (Unaudited)

OPERATING ACTIVITIES:

Net income                                           $  23,972      $   20,228
Items included in net income not affecting cash:
  Provision for losses on receivables                    2,211           3,140
  Decrease in deferred taxes payable                    (7,373)         (7,818)
  Depreciation and amortization                         10,528          10,616
Increase in payables, income taxes and other            (8,067)           (910)
------------------------------------------------------------------------------

NET CASH PROVIDED BY OPERATING ACTIVITIES               21,271          25,256

INVESTING ACTIVITIES:

Finance and other receivables acquired                (774,412)       (757,923)
Collections on finance and other receivables           684,458         579,138
Net decrease (increase) in wholesale receivables        77,135         (76,629)
Acquisition of equipment for operating leases           (4,654)         (5,600)
Proceeds from disposal of equipment                      8,364           6,443
------------------------------------------------------------------------------

NET CASH USED IN INVESTING ACTIVITIES                   (9,109)       (254,571)

FINANCING ACTIVITIES:

Net increase in commercial paper and
  other short-term borrowings                           30,772         176,773
Decrease in advances payable to PACCAR Inc                   -         (46,000)
Proceeds from medium-term notes                        312,000         373,000
Payments of medium-term notes                         (349,100)       (276,450)
Additions to paid in capital                             2,138           2,490
Payment of cash dividend                                (2,933)         (2,715)
------------------------------------------------------------------------------

NET CASH (USED IN) PROVIDED BY
  FINANCING ACTIVITIES                                  (7,123)        227,098

NET INCREASE (DECREASE) IN CASH                          5,039          (2,217)

CASH AT BEGINNING OF PERIOD                              5,967           8,956
------------------------------------------------------------------------------

CASH AT END OF PERIOD                                $  11,006      $    6,739
------------------------------------------------------------------------------
------------------------------------------------------------------------------


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, 1995.

Reclassifications:  Certain prior year amounts have been reclassified to conform
to the 1996 presentation.

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 nine-
month period ended September 30, 1996 was 1.63 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.
Annually, the Company intends to pay a dividend to PACCAR Inc for the amount
invested in the prior year.  Cash dividends of $2.9 million and $2.7 million
were paid to PACCAR Inc in 1996 and 1995, respectively.

Occasionally, the Company borrows funds from PACCAR Inc and makes market-rate,
short-term loans to PACCAR Inc.  At September 30, 1996 and 1995, there were no
outstanding loans for the Company 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

Pre-tax income for the third quarter and nine months ended September 30, 1996
increased to $13.1 million and $39.3 million, respectively, compared to pre-tax
income of $12.1 million and $33.9 million for the third quarter and year-to-date
periods in 1995.  The earnings improvement for both periods resulted primarily
from a higher finance margin.  The finance margin benefited from a 12% increase
in year-to-date average net receivables at September 30, 1996 compared to year-
to-date average net receivables at September 30, 1995, which was partially
offset by a lower average margin rate earned on the receivables.  Growth in the
physical damage insurance program, as well as a more favorable loss experience,
contributed to higher insurance margins for both the quarter and nine months
ended September 30, 1996, compared to the corresponding periods in 1995.

Selling, general and administrative expenses increased 8% for the third quarter
and 3% year-to-date 1996 compared to the same periods in 1995 to support the
higher level of business activities.  Slower growth in net receivables resulted
in a decrease in the provision for losses of 21% for the third quarter and 30%
year-to-date 1996 compared to the corresponding periods in 1995.  At September
30, 1996, the allowance for losses was 1.74% of earning assets.  The comparable
percentages at September 30, 1995 and December 31, 1995 were 1.71% and 1.72%,
respectively.

As a result of the foregoing factors, net income for the third quarter increased
11% to $8.0 million in 1996 versus $7.2 million in 1995.  Net income for the
nine months ended September 30, 1996 increased 19% to $24.0 million from $20.2
million a year earlier.


LIQUIDITY AND CAPITAL RESOURCES

The Company used cash from operations of $21.2 million to fund portfolio growth
of $9.1 million, reduce net financing by $7.1 million and increase cash reserves
by $5.0 million during the nine months ended September 30, 1996.  The funds from
financing activities continued to be provided primarily by the issuance of
commercial paper and medium-term notes.

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 September 30, 1996, the Company and PACCAR Inc together maintained unused
bank lines of credit of $355 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 1995 Annual Report on Form 10-K continues to be relevant.


                                       -6-
<PAGE>

                           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 September 30, 1996.


                                       -7-
<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:  November 5, 1996                 BY: /S/ T. R. Morton
                                            -----------------------------
                                            T. R. Morton
                                            President
                                           (Authorized Officer)



                                        BY: /S/ M. T. Barkley
                                            -----------------------------
                                            M. T. Barkley
                                            Controller
                                            (Chief Accounting Officer)


                                       -8-
<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).

4.2    Forms of Medium-Term Note, Series E (incorporated by reference to
       Exhibits 4.3A, 4.3B and 4.3C to the Company's Registration Statement on
       Form S-3 dated June 23, 1989, Registration Number 33-29434, and Forms of
       Medium-Term Note, Series E, incorporated by reference to Exhibit 4.3B.1
       to the Company's Current Report on Form 8-K dated December 19, 1991,
       under Commission File Number 0-12553).

       Letter of Representation among the Company, Citibank, N.A. and the
       Depository Trust Company, Series E, dated July 6, 1989 (incorporated by
       reference to Exhibit 4.3 of the Company's Annual Report on Form 10-K
       dated March 29, 1990, File Number 0-12553).

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


                                       -9-
<PAGE>

       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 nine-month periods
       ended September 30, 1996 and 1995.

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 nine-
       month periods ended September 30, 1996 and 1995.

12.3   Statement re computation of ratio of earnings to fixed charges of PACCAR
       Inc and subsidiaries pursuant to SEC reporting requirements for the nine-
       month periods ended September 30, 1996 and 1995.

27     Financial Data Schedule for Article 5 of Regulation S-X, Item 601(c) for
       the nine-month period ended September 30, 1996.

Other exhibits listed in Item 601 of Regulation S-K are not applicable.


                                      -10-