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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

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FORM 10-K

FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

(Mark One)

|/x/ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
|--- | ------------------------------------------------------------------------------------------------------

For the fiscal year ended December 31, 2000

OR

|/ / | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
|--- | ----------------------------------------------------------------------------------------------------------

For the transition period from  to

Commission File No. 0-12553

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

Washington

91-6029712(State of Incorporation)

(I.R.S. Employer Identification No.)777 - 106th Avenue N.E., Bellevue, Washington

98004(Address of Principal Executive Offices)

(Zip Code)


Registrant's telephone number, including area code:(425) 468-7100

Securities
registered pursuant to Section 12(b) of the Act:

Title of Each Class

Name of Each Exchange on Which RegisteredSeries H Medium-Term Notes
$2.5 Million Due July 15, 2003

New York Stock Exchange


Securities
registered pursuant to Section 12(g) of the Act:

None(Title of Class)

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 at least the past
90 days. Yes /x/ No / /

Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. /x/

The
aggregate market value of the voting stock held by non-affiliates of the registrant as of February 28, 2001:

None

The
number of shares outstanding of the registrant's classes of common stock as of February 28, 2001:

Common Stock, $100 par value145,000 shares

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

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PART I

ITEM 1. BUSINESS

GENERAL

PACCAR Financial Corp.

PACCAR Financial Corp. (the "Company") is a Washington corporation organized in 1961 as a wholly-owned subsidiary of PACCAR Inc ("PACCAR") to finance the sale
of PACCAR products. The Company provides financing and leasing of trucks and related equipment manufactured primarily by PACCAR and sold through PACCAR's independent dealers in the United States. The
Company also finances dealer inventories of transportation equipment and franchises PACCAR dealerships to engage in full-service and finance leasing.

In
2000, PACCAR Inc reorganized its U.S. finance and leasing operations to improve operating efficiency and to minimize funding costs.

Effective
May 1, 2000, PACCAR transferred the stock of the Company to PACCAR Financial Services Corporation ("PFSC"), a wholly owned subsidiary of PACCAR. PFSC was formed in
January 2000 to support the expanding financial services activities of PACCAR.

In
addition, effective May 1, 2000, PACCAR Leasing Corporation ("PLC"), another wholly owned subsidiary of PACCAR, was merged into the Company. The merger was accounted for as
a combination of entities under common control and treated for accounting purposes in a manner similar to a "pooling of interests". Since both subsidiaries are wholly owned by PACCAR, no consideration
was exchanged to effect the merger.

The
accompanying financial information, supporting schedules and other information as of and for the year ended December 31, 2000, are presented as if the Company and PLC were
combined for the entire period, and the financial statements of prior periods presented have been restated to reflect the combination for all periods presented.

PACCAR

PACCAR has two principal industry segments, (1) manufacture and distribution of light-, medium- and heavy-duty trucks and related
aftermarket distribution of parts and (2) finance and leasing services provided to customers and dealers. PACCAR distributes trucks and parts primarily through its independent dealer network.
PACCAR's finance and leasing activities are principally related to PACCAR products and associated equipment. Other manufactured products include industrial winches.

PACCAR
and its subsidiaries design and manufacture trucks which are marketed under the Peterbilt, Kenworth, DAF and Foden nameplates in the heavy-duty diesel category.
These vehicles, which are built in five plants in the United States, four in Europe and one each in Australia and Mexico, are used worldwide for over-the-road and
off-highway hauling of freight, petroleum, wood products, construction and other materials. Commercial trucks and related service parts comprise the largest segment of PACCAR's business,
accounting for 94% of total 2000 net sales.

PACCAR,
through its Peterbilt and Kenworth Divisions, competes in the North American Class 6/7 markets primarily with conventional models. These medium-duty trucks are
assembled at PACCAR's new Ste. Therese, Quebec plant and at PACCAR's Mexican subsidiary in Mexicali, Mexico. This line of business represents a small, but increasing, percentage of PACCAR's North
American sales. PACCAR competes in the European medium commercial vehicle market with DAF and Foden cab-over-engine trucks manufactured in the Netherlands and the United
Kingdom. Leyland, another of PACCAR's wholly-owned subsidiaries, manufactures light commercial vehicles in the United Kingdom for sale throughout Europe under the DAF nameplate.

2

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Trucks and related parts are sold to independent dealers for resale. Trucks manufactured in the U.S. for sale outside North America are marketed by PACCAR International, a U.S.
division. Those sales are made through a worldwide network of dealers. Trucks manufactured in Australia, Mexico, the Netherlands and the United Kingdom are marketed in their primary markets through
independent dealers and a small number of factory branches. Trucks manufactured in these countries for export beyond their primary market area are marketed by DAF or PACCAR International.

There
were four other principal competitors in the U.S. Class 8 truck market in 2000. PACCAR's share of that market was approximately 21% of registrations in 2000. There were
seven other principal competitors in the European Class 4-8 commercial vehicle market in 2000, including parent companies to three competitors of PACCAR's in the United States.
PACCAR's subsidiary, DAF, had approximately a 10% share of the western Europe heavy-duty Class 8 market and an 8% share of the Class 4-7 market. These markets are
highly competitive in price, quality and service, and PACCAR is not dependent on any single customer for its sales. There are no significant seasonal variations.

In
addition to the Company, which provides financing, leasing and full-service truck leasing in the United States, PACCAR offers similar financing programs for PACCAR
products in Mexico, Canada, Australia and the United Kingdom through other wholly owned finance companies. PACCAR also has a 49% equity ownership in DAF Financial Services in Europe.

PACCAR's
common stock, $1 par value, is traded on the NASDAQ National Market under the symbol "PCAR". PACCAR and the Company are subject to the informational requirements of the
Securities Exchange Act of 1934 and in accordance therewith file reports and other information with the Securities and Exchange Commission (the "Commission"). All reports, proxy statements and other
information filed by PACCAR and the Company with the Commission may be inspected and copied at the public reference facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549; Suite 1400, Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661; at 7 World Trade Center, 13th Floor, New York, New York 10048, or through the Commission's
internet site at www.sec.gov.

BUSINESS OF THE COMPANY

The Company operates primarily in one industry segment, truck and related equipment financing. The Company provides financing for dealers' sales of Kenworth
and Peterbilt trucks in the United States, for dealers' purchases of new Class 6, 7 and 8 trucks and used trucks, regardless of make or model, and for truck trailers and allied equipment such
as mixer and dump bodies attached to trucks. In addition, the Company franchises PACCAR dealerships to engage in full-service and finance leasing as members
of the PACLease system. The Company also engages in full-service leasing directly with its customers through Company owned stores.

The
Company currently conducts business with most PACCAR dealers. The volume of the Company's business is significantly affected by PACCAR's sales and competition from other financing
sources.

As
of December 31, 2000, the Company employed 294 full-time employees, none of whom are represented by a collective bargaining agent. The Company considers
relations with its employees to be good.

The Company's Products

Retail Receivables

Retail ContractsThe Company purchases contracts from dealers and receives assignments of the contracts and a first lien security
interest in the vehicles financed ("Retail Contracts"). Collateral for

3

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vehicles sold to leasing companies may also include an assignment of leases and rentals due. Retail Contracts purchased by the Company have fixed or floating interest rates.

Direct LoansThe Company also makes loans to the end users of the vehicles financed that are secured by a first lien security interest
in the vehicles ("Direct Loans"). Direct Loans have fixed or floating interest rates.

Master Note

These
contracts are an alternative form of retail financing offered to select dealers for new and used trucks. Retail installment contracts originated by the dealer for new or used
trucks and meeting the
Company's requirements as to form, terms and creditworthiness for Retail Contracts are pledged to the Company as collateral for direct, full recourse loans by the Company to the dealer ("Master
Note"). Master Note contracts have fixed or floating interest rates.

Wholesale Contracts

The
Company provides wholesale financing for new and used truck and trailer inventories for dealers ("Wholesale Contracts"). Wholesale Contracts are secured by the inventories
financed. The amount of credit extended by the Company for each truck is generally limited to the invoice price of new equipment and to the wholesale value of used equipment. Interest under Wholesale
Contracts is based upon floating rates.

Dealer Loans

The
Company makes loans to selected Peterbilt and Kenworth dealers ("Dealer Loans"). The purposes of these loans include the financing of real estate, fixed asset, working capital and
dealership acquisitions. Dealer loans may have fixed or floating interest rates.

Leases

The
Company offers lease contracts where it is treated as the owner of the equipment for tax purposes and generally retains the tax depreciation ("Leases"). The lessee is responsible
for the payment of property and sales taxes, licenses, maintenance and other operating items. The lessee is obligated to maintain the equipment and to insure the equipment against casualty and
liability losses.

Most
of the Company's Leases contain a Terminal Rental Adjustment Clause, which requires the lessee to guarantee to the Company a stated residual value upon disposition of the
equipment at the end of the lease term.

Full-Service Leasing

The
Company also conducts full service leasing operations under the PacLease trade name. Selected dealers are franchised to provide full service leasing. These franchisees are leased
equipment and provided managerial support. The Company also operates full service lease outlets on its own behalf.

Insurance

The
Company sells physical damage insurance through PACCAR dealers who are licensed insurance agents as well as through licensed agents of the Company. The Company retains the premium
revenues and loss exposure for the policies, which are issued through an unrelated insurance carrier.

4

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The Company also charges a fee to provide insurance coverage, through an unrelated regulated insurance carrier, on new trucks, used trucks and trailer inventory to dealers having
Wholesale Contracts with the Company. The Company retains annual loss exposure up to that year's fee revenues.

The
Company also offers physical damage and liability insurance on new and used trucks and trailers to its full service lease customers. The Company retains premium and loss exposure
for the policies which are issued through an unaffiliated insurance carrier. To limit its exposure the Company has acquired excess insurance coverage from a third party insurance carrier.

CUSTOMER CONCENTRATION, PAST DUE ACCOUNTS AND LOSS EXPERIENCE

Customer Concentration

At December 31, 2000, the largest single customer for retail contracts, direct loans or leases represented .9% of the Company's receivables, and the
five largest such accounts collectively amounted to 3.4% of receivables.

At
December 31, 2000, the Company had Master Notes outstanding with four dealers. Master Note borrowings totaled 8.1% of the Company's receivables, while the largest master
note dealer's borrowing amounted to 6.0% of the Company's receivables. Master Note contracts are secured by numerous retail installment contracts, which, in effect, reduces the amount of dealer
concentration.

With
respect to wholesale financing, at December 31, 2000, the largest single dealer group accounted for 1.4% of the Company's receivables, and the five largest dealer groups
collectively accounted for 3.1% of receivables.

At
December 31, 2000, the largest single full-service leasing franchise group accounted for 1.2% of the Company's receivables, and the five largest
full-service leasing franchise groups collectively accounted for 4.1% of receivables.

Past Due Receivables and Allowance for Losses

An account is considered past due by the Company if any portion of an installment is due and unpaid for more than 30 days. In periods of adverse
economic conditions, past due levels, repossessions and credit losses generally increase.

5

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The Company maintains an allowance for losses on receivables at a level, which it considers to be adequate to cover management's estimates of losses. The following table summarizes
the activity in the Company's allowance for losses on receivables and presents related ratios:

Allowance for Losses
(Thousands of Dollars)

|                             |                                                                                                                 | Year ended December 31 |        
|---------------------------- | --------------------------------------------------------------------------------------------------------------- | ---------------------- | -------
|
|Balance at beginning of year |                                                                                                                 | $                      | 60,707 
|Provision for losses         |                                                                                                                 |                        | 36,433 
|Net losses                   |                                                                                                                 |                        | (31,705
|                             |                                                                                                                 |                        |        
|Balance at end of year       |                                                                                                                 | $                      | 65,435 
|                             |                                                                                                                 |                        |        
|Ratios:                      |                                                                                                                 |                        |        
|                             | Net losses to average net receivables and equipment on operating leases                                         |                        |        
|                             | Allowance for losses to year-end net contracts and equipment on operating leases                                |                        |        
|                             | Year-end retail contracts and leases past due (over 60 days) to
year-end retail contracts and lease receivables |                        |        

For
discussion of the allowance for losses, see "Management's Discussion and Analysis of Financial Condition and Results of Operations, 1998-2000."

COMPETITION AND ECONOMIC FACTORS

The commercial truck and trailer finance and leasing business is highly competitive among banks, commercial finance companies, captive finance companies and
leasing companies. Many of these institutions have substantially greater financial resources than the Company and may borrow funds at lower rates.

The
dealers are the primary source of contracts acquired by the Company. However, dealers are not required to obtain financing from the Company, and they have a variety of other
sources, which may be used for wholesale and customer financing of trucks. Retail purchasers also have a variety of sources available to finance truck purchases.

The
ability of the Company to compete in its market is principally based on the rates and terms which the Company offers dealers and retail purchasers, as well as the specialized
services it provides. Rates and terms are based on the Company's desire to provide flexible financing which meets dealer and customer financing needs, the ability of the Company to borrow funds at
competitive rates and the Company's need to earn an adequate return on its invested capital. The Company's business is also affected by changes in market interest rates, which in turn are related to
general economic conditions, demand for credit, inflation and governmental policies. Seasonality is not a significant factor in the Company's business.

The
volume of receivables available to be acquired by the Company from dealers is largely dependent upon the number of Kenworth and Peterbilt trucks sold. Domestic sales of
heavy-duty trucks depend on the capital equipment requirements of the transportation industry, which in turn are influenced by economic growth and cyclical variations in the economy.
Heavy-duty truck sales are also sensitive to economic factors such as fuel costs, interest rates, federal excise and highway use taxes and taxation of the acquisition and use of capital
goods.

6

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REGULATIONS AND SIMILAR MATTERS

In certain states, the Company is subject to retail installment sales or installment loan statutes and related regulations, the terms of which vary from state
to state. These laws may require the Company to be licensed as a sales finance company and may regulate disclosure of finance charges and other
terms of retail installment contracts. The Company is also subject to some of the provisions of federal law relating to discrimination in the granting of credit.

SOURCES OF FUNDS

The Company obtains funds primarily from borrowings in the capital markets and collections on loans and leases and to a lesser extent retained earnings and
PFSC equity investments. The Company's profitable acquisition of additional receivables is dependent upon its ability to raise funds at competitive rates in the public and private debt markets. The
receivables and leases that are financed are either fixed rate or floating rate, terms of generally five years or less.

To
reduce the risk of changes in interest rates that could affect interest margins, the Company obtains funds with interest rate characteristics similar to the corresponding assets.
Fixed rate assets are funded primarily with publicly offered fixed rate medium-term notes and commercial paper combined with interest rate swaps. Floating rate assets are funded primarily
with commercial paper with maturities of three months or less and medium-term notes. As a result, the Company's interest margin on existing business does not change significantly as
interest rates change.

The
Company enters into interest rate contracts as a tool to achieve its matched funding objectives and to reduce total borrowing costs relative to its primary borrowing
sourcescommercial paper and medium-term notes. Fixed interest rate swaps, matched to floating rate borrowings, are used to lock in the funding cost of fixed rate assets. As of
December 31, 2000, the total notional principal amount of interest rate swap contracts outstanding was $1.8 billion, all of which result in a fixed rate payment obligation. The notional
amount is used to measure the volume of these contracts and does not represent exposure to credit loss. The Company's risk in these transactions is the cost of replacing, at current market rates,
these contracts in the event of default by the counterparty. Management believes the risk of incurring such losses is remote, and any losses would be immaterial. The permitted types of interest rate
contracts, their transaction limits and related approval authorizations have been established by the Company's senior management and Board of Directors. The interest rate contracts outstanding are
regularly reported to, and reviewed by, the Company's senior management.

As
of December 31, 2000, the Company and PACCAR maintained $1.5 billion of unused, confirmed bank lines of credit. These lines are maintained primarily to support the
Company's short-term borrowings. Neither PACCAR nor the Company is liable for any borrowings of the other under these lines of credit.

As
of December 31, 2000, the Company had $1.5 billion of medium-term notes and other long-term borrowings outstanding, $461.8 million of
which was due within 12 months. See "Note FBorrowings" in the Notes to Financial Statements for medium-term note maturities.

An
indenture of the Company dated as of December 1, 1983, as amended by a first supplemental indenture dated June 19, 1989 (Exhibit 4.1), with respect to the
Company's medium-term notes which are publicly issued from time to time, contains restrictions limiting secured debt which may be incurred by the Company and any subsidiary.

7

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RELATIONSHIP WITH PACCAR

General

The operations of the Company are fundamentally affected by its relationship with PACCAR. Sales of PACCAR products are the Company's principal source of
financing business. The Company receives administrative support from and pays dividends to PFSC and may occasionally borrow funds from or lend money to PACCAR or it's affiliates. Since the directors
of the Company are all executives of PACCAR or its affiliated companies and PACCAR is the sole owner of PFSC's outstanding voting common stock, PACCAR can determine the course of the Company's
business. See "Note ETransactions with PACCAR and Affiliates" in the Notes to Financial Statements.

Support Agreement

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 for any fiscal year. The Support Agreement also requires PACCAR to own,
directly or indirectly, all outstanding voting stock of the Company. The transfer of the stock of the Company to PFSC from PACCAR had no impact on the Support Agreement between PACCAR and the Company.
The required ratio for each of the years ended December 31, 1996 - 2000 was met without assistance.

The
Company and PACCAR may amend or terminate any or all of the provisions of the Support Agreement upon 30 days notice, with copies of the notice being sent to all nationally
recognized statistical rating organizations ("NRSROs") which have issued ratings with respect to debt of the Company ("Rated Debt"). Such amendment or termination will be effective only if
(i) two NRSROs confirm in writing that their ratings with respect to any Rated Debt would remain the same after such amendment or termination, or (ii) the notice of amendment or
termination provides that the Support Agreement will continue in effect with respect to Rated Debt outstanding on the effective date of such amendment or termination unless such debt has been paid or
defeased pursuant to the indenture or other agreement applicable to such debt, or (iii) the holders of at least two-thirds of the aggregate principal amount of all outstanding Rated
Debt with an original maturity in excess of 270 days consent
in writing to such amendment or termination, provided that the holders of Rated Debt having an original maturity of 270 days or less shall continue to have the benefit of the Support Agreement
until the maturity of such debt.

The
Support Agreement expressly states that PACCAR's commitments to the Company thereunder do not constitute a PACCAR guarantee of payment of any indebtedness or liability of the
Company to others and do not create rights against PACCAR in favor of persons other than the Company. There are no guarantees, direct or indirect, by PACCAR of payment of any indebtedness of the
Company.

ITEM 2. PROPERTIES

The Company's principal office is located in the corporate headquarters building of PACCAR (owned by PACCAR) at
777 - 106th Avenue N.E., Bellevue, Washington 98004. The Company owns two full-service leasing facilities in Texas.

Other
offices of the Company are located in leased premises. Annual lease rentals for offices in the aggregate are not material in relation to expenses as a whole.

ITEM 3. LEGAL PROCEEDINGS

The Company is a party to various routine legal proceedings incidental to its business involving the collection of accounts and other matters. The Company does
not consider such matters to be material with respect to the business or financial condition of the Company as a whole.

8

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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

All outstanding common stock is owned by PFSC; therefore, there is no trading market in the Company's common stock.

Cash
dividends of $3.2 million and $2.7 million were paid in 1999 and 1998, respectively. There were no cash dividends paid to PFSC or PACCAR during 2000.

ITEM 6. SELECTED FINANCIAL DATA

The following table summarizes selected financial data for the Company. The information with respect to each of the five years in the period ended
December 31, 2000 has been derived from the Company's audited financial statements.

Balance Sheet Data and Income Statement Data
(Thousands of Dollars)

|                           |  | As of December 31
|-------------------------- |  | -----------------
|
|Total Assets               |  | $                
|Total Liabilities          |  |                  
|Total Stockholder's Equity |  |                  

|                                       |  | Year ended December 31
|-------------------------------------- |  | ----------------------
|
|Interest and Other Revenue             |  | $                     
|Total Expenses                         |  |                       
|                                       |  |                       
|Income Before Income Taxes             |  |                       
|Income Taxes                           |  |                       
|                                       |  |                       
|Net Income                             |  | $                     
|                                       |  |                       
|Ratio of Earnings to Fixed Charges (1) |  |                       

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*
The year ended December 31 1999, 1998, 1997 and 1996 Balance Sheet and Income Statement Data has been restated to reflect the business combination described in Item 1.

9

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, 1998 - 2000

Results of Operations

2000
Compared to 1999:

The
Company's net income of $33.0 million was 13% lower than 1999. Interest and other revenue increased 23% to $367.4 million in 2000 due to higher interest rates and
portfolio growth. Average assets increased 20% to $3.9 billion in 2000 due to high lending volume in 1999 and the first half of 2000. The increase in interest and other revenue was offset by
higher interest costs, provision for losses and selling, general and administrative expenses to support portfolio growth.

The
provision for losses increased 127% to $36.4 million in 2000 from $16.0 million in 1999 primarily due to credit losses. Credit losses increased to
$31.7 million in 2000 from $6.9 million in 1999.

The
Company continues to experience high levels of past dues and repossessions due to higher fuel, insurance and interest costs and slowing freight volumes that have reduced operating
margins for many truck operators. The increased levels of past dues, repossessions and lower used truck prices will lead to continued high levels of credit losses until the negative factors abate.

1999
Compared to 1998:

Net
income increased 32% to $37.8 million in 1999 from $28.6 million in 1998. Increased revenues from asset portfolio growth and lower SG&A expenses were partially
offset by a higher provision for loan losses.

Funding and Liquidity

The Company manages its capital structure consistent with industry standards. Since 1983, the Company has registered senior debt securities under the
Securities Act of 1933 for offering to the public. At the end of 2000, there were $1.9 billion of such securities available for issuance.

The
Company believes that it has sufficient financial capabilities, including internally generated funds, access to public and private debt markets, lines of credit and other
financial resources, to fund current business needs and service debt maturities.

10

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ITEM 7a. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk and Derivative Financial Instruments

In the normal course of business, the Company issues various financial instruments which expose the Company to market risk associated with market interest
rates. Policies and procedures have been
established by the Company to manage these market risks through the use of various derivative financial instruments. The Company does not engage in derivatives trading, market-making or other
speculative activities.

The
following is a sensitivity analysis for the Company's derivatives which have interest rate risk. These instruments are held for other than trading purposes. The gains or losses in
the following table represent the changes in the financial instruments' fair values which would result from a 100 basis point increase of the current market rates at December 31, 2000 and 1999.

Fair Value Gains (Losses)
(Thousands of Dollars)

Year ended December 312000

1999AssetsRetail notes, contracts and wholesale financing, net of unearned interest, less allowance for losses

$
(32,050
)
$
(28,583
)LiabilitiesLong-term debt


6,521


12,652Interest rate swaps related to financial services debt


23,378


14,582Total

$
(2,151
)
$
(1,349
)


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements of the Company and related schedules described under Item 14, "Exhibits, Financial Statement Schedules, and Reports on
Form 8-K," are included following this page.

11

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Report of Ernst & Young LLP, Independent Auditors

Board
of Directors
PACCAR Financial Services Corporation and PACCAR Financial Corp.

We
have audited the accompanying balance sheets of PACCAR Financial Corp. (a wholly-owned subsidiary of PACCAR Financial Services Corporation) as of December 31, 2000 and 1999,
and the related statements of income and retained earnings and cash flows for each of the three years in the period ended December 31, 2000. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We
conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.

In
our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of PACCAR Financial Corp. at December 31, 2000 and
1999, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2000 in conformity with accounting principles generally accepted in the
United States.



Seattle,
Washington
February 19, 2001

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BALANCE SHEETS  PACCAR Financial Corp.

|                                           |                                                                                                                                             | December 31
|------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------- | -----------
|
|
|ASSETS                                     |                                                                                                                                             |            
|                                           | Cash                                                                                                                                        |            
|                                           | Finance and other receivables net of allowance for losses of $65,435 in 2000 ($60,707 in 1999)                                              |            
|                                           | Loans to affiliate                                                                                                                          |            
|                                           | Equipment on operating leases net of depreciation of $19,744 in 2000 ($14,120 in 1999)                                                      |            
|                                           | Equipment held for sale                                                                                                                     |            
|                                           | Income taxes  current                                                                                                                      |            
|                                           | Other assets                                                                                                                                |            
|                                           |                                                                                                                                             |            
|                                           | TOTAL ASSETS                                                                                                                                |            
|                                           |                                                                                                                                             |            
|LIABILITIES                                |                                                                                                                                             |            
|                                           | Accounts payable and accrued expenses                                                                                                       |            
|                                           | Payable for finance receivables acquired                                                                                                    |            
|                                           | Advances from PACCAR Inc                                                                                                                    |            
|                                           | Borrowings                                                                                                                                  |            
|                                           | Income taxes  deferred                                                                                                                     |            
|                                           |                                                                                                                                             |            
|                                           | TOTAL LIABILITIES                                                                                                                           |            
|                                           |                                                                                                                                             |            
|STOCKHOLDER'S EQUITY                       |                                                                                                                                             |            
|                                           | Preferred stock, par value $100 per share, 6% noncumulative and nonvoting, 450,000 shares authorized, 310,000 shares issued and outstanding |            
|                                           | Common stock, par value $100 per share, 200,000 shares authorized, 145,000 shares issued and outstanding                                    |            
|                                           | Paid-in capital                                                                                                                             |            
|                                           | Retained earnings                                                                                                                           |            
|                                           |                                                                                                                                             |            
|                                           | TOTAL STOCKHOLDER'S EQUITY                                                                                                                  |            
|                                           |                                                                                                                                             |            
|TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY |                                                                                                                                             | $          
|                                           |                                                                                                                                             |            

See
accompanying notes.

*
The December 31, 1999 Balance Sheet has been restated to reflect the business combination described in Note B.

13

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STATEMENTS OF INCOME AND RETAINED EARNINGS  PACCAR Financial Corp.

|                                 |                                              | Year ended December 31 |        
|-------------------------------- | -------------------------------------------- | ---------------------- | -------
|
|
|INTEREST AND OTHER REVENUE       |                                              | $                      | 367,351
|                                 | Interest and other borrowing expense         |                        |        
|                                 | Depreciation related to operating leases     |                        |        
|                                 | Insurance claims and underwriting expenses   |                        |        
|                                 | Vehicle operating expense                    |                        |        
|                                 | Selling, general and administrative expenses |                        |        
|                                 | Provision for losses on receivables          |                        |        
|                                 |                                              |                        |        
|TOTAL EXPENSES                   |                                              |                        | 313,375
|INCOME BEFORE INCOME TAXES       |                                              |                        | 53,976 
|                                 | Federal and state income taxes               |                        |        
|                                 |                                              |                        |        
|NET INCOME                       |                                              |                        | 32,990 
|                                 | Retained earnings at beginning of year       |                        |        
|                                 | Cash dividends paid                          |                        |        
|                                 |                                              |                        |        
|RETAINED EARNINGS AT END OF YEAR |                                              | $                      | 394,105
|                                 |                                              |                        |        

See
accompanying notes.

*
The year ended 1999 and 1998 Statements of Income and Retained Earnings have been restated to reflect the business combination described in Note B.

14

---



STATEMENTS OF CASH FLOWS  PACCAR Financial Corp.

|                                          |                                                                  | Year ended December 31               |         
|----------------------------------------- | ---------------------------------------------------------------- | ------------------------------------ | --------
|
|
|OPERATING ACTIVITIES                      |                                                                  |                                      |         
|                                          | Net income                                                       |                                      | $       
|                                          | Items included in net income not affecting cash:                 |                                      |         
|                                          |                                                                  | Provision for losses on receivables  |         
|                                          |                                                                  | Charge-off of loan system investment |         
|                                          |                                                                  | Increase in deferred taxes payable   |         
|                                          |                                                                  | Depreciation and amortization        |         
|                                          | Decrease in payables and other                                   |                                      |         
|                                          |                                                                  |                                      |         
|NET CASH PROVIDED BY OPERATING ACTIVITIES |                                                                  |                                      | 85,342  
|INVESTING ACTIVITIES                      |                                                                  |                                      |         
|                                          | Finance and other receivables acquired                           |                                      |         
|                                          | Collections on finance and other receivables                     |                                      |         
|                                          | Net decrease (increase) in wholesale receivables                 |                                      |         
|                                          | Acquisition of equipment                                         |                                      |         
|                                          | Proceeds from disposal of equipment                              |                                      |         
|                                          |                                                                  |                                      |         
|NET CASH USED IN INVESTING ACTIVITIES     |                                                                  |                                      | (449,918
|FINANCING ACTIVITIES                      |                                                                  |                                      |         
|                                          | Net increase in commercial paper and other short-term borrowings |                                      |         
|                                          | Proceeds from medium-term notes                                  |                                      |         
|                                          | Payments of medium-term notes                                    |                                      |         
|                                          | Net advances from/(to) PACCAR Inc                                |                                      |         
|                                          | Capital contributions                                            |                                      |         
|                                          | Cash dividend paid                                               |                                      |         
|                                          |                                                                  |                                      |         
|NET CASH PROVIDED BY FINANCING ACTIVITIES |                                                                  |                                      | 370,704 
|                                          |                                                                  |                                      |         
|NET INCREASE (DECREASE) IN CASH           |                                                                  |                                      | 6,128   
|CASH AT BEGINNING OF YEAR                 |                                                                  |                                      | 6,471   
|                                          |                                                                  |                                      |         
|CASH AT END OF YEAR                       |                                                                  | $                                    | 12,599  
|                                          |                                                                  |                                      |         

See
accompanying notes.

*
The year ended December 31, 1999 and 1998 Statements of Cash Flows have been restated to reflect the business combination described in Note B.

15

---



NOTES TO FINANCIAL STATEMENTS  PACCAR Financial Corp.  December 31, 2000  (Thousands of Dollars)

NOTE ASUMMARY OF ACCOUNTING POLICIES

Industry:PACCAR Financial Corp. (the "Company"), a wholly-owned subsidiary of PACCAR Financial Services Corporation
("PFSC"), provides financing of trucks and related equipment manufactured primarily by PACCAR Inc ("PACCAR") and sold by authorized dealers. The Company also finances dealer inventories of
transportation equipment and franchises PACCAR dealerships to engage in full-service and finance leasing. The operations of the Company are fundamentally affected by its relationship with
PACCAR. PFSC is a wholly-owned subsidiary of PACCAR. Sales of PACCAR products are the Company's principal source of financing business.

Due
to the nature of the Company's business, customers are concentrated in the transportation industry throughout the United States. Generally, all receivables are collateralized by
the equipment being financed. The risk of credit losses related to this concentration has been considered in establishing the allowance for losses.

Use of Estimates:The preparation of financial statements in conformity with accounting principles generally accepted
in the United States requires management to make estimates and assumptions that affect amounts reported and disclosed in the financial statements. Actual results could differ from the amounts
estimated by management.

Estimated Losses on Receivables:The provision for losses on finance and other receivables is charged to income in an
amount sufficient to maintain the allowance for losses at a level considered adequate to cover estimated losses. Receivables are charged to this allowance when, in the judgment of management, they are
deemed uncollectible (usually upon repossession of the collateral). On certain
retail contracts acquired from the dealers, the dealer retains liability, up to specified limits, for the credit loss on the sale of a repossessed vehicle. The amount and collectibility of dealer
recourse provisions have been considered in establishing the allowance for losses on receivables.

Revenue Recognition:Revenue from finance receivables and other receivables is recognized using the interest method.
Certain loan origination costs are deferred and amortized to interest and other income. For operating leases, income is recognized on a straight-line basis over the lease term.

Recognition
of income is suspended when management determines that collection of future income is not probable (generally after 90 days past due). Recognition is resumed if the
receivable becomes contractually current and collection doubts are removed.

Equipment:Equipment on operating leases is recorded at cost and depreciated on a straight-line basis.

Income Taxes:The Company is included in the consolidated federal income tax return of PACCAR. Income taxes for the
Company are determined on a separate return basis, and any related tax liability is paid by the Company to PACCAR and any related tax benefit is paid by PACCAR to the Company.

Derivative Financial Instruments:The Company enters into interest rate swap contracts to manage certain exposures to
fluctuations in interest rates. The Company uses interest rate swap contracts to match the interest rate characteristics of the Company's finance receivables with the borrowings used to fund those
receivables and to limit the Company's exposure to rising interest rates. Interest rate swap contracts involve the exchange of fixed and floating rate interest payments without the exchange of the

16

---

underlying principal. Net amounts paid or received are reflected as adjustments to interest expense. The fair values of interest rate swap contracts are not recognized in the financial statements.
Realized gains or losses at the time of maturity, termination or repayment of an interest rate contract are recorded in a manner consistent with the original designation of the interest rate contract.
The Company does not engage in derivatives trading, market-making or other speculative activities.

Reclassifications:Certain prior year amounts have been reclassified to conform to the 2000 presentation.

New Accounting Pronouncements:In June 1999, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard (SFAS) No. 137, Accounting for Derivative and Hedging ActivitiesDeferral of the Effective Date of FASB Statement No. 133. The Company will
adopt SFAS 133 in the first quarter of 2001. SFAS 133 requires that an entity recognize all derivatives as either assets or liabilities measured at fair value. The accounting for changes
in the fair value of a derivative depends on the use of the derivative. Adoption of these new accounting standards will result in cumulative after-tax reductions in other comprehensive
income of approximately $14.1 million and a cumulative after-tax increase to net income of $1.6 million in the first quarter of 2001. The adoption will also impact assets and liabilities
recorded on the balance sheet.

NOTE BBUSINESS COMBINATIONS

In 2000, PACCAR Inc ("PACCAR") reorganized its U.S. finance and leasing operations to improve operating efficiency and to minimize funding costs.

Effective
May 1, 2000, PACCAR transferred the stock of the Company to PACCAR Financial Services Corporation ("PFSC"), a wholly owned subsidiary of PACCAR. PFSC was formed in
January 2000 to support the expanding financial services activities of PACCAR. The transfer had no impact on the Support Agreement between PACCAR and the Company.

In
addition, effective May 1, 2000, PACCAR Leasing Corporation ("PLC"), another wholly owned subsidiary of PACCAR, was merged into the Company. The merger was accounted for as
a combination of entities under common control and treated for accounting purposes in a manner similar to a "pooling of interests". Since both subsidiaries are wholly owned by PACCAR, no consideration
was exchanged to effect the merger.

The
accompanying financial statements, supporting schedules, and other information as of and for the year ended December 31, 2000, are presented as if the Company and PLC were
combined for the entire period, and the financial statements of prior periods presented have been restated to reflect the combination for all periods presented.

Summarized
results of operations of the separate companies for the period from January 1, 2000 through May 1, 2000, the date of the merger, are as follows:

Company

PLCInterest and other revenue

$
96,772

$
15,503Net income


16,565


1,258


17

---

Following
is a reconciliation of interest and other revenue and net income as previously reported for the years ended 1999 and 1998, respectively, to the restated amounts:

|Year ended December 31, 1999 |  | Interest and
Other Revenue |         | Net Income
|---------------------------- |  | -------------------------- | ------- | ----------
|As previously reported       |  | $                          | 248,202 |           
|PLC                          |  |                            | 50,133  |           
|                             |  |                            |         |           
|As restated                  |  | $                          | 298,335 |           
|                             |  |                            |         |           

|Year ended December 31, 1998 |  | Interest and Other Revenue |         | Net Income
|---------------------------- |  | -------------------------- | ------- | ----------
|As previously reported       |  | $                          | 213,400 |           
|PLC                          |  |                            | 49,068  |           
|                             |  |                            |         |           
|As restated                  |  | $                          | 262,468 |           
|                             |  |                            |         |           

NOTE CRECEIVABLES

Terms for substantially all finance and other receivables range up to 60 months. Company experience has shown that some receivables will be paid prior
to contractual maturity and others will be extended or renewed. Accordingly, the maturities of receivables presented here should not be regarded as a forecast of future collections.

The
Company's finance and other receivables are as follows:

Year ended December 312000

1999Notes and contracts due within:One year

$
1,167,719

$
1,011,674Two years


771,055


700,229Three years


562,290


533,675Four years


334,579


289,565Five years and beyond


139,085


137,6732,974,728


2,672,816Wholesale financing


326,741


353,602Direct financing leases (including estimated residual values of $37,543 in 2000 and $27,976 in 1999)


945,683


883,318Interest and other receivables


35,500


19,2704,282,652


3,929,006Less allowance for losses


(65,435
)

(60,707
)4,217,217


3,868,299Unearned interest:Notes and contracts


(125,962
)

(115,498
)Direct financing leases


(135,881
)

(124,114
)(261,843
)

(239,612
)Finance and other receivables

$
3,955,374

$
3,628,687


18

---

Future
minimum lease payments on direct financing leases totaled $908,140 at December 31, 2000 and are due as follows: $254,756 in 2001; $227,216 in 2002; $199,120 in 2003;
$128,618 in 2004; and $98,430 in 2005 and beyond.

The
allowance for losses on receivables is summarized as follows:

|                             |  | Year ended December 31 |        
|---------------------------- |  | ---------------------- | -------
|
|Balance at beginning of year |  | $                      | 60,707 
|Provision for losses         |  |                        | 36,433 
|Net losses                   |  |                        | (31,705
|                             |  |                        |        
|Balance at end of year       |  | $                      | 65,435 
|                             |  |                        |        

At
December 31, 2000 and 1999, the recorded investments in retail notes and contracts that were considered to be impaired were $90,754 and $22,101, respectively. Included in
the allowance for losses were specific reserves of $26,342 and $7,978 on these impaired notes and contracts. The average recorded investment in impaired notes and contracts during the years ended
December 31, 2000 and 1999, was $64,818 and $27,466 respectively. The Company recognized interest income of $1,437, $1,466
and $888 for the years ended December 31, 2000, 1999 and 1998, respectively, on those impaired loans, all of which was recognized using the cash basis method of income recognition.

NOTE DOPERATING LEASES

Terms of operating leases range up to 44 months. Future annual minimum rental payments to be received for transportation equipment on
non-cancellable operating leases beginning January 1, 2001 were: $7,589 in 2001; $5,826 in 2002; $3,107 in 2003 and $302 in 2004. Interest and other revenue includes contingent
rentals of $6,360, $5,693 and $4,924 in 2000, 1999 and 1998, respectively.

NOTE ETRANSACTIONS WITH PACCAR 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 for any fiscal year. The Support Agreement also requires PACCAR to own,
directly or indirectly, all outstanding voting stock of the Company. The required ratio for the years ended December 31, 2000, 1999 and 1998, was met without assistance.

PFSC
charges the Company for certain administrative services it provides and certain services the Company receives indirectly from PACCAR. As of December 31, 2000, PFSC
employed 155 full-time employees, none of whom are represented by a collective bargaining agent. The costs are charged to the Company based upon the Company's specific use of the services
at PFSC's or 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. Fees for
services of $16,475, $2,203 and $2,874 in 2000, 1999 and 1998, respectively, were charged to the Company. 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 the prior year. Cash dividends of $3,219 and $2,710 were paid in 1999 and 1998, respectively. There were no cash dividends declared or paid during 2000.

The
Company's employees are covered by a defined benefit pension plan, an unfunded postretirement medical and life insurance plan and a defined contribution plan sponsored by PACCAR.
Separate allocations of plan assets, defined benefit accumulated plan benefits and defined contribution

19

---

plan benefits relating to the Company have not been made. Expenses charged to the Company by PACCAR for these plans were $1,647, $1,805, and $1,548 for years 2000, 1999 and 1998, respectively.

Financing
and cash management is partly provided through unsecured short-term advances to and from PACCAR. Net interest paid to PACCAR was $586, $1,378 and $467 in 2000,
1999 and 1998, respectively.

Periodically,
the Company borrows funds from PACCAR and makes loans to PACCAR. Loans outstanding to PACCAR were $9,618 at December 31, 2000. There were no loans outstanding to
PACCAR at December 31, 1999.

PACCAR
has issued letters of credit in the amount of $4,940 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, 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, Canada and Australia. The Company will not
make loans to the foreign affiliates in excess of the equivalent of $70.0 million 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 $53.3 million and $24.1 million in loans
outstanding to a foreign affiliate operating in the United Kingdom at December 31, 2000 and 1999, respectively, and no loans outstanding to other foreign affiliates for those periods. Interest
income earned on affiliate loans was $2,461, $1,055 and $362 in 2000, 1999 and 1998, respectively.

Included
within accounts payable and accrued expenses is $8,992 and $6,016 payable to PACCAR's truck divisions at December 31, 2000 and 1999, respectively.

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

NOTE FBORROWINGS

Borrowings are summarized as follows:

|                                |       | As of December 31,
|------------------------------- | ----- | ------------------
|
|Commercial paper                |       | 6.46%             
|Other floating rate borrowings  |       | 6.56%             
|Fixed rate medium-term notes    |       | 6.09%             
|Floating rate medium-term notes |       | 6.95%             
|Other fixed rate borrowings     |       | 6.06%             
|                                |       |                   
|                                | Total |                   
|                                |       |                   

---

*
The effective rate is the weighted average rate as of December 31, 2000 and includes the effects of interest rate swap agreements.

20

---

Principal amounts of medium-term notes and other fixed rate borrowings due over the next five years beginning January 1, 2001 are $461.8 million in 2001,
$826.6 million in 2002, $209.0 million in 2003, and $5.0 million in 2004.

At
December 31, 2000, there was $1.9 billion of medium-term debt available for issuance under a currently outstanding shelf registration statement.

Cash
paid for interest (net of swap interest received) was $208.1 million in 2000, $149.5 million in 1999, and $130.0 million in 1998.

At
December 31, 2000, the Company had outstanding 78 interest rate swaps with various financial institutions with a total notional balance of $1.8 billion. The notional
principal of these contracts matures as follows: $682.2 million in 2001, $623.8 million in 2002, $251.6 million in 2003, $183.2 million in 2004, and $16.0 million
thereafter. The notional amount is used to measure the volume of these contracts and does not represent exposure to credit loss. The Company's risk in these transactions is the cost of replacing, at
current market rates, these contracts in the event of default by the counterparty. Management believes the risk of incurring such losses is remote and any losses would be immaterial.

At
December 31, 2000, the interest rate swap weighted average pay rate was 6.66%. The weighted average interest rate swap receive rate of 6.70% offsets the pay rate on
associated debt obligations.

NOTE GCREDIT ARRANGEMENTS

The Company and PACCAR have lines of credit arrangements with various commercial banks that are reviewed annually for renewal. These lines are maintained
primarily to support the Company's short-term borrowings. At December 31, 2000, the Company and PACCAR maintained total unused bank lines of credit of $1.5 billion. The
Company compensates the banks for providing lines of credit with fees that are immaterial.

NOTE HINCOME TAXES

The provision for income taxes consists of the following:

|                          |         | Year ended December 31
|------------------------- | ------- | ----------------------
|
|Current (benefit)/expense |         |                       
|                          | Federal |                       
|                          | State   |                       
|                          |         |                       
|                          |         |                       
|Deferred                  |         |                       
|                          |         |                       
|                          |         | $                     
|                          |         |                       

A
reconciliation between the statutory federal income tax rate and the actual provision for income taxes is shown below:

|                                 |  | Year ended December 31
|-------------------------------- |  | ----------------------
|
|Tax at the statutory rate of 35% |  | $                     
|Effect of state income taxes     |  |                       
|Effect of other income taxes     |  |                       
|                                 |  |                       
|                                 |  | $                     
|                                 |  |                       

21

---

Cash
(received)/paid for income taxes was $(7,119) in 2000, $10,012 in 1999, and $10,922 in 1998.

Deferred
income tax assets and liabilities consisted of the following:

|                           |                                 | As of December 31 |        
|-------------------------- | ------------------------------- | ----------------- | -------
|
|Deferred tax liabilities:  |                                 |                   |        
|                           | Depreciation                    |                   | $      
|                           | State income tax                |                   |        
|                           |                                 |                   |        
|                           |                                 |                   | 202,406
|Deferred tax assets:       |                                 |                   |        
|                           | Allowance for doubtful accounts |                   |        
|                           | Other                           |                   |        
|                           |                                 |                   |        
|                           |                                 |                   | (30,112
|                           |                                 |                   |        
|Net deferred tax liability |                                 | $                 | 172,294
|                           |                                 |                   |        

NOTE IFAIR VALUES OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments:

Cash:The carrying amount reported in the balance sheets is stated at fair value.

Net Receivables:For floating rate loans and wholesale financings, fair values are stated at carrying values. For fixed
rate loans, fair values are estimated using discounted cash flow analyses based on interest rates currently being offered for loans with similar terms to borrowers of similar credit quality. The
carrying amount of accrued interest and other receivables approximates their fair value. Direct financing leases and the related allowance for losses are not included in net receivables for purposes
of fair value disclosures herein.

Off-Balance-Sheet Instruments:Fair values for the Company's interest rate swap contracts are based on
costs which would be incurred to terminate existing agreements and enter into new agreements with similar notional amounts, maturity dates and counterparties' credit standings at current market
interest rates or currency exchange rates.

Commercial Paper, Other Floating Rate Borrowings, Medium-Term Notes and Other Fixed Rate Borrowings:The
carrying amounts of the Company's commercial paper, other floating rate borrowings and floating rate medium-term notes approximate their fair value. The fair value of the Company's fixed
rate medium-term notes and other fixed rate borrowings is estimated using discounted cash flow analyses, based on the Company's current incremental borrowing rates for similar types of
borrowing arrangements.

The
carrying amounts of trade payables and receivables approximate their fair value and have been excluded from the accompanying table.

22

---

The carrying amounts and fair values of the Company's financial instruments are as follows:

|                                                    |  | As of December 31
|--------------------------------------------------- |  | -----------------
|
|
|Cash                                                |  | $                
|Net receivables                                     |  |                  
|Commercial paper and other floating rate borrowings |  |                  
|Medium-term notes and other fixed rate borrowings   |  |                  

The
Company's intent is to hold interest rate swap contracts until maturity. If recorded at fair value at December 31, 2000, the Company's off-balance-sheet
financial instruments (interest rate swap contracts) would represent gross assets of $5,434 and offsetting gross liabilities of $25,717, resulting in a net liability of $20,282. If recorded at fair
value at December 31, 1999, the Company's off-balance-sheet financial instruments would have reflected a net asset of $13,695.

NOTE JQUARTERLY RESULTS (Unaudited)

|                           |  | Quarter
|-------------------------- |  | -------
|
|2000*                      |  |        
|Revenue                    |  | $      
|Income before income taxes |  |        
|Net income                 |  |        
|1999*                      |  |        
|Revenue                    |  | $      
|Income before income taxes |  |        
|Net income                 |  |        

---

23

---

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

The registrant has not had any disagreements with its independent auditors on accounting or financial disclosure matters.

PART III

ITEMS 10, 11, 12 AND 13

These items omitted pursuant to Form 10-K General Instruction (I)(1)(a) and (b).

24

---



PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

The
following financial statements of the Company are included in Item 8:



All
schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions, are
inapplicable or have been otherwise disclosed and, therefore, have been omitted.



The
exhibits required by Item 601 of Regulation S-K are listed in the accompanying Exhibit Index.

(b)
REPORTS ON FORM 8-K FILED IN THE FOURTH QUARTER OF 2000

There
were no reports on Form 8-K for the quarter ended December 31, 2000.

25

---



SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.
| |  | ----------------------
| |  | By                    

Date:
March 21, 2001

Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant as of the above date and in
the capacities indicated.

|(1) Principal Executive Officer                                          |  |           
|------------------------------------------------------------------------ |  | ----------
|/s/ANDREW J. WOLDAndrew J. Wold                                          |  | President 
|(2) Principal Financial Officer                                          |  |           
|/s/PATRICIA A. DONOHOEPatricia A. Donohoe                                |  | Treasurer 
|(3) Principal Accounting Officer                                         |  |           
|/s/BARRY E. PRATHERBarry E. Prather                                      |  | Controller
|(4) A Majority of the Board of Directors:                                |  |           
|/s/ANDREW J. WOLDAndrew J. Wold                                          |  |           
|Kenneth R. Gangl*
David J. Hovind*
Mark C. Pigott*
Michael A. Tembreull* |  |           

|*By |  | /s/ANDREW J. WOLDAndrew J. Wold
Attorney-in-Fact |  | 
|--- |  | ------------------------------------------------ |  | 

26

---



PACCAR Financial Corp.  EXHIBIT INDEX

|2    |  | 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 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 each of the five years in the period ended December 31, 2000.                                                                                                                                                                                                                                     
|12.2 |  | Statement re computation of ratio of earnings to fixed charges of the Company pursuant to the Support Agreement with PACCAR for each of the five years in the period ended December 31, 2000.                                                                                                                                                                                                                              
|12.3 |  | Statement re computation of ratio of earnings to fixed charges of PACCAR and subsidiaries pursuant to SEC reporting requirements for each of the five years in the period ended December 31, 2000.                                                                                                                                                                                                                         
|23   |  | Consent of Independent Auditors.                                                                                                                                                                                                                                                                                                                                                                                           
|25.1 |  | Power of attorney of certain officers and directors.                                                                                                                                                                                                                                                                                                                                                                       

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

27

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