UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549
                                
                                
                            FORM 10-K
                                
                                
    [X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                 SECURITIES EXCHANGE ACT OF 1934
                                
           For the fiscal year ended October 31, 1995
                                
                               OR
                                
  [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                 SECURITIES EXCHANGE ACT OF 1934
                                
     For the transition period from __________ to__________
                        -----------------
                 Commission File Number 1-4146-1
                        -----------------
                                
                                
                 NAVISTAR FINANCIAL CORPORATION
     (Exact name of Registrant as specified in its charter)

               Delaware                            36-2472404
     (State or other jurisdiction of  (I.R.S. Employer Identification No.)
      incorporation or organization)

            2850 West Golf Road
          Rolling Meadows, Illinois                  60008
     (Address of principal executive offices)     (Zip Code)

 Registrant's telephone number, including area code 847-734-4275
                                
Securities registered pursuant to Section 12(b) of the Act:  None
                                
Securities registered pursuant to Section 12(g) of the Act:  None

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
and (2) has been subject to such filing requirements for the past
90 days.  Yes X       No__


As  of December 31, 1995, the number of shares outstanding of the
registrant's common stock was 1,600,000.


THE   REGISTRANT  IS  A  WHOLLY-OWNED  SUBSIDIARY   OF   NAVISTAR
INTERNATIONAL  TRANSPORTATION CORP. AND MEETS THE CONDITIONS  SET
FORTH IN GENERAL INSTRUCTION J(1) (a) AND (b) OF FORM 10-K AND IS
THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT.
<PAGE>
                 NAVISTAR FINANCIAL CORPORATION
                        AND SUBSIDIARIES
                                
                            FORM 10-K

                   Year Ended October 31, 1995
<TABLE>
<CAPTION>
                              INDEX
                                                        10-K Page
PART I
<S>       <C>                                               <C>
Item  1.  Business (A)                                        1
Item  2.  Properties (A)                                      1
Item  3.  Legal Proceedings                                   1
Item  4.  Submission of Matters to a Vote of
          Security Holders (A)                                1

PART II

Item  5.  Market for the Registrant's Common Equity and
          Related Stockholder Matters                         2
Item  6.  Selected Financial Data (A)                         2
Item  7.  Management's Discussion and Analysis of Financial
          Condition and Results of Operations (A)             3
Item  8.  Financial Statements and Supplementary Data         9
          Independent Auditors' Report                       39
Item  9.  Changes in and Disagreements with Accountants on
          Accounting and Financial Disclosure                40

PART III

Item 10.  Directors and Executive Officers of the
          Registrant (A)                                     40
Item 11.  Executive Compensation (A)                         40
Item 12.  Security Ownership of Certain Beneficial Owners
          and Management (A)                                 40
Item 13.  Certain Relationships and Related
          Transactions (A)                                   40
PART IV

Item 14.  Exhibits, Financial Statement Schedules and
          Reports on Form 8-K                                40

SIGNATURES - Principal Accounting Officer                    41
           - Directors                                       42

POWER OF ATTORNEY                                            42

EXHIBITS                                                    E-1

(A) - Omitted or amended as the registrant is a wholly-owned
      subsidiary of Navistar International Transportation Corp. and
      meets the conditions set forth in General Instructions J(1) (a)
      and (b) of Form 10-K and is, therefore, filing this Form with
      reduced disclosure format.
</TABLE>
<PAGE>
                             PART I

Item 1.  Business

   The  registrant, Navistar Financial Corporation  ("NFC"),  was
incorporated in Delaware in 1949 and is a wholly-owned subsidiary
of      Navistar      International     Transportation      Corp.
("Transportation"),   which   is   wholly-owned    by    Navistar
International  Corporation ("Navistar").   As  used  herein,  the
"Corporation"  refers to Navistar Financial Corporation  and  its
wholly-owned subsidiaries unless the context otherwise requires.

   The  Corporation provides wholesale, retail, and to  a  lesser
extent, lease financing in the United States for sales of new and
used  trucks sold by Transportation and Transportation's dealers.
The  Corporation  also finances wholesale accounts  and  selected
retail  accounts  receivable  of  Transportation.  Sales  of  new
products  (including  trailers) of other manufacturers  are  also
financed  regardless of whether designed or customarily sold  for
use   with   Transportation's  truck  products.   Harco  National
Insurance   Company,  NFC's  wholly-owned  insurance  subsidiary,
provides  commercial  physical  damage  and  liability  insurance
coverage to Transportation's dealers and retail customers, and to
the  general  public  through  the independent  insurance  agency
system.

Item 2.  Properties

  The Corporation uses leased facilities to carry out most of the
administrative and finance sales activities.

Item 3.  Legal Proceedings

   During  1992, auditors of the Illinois Department  of  Revenue
("Department")  began an income tax audit of NFC for  the  fiscal
years  ended  October 31, 1989, 1990 and 1991.   On  February  1,
1994,  the  Department issued a Notice of Deficiency to  NFC  for
approximately  $11.9  million.   The  Department  has  taken  the
position  that  nearly 100% of NFC's income  during  these  years
should  be  attributed to and taxed by Illinois.   NFC  maintains
that  the Department's interpretation and application of the  law
is  incorrect  and  improper, and that the Department's  intended
result is constitutionally prohibited.  NFC's outside counsel  is
of  the  opinion  that  it is more likely  than  not  that  NFC's
position will prevail such that the Department's action will  not
have a material impact on NFC's earnings and financial position.

   In  May 1993, a jury issued a verdict in favor of Vernon Klein
Truck   &   Equipment,   Inc.   ("Klein   Truck")   and   against
Transportation and the Corporation in the amount of $10.8 million
in  compensatory  damages and $15 million  in  punitive  damages.
Transportation  appealed the verdict and, in November  1994,  the
Court  of  Appeals of the State of Oklahoma reversed the  verdict
and  entered judgment in favor of Transportation on virtually all
aspects  of  the  case.   Klein Truck appealed  to  the  Oklahoma
Supreme Court where the case is now pending.

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

      Intentionally omitted.  See the index page of  this  Report
for explanation.
<PAGE>
                             PART II
<TABLE>
<CAPTION>
                                                              Page
<S>     <C>                                                    <C>
Item 5. Market for the Registrant's Common Equity and
        Related Stockholder Matters                            29
</TABLE>

Item 6. Selected Financial Data

    Intentionally omitted.  See the index page to this Report for
explanation.
<PAGE>
Item 7.   Management's Discussion and Analysis of
          Financial Condition and Results of Operations



      Customer demand for Class 5 through 8 trucks remained  high
in  1995, as the strength in the U.S. economy experienced  during
fiscal  1994  continued during fiscal 1995.  As a result  of  the
strong  truck  industry and economy, the financial  strength  and
cash  flows of many NFC customers continued to improve and  NFC's
delinquencies and losses remained low.  The strong  economy  also
contributed to high liquidity in the commercial financing markets
during  1995.   As  a  result, many financial  institutions  have
increased  their loan activity which gives NFC's  customers  more
financing alternatives than normal.  This competition has  caused
NFC  to  increase  marketing  efforts  of  its  retail  financing
products  and  services and to reduce finance  rates  during  the
fiscal year.

Financing Volume

      The  Corporation's  serviced receivables  portfolio,  which
includes  sold receivables, totaled $3.2 billion at  October  31,
1995,  up from $2.5 billion and $2.2 billion at October 31,  1994
and 1993, respectively.  The increases year over year reflect the
continued  growth  in  the  truck  industry.   During  1995,  the
Corporation supplied 93% of the wholesale financing of new trucks
sold to Transportation's dealers, unchanged from 1994 and up from
90%  in  1993.   Acquisitions of wholesale notes  increased  $672
million,  29%, to $2,979 million in 1995 after a 17% increase  to
$2,307  million  in  1994  from 1993.   Serviced  wholesale  note
balances  were  $854 million at October 31, 1995,  up  from  $577
million   and  $559  million  at  October  31,  1994  and   1993,
respectively.

      Acquisitions  of retail notes and leases, net  of  unearned
finance income, increased 20% to $1.1 billion in 1995 after a 19%
increase  to $.9 billion in 1994 from $.8 billion in  1993.   The
higher  level of financing activity reflects increased  sales  by
Transportation,  especially of heavy trucks.   The  Corporation's
share  of  the  retail  financing of new trucks  manufactured  by
Transportation and sold in the United States was  14.4%  in  1995
compared with 15.3% in 1994 and 1993.  The Corporation's  reduced
penetration  level of retail financing of Transportation's  sales
in  1995  was  a  result  of competition  and  liquidity  in  the
commercial  financing markets.  Serviced retail notes  and  lease
financing  balances  were  $1.9  billion  at  October  31,  1995,
compared  with $1.6 billion and $1.4 billion at October 31,  1994
and 1993, respectively.

       Owned   net   finance   receivables  balances,   including
subordinated  interests  in  retail  and  wholesale  receivables,
increased to $1.5 billion at October 31, 1995, from $1.2  billion
at  October 31, 1994, and $1.3 billion at October 31, 1993.   The
increase  in  owned  receivable  balances  resulted  from  higher
financing  volumes, partially offset by increases  in  sold  note
balances.   Sold  retail receivables balances increased  to  $1.2
billion at October 31, 1995, from $1.0 billion and $.5 billion at
October  31,  1994 and 1993, respectively.  Sold  wholesale  note
balances  were $500 million at October 31, 1995, a  $200  million
increase over 1994 and 1993.
<PAGE>
            Management's Discussion and Analysis of
        Financial Condition and Results of Operations (Continued)


Results of Operations

      The  components  of net income for the  three  years  ended
October 31 are as follows:
<TABLE>
<CAPTION>
($ Millions)                                1995     1994     1993
<S>                                        <C>      <C>      <C>       
Income before income taxes:                                  
  Finance operations                       $53.1    $49.9    $51.6
  Insurance operations                       5.6      5.3      1.1
  Supplemental Trust contribution              -        -     (3.7)
  Income before taxes                                        
     and cumulative effect                  58.7     55.2     49.0
Taxes on income                             22.5     21.2     17.7
Cumulative effect of changes in                              
  accounting policy                            -        -      8.8
     Net income                            $36.2    $34.0    $22.5
</TABLE>

     Income before taxes in 1995 was $58.7 million, a 6% increase
from  $55.2 million in 1994.  Finance operations' income in  1995
was  $3.2 million higher than 1994 as a result of higher  finance
receivables  to  support  the  demand  for  Transportation  truck
products  and  improvement in the Corporation's borrowing  spread
over  market interest rates.  This increase was partially  offset
by  lower  gains  on sales of retail notes.  Gains  on  sales  of
retail note receivables during 1995 were $5.2 million on sales of
$740  million compared with gains of $11.8 million  on  sales  of
$1,033  million  in  1994.  Lower gains on  sales  resulted  from
reduced   sales  volumes  and  lower  margins  on   retail   note
acquisitions  from  the second half of fiscal  1994  through  the
first  quarter of fiscal 1995, as rising interest costs  to  fund
retail  note acquisitions could not be offset fully by  increased
retail note pricing.  In a rising interest rate environment, this
margin  contraction is a typical occurrence  for  NFC  as  retail
truck  customers  generally require finance rate  commitments  on
purchases  of  trucks 30 to 90 days in advance of  delivery.   In
addition, the Corporation funds the majority of its retail  notes
by  selling  the  notes in the public market  and  the  effective
interest rate for each sale is based on a market interest rate at
the  time  of sale which may be up to six months after the  truck
delivery  date.  The gains on sales in fiscal 1994 were primarily
on  sales  in  November and December, prior to  the  increase  in
market  interest  rates.  During the last half  of  fiscal  1995,
margins  on  retail  note acquisitions have  improved  as  market
interest  rates  have  declined; however,  margins  remain  below
historical  levels due to increased competition in the commercial
financing markets.

      Income before taxes of $55.2 million in 1994 increased  13%
from  $49.0 million in 1993, which included a $3.7 million pretax
charge  for  the Corporation's portion of the Supplemental  Trust
contribution.    See  note  10  to  the  Consolidated   Financial
Statements.  Finance operations' income in 1994 was $1.7  million
lower  than 1993 as a result of lower margins on retail financing
and gains of $2.4 million less than those on 1993 sales of retail
receivables  offset in part by the increased volume of  wholesale
financing  to  support  the increased  demand  for  trucks.   The
Corporation's  insurance subsidiary's 1994 income increased  $4.2
million over 1993 as a result of improved
<PAGE>
             Management's Discussion and Analysis of
    Financial Condition and Results of Operations (Continued)


Results of Operations (Continued)

underwriting  results  on truck liability  insurance.   The  more
significant elements of revenue and expense impacting net  income
for these years are discussed in the following paragraphs.

      Total revenue for 1995 was $228 million compared with  $211
million and $232 million in 1994 and 1993, respectively.   Retail
note and lease financing revenue was $73 million in 1995 compared
with $71 million and $102 million in 1994 and 1993, respectively.
The  1995 improvement over 1994 is due to higher financing volume
offset in part by lower gains on sold notes.  Revenue in 1994 was
30%  below  1993  as  a  higher proportion of  retail  notes  was
financed  through  the  sale of receivables  as  the  Corporation
gained  access  to  the  asset-backed securitized  market.   When
receivables are sold only the net gains on the sales, rather than
the individual components of revenue and expense, are reported in
the Statement of Consolidated Income.

      Wholesale note revenue increased 38% in 1995 to $54 million
and increased 22% in 1994 from 1993 as a result of higher average
outstanding  note  balances in support of  increased  demand  for
Transportation  truck  products.  In addition,  revenue  in  1995
increased  from higher average yields relating to a higher  prime
interest rate.

      Revenue from accounts increased in 1995 to $29 million from
$22  million and $18 million in 1994 and 1993, respectively.  The
increase   in   1995  and  1994  resulted  from  higher   average
outstanding   balances  in  support  of  increased   demand   for
Transportation  truck  products.  In addition,  revenue  in  1995
increased  from higher average yields relating to a higher  prime
interest rate.

      Servicing fee income increased to $18 million in 1995  from
$17 million in 1994 and $11 million in 1993 as a result of higher
levels  of  sold  note receivable balances which the  Corporation
continues to service.

      Insurance  premiums earned by Harco decreased  12%  to  $45
million  in  1995 from $51 million in 1994 and 11% in  1994  from
1993.   The  decreases  in 1995 and 1994  reflect  reductions  in
written  premiums of truck liability lines in response to adverse
loss experience in those lines and to increased competition.

      Borrowing  costs increased 20% in 1995 to $84 million  from
$70  million and $79 million in 1994 and 1993, respectively.  The
increase in 1995 from 1994 is primarily the result of higher debt
balances to support increased wholesale note and account balances
and  higher  market  interest rates.  These  increased  borrowing
costs   were  offset  by  an  improvement  in  the  Corporation's
borrowing  spread over market interest rates as a result  of  the
amended  revolving debt agreement and the asset-backed commercial
paper ("ABCP") program.  See note 9 to the Consolidated Financial
Statements.  The decrease between 1994 and 1993 was the result of
reduced debt required to finance the lower level of owned  retail
receivables, offset in part by higher interest rates.  The  ratio
of debt to equity was 5.2:1, 4.8:1 and 5.5:1 at October 31, 1995,
1994 and 1993, respectively.
<PAGE>
             Management's Discussion and Analysis of
    Financial Condition and Results of Operations (Continued)


Results of Operations (Continued)

     On July 1, 1993, Navistar implemented a restructured retiree
health care and life insurance plan (the "Plan"), as discussed in
note 10 to the Consolidated Financial Statements.  As part of the
Plan,  Navistar contributed $300 million to pre-fund Plan benefit
liabilities  and  common  stock  valued  at  $513  million  to  a
Supplemental Benefit Trust to help pay for Plan benefits  in  the
future.   The Corporation recognized $3.7 million of  expense  as
its portion of the Supplemental Benefit Trust contribution.

      Credit,  collection  and  administrative  expenses  of  $28
million were $2 million higher than 1994 primarily as a result of
the   provision  for  payments  to  employees  as   provided   by
Transportation's  profit sharing agreement and the  Corporation's
management  incentive programs.  In addition, costs  were  higher
due to increased retail note marketing efforts.

     The provision for losses on receivables totaled $2.6 million
in  1995  compared with $2.3 million in 1994 and $1.5 million  in
1993.   Truck note and account write-offs (recoveries), including
those  on sold notes, totaled $(.8) million in 1995, $.9  million
in  1994, and $.7 million in 1993.  The provision amount exceeded
the   write-offs  (recoveries)  due  to  growth  of   receivables
financed.   At October 31, 1995, the Corporation's allowance  for
losses equaled .62% of net financing receivables, including  sold
receivables, compared with .65% and .69% as of October  31,  1994
and 1993, respectively.

      Insurance claims and underwriting expenses decreased to $47
million  in  1995 from $54 million and $65 million  in  1994  and
1993,  respectively.   The  decline resulted  from  decreases  in
losses  incurred  in  Harco's  truck liability  insurance  lines.
Additionally, insurance operating expenses were lower as a result
of  decreased commission costs associated with lower  volumes  of
premiums written through general agents.

Liquidity and Funds Management

      The  Corporation's  operations are substantially  dependent
upon  the production and sale of Transportation's truck products.
Navistar  Financial  has  traditionally  obtained  the  funds  to
provide   financing  to  Transportation's  dealers   and   retail
customers  from  commercial  paper,  short-  and  long-term  bank
borrowings,   medium-  and  long-term  debt  issues,   sales   of
receivables and equity capital.  The current debt ratings of  the
Corporation, detailed below, have made bank borrowings and  sales
of  finance receivables the most economical sources of cash.  The
Corporation's  insurance operations generate their funds  through
internal operations and have no external borrowings.

      Receivable  sales were a significant source of  funding  in
1995  and  1994.   Through the asset-backed  public  market,  the
Corporation  has  been  able  to  fund  fixed  rate  retail  note
receivables  at rates offered to companies with investment  grade
ratings.   During fiscal 1995, the Corporation sold $740  million
of retail notes, net of unearned finance income, through Navistar
Financial  Retail  Receivables Corporation ("NFRRC"),  a  wholly-
owned subsidiary,
<PAGE>                               
             Management's Discussion and Analysis of
    Financial Condition and Results of Operations (Continued)


Liquidity and Funds Management (Continued)

to  two  owner  trusts.  The owner trusts,  in  turn,  sold  $714
million  of  notes and $26 million of certificates to  investors.
Net  proceeds from these sales were $693 million, after deducting
$2  million  for underwriting fees and $45 million  to  establish
reserve  accounts with the trusts as credit enhancement  for  the
public  sales.  During 1994, the Corporation sold $1,033  million
of  retail  notes  receivable,  $203  million  through  its  bank
receivable purchase facility and $830 million through  NFRRC  and
owner  trusts to public investors.  Net proceeds from these sales
were  $952  million after the reduction of holdback reserves  and
credit   enhancement.   The  net  proceeds  were  used   by   the
Corporation for general working capital purposes.  At October 31,
1995,  the  remaining shelf registration available to  NFRRC  for
issuance  of  asset-backed securities  was  $1,430  million.   On
November  14,  1995, NFRRC filed an additional registration  with
the Securities and Exchange Commission providing for the issuance
from time to time of an additional $2,000 million of asset-backed
securities.

      Since  December 1990, the Corporation has utilized  a  $300
million  revolving wholesale note sales trust providing  for  the
continuous sale of eligible wholesale notes on a daily basis.  On
June  8, 1995, a new Navistar Financial Dealer Note Master  Trust
issued $200 million of 9.3 year asset-backed certificates to  the
public.   The  proceeds of $195 million, net  of  $2  million  of
expenses  and underwriting fees and $3 million to fund a  reserve
account, were used by the Corporation for general working capital
purposes.   This issuance of $200 million of certificates  during
fiscal  1995  increased  NFSC's revolving  wholesale  note  sales
trusts to $500 million.  The sales trusts are comprised of  three
$100  million pools of notes maturing serially from 1997 to  1999
and the $200 million pool maturing in 2004.

      See  note 9 to the Consolidated Financial Statements for  a
discussion  of  the Corporation's revolving credit agreement  and
asset-backed commercial paper program.

      In  March  1995,  ratings  on the Corporation's  debt  were
upgraded   by   Moody's  Investors  Service,  Inc.   ("Moody's").
Moody's raised its ratings for the Corporation's debt from Ba3 to
Ba2 for senior debt and from B2 to B1 for subordinated debt.   In
March  1995, Duff & Phelps confirmed its debt ratings of BB+  for
senior  debt  and  BB for subordinated debt.   In  October  1993,
ratings  on the Corporation's debt were reviewed by Standard  and
Poor's  Corporation ("Standard and Poor's").  Standard and Poor's
raised  its ratings for the Corporation's debt from B- to BB  for
senior  debt  and  from  CCC to B+ for  subordinated  debt.   The
Corporation's commercial paper is rated "not prime" by Moody's.
<PAGE>

             Management's Discussion and Analysis of
    Financial Condition and Results of Operations (Continued)


Liquidity and Funds Management (Continued)

      In  November  1995, the Corporation sold  $525  million  of
retail notes, net of unearned finance income, through NFRRC to an
owner  trust which, in turn, sold $507 million of notes  and  $18
million  of  certificates to investors.   The  proceeds  of  $499
million, after deducting $1 million for underwriting fees and $25
million  to establish a reserve account with the trust as  credit
enhancement,  were  used by the Corporation for  general  working
capital purposes.

     The Corporation manages sensitivity to interest rate changes
by   funding  floating  rate  assets  with  floating  rate  debt,
primarily  borrowings under the bank revolving credit  agreement,
and  fixed rate assets with fixed rate debt, equity and  floating
rate  debt.   Management has limited the  amount  of  fixed  rate
assets   funded  with  floating  rate  debt  by  selling   retail
receivables  on  a fixed rate basis and, to a lesser  extent,  by
utilizing derivative financial instruments.  See notes 1  and  13
to  the Consolidated Financial Statements.  Corporate policy does
not allow the use of derivatives for speculative purposes.

Business Outlook

      The  demand  for heavy trucks is forecast to soften  during
fiscal  1996  and  correspondingly  NFC's  wholesale  and  retail
financing  activity  is anticipated to be  lower  in  1996.   The
decline  in  the  heavy truck industry may impact  the  financial
strength  of dealers and customers and NFC's ability to  maintain
the   current  level  of  portfolio  quality.   Competition  will
continue  to  put  pressure  on  the  Corporation's  retail  note
acquisition activity and retail note margins.

      Management  believes that collections  on  the  outstanding
receivables  portfolio plus cash available from the Corporation's
various  funding sources will permit Navistar Financial  to  meet
the financing requirements of Transportation's dealers and retail
customers through 1996 and beyond.
<PAGE>
                                                             Page
Item 8.  Financial Statements and Supplementary Data

  Navistar Financial Corporation and Subsidiaries:

  Statement of Consolidated Income and Retained Earnings
    for the years ended October 31, 1995, 1994 and 1993        10
  Statement of Consolidated Financial Condition as of
    October 31, 1995 and 1994                                  11
  Statement of Consolidated Cash Flow for the years ended
    October 31, 1995, 1994 and 1993                            12
  Notes to Consolidated Financial Statements                   13
  Supplementary Financial Data                                 34
  Independent Auditors' Report                                 39
<PAGE>
              Navistar Financial Corporation and Subsidiaries


          Statement of Consolidated Income and Retained Earnings
                            Millions of dollars
<TABLE>
<CAPTION>
                                                                 Note
For the years ended October 31              1995   1994    1993  Reference
                                                                 
<S>                                        <C>    <C>     <C>        <C>  
Revenues                                                         
  Retail notes and lease financing         $ 73.3 $ 71.4  $101.9     
  Wholesale notes                            54.1   39.2    32.0   
  Accounts                                   29.2   22.2    17.5   
  Servicing fee income                       18.3   17.3    10.6   
  Insurance premiums earned                  44.6   51.1    57.4   
  Marketable securities                       8.7    9.6    12.5 
     Total                                  228.2  210.8   231.9 
                                                                 
Expenses                                                         
  Cost of borrowing:                                             
     Interest expense                        75.1   62.7    74.6     8, 9
     Other                                    9.1    7.1     4.7 
     Total                                   84.2   69.8    79.3   
  Supplemental Trust expense                    -      -     3.7     10        
  Credit, collection and administrative      27.9   25.9    26.1   
  Provision for losses on receivables         2.6    2.3     1.5     6
  Insurance claims and underwriting          46.7   54.0    65.2   
  Other expense, net                          8.1    3.6     7.1 
     Total                                  169.5  155.6   182.9 
                                                                 
Income Before Taxes on Income and                                
Cumulative
  Effect of Changes in Accounting Policy     58.7   55.2    49.0   
                                                                 
Taxes on Income                              22.5   21.2    17.7     7
                                                                 
Income Before Cumulative Effect of Changes                       
  in Accounting Policy                       36.2   34.0    31.3   
                                                                 
Cumulative Effect of Changes in Accounting      -      -     8.8     10
Policy                                       
                                                                 
Net Income                                   36.2   34.0    22.5   
                                                                 
Retained Earnings                                                
  Beginning of year                          56.8   48.4    48.5   
  Dividends paid                             (9.0) (25.6)  (22.6)
  End of year                              $ 84.0 $ 56.8  $ 48.4     12
</TABLE>
                                     
                                     
                                     
                                     
                                     
              See Notes to Consolidated Financial Statements.
<PAGE>
              Navistar Financial Corporation and Subsidiaries


               Statement of Consolidated Financial Condition
                            Millions of dollars
<TABLE>
<CAPTION>
                                                                    Note
As of October 31                             1995       1994        Reference
                                                                 
<S>                                          <C>        <C>          <C>        
ASSETS                                                           
                                                                 
Cash and Cash Equivalents                    $    2.9   $   28.3  
Marketable Securities                           131.8      130.5     4
Receivables                                                      
  Finance receivables                         1,381.3    1,102.2     5
  Allowance for losses                          (10.4)      (8.2)    6
      Receivables, net                        1,370.9    1,094.0   
Amounts Due from Sales of Receivables           247.8      193.0     5
Equipment on Operating Leases, Net               39.3       26.6      
Repossessions                                     5.8        1.8       
Reinsurance Receivables                          24.8       33.7      
Other Assets                                     51.4       26.9  
                                                                 
Total Assets                                 $1,874.7   $1,534.8  
                                                                 
                                                                 
LIABILITIES AND SHAREOWNER'S EQUITY                              
                                                                 
Short-Term Debt                              $   50.5   $  419.2     8
Accounts Payable                                138.8       63.6      
Accrued Income Taxes                             12.0        2.3       
Accrued Interest                                 12.1       11.3      
Senior and Subordinated Debt                  1,279.8      672.3     9
Dealers' Reserves                                21.0       18.8      
Unpaid Insurance Claims and Unearned Premiums   103.8      121.7     
Shareowner's Equity                                                  12
  Capital stock (Par value $1.00, 1,600,000                      
    shares issued and outstanding) and
    paid-in capital                             171.0      171.0      
  Retained Earnings                              84.0       56.8      
  Unrealized gains (losses) on marketable                        
     securities                                   1.7       (2.2)    4 
       Total                                    256.7      225.6  
                                                                 
Total Liabilities and Shareowner's Equity    $1,874.7   $1,534.8  
</TABLE>
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                     
              See Notes to Consolidated Financial Statements.
<PAGE>
               Navistar Financial Corporation and Subsidiaries

                     Statement of Consolidated Cash Flow
                             Millions of dollars
<TABLE>
<CAPTION>
                                                                         Note
For the years ended October 31               1995      1994     1993     Reference
<S>                                       <C>        <C>      <C>         <C>   
Cash Flow From Operations                                             
  Net income                              $   36.2   $  34.0  $  22.5    
  Adjustments to reconcile net income to                              
     cash provided from operations:                                   
  Gains on sales of receivables               (5.2)    (11.8)   (14.2)    5
  Depreciation and amortization               11.1       8.7      9.7      
  Provision for losses on receivables          2.6       2.3      1.5     6
  Cumulative effect of changes in                                     
     accounting policy                           -         -      8.8      
  Supplemental Trust expense                     -         -      3.7      
  Increase (decrease) in accounts payable                             
    and accrued liabilities                    5.3      (3.5)    (1.8)    
  Increase in deferred income taxes             .5       3.1      3.7      
  Increase (decrease) in accounts payable                             
     to affiliated companies                  73.2      (0.9)    14.3     
  Increase (decrease) in unpaid insurance                             
     claims and unearned premiums, net of                             
     reinsurance receivables                  (8.9)     (6.5)    10.7     
  Other                                       (3.6)     (5.4)    (3.6) 
        Total                                111.2      20.0     55.3  
Cash Flow From Investing Activities                                   
  Purchase of retail notes and lease 
    receivables                           (1,099.5)   (915.9)  (770.2) 
  Principal collections on retail notes                               
    and lease receivables                    123.4     180.9    337.4    
  Proceeds from sold retail notes            726.8     994.8    558.2    
  Acquisitions over cash collections of                               
     wholesale notes and accounts 
     receivable                              (77.1)   (140.0)  (171.9)  
  Purchase of marketable securities          (61.9)    (51.8)   (58.1)   
  Proceeds from sales of marketable
    securities                                67.3      45.1     64.8     
  Increase in property and equipment                                  
     leased to others                        (18.7)     (5.3)   (14.2) 
       Total                                (339.7)    107.8    (54.0) 
Cash Flow From Financing Activities                                   
  Net increase in commercial paper            31.3      19.2        -
  Net increase (decrease) in                                          
     short-term bank borrowings             (400.0)    325.0     75.0     
  Net increase (decrease) in bank                                     
     revolving credit facility usage         405.0    (372.0)       -
  Net increase in asset-backed commercial                             
    paper facility usage                     275.8         -        -
  Principal payments on term debt           (100.0)    (80.0)   (99.0)   
  Principal payments on subordinated debt        -    (100.0)       -
  Proceeds from issuance of subordinated                  
    debt                                         -     100.0        -
  Dividends paid to Transportation            (9.0)    (25.6)   (22.6) 
       Total                                 203.1    (133.4)   (46.6) 
Decrease in Cash and Cash Equivalents        (25.4)     (5.6)   (45.3)   
Cash and Cash Equivalents at Beginning of
    Year                                      28.3      33.9     79.2  
Cash and Cash Equivalents at End of Year   $   2.9   $  28.3  $  33.9  
                                                                      
Supplementary disclosure of cash flow                                 
information:
  Interest paid                            $  74.3   $  64.8  $  79.3  
  Income taxes paid                        $  14.6   $  22.1  $  13.5  
</TABLE>


               See Notes to Consolidated Financial Statements.
<PAGE>
         NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES
                                
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

           FOR THE THREE YEARS ENDED OCTOBER 31, 1995
                                
                       MILLIONS OF DOLLARS


1. SUMMARY OF ACCOUNTING POLICIES

Principles of Consolidation

       The   consolidated   financial   statements   include   the   accounts
of    Navistar   Financial   Corporation   ("NFC")   and   its   wholly-owned
subsidiaries      ("Corporation").      All     significant      intercompany
accounts   and   transactions   have   been   eliminated.    All    of    the
Corporation's    capital   stock   is   owned   by   Navistar   International
Transportation   Corp.  ("Transportation"),  which   is   wholly   owned   by
Navistar International Corporation ("Navistar").

Revenue on Receivables

       Finance   charges   on   retail   notes   and   finance   leases   are
recognized   as  income  over  the  terms  of  the  receivables   using   the
interest    method.     Interest    from    interest-bearing    notes     and
accounts is taken into income on the accrual basis.

Allowance for Losses on Receivables

       The   Corporation's   allowance   for   losses   on   receivables   is
maintained    at    an   amount   management   considers    appropriate    in
relation    to    the   outstanding   receivables   portfolio.    Receivables
are   charged  off  to  the  allowance  for  losses  as  soon  as  they   are
determined   to   be   uncollectible  based   on   a   note-by-note   review,
after all prelitigation collection efforts have been exhausted.

       Repossessions  are carried  at the lower of the unpaid net receivable
balance or estimated realizable value of the equipment.

Receivable Sales

       The   Corporation   securitizes  and  sells  receivables   to   public
and    private    investors   with   limited   recourse.    The   Corporation
continues   to   service  the  receivables,  for  which   a   servicing   fee
is   received.    Servicing  fees  are  earned  on  a   level   yield   basis
over   the   terms  of  the  related  sold  receivables  and   are   included
in    servicing    fee   income.    In   a   subordinated    capacity,    the
Corporation     retains   excess   servicing   cash    flows,    a    limited
interest   in   the   principal  balances  of  the   sold   receivables   and
certain    cash    deposits    provided   as    credit    enhancements    for
investors.    Gains   or  losses  on  sales  of  receivables   are   credited
or   charged  to  financing  revenue  in  the  period  in  which  the   sales
occur.
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                
                       MILLIONS OF DOLLARS


1. SUMMARY OF ACCOUNTING POLICIES (Continued)

Insurance Operations

       Insurance  premiums  are  earned  on  a  pro  rata  basis   over   the
terms    of    the   policies.    Commission   costs   and   premium    taxes
incurred   in   acquiring  business  are  deferred  and  amortized   on   the
same   basis  as  such  premiums  are  earned.   The  liability  for   unpaid
insurance   claims   includes  provisions  for   reported   claims   and   an
estimate   of   unreported   claims   based   on   past   experience.    Such
provisions   include   an   estimate  of  loss   adjustment   expense.    The
estimated    liability   for   unpaid   insurance   claims    is    regularly
reviewed   and   updated.    Any  change  in  such  estimate   is   reflected
in current operations.

        The    Corporation's   wholly-owned   insurance   subsidiary,   Harco
National   Insurance   Company  ("Harco"),  limits  its   exposure   on   any
single   loss   occurrence   by  ceding  reinsurance   to   other   insurance
enterprises.     Reinsurance    receivables   including    amounts    related
to   unpaid   insurance   claims  and  prepaid   reinsurance   premiums   are
reported   as   assets   in   the   Statement   of   Consolidated   Financial
Condition.

Income Taxes

       Navistar  and its subsidiaries  file  a consolidated Federal income
tax  return  which  includes Transportation and the Corporation.   Federal
income taxes  for the  Corporation are computed on a separate consolidated
return basis and  are payable to Transportation.

Cash and Cash Equivalents

       Cash and cash equivalents include money market funds and marketable
securities with original  maturities of three months or less, except  for
such  securities held  by the insurance  operations which are included in
marketable securities.

Marketable Securities

       Marketable securities, which are classified as available-for-sale,
are reported at fair value.  Unrealized gains or losses, net of  deferred
income  taxes,  are  included  as  a separate component  of  shareowner's
equity in the Statement of Consolidated Financial Condition.

Derivative Financial Instruments

       The Corporation uses derivatives to  reduce  risks of interest rate
volatility.    All   derivative   financial   instruments   are   held for
purposes other than trading, and the  Corporation's  policy does not allow
the use  of  derivatives  for  speculative   purposes.  Gains  or   losses
related to hedges of anticipated sales of receivables are deferred and are
recognized in income when the receivables are sold.



<PAGE>

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                
                       MILLIONS OF DOLLARS


1. SUMMARY OF ACCOUNTING POLICIES (Continued)

Reclassification

       Certain amounts for prior years have been reclassified to conform
with the presentation used in the 1995 financial statements.


2. TRANSACTIONS WITH AFFILIATED COMPANIES

       The Corporation's primary business is the retail, wholesale, and,
to a lesser  extent,lease  financing of  products sold by Transportation
and its dealers within the United States.

Wholesale Notes, Wholesale Accounts and Retail Accounts Revenue

       In accordance  with the  agreements between the Corporation and
Transportation  relating to  financing of  wholesale notes,  wholesale
accounts and retail accounts, the Corporation receives interest income
from  Transportation  at agreed  upon interest  rates applied  to the
average outstanding balances less  interest amounts paid by dealers on
wholesale notes and wholesale accounts.

       The Corporation  purchases wholesale notes and accounts of dealers
from  Transportation  at the  principal  amount of  the  receivables.  An
acquisition fee applicable  to purchases of wholesale notes secured by new
equipment is charged to Transportation.  The retail accounts  are accounts
of Transportation  customers.  Revenue  collected from Transportation for
wholesale  notes, wholesale  and retail  accounts  and leases  was $55.7 
in 1995, $50.7 in 1994 and $41.2 in 1993.

Support Agreements

       Under   provisions  of  certain   public  and  private  financing 
arrangements,  agreements  with  Transportation and  Navistar  provide that 
the Corporation's  consolidated income  before interest expense  and income 
taxes will be maintained at not less than 125% of its consolidated interest
expense.   Since 1984,  no  maintenance  payments  have been required under 
these agreements.

Administrative Expenses

        The Corporation  pays a fee to Transportation for data processing
and  other administrative  services based on  the actual cost of services
performed.  The amount of the fee was $2.4 in 1995, $2.5 in 1994 and $2.3
in 1993.


<PAGE>

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                
                       MILLIONS OF DOLLARS
                                

2. TRANSACTIONS WITH AFFILIATED COMPANIES (Continued)

Short-Term Borrowings

       The   Corporation  had  daily  average  short-term   borrowings   from
Transportation   of  $93  in  1995  and  $83  in  1994  on   which   interest
accrued  at   the   Corporation's  incremental  short-term   borrowing  rate.
These  borrowings, including  $6 and $4 of interest expense in 1995 and 1994,
respectively, were repaid during each of the fiscal years.

Accounts Payable

        Accounts payable include $89.5 and $16.3 payable to Transportation
at October 31, 1995 and 1994, respectively.


3. INDUSTRY SEGMENTS

Information by industry segment is summarized as follows:
<TABLE>
<CAPTION>
                                          1995      1994       1993
<S>                                     <C>       <C>       <C>         
Revenues:                                                
 Finance operations                     $  175.1  $  150.6  $  164.2
 Insurance operations                       53.1      60.2      67.7
   Total revenue                        $  228.2  $  210.8  $  231.9
                                                         
Income before taxes on income and                  
 cumulative effect of changes in
 accounting policy:
Finance operations                      $   53.1  $   49.9  $   47.9
 Insurance operations                        5.6       5.3       1.1
    Total income before taxes on income                  
      and cumulative effect of changes
      in accounting policy              $   58.7  $   55.2  $   49.0
                                                         
Assets at end of year:                                   
 Finance operations                     $1,701.9  $1,354.1  $1,473.5
 Insurance operations                      172.8     180.7     151.7
   Total assets at end of year          $1,874.7  $1,534.8  $1,625.2
</TABLE>
<PAGE>

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                
                       MILLIONS OF DOLLARS
                                

4. MARKETABLE SECURITIES

      The  fair value of marketable securities is estimated based
on  quoted market prices, when available.  If a quoted  price  is
not available, fair value is estimated using quoted market prices
for   similar  financial  instruments.   The  difference  between
amortized  cost and fair value, net of deferred income taxes,  is
reflected  as  a  separate  component  of  shareowner's   equity.
Shareowner's equity was increased by net unrealized holding gains
of  $1.7  as of October 31, 1995, and decreased by net unrealized
holding  losses of $2.2 at October 31, 1994. The following  table
sets  forth, by type of security issuer, the amortized  cost  and
estimated market values at October 31, 1995 and 1994:
<TABLE>
<CAPTION>
                              Amortized  Gross Unrealized   Fair
                                Cost     Gains     Losses   Value
<S>
October 31, 1995              <C>        <C>       <C>      <C>   
U.S. government securities    $ 52.8     $  1.2    $  .1    $ 53.9
Corporate debt securities       32.0         .2       .2      32.0
Mortgage- and                                         
 asset-backed securities        32.7         .5       .1      33.1
Foreign governments              1.7          -        -       1.7
   Total debt securities      $119.2     $  1.9    $  .4    $120.7
                                                      
Equity securities               10.0        1.7       .6      11.1
   Total                      $129.2     $  3.6    $ 1.0    $131.8


October 31, 1994                                      
U.S. government securities    $ 67.4     $   .4    $ 2.4    $ 65.4
Corporate debt securities       27.7          -       .4      27.3
Mortgage- and                                         
 asset-backed securities        28.3         .1       .7      27.7
Foreign governments              1.6          -        -       1.6
   Total debt securities      $125.0     $   .5    $ 3.5    $122.0
                                                      
Equity securities                8.8         .4       .7       8.5
   Total                      $133.8     $   .9    $ 4.2    $130.5
</TABLE>
<PAGE>

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                
                       MILLIONS OF DOLLARS
                                

4. MARKETABLE SECURITIES (Continued)

      Contractual  maturities of marketable  debt  securities  at
October 31, 1995, are as follows:
<TABLE>
<CAPTION>
                                               Amortized  Fair
                                                 Cost     Value
<S>                                           <C>       <C>
Due in one year or less                       $  21.9   $  21.9
Due after one year through five years            32.1      32.8
Due after five years through ten years           21.2      21.5
Due after ten years                              11.3      11.4
                                                 86.5      87.6
Mortgage- and asset-backed securities            32.7      33.1
 Total                                        $ 119.2   $ 120.7
</TABLE>

      Proceeds  from sales or maturities of marketable securities
available for sale were $67.3 during 1995 and $45.1 during  1994.
Gross  gains of $.8 and $.9 and gross losses of $.6 and $.2  were
realized on those sales in 1995 and 1994, respectively.

     All marketable securities at October 31, 1995 and 1994, were
held  by  Harco, of which $23.2 and $29.5, respectively, were  on
deposit  with various state departments of insurance or otherwise
restricted as to use.


5. FINANCE RECEIVABLES

     Finance receivable balances, net of unearned finance income,
at October 31 are summarized as follows:
<TABLE>
<CAPTION>
                                                  1995      1994
<S>                                            <C>       <C>     
Retail notes and lease financing               $  747.2  $  513.9
                                                        
Wholesale notes                                   268.2     230.6
                                                        
Accounts:                                               
  Retail                                          316.7     308.2
  Wholesale                                        49.2      49.5
     Total                                        365.9     357.7
       Total finance receivables               $1,381.3  $1,102.2
</TABLE>
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                
                       MILLIONS OF DOLLARS
                                

5. FINANCE RECEIVABLES (Continued)

      Contractual  maturities  of finance  receivables  including
unearned  finance income at October 31, 1995, are  summarized  as
follows:
<TABLE>
<CAPTION>
                                      Retail    Wholesale    Accounts
<S>                                   <C>        <C>          <C>
Due in:
 1996                                 $238.6      $181.3      $365.9
 1997                                  203.0        86.9           -
 1998                                  184.5           -           -
 1999                                  139.8           -           -
 2000                                   92.5           -           -
Due after 2000                           7.7           -           -
   Gross finance receivables           866.1       268.2       365.9
Unearned finance income                118.9           -           -
   Total finance receivables          $747.2      $268.2      $365.9
</TABLE>

      The  actual cash collections from finance receivables  will
vary   from   the  contractual  cash  flows  because  of   sales,
prepayments,   extensions   and   renewals.    The    contractual
maturities,  therefore, should not be regarded as a  forecast  of
future collections.

      The  Corporation sells finance receivables  to  public  and
private  investors with limited recourse provisions.  Outstanding
sold receivable net balances at October 31 are as follows:
<TABLE>
<CAPTION>     
                                              1995        1994
<S>                                         <C>         <C>         
Retail notes                                $1,173.2    $1,046.8
Wholesale notes                                500.0       300.0
  Total                                     $1,673.2    $1,346.8
</TABLE>

     Gains or losses from the sales of receivables are recognized
in  the  period in which such sales occur.  As the allowance  for
credit  losses  is  adequately provided prior to  the  receivable
sales,  gains from receivable sales are not reduced for  expected
credit  losses.   Included in "Retail notes and lease  financing"
revenue  are gains totaling $5.2, $11.8 and $14.2 on retail  note
receivable  sales of $740, $1,033 and $576 for the  fiscal  years
ended  October 31, 1995, 1994 and 1993, respectively.   Gains  on
sales  of  wholesale receivables are not material as a result  of
their short maturities.

      The Corporation has two wholly-owned subsidiaries, Navistar
Financial  Retail Receivables Corporation ("NFRRC") and  Navistar
Financial  Securities Corporation ("NFSC"), which have a  limited
purpose   of   purchasing   retail  and  wholesale   receivables,
respectively, and transferring an undivided ownership interest in
such  notes to investors in exchange for pass-through  notes  and
certificates.   These subsidiaries have limited recourse  on  the
sold
<PAGE>

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                
                       MILLIONS OF DOLLARS
                                

5. FINANCE RECEIVABLES (Continued)

receivables and their assets are available to satisfy the  claims
of their creditors prior to such assets becoming available to the
Corporation or affiliated companies.  During fiscal 1995, in  two
separate  sales, the Corporation sold a total of $740  of  retail
notes,  net  of  unearned finance income, through  NFRRC  to  two
individual owner trusts.  The owner trusts, in turn, sold $714 of
notes  and  $26  of certificates to investors.  The  proceeds  of
$693,  after  deducting  $2  for underwriting  fees  and  $45  to
establish reserve accounts with the trusts as credit enhancement,
were   used  by  the  Corporation  for  general  working  capital
purposes.   At October 31, 1995, the remaining shelf registration
available  to  NFRRC for issuance of asset-backed securities  was
$1,430.    On  November  14,  1995,  NFRRC  filed  an  additional
registration   with   the  Securities  and  Exchange   Commission
providing  for  the issuance from time to time of  an  additional
$2,000 of asset-backed securities.

      At  October  31, 1994, NFSC had in place a  $300  revolving
wholesale note sales trust providing for the continuous  sale  of
eligible  wholesale notes on a daily basis.  On June 8,  1995,  a
new  Navistar Financial Dealer Note Master Trust issued  $200  of
9.3  year  asset-backed certificates to the public.  The proceeds
of  $195, net of $2 of expenses and underwriting fees and  $3  to
fund  a reserve account, were used by the Corporation for general
working  capital  purposes.  Under the terms  of  the  sale,  the
Corporation  increased the amount subordinated to the  investor's
interest  from  $46.5  to  $86.5.   This  issuance  of  $200   of
certificates  during  fiscal  1995  increased  NFSC's   revolving
wholesale  note  sales  trusts to $500.   The  sales  trusts  are
comprised  of  three $100 pools of notes maturing  serially  from
1997 to 1999 and the $200 pool maturing in 2004.

      The Corporation's retained interest in sold receivables and
other  related  amounts are generally restricted and  subject  to
limited  recourse provisions.  Holdback reserves were established
pursuant  to  the limited recourse provisions of the retail  note
sales  to  private  investors.   The  retail   securitized  sales
structure requires the Corporation to maintain cash reserves with
the  trusts  as  credit enhancement for public sales.   The  cash
reserves  are held by the trusts and restricted for  use  by  the
securitized sales agreements.
<PAGE>

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                
                       MILLIONS OF DOLLARS
                                

5. FINANCE RECEIVABLES (Continued)

The  following is a summary of amounts included in  "Amounts  Due
from Sales of Receivables":
<TABLE>
<CAPTION>
                                                    October 31
                                                  1995      1994
<S>                                             <C>       <C>                
Cash held and invested by trusts                $ 66.8    $ 51.5
Subordinated retained interests in wholesale         
  receivables                                     86.3      46.5  
Subordinated retained interests in retail           
  receivables                                     12.2      14.1
Holdback reserves                                 43.7      64.4
Excess servicing fee and other                    48.0      24.5
Allowance for credit losses                       (9.2)     (8.0)
  Total                                         $247.8    $193.0
</TABLE>

6. ALLOWANCE FOR LOSSES

      The  allowance for losses on receivables is  summarized  as
follows:
<TABLE>
<CAPTION>
                                              1995    1994    1993
<S>                                          <C>     <C>     <C>           
Total allowance for losses at beginning of
  year                                       $16.2   $14.8   $14.0
Provision for losses                           2.6     2.3     1.5
Net (losses) recoveries (charged)                        
  credited to allowance                         .8     (.9)    (.7)
    Total allowance for losses at end of
      year                                   $19.6   $16.2   $14.8
                                                         
                                                         
Allowance pertaining to:                                 
  Owned notes                                $10.4   $ 8.2   $10.9
  Sold notes                                   9.2     8.0     3.9
     Total                                   $19.6   $16.2   $14.8
</TABLE>
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                
                       MILLIONS OF DOLLARS


7. TAXES ON INCOME

     Deferred tax assets and liabilities are generally determined
based  on the difference between the financial statement and  tax
bases of assets and liabilities using enacted tax rates in effect
for  the  year in which the differences are expected to  reverse.
Recognition  of  deferred  tax  assets  is  allowed   if   future
realization is more likely than not.
                                
     Taxes on income are summarized as follows:
<TABLE>
<CAPTION>
                                            1995    1994    1993
<S>                                        <C>     <C>     <C>              
Current:                                                 
  Federal                                  $18.9   $15.1   $12.0
  State and local                            3.1     3.0     2.0
     Total current                          22.0    18.1    14.0
                                                         
Deferred (primarily Federal)                  .5     3.1     3.7
     Total                                 $22.5   $21.2   $17.7
</TABLE>
                                
      The  effective tax rate of 38% in 1995 and 1994 and 36%  in
1993 differs from the statutory United States Federal tax rate of
35%  primarily because of state and local income taxes.  Deferred
tax  assets  and  liabilities  at  October  31,  1995  and  1994,
comprised the following:
<TABLE>
<CAPTION>
                                                  1995      1994
<S>                                               <C>       <C>              
Deferred tax assets:                                            
  Other postretirement benefits                   $2.8      $2.7
  Unrealized losses on marketable securities         -       1.2
     Total deferred tax assets                     2.8       3.9
                                                         
Deferred tax liabilities:                                
  Depreciation and other                           6.4       5.9
  Unrealized gains on marketable securities        1.0         -
     Total deferred tax liabilities                7.4       5.9
     Net deferred tax liabilities                 $4.6      $2.0
</TABLE>
      During 1992, auditors of the Illinois Department of Revenue
("Department")  began an income tax audit of NFC for  the  fiscal
years  ended  October 31, 1989, 1990 and 1991.   On  February  1,
1994,  the  Department issued a Notice of Deficiency to  NFC  for
approximately  $11.9  million.   The  Department  has  taken  the
position  that  nearly 100% of NFC's income  during  these  years
should  be  attributed to and taxed by Illinois.   NFC  maintains
that  the Department's interpretation and application of the  law
is  incorrect  and  improper, and that the Department's  intended
result is constitutionally prohibited.  NFC's outside counsel  is
of  the  opinion  that  it is more likely  than  not  that  NFC's
position will prevail such that the Department's action will  not
have a material impact on NFC's earnings and financial position.
<PAGE>

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                
                       MILLIONS OF DOLLARS


8. SHORT-TERM DEBT

      Commercial paper is issued by the Corporation with  varying
terms.   The  Corporation  also has  short-term  borrowings  with
various  banks  on  a  non-committed basis.    Compensating  cash
balances  and  commitment  fees  are  not  required  under  these
agreements.

     Short-Term Debt at October 31 is summarized as follows:
<TABLE>
<CAPTION>
                                                 1995     1994
<S>                                             <C>      <C>                
Commercial paper                                $50.5    $ 19.2
Short-term bank borrowings                          -     400.0
  Total                                         $50.5    $419.2
</TABLE>

     Information regarding short-term borrowings is as follows:
<TABLE>
<CAPTION>
                                           1995    1994    1993
<S>                                      <C>      <C>      <C>          
Aggregate obligations outstanding:                       
  Daily average                          $ 37.8   $ 11.7   $  .6
  Maximum month-end balance                81.1    419.2    75.0
                                                         
Weighted average interest rate:                          
  On average daily borrowing               6.4%     5.4%    6.5%
  At October 31                            6.3%     5.6%    6.5%
</TABLE>

      Unused  commitments under the Corporation's bank  revolving
credit facility and bank liquidity facility supporting the asset-
backed   commercial  paper  program  are  used  as   backup   for
outstanding  short-term  borrowings.  See  also  note  9  to  the
Consolidated Financial Statements.
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                
                       MILLIONS OF DOLLARS


9. SENIOR AND SUBORDINATED DEBT

     Senior and Subordinated Debt outstanding at October 31 is
summarized as follows:
<TABLE>
<CAPTION>
                                                 1995      1994
<S>                                           <C>        <C>                
Bank revolving credit, at variable rates,              
  due October 1998                            $  760.0   $ 355.0
                                                       
Funding under asset-backed commercial                  
   paper program, at variable rates,                   
   maturing October 1998                         302.3        -
                                                       
Senior term debt:                                      
  Notes, medium-term, 9.50%, due 1996            117.5     217.5
            Unamortized discount                     -       (.2)
       Total senior term debt                    117.5     217.3
                                                       
Subordinated term debt:                                
  Senior Notes, 8 7/8%, due November 1998        100.0     100.0
       Total senior and subordinated debt     $1,279.8   $ 672.3
</TABLE>

      The weighted average interest rate on total debt, including
short-term   debt  and  the  effect  of  discounts  and   related
amortization,  was 7.4%, 7.1% and 6.6% in 1995,  1994  and  1993,
respectively.   The  aggregate  annual  maturities  and  required
payments  of  debt are as follows:  1996, $117.5; 1998,  $1,062.3
and 1999, $100.0.

      Effective  November  9, 1994, the Corporation  amended  and
restated its $727 bank revolving credit agreement, extending  the
maturity date to October 31, 1998 and expanding the commitment to
$900.   In  addition, the purchasers' commitments under the  $600
retail notes purchase facility agreement were terminated and  the
Corporation  established  a  $300 asset-backed  commercial  paper
("ABCP")  program supported by a bank liquidity facility  with  a
maturity  date of October 31, 1998.  Under the terms of the  ABCP
program,  a  special  purpose  wholly-owned  subsidiary  of   NFC
purchases  eligible  receivables from NFC.   All  assets  of  the
subsidiary are pledged to a Trust that funds the receivables with
A1/P1  rated  commercial paper.  In addition, the assets  may  be
sold to the Trust.

      Available  funding  under the amended and  restated  credit
facility  and  the ABCP program was $148, of which  $50  provided
funding backup for the outstanding short-term debt at October 31,
1995.  The remaining $98 when combined with unrestricted cash and
cash equivalents made $101 available to fund the general business
purposes  of  the  Corporation at October 31,  1995.   While  the
amended   revolving  credit  facility  removed  certain  dividend
restrictions,  the  Corporation is required to maintain  tangible
net  worth at a minimum of $175 and a debt to tangible net  worth
ratio  of  no greater than 7 to 1.  Consistent with the  previous
revolving   credit  agreement,  the  restated  agreement   grants
security  interests  in substantially all  of  the  Corporation's
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                
                       MILLIONS OF DOLLARS


9. SENIOR AND SUBORDINATED DEBT (Continued)

assets  to  the  Corporation's  debtholders.   Compensating  cash
balances  are  not  required under the restated revolving  credit
facility.  Facility fees are paid quarterly regardless of usage.

     As of October 31, 1995, approximately $208 of sold notes was
outstanding  under  the  $600  retail  notes  purchase  facility.
Participants of the facility will continue to own the receivables
during the run-off.


10. RETIREMENT BENEFITS

       The   Corporation  provides  postretirement  benefits   to
substantially  all  of its employees.  Expenses  associated  with
postretirement  benefits include pension expense  for  employees,
retirees  and surviving spouses, and postretirement  health  care
and  life  insurance  expense for employees, retirees,  surviving
spouses and dependents.

     The pension plans are non-contributory with benefits related
to  an  employee's length of service and compensation rate.   The
Corporation's  policy is to fund its qualified  pension  plan  in
accordance  with applicable government regulations  and  to  make
additional payments as necessary to maintain full funding of  the
vested  accumulated  benefit obligation.  For  plan  years  which
ended   during  the  current  fiscal  year,  all  legal   funding
requirements  have been met.  Plan assets are primarily  invested
in a dedicated portfolio of long-term fixed income securities.

      In  addition to providing pension benefits, the Corporation
provides  health  care and life insurance for a majority  of  its
retired employees.  For most retirees, these benefits are defined
by  the terms of an agreement between Navistar and its employees,
retirees  and collective bargaining organizations which  provides
for  postretirement health care and life insurance benefits  (the
"Plan").   The  Plan,  which was implemented  on  July  1,  1993,
provided  for cost sharing between Navistar and retirees  in  the
form  of  premiums,  co-payments and deductibles.   A  trust  was
established  to provide a vehicle for funding of the health  care
liability through Navistar contributions and retiree premiums.  A
separate independent Retiree Supplemental Benefit Trust was  also
established  to potentially reduce retiree premiums,  co-payments
and  deductibles and provide additional benefits in  the  future.
During  1993, the Corporation agreed to contribute  $3.7  to  the
Supplemental Benefit Trust.
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                
                       MILLIONS OF DOLLARS


10. RETIREMENT BENEFITS (Continued)

Pension Expense
     Net pension cost includes the following:
<TABLE>
<CAPTION>
                                             1995    1994    1993
<S>                                         <C>     <C>     <C>              
Service cost-benefits earned during                         
  the period                                $  .5   $ 1.0   $  .6
Interest cost on projected benefit                          
  obligation                                  2.8     2.7     2.8
Return on assets - actual (gain) loss        (9.1)    3.3    (8.4)
                 - deferred gain (loss)       5.8    (6.8)    5.2
Other costs (including amortization of                      
  transition amount)                            -      .1      .1
    Net pension cost                        $   -   $  .3   $  .3
</TABLE>

Pension Assets and Liabilities

     The plans' funded status and reconciliation to the Statement
of  Consolidated  Financial Condition as of October  31  were  as
follows:
<TABLE>
<CAPTION>
                                Plan in Which         Plan in Which
                                Assets Exceed     Accumulated Benefits
                            Accumulated Benefits     Exceed Assets
                                1995       1994       1995       1994
<S>                           <C>        <C>        <C>        <C>           
Actuarial present value of:                              
  Vested benefits             $(31.8)    $(25.8)    $ (2.2)    $ (1.8)
  Non-vested benefits           (4.0)      (3.0)       (.1)       (.1)
     Accumulated benefit                                 
       obligation              (35.8)     (28.8)      (2.3)      (1.9)
  Effect of projected future                             
       compensation levels       (.9)       (.6)         -          -
     Total projected benefit                             
       obligation              (36.7)     (29.4)      (2.3)      (1.9)
Plan assets at fair value       41.5       34.5          -          -
  Funded status at October 31    4.8        5.1       (2.3)      (1.9)
Unrecognized net losses (gains) (4.2)      (4.8)        .6         .2
Unrecognized plan amendments      .5         .5          -          -
Unrecognized net obligation                              
       as of transition date      .1         .2          -          -
     Net asset (liability)    $  1.2     $  1.0     $ (1.7)    $ (1.7)
</TABLE>
<PAGE>



           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                
                       MILLIONS OF DOLLARS


10. RETIREMENT BENEFITS (Continued)

      The  weighted average rate assumptions used in  determining
the projected benefit obligation and pension expense were:
<TABLE>
<CAPTION>
                                                1995   1994   1993
<S>                                             <C>    <C>    <C>         
Discount rate used to determine the present 
  value of the projected benefit obligations    7.5%   9.2%    6.7%
Expected long-term rate of return on plan
  assets                                        9.9%   9.0%   10.0%
Expected rate of increase in future                      
  compensation levels                           3.5%   3.5%    3.5%
</TABLE>

Other Postretirement Benefits

      During  1993, the Corporation adopted SFAS 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions,"  and
recognized  the  transition obligation as  a  one-time,  non-cash
charge  to  earnings.  The cumulative effect of  this  change  in
accounting  policy,  as of November 1, 1992,  was  $8.8,  net  of
income taxes of $5.4.

      The components of expense for other postretirement benefits
that  are  included in the Statement of Consolidated  Income  and
Retained Earnings include the following:
<TABLE>
<CAPTION>
                                                 1995   1994   1993
<S>                                              <C>    <C>    <C>            
Service cost - benefits earned during
  the year                                       $ .3   $ .2   $ .3
Interest cost on the accumulated benefit                  
  obligation                                       .8     .7     .6
Expected return on assets - actual (gain)/loss   (1.5)   (.2)     -
                          - deferred gain/(loss)  1.2      -      -
Total cost of postretirement benefits other
  than pension                                   $ .8   $ .7   $ .9
</TABLE>
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                
                       MILLIONS OF DOLLARS


10. RETIREMENT BENEFITS (Continued)

      The  components  of the liability for other  postretirement
benefits as of October 31, 1995 and 1994, were as follows:
<TABLE>
<CAPTION>
                                                       1995    1994
<S>                                                   <C>     <C>  
Retirees and their dependents                         $(4.9)  $(4.2)
Active employees eligible to retire                    (2.4)   (2.2)
Other active participants                              (3.3)   (2.6)
                                                         
Accumulated postretirement benefit obligation (APBO)  (10.6)   (9.0)
Plan assets at fair value                               4.5     2.8
                                                       
APBO in excess of plan assets                          (6.1)   (6.2)
Unrecognized net loss                                    .4      .7
                                                         
Net liability                                         $(5.7)  $(5.5)
</TABLE>
      The expected return on plan assets was 10% for 1995 and  9%
for  1994 and 1993.  The weighted average of discount rates  used
to  determine  the accumulated postretirement benefit  obligation
was  7.7%  and  8.9% at October 31, 1995 and 1994,  respectively.
For 1996, the weighted average rate of increase in the per capita
cost  of  covered health care benefits is projected to  be  9.8%.
The  rate  is projected to decrease to 5.0% in the year 2003  and
remain  at  that level each year thereafter.  If the  cost  trend
rate  assumptions were increased by one percentage point for each
year,  the  accumulated postretirement benefit  obligation  would
increase  by  approximately  $1.7  and  the  associated   expense
recognized for the year ended October 31, 1995, would increase by
an estimated $.2.
                                

11. LEASES

      The  Corporation is obligated under noncancelable operating
leases  for  the majority of its office facilities and equipment.
These  leases  are generally renewable and provide that  property
taxes  and  maintenance costs are to be paid by the  lessee.   At
October   31,  1995,  future  minimum  lease  commitments   under
noncancelable operating leases with remaining terms in excess  of
one year are as follows:
<TABLE>
<S>       <C>                                        <C>
          Year Ended October 31,
          1996                                       $1.7
          1997                                        1.6
          1998                                        1.6
          1999                                        1.5
          2000                                        1.2
          Thereafter                                   .2
            Total                                    $7.8
</TABLE>
<PAGE>
      
                               
                               
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                
                       MILLIONS OF DOLLARS


12. SHAREOWNER'S EQUITY

      The  number  of authorized shares of capital  stock  as  of
October  31,  1995  and 1994, was 2,000,000  of  which  1,600,000
shares  were  issued  and outstanding.  All  of  the  issued  and
outstanding  capital  stock is owned  by  Transportation  and  no
shares  are reserved for officers and employees, or for  options,
warrants, conversions and other rights.  As discussed in note  9,
the Corporation amended and restated its bank credit facility  in
November   1994  which,  among  other  things,  changed  previous
limitations  on the Corporation's authority to pay  dividends  to
Transportation.


13. FINANCIAL INSTRUMENTS

    Fair Value of Financial Instruments

      The  carrying  amounts and estimated  fair  values  of  the
Corporation's financial instruments were as follows:
<TABLE>
<CAPTION>
                                         1995                1994
                                 Carrying    Fair     Carrying   Fair
                                  Amount     Value     Amount    Value
<S>                              <C>       <C>        <C>      <C> 
Financial assets:                                        
  Finance receivables:                                   
     Retail notes                $  680.8  $  707.2   $ 452.0  $ 458.1
     Wholesale notes                268.2     268.2     230.6    230.6
     Accounts                       365.9     365.9     357.7    357.7
 Amounts due from sales of                               
     receivables                    247.8     234.6     193.0    183.0
                                                         
Financial liabilities:                                   
  Senior and subordinated debt   $1,279.8  $1,282.9   $ 672.3  $ 673.9
</TABLE>
<PAGE>




           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                
                       MILLIONS OF DOLLARS


13. FINANCIAL INSTRUMENTS (Continued)

      The methods and assumptions used to estimate the fair value
of each class of financial instruments are summarized as follows:

 Cash and Cash Equivalents

 The  carrying amount approximates fair value as a result of  the
 short maturity of these instruments.
 
 Marketable Securities
 
 Fair  value is estimated based on quoted market price.  The cost
 and fair value of marketable securities is disclosed in note 4.
 
 Finance Receivables
 
 The   fair   value  of  truck  retail  notes  is  estimated   by
 discounting  the  future cash flows using an estimated  discount
 rate  reflecting  current rates paid to  purchasers  of  similar
 types  of  receivables with similar credit,  interest  rate  and
 prepayment  risks.  For other retail notes, primarily  variable-
 rate notes that reprice frequently, and for wholesale notes  and
 retail  and wholesale accounts, the carrying amounts approximate
 fair  value  as  a  result  of the  short  term  nature  of  the
 receivables.
 
 Amounts Due from Sales of Receivables
 
 The  fair  values  of  excess servicing  cash  flows  and  other
 subordinated   amounts   due   the  Corporation   arising   from
 receivable   sale  transactions  were  derived  by   discounting
 expected  cash  flows at estimated current  market  rates.   The
 fair value of cash deposits approximates their carrying value.
 
 Senior and Subordinated Debt
 
 For  variable-rate  borrowings under the bank  revolving  credit
 agreement   that   reprice  frequently,  the   carrying   amount
 approximates  fair  value.   The  fair  values  of   notes   and
 debentures  are  estimated based on quoted market  prices  where
 available  and, where not available, on quoted market prices  of
 debt with similar characteristics.
<PAGE>
                                
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                
                       MILLIONS OF DOLLARS
                                
                                
13. FINANCIAL INSTRUMENTS (Continued)

  Derivative Financial Instruments

      The  Corporation  manages its exposure to  fluctuations  in
interest rate changes by limiting the amount of fixed rate assets
funded  with  variable  rate debt by selling  fixed  rate  retail
receivables  on  a fixed rate basis and, to a lesser  extent,  by
utilizing  derivative  financial instruments.   These  derivative
financial  instruments may include interest rate swaps,  interest
rate  caps  and forward interest rate contracts.  The Corporation
manages  exposure  to counterparty credit risk by  entering  into
derivative    financial   instruments   with   major    financial
institutions  that  can be expected to fully  perform  under  the
terms  of such agreements.  Notional amounts are used to  measure
the  volume  of  derivative  financial  instruments  and  do  not
represent exposure to credit loss.

      The Corporation enters into forward interest rate contracts
to  manage its exposure to fluctuations in funding costs from the
anticipated  securitization  and  sale  of  retail  notes.    The
Corporation  locks  into  an interest rate  by  entering  into  a
forward  contract  on  a  U.S.  Treasury  security   whose  terms
approximate  those  used to determine the selling  price  of  the
anticipated  sale of receivables.  Gains or losses incurred  with
the  closing  of these agreements are included as a component  of
the gain on sale of receivables.

      During  June through October 1995, the Corporation  entered
into  $325 of forward interest rate lock agreements on a Treasury
maturing in 1997 related to the anticipated November 1995 sale of
retail  receivables.  See also note 15.  These hedge  agreements,
which  were closed on October 18, 1995, in conjunction  with  the
pricing  of  the sale, resulted in an immaterial loss  which  was
deferred  at  October 31, 1995, and included in the gain  on  the
sale of receivables recognized in November 1995.

      During  fiscal 1994 and 1995, there were no swap agreements
outstanding and only one interest rate cap purchased in 1985  for
a  notional amount of $50 which serves to hedge the interest cost
of  variable rate debt.  The premium paid for this interest  rate
cap  agreement has been fully amortized to interest expense.  The
effect of this cap on the Corporation's interest expense was  not
material.

      The  Corporation's  wholly-owned insurance  subsidiary  has
investments  in Collateralized Mortgage Obligations ("CMO's")  of
$33 which are included in the Corporation's marketable securities
at October 31, 1995.
<PAGE>
                                
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                
                       MILLIONS OF DOLLARS


14. LEGAL PROCEEDINGS

      In  May  1993, a jury issued a verdict in favor  of  Vernon
Klein   &   Equipment,   Inc.   ("Klein   Truck")   and   against
Transportation  and  the Corporation in the amount  of  $10.8  in
compensatory damages and $15 in punitive damages.  Transportation
appealed the verdict and, in November 1994, the Court of  Appeals
of  the  State  of  Oklahoma reversed  the  verdict  and  entered
judgment  in favor of Transportation on virtually all aspects  of
the  case.   Klein Truck appealed to the Oklahoma  Supreme  Court
where the case is now pending.

      The Corporation and its subsidiaries are subject to various
other claims arising in the ordinary course of business, and  are
parties  to  various legal proceedings which constitute  ordinary
routine  litigation incidental to the business of the Corporation
and  its  subsidiaries.   In  the opinion  of  the  Corporation's
management,  none of these proceedings or claims are material  to
the business or the financial condition of the Corporation.


15. SUBSEQUENT EVENT

     In November 1995, the Corporation sold $525 of retail notes,
net  of unearned finance income, through NFRRC to an owner  trust
which,  in  turn,  sold $507 of notes and $18 of certificates  to
investors.   The Corporation initially sold $455 of retail  notes
receivable on November 1, 1995, and via a pre-funding feature  in
the  agreement,  subsequently sold an additional  $70  of  retail
receivables  on November 10, 1995.  The proceeds of  $499,  after
deducting $1 for underwriting fees and $25 to establish a reserve
account with the trust as credit enhancement for the public sale,
were   used  by  the  Corporation  for  general  working  capital
purposes.
<PAGE>

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                
                       MILLIONS OF DOLLARS


16. QUARTERLY FINANCIAL INFORMATION  (unaudited)
<TABLE>
<CAPTION>
                                                 1995
                              1st       2nd       3rd       4th     Fiscal
                            Quarter   Quarter   Quarter   Quarter    Year
<S>                          <C>       <C>      <C>        <C>      <C>
Revenues                     $50.9     $56.5    $64.1      $56.7    $228.2
Interest expense              17.1      20.4     19.1       18.5      75.1
Provision for losses
  on receivables                .1        .5       .4        1.6       2.6
Net income                     6.3       7.5     13.3        9.1      36.2
</TABLE>
<TABLE>
<CAPTION>

                                                 1994
                              1st       2nd       3rd       4th     Fiscal
                            Quarter   Quarter   Quarter   Quarter    Year
<S>                          <C>       <C>       <C>       <C>      <C>
Revenues                     $58.8     $50.2     $50.6     $51.2    $210.8
Interest expense              15.7      15.7      16.7      14.6      62.7
Provision for losses
  on receivables                .8        .2        .1       1.2       2.3
Net income                    10.9       8.0       8.6       6.5      34.0
</TABLE>
<PAGE>
                    SUPPLEMENTARY FINANCIAL DATA


           Five Year Summary of Financial and Operating Data
                                   
                      Dollar amounts in millions
<TABLE>
<CAPTION>    
                                   1995    1994      1993      1992      1991
<S>                           <C>       <C>       <C>       <C>       <C>  
Revenues and net income
    retained
  Revenues                    $  228.2  $  210.8  $  231.9  $  228.3  $  235.9
  Provision for losses on                                       
    receivables                    2.6       2.3       1.5       3.6       5.8
  Interest expense                75.1      62.7      74.6      82.2      90.3
  Other charges, net              91.8      90.6     106.8      96.1      86.6
  Taxes on income                 22.5      21.2      17.7      16.9      20.2
  Cumulative effect of changes                                 
    in accounting policy, net                                  
    of income taxes                  -         -       8.8         -         -
  Net income                      36.2      34.0      22.5      29.5      33.0
  Dividends paid                   9.0      25.6      22.6      16.0      74.0
  Net income retained          $  27.2    $  8.4    $  (.1)   $ 13.5    $(41.0)
                                                               
                                                                
  Percent  of  net  income  to                                 
    average shareowner's equity   15.0%     15.1%     10.3%     13.8%     15.0%
                                                                
                                                                
Assets at end of year                                           
  Cash and cash equivalents     $  2.9   $  28.3    $ 33.9    $ 79.2    $ 16.0
  Marketable securities          131.8     130.5     125.6     130.5     119.1
  Finance receivables:                                          
    Truck retail notes and
      lease financing            747.2     513.9     823.5     955.1     928.0
    Wholesale notes              268.2     230.6     212.5      81.5      37.8
    Accounts                     365.9     357.7     245.1     204.3     162.9
      Total                    1,381.3   1,102.2   1,281.1   1,240.9   1,128.7
    Allowance for losses         (10.4)     (8.2)    (10.9)    (12.4)    (11.7)
      Finance receivables,net  1,370.9   1,094.0   1,270.2   1,228.5   1,117.0
  Other assets                   369.1     282.0     195.5     170.5     196.0
       Total assets           $1,874.7  $1,534.8  $1,625.2  $1,608.7  $1,448.1 
                                                                
Liabilities   and  shareowner's                                 
equity at end of year
  Commercial paper             $  50.5  $   19.2  $      -  $      -  $  143.8
  Short-term bank borrowings         -     400.0      75.0         -      40.0
  Bank revolving credit          760.0     355.0     727.0     727.0     220.0
  Asset-backed commercial paper
    facility                     302.3         -         -         -         -
  Medium-term notes              117.5     217.3     222.2     261.1     419.4
  Long-term notes and debentures     -         -      75.0     135.0     135.0
  Subordinated debt              100.0     100.0     100.0      94.9      93.7
      Total debt               1,330.3   1,091.5   1,199.2   1,218.0   1,051.9
  Other liabilities              287.7     217.7     206.6     171.2     190.2
  Shareowner's equity            256.7     225.6     219.4     219.5     206.0
      Total liabilities and                                    
        shareowner's equity   $1,874.7  $1,534.8  $1,625.2  $1,608.7  $1,448.1
                                                                
                                                                
                                                                
  Debt to equity ratio           5.2:1     4.8:1     5.5:1     5.5:1     5.1:1
  Senior debt to capital funds
    ratio                        3.4:1     3.0:1     3.4:1     3.6:1     3.2:1
                                                                
  Gross insurance premiums
    written                    $  52.0    $ 59.0    $ 65.8    $ 69.2    $ 66.3
                                                                
  Number of employees at
    October 31                     360       353       339       364       353
</TABLE>
<PAGE>
                SUPPLEMENTARY FINANCIAL DATA (Continued)



Gross Finance Receivables and Leases Acquired
<TABLE>
<CAPTION>                                                                    
Dollar amounts in millions     1995      1994      1993      1992      1991
<S>                          <C>       <C>       <C>       <C>       <C>
Wholesale notes              $2,979.4  $2,306.6  $1,977.6  $1,547.7  $1,461.0
                                                                 
Retail notes and leases:                                         
  New                         1,075.0     861.9     730.0     591.8     554.4
  Used                          242.3     217.2     168.4     185.9     192.8
    Total                     1,317.3   1,079.1     898.4     777.7     747.2
                                                                 
  Total                      $4,296.7  $3,385.7  $2,876.0  $2,325.4  $2,208.2
</TABLE>




Analysis of Finance Retail Notes Acquired
<TABLE>
<CAPTION>                                                                
                               Average       Down Payment         
                             Contractual     as a Percent       Average
                                Terms         of Retail         Monthy
                              in Months      Sales Price      Installment
                Number of                                         
Year              Units       New   Used     New    Used       New    Used
<S>              <C>          <C>     <C>    <C>    <C>      <C>     <C>     
1995             18,286       55      39     8.0%   16.7%    $1,514  $1,003
1994             17,331       54      38     6.6    13.9      1,311     921
1993             15,879       53      34     6.2    17.0      1,248     786
1992             14,227       52      35     6.6    14.1      1,239     845
1991             13,768       52      37     7.2    13.5      1,286     875
</TABLE>
<PAGE>
                                  
            SUPPLEMENTARY FINANCIAL DATA (Continued)



Analysis of Gross Retail Notes and Lease Financing
With Installments Past Due Over 60 Days
<TABLE>
<CAPTION>                                                           
At October 31 ($ Millions)       1995     1994     1993     1992    1991
<S>                             <C>      <C>      <C>      <C>     <C>       
  Original amount of notes                                 
     and leases                 $ 1.2    $ 1.3    $ 2.6    $ 4.3   $ 3.9
  Balance of notes and leases      .5       .5       .7      2.1     1.9
  Balance as a percent of                                  
    total outstanding            .06%     .09%     .08%     .19%    .18%
</TABLE>                                                           
                                                           
                                                           
                                                           
Analysis of Retail Note Repossessions
<TABLE>
<CAPTION>
                                1995     1994     1993     1992     1991
<S>                             <C>      <C>     <C>      <C>      <C>       
  Retail note repossessions                                 
   acquired as a perrcentage   
   of average retail note
   gross balance                .92%     .97%    1.95%    3.70%    4.45%
</TABLE>
<PAGE>                          


            SUPPLEMENTARY FINANCIAL DATA (Continued)





 Analysis of Loss Experience                                     
<TABLE>
<CAPTION>                                                                 
 ($ Millions)                    1995    1994    1993    1992    1991
<S>                             <C>      <C>     <C>     <C>     <C>         
                                                           
 Net losses (recoveries):                                  
   Retail notes and leases       $ .3    $ .6    $(.1)   $2.4    $3.0
   Wholesale notes                (.9)     .1      .8      .8     2.8
   Accounts                       (.2)     .2       -       -       -
      Total                      $(.8)   $ .9    $ .7    $3.2    $5.8
 
 
 
 Percent net losses (recoveries)                            
   to liquidations:
                                                            
   Retail notes and leases       .03%    .07%    (.01)%   .27%    .41%
   Wholesale notes              (.03)    .01      .04     .06     .19
      Total                     (.02)%   .03%     .03%    .13%    .26%
 
 
 
Percent net losses (recoveries)                             
  to related average gross
  receivables outstanding:
  Retail notes and leases        .02%     .04%      -      .17%    .21%
  Wholesale notes               (.13)     .03     .16      .20     .66
  Accounts                      (.05)     .08       -        -       -
     Total                      (.03)%    .04%    .03%     .16%    .29%
</TABLE>
 
 
 
 
 Includes loss experience on sold notes.
<PAGE>




         Navistar Financial Corporation and Subsidiaries
                                
                                
         Statement of Financial Reporting Responsibility
                                
  
  
       Management  of  Navistar  Financial  Corporation  and  its
  subsidiaries  is responsible for the preparation  and  for  the
  integrity   and  objectivity  of  the  accompanying   financial
  statements and other financial information in this report.  The
  financial  statements  have been prepared  in  accordance  with
  generally  accepted accounting principles and  include  amounts
  that are based on management's estimates and judgments.
  
      The accompanying financial statements have been audited  by
  Deloitte  &  Touche LLP, independent auditors.  Management  has
  made  available to Deloitte & Touche LLP all the  Corporation's
  financial  records and related data, as well as the minutes  of
  Directors'    meetings.    Management   believes    that    all
  representations made to Deloitte & Touche LLP during its  audit
  were valid and appropriate.
  
     Management is responsible for establishing and maintaining a
  system  of  internal  controls throughout its  operations  that
  provides   reasonable  assurance  as  to  the   integrity   and
  reliability  of  the financial statements,  the  protection  of
  assets from unauthorized use and the execution and recording of
  transactions  in  accordance  with management's  authorization.
  The  system of internal controls which provides for appropriate
  division of responsibility is supported by written policies and
  procedures  that are updated by management as  necessary.   The
  system   is  tested  and  evaluated  regularly  by  the  parent
  Company's  internal  auditors as well  as  by  the  independent
  auditors in connection with their annual audit of the financial
  statements.   The independent auditors conduct their  audit  in
  accordance  with  generally  accepted  auditing  standards  and
  perform  such tests of transactions and balances as  they  deem
  necessary.   Management  considers the recommendations  of  its
  internal  auditors  and  independent  auditors  concerning  the
  Corporation's  system  of  internal  controls  and  takes   the
  necessary  actions that are cost-effective in the circumstances
  to  respond  appropriately  to the  recommendations  presented.
  Management  believes that the Corporation's system of  internal
  controls  accomplishes the objectives set forth  in  the  first
  sentence of this paragraph.
  
  
  
  
  John J. Bongiorno
  President and Chief Executive Officer
  
  
  
  
  Phyllis E. Cochran
  Vice President and Controller
<PAGE>
        Navistar Financial Corporation and Subsidiaries
  
                               
                 Independent Auditors' Report
  
  
  
  Navistar Financial Corporation:
  
      We  have  audited  the  financial  statements  of
  Navistar  Financial Corporation and its  subsidiaries
  listed  in  Item  8.   These  consolidated  financial
  statements    are   the   responsibility    of    the
  Corporation's management.  Our responsibility  is  to
  express  an  opinion on these consolidated  financial
  statements based on our audits.
  
       We  conducted  our  audits  in  accordance  with
  generally   accepted   auditing   standards.    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 accompanying  consolidated
  financial statements present fairly, in all  material
  respects,   the   financial  position   of   Navistar
  Financial Corporation and its subsidiaries at October
  31, 1995 and 1994 and the results of their operations
  and  their cash flow for each of the three  years  in
  the  period ended October 31, 1995 in conformity with
  generally accepted accounting principles.
  
      As  discussed  in  Note 10  to  the  consolidated
  financial  statements, effective  November  1,  1992,
  Navistar Financial Corporation changed its method  of
  accounting  for  postretirement benefits  other  than
  pensions.
 
  
  
  
  /s/DELOITTE & TOUCHE LLP
     Deloitte & Touche LLP
     December 18, 1995
     Chicago, Illinois
<PAGE>
  Item 9.    Changes in and Disagreements With Accountants on
             Accounting and Financial Disclosure
  
     None
  
                             PART III
  
  
  Items 10, 11, 12 and 13
  
     Intentionally omitted.  See the index page of this Report
  for explanation.
  
                             PART IV
  
  
  Item 14.   Exhibits, Financial Statement Schedules and
             Reports on Form 8-K
  
  Financial Statements
  
     See Index to Financial Statements in Item 8.
  
  Financial Statement Schedules
  
      All  schedules are omitted because of the absence of the
  conditions under which they are required or because information
  called for is shown in the financial statements and notes thereto.
  
  Exhibits, Including Those Incorporated By Reference
<TABLE>
<CAPTION>
  
    Exhibit                                              Form 10-K
    Number                                              Description
  Page
<S>       <C>                                               <C>
   (3)    Articles of Incorporation and By-Laws
            of the Registrant                               E-1
   (4)    Instruments Defining the Rights of Security
          Holders, including Indentures                     E-2
  (10)    Material Contracts                                E-3
  (24)    Power of Attorney                                  42
  (27)    Financial Data Schedule                           E-9
</TABLE>
  
  Reports on Form 8-K
  
      No reports on Form 8-K were filed for the three months
  ended October 31, 1995.
<PAGE>
  
  
  
  
                            SIGNATURE
                               
  
  
  
      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.
  
  
  
                                  NAVISTAR FINANCIAL CORPORATION
                                      (Registrant)
  
  
  
  
  By:   /s/PHYLLIS E. COCHRAN              January 26, 1996
        Phyllis E. Cochran
        Vice President and Controller
        (Principal Accounting Officer)