EXECUTION
      COPY


AMENDMENT
      NO. 1 TO POOLING AGREEMENT




THIS
      AMENDMENT NO. 1 TO POOLING AGREEMENT (this "Amendment") dated as
      of January 31, 2007, is entered into among Navistar Financial Retail Receivables
      Corporation (the "Seller") and
      Navistar Financial 2006-ARC Owner Trust, as issuer (the "Issuer").




RECITALS




A.  Seller
      and Issuer are parties to that certain Pooling Agreement, dated as of September
      1, 2006 (as amended, supplemented or otherwise modified through the date hereof,
      the "Agreement").




B.  Such
      parties desire to amend the Agreement as hereafter set forth in accordance
      with
      Section 5.01(b) of the Agreement.




NOW
      THEREFORE, for good and valuable consideration, the receipt and sufficiency
      of
      which are hereby acknowledged, the parties agree as follows:




1.  Amendments
      to
      Agreement. By its signature hereto, each party hereto hereby agrees to
      the following amendments to the Agreement:




(a)
      The
      definition of "Principal Distribution Amount" in Part I of Appendix A of the
      Agreement is amended by deleting the second proviso to such definition and
      substituting therefor the following proviso:




"and
      providedfurther,
      that
      notwithstanding the foregoing, on the Final Scheduled Distribution Date for
      the
      Notes (and on any Distribution Date thereafter), on and after the date the
      Notes
      have been declared due and payable following an Event of Default until such
      acceleration has been rescinded, and on any Distribution Date on and after
      the
      occurrence of a Trigger Event (other than a Trigger Event described in clause (c) of the
      definition of Enhancement Event), until such Trigger Event has been waived
      or
      cured, the Principal Distribution Amount shall not be less than the amount
      that
      is necessary to reduce the Outstanding Amount of the Notes to
      zero."




2.  Representations
      and
      Warranties. The Seller hereby represents and warrants that, after giving
      effect to this Amendment, no Event of Default has occurred and is now
      continuing.




3.  Effect
      of Amendment.
      All provisions of the Agreement, as extended by this Amendment, remain in full
      force and effect. After this Amendment becomes effective, all references in
      the
      Agreement to "this Agreement", "hereof”, "herein" or words of similar effect
      referring to the Agreement in the Agreement or in any other document relating
      to
      the


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Seller's
      securitization program shall be deemed to be references to the Agreement as
      extended by this Amendment. This Amendment shall not be deemed to expressly
      or
      impliedly waive, amend or supplement any provision of the Agreement other than
      as set forth herein.




4.  Conditions
      Precedent.
      This Amendment shall become effective on the first date written above subject
      to
      the satisfaction of the following conditions:




(a)  each
      of
      the Seller, the Issuer, the Indenture Trustee, the Funding Agent, the Alternate
      Investor, each Conduit Investor, each Certificateholder and the Swap
      Counterparty shall have executed counterparts of this Amendment;




(b)  each
      of
      S&P and Moody's confirms in writing to the Conduit Investors, without regard
      to the financial strength of Navistar Financial Corporation for the ratings
      of
      the transaction, that such amendment shall not result in a reduction or
      withdrawal of its rating on the Commercial Paper issued by such Conduit
      Investors;




(c)  delivery
      to each Trustee of (a) an Opinion of Counsel described in Section 5.02(i) of
      the
      Agreement and (b) an opinion of counsel stating that the execution of such
      amendment is authorized or provided by the Agreement and that all conditions
      precedent to the execution and delivery of this Amendment have been satisfied;
      and




(d)  delivery
      to the Funding Agent by the Indenture Trustee of the substance of this Amendment
      as provided to the Indenture Trustee.




5.  Counterparts.
      This
      Amendment may be executed in any number of counterparts and by different parties
      on separate counterparts, and each counterpart shall be deemed to be an
      original, and all such counterparts shall together constitute but one and the
      same instrument.




6.  Governing
      Law. This
      Amendment shall be governed by, and construed in accordance with, the internal
      laws of the State of New York without regard to any otherwise applicable
      principles of conflict of laws.




7.  Section
      Headings. The
      various headings of this Amendment are inserted for convenience only and shall
      not affect the meaning or interpretation of this Amendment or the Agreement
      or
      any provision hereof or thereof.




8.  Limitation
      of Liability of
      the Indenture Trustee and the Owner Trustee.




(a)       Notwithstanding anything contained
      herein to the contrary, this Amendment has been acknowledged and accepted by
      LaSalle Bank, National Association not in its individual capacity but solely
      as
      Indenture Trustee and in no event shall LaSalle Bank, National Association
      have
      any liability for the representations, warranties, covenants, agreements or
      other obligations of the Issuer hereunder or in any of the certificates, notices
      or
      agreements delivered pursuant hereto, as to all of which recourse shall be
      had
      solely to the assets of the Issuer.


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(b)      Notwithstanding anything contained herein to
      the contrary, this Amendment has been executed by Chase Bank USA, National
      Association not in its individual capacity but solely in its capacity as Owner
      Trustee and in no event shall Chase Bank USA, National Association in its
      individual capacity or, except as expressly provided in the Trust Agreement,
      as
      Owner Trustee of the Issuer have any liability for the representations,
      warranties, covenants, agreements or other obligations of the Issuer hereunder
      or in any of the certificates, notices or agreements delivered pursuant hereto,
      as to all of which recourse shall be had solely to the assets of the Issuer.
      For
      all purposes of this Agreement, in the performance of its duties or obligations
      hereunder, or in the performance of any duties or obligations of the Issuer
      hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
      of, the terms and provisions of Article VI of the Trust Agreement.




[Signature
      Pages Follow]






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IN
      WITNESS WHEREOF, the parties have caused this Amendment to be executed by their
      respective officers thereunto duly authorized, as of the date first above
      written,





NAVISTAR
                FINANCIAL 2006-ARC
                OWNER TRUST,
              
              By:  Chase
                Bank USA, National Association, not in its individual capacity, but
                solely
                as Owner Trustee on behalf of the Trust
              
              By:  /s/
                JOHN J.
                CASHIN
              Name:  Vice
                President
              
              
              NAVISTAR
                FINANCIAL RETAIL
                RECEIVABLES CORPORATION, as Seller
              
              By:  /s/
                KRISTIN L
                MORAN
              Name:  Kristin
                L Moran
              Title:    V.P.,
                & General Counsel







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Consent
                to, Acknowledge and Accept:
              
              LASALLE
                BANK NATIONAL ASSOCIATION, not in its individual capacity but solely
                as
                indenture Trustee
              
              By:   /s/
                TIMOTHY E.
                CUTSINGER
              Title:     Assistant
                Vice President
              
              
              ABN
                AMRO BANK, N.V., as Funding Agent and Alternate Investor
              
              By:   /s/
                DAVID J.
                DONOFRIO
              Title:     Director
              
              By:   /s/
                BRANDY
                HAN
              Title:     Vice
                President
              
              
              AMSTERDAM
                FUNDING CORPORATION, as Conduit Investor
              
              By:   /s/
                BERNARD J.
                ANGELO
              Title:     Vice
                President
              
              
              NAVISTAR
                FINANCIAL RETAIL RECEIVABLES CORPORATION, as
                Certificateholder
              
              By:  /s/
                KRISTIN L
                MORAN
              Name:  Kristin
                L Moran
              Title:    V.P.,
                & General Counsel


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LASALLE
                BANK NATIONAL ASSOCIATION, as swap Counterparty
              
              By:   /s/
                FREDRICK P.
                ENGLER
              Title:     Senior
                Vice President






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