UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                   Washington, D. C.  20549

                          FORM 10-Q

  X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934

       For the quarterly period ended January 31, 1997

                              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

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

             APPLICABLE ONLY TO ISSUERS INVOLVED
               IN BANKRUPTCY PROCEEDINGS DURING
                  THE PRECEDING FIVE YEARS:

Indicate  by  check  mark  whether the  registrant  has  filed  all
documents and reports required to be filed by Sections 12, 13 or 15
(d)  of  the  Securities  Exchange Act of 1934  subsequent  to  the
distribution of securities under a plan confirmed by a court.   Yes
No

            APPLICABLE ONLY TO CORPORATE ISSUERS:

As  of  February 28, 1997, 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 INSTRUCTIONS H(1)(a) AND (b) OF FORM 10-Q AND  IS
THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT.


<PAGE>



                NAVISTAR FINANCIAL CORPORATION
                       AND SUBSIDIARIES



                                INDEX

                                                                     Page


PART I.    FINANCIAL INFORMATION

 Item 1.   Financial Statements:

   Statement of Consolidated Income and Retained Earnings --
      Three Months Ended January 31, 1997 and 1996. . . . . . . . . .  2

   Statement of Consolidated Financial Condition --
      January  31, 1997; October 31, 1996; and January  31, 1996 . . . 3

   Statement of Consolidated Cash Flow --
      Three Months Ended January 31, 1997 and 1996. . . . . . . . . .  4

    Notes to Consolidated Financial Statements  . . . . . . . . . . .  5

  Item 2.   Management's Discussion and Analysis of Results of
              Operations and Financial Condition. . . . . . . . . . .  9


PART II.    OTHER INFORMATION

  Item 6.   Exhibits and Reports on Form 8-K. . . . . . . . . . . . . 13

Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

<PAGE>

                       PART I - FINANCIAL INFORMATION

Item 1.   Financial Statements

              NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES
     STATEMENT OF CONSOLIDATED INCOME AND RETAINED EARNINGS (Unaudited)
                           (Millions of dollars)

<TABLE>
<CAPTION>

                                                           Three Months Ended
                                                                January 31
                                                             1997        1996
<S>                                                        <C>         <C>
Revenue
   Retail notes and lease financing . . . . . . . . . . .  $ 25.7      $ 27.2
   Wholesale notes. . . . . . . . . . . . . . . . . . . .     9.2        16.1
   Accounts . . . . . . . . . . . . . . . . . . . . . . .     7.2         6.8
   Servicing fee income . . . . . . . . . . . . . . . . .     5.6         5.6
   Insurance premiums earned. . . . . . . . . . . . . . .     8.4        10.4
   Marketable securities. . . . . . . . . . . . . . . . .     2.0         2.6
         Total. . . . . . . . . . . . . . . . . . . . . .    58.1        68.7

Expense
   Cost of borrowing:
      Interest expense. . . . . . . . . . . . . . . . . .    14.3        17.1
      Other . . . . . . . . . . . . . . . . . . . . . . .     1.6         3.1
          Total . . . . . . . . . . . . . . . . . . . . .    15.9        20.2

   Credit, collection and administrative. . . . . . . . .     7.0         6.8
   Provision for losses on receivables. . . . . . . . . .      .7         1.1
   Insurance claims and underwriting. . . . . . . . . . .     7.9        10.9
   Other expense, net . . . . . . . . . . . . . . . . . .     4.7         2.8
          Total . . . . . . . . . . . . . . . . . . . . .    36.2        41.8
  
Income Before Taxes on Income . . . . . . . . . . . . . .    21.9        26.9

Taxes on Income . . . . . . . . . . . . . . . . . . . . .     8.5        10.3

Net Income  . . . . . . . . . . . . . . . . . . . . . . .    13.4        16.6

Retained Earnings

   Beginning of period. . . . . . . . . . . . . . . . . .   107.4        84.0

   Dividends paid . . . . . . . . . . . . . . . . . . . .       -        10.0

   End of period. . . . . . . . . . . . . . . . . . . . .  $120.8      $ 90.6
</TABLE>


See Notes to Consolidated Financial Statements.

<PAGE>


              NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES
         STATEMENT OF CONSOLIDATED FINANCIAL CONDITION (Unaudited)
                           (Millions of dollars)

<TABLE>
<CAPTION>
                                                 January 31    October 31    January 31
                                                    1997          1996          1996
                    ASSETS

<S>                                             <C>           <C>           <C>      
Cash and Cash Equivalents. . . . . . . . . . . .$   12.2      $    6.7      $    6.2

Marketable Securities. . . . . . . . . . . . . .   121.8         128.1         131.7

Finance Receivables
   Retail notes and lease financing. . . . . . .   437.7         733.3         466.1
   Wholesale notes . . . . . . . . . . . . . . .   138.4         100.5         341.6
   Accounts. . . . . . . . . . . . . . . . . . .   329.5         371.4         239.2
                                                   905.6       1,205.2       1,046.9
   Allowance for losses. . . . . . . . . . . . .    (9.0)        (11.6)         (7.9)
     Finance Receivables, Net. . . . . . . . . .   896.6       1,193.6       1,039.0

Amounts Due from Sales of Receivables. . . . . .   270.6         264.3         279.9
Equipment on Operating Leases, Net . . . . . . .   113.4         101.1          47.4
Repossessions. . . . . . . . . . . . . . . . . .    12.5          13.2           5.8
Reinsurance Receivables. . . . . . . . . . . . .    25.7          21.2          22.3
Other Assets . . . . . . . . . . . . . . . . . .    45.6          65.6          45.5
Total Assets . . . . . . . . . . . . . . . . . .$1,498.4      $1,793.8      $1,577.8

    LIABILITIES AND SHAREOWNER'S EQUITY

Short-Term Borrowings. . . . . . . . . . . . . .$  142.0      $   99.4      $   56.5
Accounts Payable
  Affiliated companies . . . . . . . . . . . . .    80.6          24.5          14.2
  Other  . . . . . . . . . . . . . . . . . . . .    43.8          42.2          54.7
    Total  . . . . . . . . . . . . . . . . . . .   124.4          66.7          68.9

Dealers' Reserves. . . . . . . . . . . . . . . .    22.0          22.3          21.7
Unpaid Insurance Claims and Unearned Premiums. .    92.8          99.6         102.0
Accrued Income Taxes . . . . . . . . . . . . . .    16.3          10.8          18.8
Accrued Interest . . . . . . . . . . . . . . . .     3.8           8.9           6.0
Senior and Subordinated Debt . . . . . . . . . .   804.9       1,206.4       1,039.6

Shareowner's Equity
  Capital stock (Par value $1.00, 1,600,000
      shares issued and outstanding)
    and paid-in capital. . . . . . . . . . . . .   171.0         171.0         171.0
  Retained earnings  . . . . . . . . . . . . . .   120.8         107.4          90.6
  Unrealized gains (losses) on
    marketable securities. . . . . . . . . . . .     0.4           1.3           2.7
    Total. . . . . . . . . . . . . . . . . . . .   292.2         279.7         264.3
Total Liabilities and Shareowner's Equity. . .  $1,498.4      $1,793.8      $1,577.8
</TABLE>

See Notes to Consolidated Financial Statements.

<PAGE>


              NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES
              STATEMENT OF CONSOLIDATED CASH FLOW (Unaudited)
                           (Millions of dollars)

<TABLE>
<CAPTION>
                                                           Three Months Ended
                                                                 January 31
                                                              1997        1996
<S>                                                       <C>         <C>
Cash Flow From Operations
   Net income. . . . . . . . . . . . . . . . . . . . . .  $   13.4    $   16.6
   Adjustments to reconcile net income to cash
      used in operations:
      Gains on sales of receivables  . . . . . . . . . . .    (6.9)      (12.2)
      Depreciation and amortization. . . . . . . . . . . .     4.5         4.1
      Provision for losses on receivables. . . . . . . . .      .7         1.1
      Decrease in accounts payable to affiliates . . . . .   (17.4)      (75.3)
      Other. . . . . . . . . . . . . . . . . . . . . . . .    (8.2)        6.0
        Total. . . . . . . . . . . . . . . . . . . . . . .   (13.9)      (59.7)

Cash Flow From Investing Activities
   Proceeds from sold retail notes . . . . . . . . . . . .   479.8       500.4
   Purchase of retail notes and lease receivables. . . . .  (207.6)     (264.5)
   Principal collections on retail notes and
     lease receivables . . . . . . . . . . . . . . . . . .    17.1        20.6
   Acquisitions under cash collections of wholesale
      notes and accounts receivable. . . . . . . . . . . .     4.2        53.4
   Purchase of marketable securities . . . . . . . . . . .   (10.0)      (19.3)
   Proceeds from sales and maturities of
      marketable securities  . . . . . . . . . . . . . . .    18.3        21.5
   Increase in property and equipment leased to others . .   (16.3)      (10.1)
        Total. . . . . . . . . . . . . . . . . . . . . . .   285.5       302.0

Cash Flow From Financing Activities
   Net increase in short term borrowings . . . . . . . . .    42.6         6.0
   Net decrease in bank revolving credit facility usage  .  (302.0)     (180.0)
   Net decrease in asset-backed commercial 
      paper facility usage . . . . . . . . . . . . . . . .  (150.0)      (55.0)
   Proceeds from long-term debt  . . . . . . . . . . . . .    78.9           -
   Principal payment of long-term debt . . . . . . . . . .    (9.2)          -
   Net increase in advance from Transportation . . . . . .    73.6           -
   Dividends paid to Transportation. . . . . . . . . . . .       -       (10.0)
        Total. . . . . . . . . . . . . . . . . . . . . . .  (266.1)     (239.0)
  
Increase in Cash and Cash Equivalents  . . . . . . . . . .     5.5         3.3

Cash and Cash Equivalents at Beginning of Period . . . . .     6.7         2.9

Cash and Cash Equivalents at End of Period . . . . . . . . $  12.2        $6.2

Supplemental disclosure of cash flow information

   Interest paid . . . . . . . . . . . . . . . . . . . . . $  19.1       $23.2

   Income taxes paid . . . . . . . . . . . . . . . . . . . $   2.4       $ 4.1
</TABLE>

See Notes to Consolidated Financial Statements.

<PAGE>


                NAVISTAR FINANCIAL CORPORATION
                       AND SUBSIDIARIES

          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         (Unaudited)


1.  The  consolidated financial statements include the  accounts  of
    Navistar  Financial  Corporation ("NFC")  and  its  wholly-owned
    subsidiaries     ("Corporation").     Navistar     International
    Transportation  Corp. ("Transportation"), which is  wholly-owned
    by  Navistar  International  Corporation  ("Navistar"),  is  the
    parent company of NFC.

    The  accompanying unaudited financial statements and notes  have
    been  prepared  in accordance with the accounting  policies  set
    forth  in the Corporation's 1996 Annual Report on Form 10-K  and
    should   be   read  in  conjunction  with  the  Notes   to   the
    Consolidated Financial Statements therein.

    In   the   opinion   of  management,  these  interim   financial
    statements  reflect  all  adjustments,  consisting   of   normal
    recurring  accruals, necessary to fairly present  the  financial
    position,  results of operations and cash flow for  the  interim
    periods   presented.   Interim  results  are   not   necessarily
    indicative  of  results  to  be  expected  for  the  full  year.
    Certain 1996 amounts have been reclassified to conform with  the
    presentation used in the 1997 financial statements.

2.  Finance receivable balances do not include receivables sold by
    the  Corporation  to public and private investors  with  limited
    recourse provisions. Outstanding sold receivables balances are as
    follows:

<TABLE>
<CAPTION>
                                        January  31    October  31   January 31
                                             1997         1996          1996
                                                      ($ Millions)
      <S>                                 <C>           <C>           <C>     
      Retail notes. . . . . . . . . . .   $1,636.0      $1,366.4      $1,513.4
      Wholesale notes . . . . . . . . .      427.8         500.0         500.0
          Total   . . . . . . . . . . .   $2,063.8      $1,866.4      $2,013.4
</TABLE>

    In  November 1996, the Corporation sold $487 million  of  retail
    notes,   net  of  unearned  finance  income,  through   Navistar
    Financial  Retail  Receivables Corporation  to  an  owner  trust
    which,  in  turn, sold $455 million of notes and $32 million  of
    certificates  to investors.  The proceeds of $474  million,  net
    of  underwriting fees and credit enhancements were used  by  the
    Corporation for general working capital purposes.
    
<PAGE>

                    NAVISTAR FINANCIAL CORPORATION
                       AND SUBSIDIARIES


          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         (Unaudited)



   On  January  1,  1997,  the  Corporation  adopted  Statement  of
   Financial  Accounting  Standards  No.  125  ("SFAS  No.   125"),
   "Accounting for Transfers and Servicing of Financial Assets  and
   Extinguishments    of   Liabilities",   for    all    applicable
   transactions.    SFAS   No.  125  requires  amounts   previously
   classified  as excess servicing to be reclassified  as  interest
   only  receivables and to record such amounts at  estimated  fair
   value.  Restatement of prior periods is not permitted.  The  new
   standard  did  not  have a material effect on the  Corporation's
   net income or financial condition.

   The   Corporation's  subordinated  retained  interests  in  sold
   receivables  are  generally restricted and  subject  to  limited
   recourse  provisions.   The  terms of  retail  receivable  sales
   require  the  Corporation to maintain  cash  reserves  with  the
   trusts  as  credit  enhancement  for  public  sales.   The  cash
   reserves  held  by  the trusts are restricted  for  use  by  the
   securitized  sales agreements.  The following is  a  summary  of
   amounts included in "Amounts Due from Sales of Receivables":

<TABLE>
<CAPTION>
                                         January 31    October 31    January 31
                                            1997          1996          1996
                                                      ($ Millions)
     <S>                                  <C>           <C>            <C> 
     Cash held and invested by
        trusts. . . . . . . . . . . . .   $ 89.3        $ 85.2         $ 88.4
     Subordinated retained interests
        in wholesale receivables. . . .     85.1          85.4           86.0
     Subordinated retained interests
        in retail receivables . . . . .     98.8          96.0          101.1
     Interest only receivables. . . . .     12.9             -              -
     Excess servicing fee           . .        -          10.1           17.2
     Allowance for credit losses. . . .    (15.5)        (12.4)         (12.8)
           Total. . . . . . . . . . . .   $270.6        $264.3         $279.9
</TABLE>


   The  allowance  for  losses  on  receivables  is  summarized  as
   follows:

<TABLE>
<CAPTION>
                                        January 31    October 31     January 31
                                            1997         1996           1997
                                                     ($ Millions)
     <S>                                  <C>            <C>            <C>
     Allowance pertaining to:
        Owned notes . . . . . . . . . .   $  9.0         $11.6          $ 7.9
        Sold notes. . . . . . . . . . .     15.5          12.4           12.8
            Total . . . . . . . . . . .    $24.5         $24.0          $20.7
</TABLE>

<PAGE>


                NAVISTAR FINANCIAL CORPORATION
                       AND SUBSIDIARIES


          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         (Unaudited)



3.  Average short-term debt outstanding during the first quarter  of
    fiscal  1997 and 1996, which included commercial paper and  bank
    borrowings,  was  approximately $114 million  and  $61  million,
    respectively,   at   an  average  cost   of   6.0%   and   6.3%,
    respectively.  The weighted average interest rate on  all  debt,
    including  short-term  debt  and the  effect  of  discounts  and
    related  amortization, was 6.3% and 7.0%  for  the  first  three
    months of fiscal 1997 and 1996, respectively.

    Accounts  payable  due to affiliated companies  at  January  31,
    1997  included an inter-company advance of $73.6  million.   The
    advance,  which was payable to Transportation, accrued  interest
    at  the  Corporation's  incremental short-term  borrowing  rate.
    There  was  no inter-company advance outstanding at January  31,
    1996 or October 31, 1996.

4.  The  Corporation  has $1,325 million of contractually  committed
    support  facilities, consisting of a $925 million bank revolving
    credit  facility  and  a  $400 million  asset-backed  commercial
    paper  ("ABCP") program supported by a bank liquidity  facility.
    Each  of these facilities has a maturity date of March 31, 2001.
    At  January  31, 1997, unused commitments under these facilities
    were  $704  million,  of  which $142  million  provided  funding
    backup for the outstanding short-term debt.  The remaining  $562
    million,   when  combined  with  unrestricted  cash   and   cash
    equivalents,  made $574 million available to  fund  the  general
    business purposes of the Corporation at January 31, 1997.

5.  The   Corporation  manages  its  exposure  to  fluctuations   in
    interest  rate  changes  and limits 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 counter-party  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.

<PAGE>

                NAVISTAR FINANCIAL CORPORATION
                       AND SUBSIDIARIES


          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         (Unaudited)



    During  the  first quarter of fiscal 1997, the  Corporation  did
    not  enter  into  any derivative contracts, nor were  there  any
    derivative instruments outstanding at January 31, 1997.

    The   Corporation's   wholly-owned  insurance   subsidiary   has
    investments  in  Collateralized  Mortgage  Obligations  of   $41
    million  which  are  included  in the  Corporation's  marketable
    securities at January 31, 1997.

6.  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 $12 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.  On February 14, 1997, a state
    law  was enacted which will negate the Department's position and
    will relieve NFC of the aforementioned Notice of Deficiency.

    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.

<PAGE>

                NAVISTAR FINANCIAL CORPORATION
                       AND SUBSIDIARIES


ITEM  2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
          OPERATIONS AND FINANCIAL CONDITION



Certain  statements under this caption constitute  "forward-looking
statements"  under the Securities Reform Act, which  involve  risks
and uncertainties.  Navistar Financial Corporation's actual results
may differ significantly from the results discussed in such forward-
looking  statements.  Factors that might cause  such  a  difference
include, but are not limited to, those discussed under the  heading
"Business Outlook."


Financing Volume

In  the  first quarter of fiscal 1997 customer demand for  class  5
through 8 trucks declined approximately 11% compared with the  same
period  of 1996. As a result of the lower customer demand  and  the
continued   highly   competitive   commercial   financing   market,
acquisitions  of  retail notes and leases in the first  quarter  of
fiscal  1997  of  $224  million  were  18%  lower  than  1996.  The
Corporation's  share  of  the  retail  financing  of   new   trucks
manufactured  by Transportation and sold in the United  States  was
15.8%  during  the first quarter of 1997 compared to 18.6%  in  the
same  period  of  1996.  Serviced retail notes and lease  financing
balances were $2.2 billion at January 31, 1997 and October 31, 1996
compared with $2.0 billion at January 31, 1996.

During  the  first quarter of fiscal 1997 and 1996 the  Corporation
supplied  94%  of  the wholesale financing of new  trucks  sold  to
Transportation's dealers.  During the last quarter of  fiscal  1996
and the first quarter of fiscal 1997, Transportation's dealers have
reduced  inventory  levels in response to  lower  customer  demand.
Serviced  wholesale note balances were $651 million at January  31,
1997  compared  with $686 at October 31, 1996 and $928  million  at
January 31, 1996.

Owned  finance  receivable and lease balances,  including  retained
interest  in  sold  retail  and wholesale  receivables,  were  $1.2
billion  at  January 31, 1997 and 1996 and $1.4 billion at  October
31,  1996.  The decrease in owned receivable balances from year-end
resulted  from  retail  sales activity as sold  retail  receivables
balances  increased to $1.6 billion at January 31, 1997  from  $1.4
billion  at October 31, 1996 and $1.5 billion at January 31,  1996.
Sold  wholesale note balances were $428 million at January 31, 1997
and $500 million at October 31, 1996 and January 31, 1996.

<PAGE>

                  NAVISTAR FINANCIAL CORPORATION
                         AND SUBSIDIARIES


ITEM  2.  MANAGEMENT'S  DISCUSSION AND  ANALYSIS  OF  RESULTS  OF
          OPERATIONS AND FINANCIAL CONDITION (continued)


Results of Operations

The components of net income for the three months ended January  31
are as follows:

<TABLE>
<CAPTION>
                                                               1997    1996
                                                                 ($Millions)
<S>                                                           <C>      <C>
Income before income taxes:
   Finance operations. . . . . . . . . . . . . . . . . .  .   $19.5    $25.0
   Insurance operations. . . . . . . . . . . . . . . . .  .     2.4      1.9
      Income before taxes. . . . . . . . . . . . . . . .  .    21.9     26.9
   Taxes on income . . . . . . . . . . . . . . . . . . .  .     8.5     10.3
      Net  income . . . . . . . . . . . . . . . . . . . . .   $13.4    $16.6
</TABLE>

Pretax  income  of $21.9 million was $5.0 million lower  than  1996
primarily as a result of lower gains on sales of retail receivables
and reduced levels of wholesale financing activities in response to
lower  customer demand.  These factors were offset in part by lower
borrowing costs due to the maturity in the third quarter of  fiscal
1996 of high fixed-rate public debt.

Gains  on sales of retail notes receivable during the first quarter
of  1997 were $6.9 million on $487 million sold compared with gains
of  $12.2  million  on  $525 million sold in the first  quarter  of
1996.  The higher gains in fiscal 1996 resulted from higher margins
on retail notes due to declining market interest rates prior to the
sale   in   November  1995.   During  a  declining  interest   rate
environment, the Corporation's acquisition spreads improve as NFC's
cost  of  borrowing differs from the time when interest  rates  are
quoted  to  borrowers  and the time when notes  are  acquired.   In
addition,  the effective interest rate for each sale  is  based  on
market interest rates at the time of the sale, which may be  up  to
six months after the Corporation acquired the retail notes.  During
fiscal 1997 market interest rates were also declining in the period
prior  to  the  sale  in  November 1996,  but  not  to  the  extent
experienced  in fiscal 1996 which caused the margins  to  be  lower
year over year.

Wholesale note revenue decreased 43% in 1997 to $9.2 million  as  a
result  of  lower wholesale average outstanding note  balances  and
lower average yields relating to a lower prime interest rate.

Borrowing  costs declined $4.3 million to $15.9 million during  the
first  quarter of 1997 due to lower wholesale funding  requirements
and  lower borrowing rates. During 1997, the Corporation's weighted
average interest rate on all debt declined to 6.3% from 7.0% in the
first  quarter of 1996 primarily due to the maturity of high  fixed
rate public debt  in June 1996 and lower market interest rates.

<PAGE>

                  NAVISTAR FINANCIAL CORPORATION
                         AND SUBSIDIARIES


ITEM  2.  MANAGEMENT'S  DISCUSSION AND  ANALYSIS  OF  RESULTS  OF
          OPERATIONS AND FINANCIAL CONDITION (continued)


Results of Operations (continued)

The  $.5  million  increase  in pretax income  for  Harco  National
Insurance   Company   ("Harco"),  the  Corporation's   wholly-owned
insurance  subsidiary, resulted from improved  loss  experience  in
Harco's liability insurance lines during the first quarter of  1996
compared to 1995.


Liquidity and Funds Management

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

Operations used $13.9 million in cash in the first quarter of  1997
as  the  cash provided from net income was offset by a decrease  in
accounts   payable   reflecting   the   timing   of   payments   to
Transportation.  Investment activities provided $285.5  million  in
cash  during  this period principally as a result of the  sales  of
retail  notes offset in part by the purchase of retail  notes   and
leases.  The cash generated from investment activities was used  to
reduce financing activities by $266.1 million.

Receivable sales were a significant source of funding in  1997  and
1996.  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  the
first quarter of fiscal 1997 and 1996 the Corporation sold $486 and
$525  million,  respectively,  of retail  notes,  through  Navistar
Financial  Retail Receivables Corporation ("NFRRC"), a wholly-owned
subsidiary,  to  owner  trusts  which  in  turn  sold   notes   and
certificates  to  investors.  At January 31,  1997,  the  remaining
shelf  registration available to NFRRC for issuance of asset-backed
securities  was  $1,973 million.  The Corporation has  a  revolving
wholesale  note  trust  that provides for the  continuous  sale  of
eligible wholesale notes on a daily basis.  The trust is funded  by
securities  sold  to  the public comprised of  three  $100  million
tranches  of investor certificates maturing serially from  1997  to
1999  and  a $200 million tranche maturing in 2004.  As of  January
31, 1997, $72 million of the tranche maturing in 1997 has been paid
and  the  remaining  $28 million will amortize over  the  next  few
months.  The ongoing commitment will be $400 million.

<PAGE>

                  NAVISTAR FINANCIAL CORPORATION
                         AND SUBSIDIARIES


ITEM  2.  MANAGEMENT'S  DISCUSSION AND  ANALYSIS  OF  RESULTS  OF
          OPERATIONS AND FINANCIAL CONDITION (continued)


Liquidity and Funds Management (continued)

At  January  31,  1997,  available funding under  the  amended  and
restated  credit  facility and the asset-backed   commercial  paper
facility  was $704 million, of which $142 million provided  funding
backup  for  the  outstanding short-term debt. The remaining  $562,
when  combined  with unrestricted cash and cash  equivalents,  made
$574 million available to fund the general business purposes of the
Corporation.

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 to the Consolidated Financial  Statements.
Corporate  policy prohibits the use of derivatives for  speculative
purposes.

On   February   1,  1994,  the  Illinois  Department   of   Revenue
("Department") issued a Notice of Deficiency to the Corporation for
approximately  $12 million for the fiscal years 1989 through  1991.
On February 14, 1997, a state law was enacted which will negate the
Department's position and will relieve NFC of the liability  Notice
of Deficiency.


Business Outlook

The  demand  for  heavy trucks is forecast to  continue  to  soften
during  fiscal  1997  and correspondingly NFC's  profitability  and
wholesale  and  retail  financing activity are  anticipated  to  be
lower.    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  funds  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 1997 and beyond.

<PAGE>


                 PART II - OTHER INFORMATION


Item 6.   Exhibits and Reports on Form 8-K

No  reports  on Form 8-K were filed during the three  months  ended
January 31, 1997.



                          SIGNATURE


Pursuant  to  the  requirements of the Securities Exchange  Act  of
1934,  the  registrant has duly caused this report to be signed  on
its behalf by the undersigned thereunto duly authorized.




                                 Navistar Financial Corporation
                                        (Registrant)






Date March 14, 1997              /s/ P. E. Cochran
                                     P. E. Cochran
                                     Vice President and Controller
                                     (Principal Accounting Officer)