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, 1998

                                       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 847-734-4000

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, 1998, 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:

      Statements of Consolidated Income and Retained Earnings --
        Three Months Ended January 31, 1998 and 1997. . . . . . . . . .  2

      Statements of Consolidated Financial Condition --
        January 31, 1998; October 31, 1997; and January 31, 1997. . . .  3

      Statements of Consolidated Cash Flow --
        Three Months Ended January 31, 1998 and 1997. . . . . . . . . .  4

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

   Item 2.   Management's Discussion and Analysis of Results of
                Operations and Financial Condition. . . . . . . . . . .  7


PART II.   OTHER INFORMATION

   Item 6.   Exhibits and Reports on Form 8-K . . . . . . . . . . . . . 12

Signature   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12


<PAGE>


                         PART I - FINANCIAL INFORMATION

Item 1.   Financial Statements

                 NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES
       STATEMENTS OF CONSOLIDATED INCOME AND RETAINED EARNINGS (Unaudited)
                              (Millions of dollars)
<TABLE>
<CAPTION>

                                                              Three Months Ended
                                                                  January 31  
<S>                                                          <C>          <C> 
                                                               1998         1997
Revenue
   Retail notes and lease financing . . . . . . . . . . . .  $ 28.9       $ 25.7
   Wholesale notes. . . . . . . . . . . . . . . . . . . . .     8.3          9.2
   Accounts . . . . . . . . . . . . . . . . . . . . . . . .     9.6          7.2
   Servicing fee income . . . . . . . . . . . . . . . . . .     5.7          5.6
   Insurance premiums earned. . . . . . . . . . . . . . . .     7.9          8.4
   Marketable securities. . . . . . . . . . . . . . . . . .     2.2          2.0
         Total. . . . . . . . . . . . . . . . . . . . . . .    62.6         58.1

Expense
   Cost of borrowing:
      Interest expense. . . . . . . . . . . . . . . . . . .    15.7         14.3
      Other . . . . . . . . . . . . . . . . . . . . . . . .     1.9          1.6
          Total . . . . . . . . . . . . . . . . . . . . . .    17.6         15.9

   Credit, collection and administrative. . . . . . . . . .     8.1          7.3
   Provision for losses on receivables. . . . . . . . . . .     0.4          0.7
   Insurance claims and underwriting. . . . . . . . . . . .     9.1          7.9
   Depreciation expense and other . . . . . . . . . . . . .     5.5          4.4
          Total . . . . . . . . . . . . . . . . . . . . . .    40.7         36.2

Income Before Taxes on Income . . . . . . . . . . . . . . .    21.9         21.9

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

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

Retained Earnings

   Beginning of period. . . . . . . . . . . . . . . . . . .   113.1        107.4

   Dividends paid . . . . . . . . . . . . . . . . . . . . .   (12.0)           -

   End of period. . . . . . . . . . . . . . . . . . . . . .  $114.5       $120.8

</TABLE>

See Notes to Consolidated Financial Statements.


<PAGE>


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

<TABLE>
<CAPTION>
                                               Jan. 31      Oct. 31      Jan. 31
                                                 1998         1997         1997
                    ASSETS

<S>                                          <C>          <C>          <C>
Cash and Cash Equivalents. . . . . . . . . . $    6.4     $   10.7     $   12.2

Marketable Securities. . . . . . . . . . . .    112.5        114.2        121.8

Finance Receivables
   Retail notes and lease financing. . . . .    444.0        706.5        437.7
   Wholesale notes . . . . . . . . . . . . .    137.8         45.7        138.4
   Accounts. . . . . . . . . . . . . . . . .    357.0        471.0        329.5
                                                938.8      1,223.2        905.6
   Allowance for losses. . . . . . . . . . .    (10.3)       (12.0)        (9.0)
     Finance Receivables, Net. . . . . . . .    928.5      1,211.2        896.6

Amounts Due from Sales of Receivables. . . .    236.5        233.3        270.6
Equipment on Operating Leases, Net . . . . .    158.9        124.1        113.4
Repossessions. . . . . . . . . . . . . . . .     18.5         13.0         12.5
Other Assets . . . . . . . . . . . . . . . .    104.2        104.1         71.3
Total Assets . . . . . . . . . . . . . . . . $1,565.5     $1,810.6     $1,498.4

    LIABILITIES AND SHAREOWNER'S EQUITY

Short-Term Borrowings. . . . . . . . . . . . $  115.3     $  141.0     $  142.0
Accounts Payable to Affiliated Companies . .     99.3        131.5         80.6
Other Liabilities. . . . . . . . . . . . . .     52.9         59.8         63.9
Senior and Subordinated Debt . . . . . . . .    903.7      1,082.7        804.9
Dealers' Reserves. . . . . . . . . . . . . .     22.5         22.2         22.0
Unpaid Insurance Claims and
  Unearned Premiums. . . . . . . . . . . . .     82.4         85.6         92.8

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 . . . . . . . . . . . .    114.5        113.1        120.8
   Unrealized gains on
      marketable securities  . . . . . . . .      3.9          3.7          0.4
   Total . . . . . . . . . . . . . . . . . .    289.4        287.8        292.2
Total Liabilities and Shareowner's Equity. . $1,565.5     $1,810.6     $1,498.4
</TABLE>

See Notes to Consolidated Financial Statements.


<PAGE>


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

<TABLE>
<CAPTION>
                                                             Three Months Ended
                                                                  January 31
                                                                1998       1997
<S>                                                          <C>        <C>
Cash Flow From Operations
   Net income. . . . . . . . . . . . . . . . . . . . . . . . $  13.4    $  13.4
   Adjustments to reconcile net income to cash
      used in operations:
      Gains on sales of receivables  . . . . . . . . . . . .    (7.2)      (6.9)
      Depreciation and amortization. . . . . . . . . . . . .     6.7        4.5
      Provision for losses on receivables. . . . . . . . . .     0.4        0.7
      (Decrease) increase in accounts payable to
          Affiliated Companies. . . . . . . .  . . . . . . .   (32.2)      56.1
      Other. . . . . . . . . . . . . . . . . . . . . . . . .   (30.3)      (8.1)
        Total. . . . . . . . . . . . . . . . . . . . . . . .   (49.2)      59.7

Cash Flow From Investing Activities
   Proceeds from sold retail notes . . . . . . . . . . . . .   468.2      479.8
   Purchase of retail notes and lease receivables. . . . . .  (236.7)    (196.1)
   Principal collections on retail notes and
     lease receivables . . . . . . . . . . . . . . . . . . .    16.6        5.6
   Acquisitions under cash collections of wholesale
      notes and accounts receivable. . . . . . . . . . . . .    32.9        4.2
   Purchase of marketable securities . . . . . . . . . . . .    (7.9)     (10.0)
   Proceeds from sales and maturities of
      marketable securities  . . . . . . . . . . . . . . . .    10.2       18.3
   Purchase of equipment leased to others. . . . . . . . . .   (41.5)     (18.8)
   Sale of equipment leased to others  . . . . . . . . . . .     0.9        2.5
        Total. . . . . . . . . . . . . . . . . . . . . . . .   242.7      285.5

Cash Flow From Financing Activities
   Net (decrease)increase in short term borrowings . . . . .   (25.7)      42.6
   Net increase (decrease) in bank revolving credit
      facility usage  . . .  . . . . . . . . . . . . . . . .    37.0     (302.0)
   Net (decrease) in asset-backed commercial paper
      facility usage . . . . . . . . . . . . . . . . . . . .  (221.7)    (150.0)
   Proceeds from long-term debt  . . . . . . . . . . . . . .    48.2       78.9
   Principal payment of long-term debt . . . . . . . . . . .   (23.6)      (9.2)
   Dividends paid to Transportation. . . . . . . . . . . . .   (12.0)         -
        Total. . . . . . . . . . . . . . . . . . . . . . . .  (197.8)    (339.7)

(Decrease) Increase in Cash and Cash Equivalents . . . . . .    (4.3)       5.5

Cash and Cash Equivalents at Beginning of Period . . . . . .    10.7        6.7

Cash and Cash Equivalents at End of Period . . . . . . . . . $   6.4    $  12.2


Supplemental disclosure of cash flow information

   Interest paid . . . . . . . . . . . . . . . . . . . . . . $  22.9    $  19.1

   Income taxes paid . . . . . . . . . . . . . . . . . . . . $   7.4    $   2.4

</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 the Corporation.

          The accompanying  unaudited  financial  statements and notes have been
          prepared in accordance  with the accounting  policies set forth in the
          Corporation's  1997  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 1997 amounts have been reclassified to conform
          with the presentation used in the 1998 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
                                             1998          1997          1997
                                                       ($ Millions)

        <S>                                <C>           <C>           <C>
        Retail notes. . . . . . . . . . .  $1,654.3      $1,422.2      $1,636.0
        Wholesale notes . . . . . . . . .     531.3         545.5         427.8
           Total  . . . . . . . . . . . .  $2,185.6      $1,967.7      $2,063.8
</TABLE>

          In November 1997, the  Corporation  sold $500 million of retail notes,
          net of unearned  finance income,  through  Navistar  Financial  Retail
          Receivables  Corporation to an owner trust which,  in turn, sold notes
          to investors.  A gain of $7.2 million was  recognized on the sale. The
          proceeds  of  $477  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)


        The allowance for losses on receivables is summarized as follows:

<TABLE>
<CAPTION.

                                         January 31    October 31    January 31
                                            1998          1997          1997
                                                      ($ Millions)
        <S>                                <C>           <C>           <C>
        Allowance pertaining to:
          Owned notes. . . . . . . . . .   $10.3         $12.0         $ 9.0
          Sold notes . . . . . . . . . .    14.4          12.5          15.5
             Total . . . . . . . . . . .   $24.7         $24.5         $24.5

</TABLE>

     3.   During the first quarter of fiscal 1998, the Corporation  entered into
          a $50 million forward treasury lock in anticipation of a May 1998 sale
          of retail receivables.  The Corporation intends to close this position
          on the pricing date of the sale.  Any gain or loss resulting from this
          transaction  will be  included  in the  gain  or  loss on the  sale of
          receivables recognized in May 1998.





<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 1998 industry  retail sales for Class 5 through 8
trucks  was  approximately  21%  higher  than  1997.  The  Corporation's  retail
financing  acquisitions in fiscal 1998,  including  retail notes and finance and
operating  leases,  were $278  million,  29% higher than 1997.  The  increase is
primarily  the result of the strong truck  industry  demand  offset in part by a
decline in the Corporation's  finance market share of new  International  trucks
sold in the U.S.  from  15.8% in 1997 to 14.5% in fiscal  1998 due to the highly
competitive  commercial  financing  market.  Serviced  retail  notes  and  lease
financing  balances were $2,258  million and $2,188  million at January 31, 1998
and 1997, respectively.

In spite of the continued strong liquidity in the commercial  financing  market,
the  Corporation  provided 95% and 94% of the wholesale  financing of new trucks
sold to  Transportation's  dealers in the first quarter of fiscal 1998 and 1997,
respectively.  Serviced wholesale note balances were $758 million at January 31,
1998,  a 16%  increase  compared  to the same  period of 1997 due to the  strong
industry demand.


Results of Operations

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

<TABLE>
<CAPTION>
                                                            1998      1997
                                                             ($ Millions)
<S>                                                        <C>       <C>
Income before income taxes:
  Finance operations. . . . . . . . . . . . . . . . . . .  $20.9     $19.5
  Insurance operations. . . . . . . . . . . . . . . . . .    1.0       2.4
     Income before taxes. . . . . . . . . . . . . . . . .   21.9      21.9
  Taxes on income . . . . . . . . . . . . . . . . . . . .    8.5       8.5
     Net income . . . . . . . . . . . . . . . . . . . . .  $13.4     $13.4
</TABLE>


<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)

Pretax  income was $21.9  million in the first  quarter of fiscal 1998 and 1997.
During the first quarter of 1998 receivable  balances were higher in response to
the increase in Transportation's sales. The higher level of financing was offset
by lower financing  margins primarily due to the highly  competitive  commercial
financing market and higher borrowing costs associated with the issuance of high
yield fixed rate debt in May 1997.

Finance Operations:

Retail  note and lease  revenue was $28.9  million in the first  quarter of 1998
compared to $25.7 million in 1997.  The increase is the result of higher average
finance  receivables  and  investment  in  operating  leases  as a result  of an
increase  in  Transportation's  retail  sales.  Included  in  these  amounts  is
operating  lease  revenue  of $8.5  million  and $5.9  million in 1998 and 1997,
respectively. The higher operating lease revenue is the result of an increase in
operating  lease  balances due to a market shift  toward  lease  financing.  For
operating leases, the Corporation recognizes the entire lease payment as revenue
and records depreciation expense on the assets under lease.

Wholesale  note  revenue  was $8.3  million in the first  quarter of fiscal 1998
compared  to $9.2  million in 1997.  The  higher  level of  wholesale  financing
activity in 1998 was more than offset by lower financing  margins in response to
the highly competitive commercial financing market.

Retail and  wholesale  account  revenue was $9.6 million in the first quarter of
1998  compared to $7.2 million in fiscal 1997.  The increase was  primarily  the
result of higher average balances and higher average yields relating to a higher
prime interest rate.

Borrowing costs increased $1.7 million to $17.6 million during the first quarter
of 1998 due primarily to higher receivable  financing and higher interest rates.
The  Corporation's  weighted average interest rate on all debt increased to 6.8%
in 1998 from 6.3% in the first quarter of 1997  primarily due to the issuance of
high yield fixed rate debt in May 1997 and higher  average  short term  interest
rates.

Depreciation  and other expenses  increased to $5.5 million in the first quarter
of 1998 from $4.4 million in 1997.  The  increase is  primarily  the result of a
larger investment in equipment under operating leases.


<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)

Insurance Operations:

Harco National Insurance  Company's pretax income in the first quarter of fiscal
1998  was $1.4  million  lower  than  1997  primarily  due to  unfavorable  loss
experience in the physical damage line.


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  Corporation's  current  debt  ratings  have made sales of finance
receivables the most economical source of funding.  The Corporation's  insurance
operation  generates its funds through  internal  operations and has no external
borrowings.

In January  1998,  Moody's,  Standard  and Poors and Duff and Phelps  raised the
Corporation's  senior debt  ratings  from Ba2, BB and BB+ to Ba1,  BB+ and BBB-,
respectively,  while the subordinated  debt ratings were also raised from B1, B+
and BB to Ba3, BB- and BB+, respectively.

Operations  used $49.2  million in cash in the first quarter of 1998 as the cash
provided  from net  income  was  offset by a  decrease  in  accounts  payable to
affiliated  companies.  Investment  activities  provided  $242.7 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
investing  activities was used primarily to lower borrowings in the asset-backed
commercial   paper   facility  by  $221.7   million  and  to  pay  dividends  to
Transportation of $12.0 million.

Receivable sales were a significant  source of funding in 1998 and 1997. 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 1998 and 1997 the Corporation  sold
$500 and $486 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,
1998,  the  remaining  shelf  registration  available  to NFRRC for  issuance of
asset-backed securities was $973 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)

As of January  1998,  Navistar  Financial  Securities  Corporation  ("NFSC"),  a
wholly-owned  subsidiary  of the  Corporation,  had  in  place  a  $531  million
revolving wholesale note trust that provides for the continuous sale of eligible
wholesale  notes on a daily  basis.  During the next two months $31 million will
amortize and the  commitment  will be $500  million.  At January 31,  1998,  the
remaining  shelf  registration  available  to NFSC for the  issuance of investor
certificates was $200 million.

At January 31, 1998,  available  funding  under the amended and restated  credit
facility and the  asset-backed  commercial  paper facility was $767 million,  of
which $115 million provided funding backup for the outstanding  short-term debt.
The remaining  $652  million,  when  combined  with  unrestricted  cash and cash
equivalents,  made $658 million  available to fund the general business purposes
of the Corporation.


Year 2000

The  Corporation has identified all  significant applications  that will require
modification  to ensure Year  2000 compliance.   Internal and external resources
are being used to make the required modifications and test Year 2000 compliance.
NFC  plans to complete  the modifications and testing process of all significant
applications by  July 1999,  which is prior  to  any  anticipated impact on  its
operating systems.  The total cost of the Year  2000 project has not been and is
not  anticipated  to  be  material  to  the Corporation's  financial position or
results of operations and will be funded through operating cash flows.

The costs of the project and the date on which NFC believes it will complete the
Year 2000  modifications are based on  management's best  estimates,  which were
derived utilizing numerous assumptions of future events, including the continued
availability  of certain resources,  third  party  modification plans  and other
factors.  However,  there  can be no  guarantee  that  these estimates  will  be
achieved and actual  results could  differ  materially  from those  anticipated.
Specific factors that might cause such material differences include, but are not
limited to,  the availability and  cost of personnel  trained in this area,  the
ability  to  locate  and  correct  all  relevant  computer  codes  and  similar
uncertainties.

<PAGE>

                        NAVISTAR FINANCIAL CORPORATION
                               AND SUBSIDIARIES


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


Year 2000 (continued)

In  addition,  the  Corporation has communicated with others with whom  it does
significant business to determine their  Year 2000 compliance readiness and the
extent to which NFC is vulnerable to any third party Year 2000 issues.  However,
there can be  no guarantee that  the systems of  other companies  on which  the
Corporation's systems rely will be  timely converted, or that a conversion that
is imcompatible with NFC's  systems would not have a material adverse effect on
the Corporation.


Business Outlook

Navistar  forecasts  industry  demand  for Class 5 through 8 trucks to  increase
approximately 8% over 1997 levels. The competitive  commercial  financing market
will  continue  to  put  pressure  on the  Corporation's  retail  and  wholesale
financing activity and 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 1998 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,
1998.



                                    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 17, 1998                      /s/ P.E. COCHRAN
                                              P. E. Cochran
                                              Vice President and Controller
                                              (Principal Accounting Officer)