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, 1996

                                     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 29, 1996, 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, 1996 and 1995. . . . . . . . . . .   2

    Statement of Consolidated Financial Condition --
      January 31, 1996; October 31, 1995; and January 31, 1995. . . . .   3

    Statement of Consolidated Cash Flow --
      Three Months Ended January 31, 1996 and 1995. . . . . . . . . . .   4

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

  Item 2.   Management's Discussion and Analysis of Results of 
              Operations and Financial Condition. . . . . . . . . . . .   8


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
             STATEMENT OF CONSOLIDATED INCOME AND RETAINED EARNINGS (Unaudited)
                                    (Millions of dollars)

<TABLE>
<CAPTION>

                                                                          Three Months Ended
                                                                              January 31    
                                                                           1996       1995  
<S>                                                                       <C>        <C>        
Revenue
   Retail notes and lease financing . . . . . . . . . . . . . . . . . . . $ 27.2     $ 14.9
   Wholesale notes. . . . . . . . . . . . . . . . . . . . . . . . . . . .   16.1       11.2
   Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    6.8        7.0
   Servicing fee income . . . . . . . . . . . . . . . . . . . . . . . . .    5.6        4.3
   Insurance premiums earned. . . . . . . . . . . . . . . . . . . . . . .   10.4       11.3
   Marketable securities. . . . . . . . . . . . . . . . . . . . . . . . .    2.6        2.2
         Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   68.7       50.9


Expense
   Cost of borrowing:
      Interest expense . . . . . . . . . . . . . . . . . . . . . . . . .    17.1       17.1
      Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     3.1        2.1
          Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . .    20.2       19.2

   Credit, collection and administrative . . . . . . . . . . . . . . . .     6.8        6.6
   Provision for losses on receivables . . . . . . . . . . . . . . . . .     1.1         .1
   Insurance claims and underwriting . . . . . . . . . . . . . . . . . .    10.9       12.8
   Other expense, net. . . . . . . . . . . . . . . . . . . . . . . . . .     2.8        1.8
          Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . .    41.8       40.5


Income Before Taxes on Income. . . . . . . . . . . . . . . . . . . . . .    26.9       10.4

Taxes on Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . .    10.3        4.1

Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    16.6        6.3

Retained Earnings

   Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . .    84.0       56.8

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

   End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 90.6     $ 63.1
</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
                                                        1996         1995         1995   
<S>                                                 <C>          <C>          <C>
                    ASSETS

Cash and Cash Equivalents. . . . . . . . . . . .    $    6.2     $    2.9     $    3.8
                                                     
Marketable Securities. . . . . . . . . . . . . .       131.7        131.8        128.7

Finance Receivables
   Retail notes and lease financing. . . . . . .       466.1        747.2        375.1
   Wholesale notes . . . . . . . . . . . . . . .       341.6        268.2        257.3
   Accounts. . . . . . . . . . . . . . . . . . .       239.2        365.9        310.5
                                                     1,046.9      1,381.3        942.9
   Allowance for losses. . . . . . . . . . . . .        (7.9)       (10.4)        (6.5)
     Finance Receivables, Net. . . . . . . . . .     1,039.0      1,370.9        936.4

Amounts Due from Sales of Receivables. . . . . .       279.9        247.8        206.6
Equipment on Operating Leases, Net . . . . . . .        47.4         39.3         33.5
Repossessions. . . . . . . . . . . . . . . . . .         5.8          5.8          1.5
Reinsurance Receivables. . . . . . . . . . . . .        22.3         24.8         30.3
Other Assets . . . . . . . . . . . . . . . . . .        45.5         51.4         40.5
Total Assets . . . . . . . . . . . . . . . . . .    $1,577.8     $1,874.7     $1,381.3
 
      LIABILITIES AND SHAREOWNER'S EQUITY


Short-Term Borrowings. . . . . . . . . . . . . .    $   56.5     $   50.5     $   58.9
Accounts Payable
   Affiliated companies. . . . . . . . . . . . .        14.2         89.5         85.2
   Other . . . . . . . . . . . . . . . . . . . .        54.7         49.3         48.7
      Total. . . . . . . . . . . . . . . . . . .        68.9        138.8        133.9

Dealers' Reserves. . . . . . . . . . . . . . . .        21.7         21.0         19.1
Unpaid Insurance Claims and Unearned Premiums. .       102.0        103.8        115.6
Accrued Income Taxes . . . . . . . . . . . . . .        18.8         12.0          6.0
Accrued Interest . . . . . . . . . . . . . . . .         6.0         12.1         13.7
Senior and Subordinated Debt . . . . . . . . . .     1,039.6      1,279.8        802.0

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 . . . . . . . . . . . . . .        90.6         84.0         63.1
   Unrealized gains (losses) on
      marketable securities. . . . . . . . . . .         2.7          1.7         (2.0)
      Total. . . . . . . . . . . . . . . . . . .       264.3        256.7        232.1
Total Liabilities and Shareowner's Equity. . . .    $1,577.8     $1,874.7     $1,381.3
</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    
                                                                         1996       1995  
<S>                                                                     <C>        <C>
Cash Flow From Operations
   Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $  16.6    $   6.3  
   Adjustments to reconcile net income to cash
      used in operations: 
      Losses (gains) on sales of receivables . . . . . . . . . . . . .    (12.2)        .5
      Depreciation and amortization. . . . . . . . . . . . . . . . . .      4.1        2.5
      Provision for losses on receivables. . . . . . . . . . . . . . .      1.1         .1
      Increase (decrease) in unpaid insurance claims and
         unearned premiums, net of reinsurance receivables . . . . . .       .6       (2.7)
      Decrease in accounts payable to affiliates . . . . . . . . . . .    (75.3)     (15.1)
      Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      5.4        5.2
        Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . .    (59.7)      (3.2)

Cash Flow From Investing Activities
   Proceeds from sold retail notes . . . . . . . . . . . . . . . . . .    500.4      298.5
   Purchase of retail notes and lease receivables. . . . . . . . . . .   (264.5)    (215.5)
   Principal collections on retail notes and
     lease receivables . . . . . . . . . . . . . . . . . . . . . . . .     20.6       39.4
   Acquisitions under cash collections of wholesale
      notes and accounts receivable. . . . . . . . . . . . . . . . . .     53.4       22.3
   Purchase of marketable securities . . . . . . . . . . . . . . . . .    (19.3)     (11.7)
   Proceeds from sales of marketable securities. . . . . . . . . . . .     21.5       13.8
   Increase in property and equipment leased to others . . . . . . . .    (10.1)      (8.4)
        Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . .    302.0      138.4

Cash Flow From Financing Activities
   Net increase in commercial paper. . . . . . . . . . . . . . . . . .      6.0       39.8 
   Principal payments on short-term debt . . . . . . . . . . . . . . .        -     (400.0)
   Net increase (decrease) in bank revolving credit facility usage . .   (180.0)      17.0
   Net increase (decrease) in asset-backed commercial paper
      facility usage . . . . . . . . . . . . . . . . . . . . . . . . .    (55.0)      99.4
   Net increase in advance from Transportation . . . . . . . . . . . .        -       84.1
   Dividends paid to Transportation. . . . . . . . . . . . . . . . . .    (10.0)         -
        Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (239.0)    (159.7)

Increase (Decrease) in Cash and Cash Equivalents . . . . . . . . . . .      3.3      (24.5)

Cash and Cash Equivalents at Beginning of Period . . . . . . . . . . .      2.9       28.3

Cash and Cash Equivalents at End of Period . . . . . . . . . . . . . .  $   6.2    $   3.8


Supplemental disclosure of cash flow information

   Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . .  $  23.2    $  14.9

   Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . .  $   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 1995 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
    present fairly 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 1995
    amounts have been reclassified to conform with the presentation used in
    the 1996 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
                                           1996          1995          1995   
                                                     ($ Millions)
    <S>                                  <C>           <C>           <C>
    Retail notes . . . . . . . . . . .   $1,513.4      $1,173.2      $1,222.2
    Wholesale notes. . . . . . . . . .      500.0         500.0         300.0
          Total. . . . . . . . . . . .   $2,013.4      $1,673.2      $1,522.2
</TABLE>

    In November 1995, the Corporation sold $525 million of retail notes, net
    of unearned finance income, through Navistar Financial Retail Receivables
    Corporation, a wholly-owned subsidiary of NFC, to an owner trust which,
    in turn, sold $507 million of notes and $18 million of certificates to
    investors.  The proceeds of $495 million, after deducting $1 million for
    underwriting fees and $29 million 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.

    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>

                        NAVISTAR FINANCIAL CORPORATION
                               AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)



     The following is a summary of amounts included in "Amounts Due from Sales
     of Receivables":
<TABLE>
<CAPTION>
                                        January 31    October 31    January 31
                                            1996          1995          1995   
                                                      ($ Millions)
     <S>                                    <C>          <C>          <C>

     Cash held and invested by 
        trusts. . . . . . . . . . . . .     $ 88.4       $ 66.8       $ 64.7
     Subordinated retained interests 
        in wholesale receivables. . . .       86.0         86.3         46.5
     Subordinated retained interests 
        in retail receivables . . . . .       12.4         12.2         13.5
     Holdback reserves. . . . . . . . .       39.5         43.7         59.8
     Excess servicing fee and other . .       66.4         48.0         32.0
     Allowance for credit losses. . . .      (12.8)        (9.2)        (9.9)
           Total. . . . . . . . . . . .     $279.9       $247.8       $206.6
</TABLE>

     The allowance for losses on receivables is summarized as follows:
<TABLE>
<CAPTION>

                                        January 31    October 31    January 31
                                           1996          1995          1995   
                                                     ($ Millions)
    <S>                                    <C>           <C>           <C>
    Allowance pertaining to:
       Owned notes . . . . . . . . . .     $ 7.9         $10.4         $ 6.5
       Sold notes. . . . . . . . . . .      12.8           9.2           9.9
           Total . . . . . . . . . . .     $20.7         $19.6         $16.4
</TABLE>

3.   Average short-term debt outstanding during the first quarter of fiscal 
     1996 and 1995, which included commercial paper and bank borrowings, was
     approximately $61 million and $102 million, respectively, at an average
     cost of 6.3% and 5.3%, respectively.  The weighted average interest rate
     on all debt, including short-term debt and the effect of discounts and
     related amortization, was 7.0% and 7.6% for the first three months of
     fiscal 1996 and 1995, respectively.

     Accounts payable due to affiliated companies at January 31, 1995 included
     an intercompany advance of $84.1 million.  The advance, which was payable
     to Transportation, accrued interest at the Corporation's incremental
     short-term borrowing rate.  There was no intercompany advance outstanding
     at January 31, 1996 or October 31, 1995.

<PAGE>

                        NAVISTAR FINANCIAL CORPORATION
                               AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)


4.   The Corporation has $1,200 million of contractually committed support
     facilities, consisting of a $900 million bank revolving credit facility and
     a $300 million asset-backed commercial paper ("ABCP") program supported by
     a bank liquidity facility.  Each of these facilities has a maturity date
     of October 31, 1998.  At January 31, 1996, unused commitments under these
     facilities were $384 million, of which $57 million provided funding backup
     for the outstanding short-term debt at January 31, 1996.  The remaining
     $327 million when combined with unrestricted cash and cash equivalents made
     $333 million available to fund the general business purposes of the
     Corporation at January 31, 1996.


5.   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.  Gains or losses incurred with the
     closing of these agreements are included as a component of the gain on sale
     of receivables.

     During the first quarter of fiscal 1996, the Corporation did not enter into
     any interest rate contracts, swaps or caps; and there were no derivative
     instruments outstanding at January 31, 1996.
     
     In February 1996, the Corporation entered into three short-term forward
     interest rate lock agreements related to the anticipated sale of retail
     receivables.  The Corporation, in anticipation of selling receivables at
     some time in May or June of 1996, hedged, until May 31, 1996, a total of
     $200 million against a Treasury security maturing in 1998.

     The Corporation's wholly-owned insurance subsidiary has investments in
     Collateralized Mortgage Obligations of $39 million which are included in
     the Corporation's marketable securities at January 31, 1996.


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 $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.

<PAGE>

                        NAVISTAR FINANCIAL CORPORATION
                               AND SUBSIDIARIES


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


Customer demand for Class 5 through 8 trucks declined approximately 10% during
the first quarter of 1996 compared with the first three months of 1995. Although
the receivable portfolio quality continued to be strong, the softening in the
truck industry has resulted in the inability of some customers to meet scheduled
payments on a timely basis and an increase in repossession frequency as compared
to the first quarter of 1995.  The high liquidity in the commercial financing
markets continued to give NFC's customers more financing alternatives than
normal.  

Financial Condition

The Corporation's serviced receivables portfolio, which includes sold
receivables, totaled $3.2 billion at January 31, 1996 compared to $2.5 billion
at January 31, 1995.  During the first quarter of 1996, the Corporation supplied
94% of the wholesale financing of new trucks sold to Transportation's dealers,
compared to 92% supplied during the first quarter of 1995.  Acquisitions of
wholesale notes increased $152 million to $795 million during the first three
months of fiscal 1996 as compared to the same period a year ago.  Serviced
wholesale note balances were $842 million at January 31, 1996 up from $768
million and $557 million at October 31, 1995 and January 31, 1995, respectively.

Acquisitions of retail notes and leases, net of unearned finance income, 
remained strong during the first three months of fiscal 1996 at $265 million 
compared to $216 million during the first three months of fiscal 1995.  The
Corporation's share of the retail financing of new trucks manufactured by 
Transportation and sold in the United States was 18% during the first quarter 
of 1996 compared to 12% during the same period a year ago.  Serviced retail 
notes and lease financing balances were $2.0 billion at January 31, 1996 
compared with $1.9 billion at October 31, 1995 and $1.6 billion at 
January 31, 1995.

Owned net finance receivable balances including subordinated interests in retail
and wholesale receivables, were $1.1 billion at January 31, 1996, $1.5 billion
at October 31, 1995 and $1.0 billion at January 31, 1995.  The decrease in owned
receivable balances from year-end resulted from retail receivables sales 
activity as sold retail receivables balances increased to $1.5 billion at 
January 31, 1996 from $1.2 billion at October 31, 1995 and January 31, 1995.  
Sold wholesale note balances were $500 million at January 31, 1996 and 
October 31, 1995 and $300 million at January 31, 1995.

<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>
                                                            1996      1995
                                                             ($ Millions)
<S>                                                        <C>       <C>
Income before income taxes:
  Finance operations. . . . . . . . . . . . . . . . . . .  $25.0     $10.0
  Insurance operations. . . . . . . . . . . . . . . . . .    1.9       0.4
     Income before taxes. . . . . . . . . . . . . . . . .   26.9      10.4
Taxes on income . . . . . . . . . . . . . . . . . . . . .   10.3       4.1
     Net income . . . . . . . . . . . . . . . . . . . . .  $16.6     $ 6.3
</TABLE>

In the first quarter of fiscal 1996, the Corporation's pretax income increased
$16.5 million to $26.9 million compared to the same period a year ago.  Pretax
income from the Corporation's finance operations increased $15.0 million as the
result of higher gains on sales of retail notes and higher levels of wholesale
note financing.  Gains on sales of retail notes receivable during the first
quarter of 1996 were $12.2 million on $525 million sold compared with losses of
$.5 million on $315 million of retail receivables sold in the first quarter of
1995.  The higher gains on sales resulted from higher margins on retail notes 
due to declining market interest rates.  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 a market interest rate at the time of the sale which may
be up to six months after the Corporation acquires the retail note.  During 
1995, the opposite impact was experienced by NFC as market interest rates were
rising and a loss was recorded on the sale. 

Servicing fee income increased $1.3 million to $5.6 million during the first
quarter of 1996 compared with 1995 as a result of higher levels of sold note
receivable balances which the Corporation continues to service.

The provision for losses increased $1.0 million to $1.1 million during the first
quarter of 1996 compared with the same period one year ago as a result of an 
increase in receivables balances combined with a softening in the truck 
industry. 


The $1.5 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.  Also contributing to the improvement in
insurance operation's pretax income was an increase in realized gains on sales
of investments.

<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

The Corporation's operations are substantially dependent upon the production 
and sale of Transportation's truck products in the United States.  Navistar
Financial's traditional sources of funding for its receivables include
commercial paper, short- and long-term bank borrowings, medium- and long-term 
debt issues, sales of receivables and equity capital.  The insurance operations
generate their funds through internal operations and have no external 
borrowings. 

Receivable sales were a significant source of funding in 1996 and 1995.  During
the first quarter of 1996, the Corporation sold $525 million of retail notes, 
net of unearned finance income, through Navistar Financial Retail Receivables
Corporation ("NFRRC"), its wholly-owned subsidiary, to an owner trust.  The  
owner trust, in turn, sold $507 million of notes and $18 million of certificates
to investors.  Net proceeds from the sale were $495 million after deducting $1
million for underwriting fees and $29 million to establish a reserve account 
with the trust as credit enhancement for the public sale.  During the same 
period in 1995, the Corporation sold $315 million of retail notes receivable 
through NFRRC and an owner trust to public investors.  Net proceeds from this
sale were $295 million after the reduction of underwriting fees and credit 
enhancement.  The net proceeds from the sales were used by the Corporation for
general working capital purposes.  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 $2.0 billion of asset-backed
securities.  At January 31, 1996, the remaining shelf registration available to 
NFRRC for issuance of asset-backed securities was $2.9 billion.

At January 31, 1996, available funding under the amended and restated credit
facility and the asset-backed commercial paper facility was $384 million, of
which $57 million provided funding backup for the outstanding short-term debt at
January 31, 1996.  The remaining $327 million when combined with unrestricted
cash and cash equivalents made $333 million available to fund the general
business purposes of the Corporation.  In addition to the committed credit
facilities, the Corporation also utilizes $500 million of revolving wholesale
note sales trusts providing for the continuous sale of eligible wholesale notes
on a daily basis.  The sales trusts are composed of three $100 million pools of
notes maturing serially from 1997 to 1999 and a $200 million pool maturing in
2004.

The Corporation paid dividends of $10.0 million to Transportation during the
first quarter of 1996.  There were no dividends paid to Transportation during 
the first three months of 1995.  The Corporation's debt to equity ratio was 
4.1:1 at January 31, 1996, 5.2:1 at October 31, 1995 and 3.7:1 at 
January 31, 1995.


<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)

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 ABCP program, 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 Note 5 to the Consolidated Financial Statements for a
discussion of derivatives.

Business Outlook

The year-over-year truck demand levels are 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 truck industry may impact the financial
strength of dealers and customers and NFC's ability to maintain the current 
level of portfolio quality. 

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 1996 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, 1996.





                                   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 12, 1996                        /s/P. E. Cochran                
                                               P. E. Cochran
                                               Vice President and Controller