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                                                      EXHIBIT 10.66

                TRUCK ENGINE RECEIVABLES MASTER TRUST

              $100,000,000 Aggregate Principal Balance
   of Floating Rate Trade Receivables Backed Notes, Series 2000-1

                         PURCHASE AGREEMENT

                    Dated as of November 15, 2000

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                                 i

                          TABLE OF CONTENTS

SECTION 1.  Representations, Warranties and Agreements............2
      (a)  Seller and Navistar Financial..........................2
      (b)  Initial Purchaser......................................5

SECTION 2. Sale and Delivery to Initial Purchaser -- Closing......6
      (a)  Notes..................................................6
      (b)  Payment................................................6
      (c)  Denominations; Registration............................6

SECTION 3. Covenants of the Seller and Navistar Financial.........6
      (a)  Offering Memorandum....................................6
      (b)  Notice and Effect of Material Events...................6
      (c)  Amendment to Offering Memorandum and Supplements.......6
      (d)  Qualification of Notes for Offer and Sale..............7
      (e)  Rating of Notes........................................7
      (f)  DTC....................................................7
      (g)  Use of Proceeds........................................7
      (h)  Information............................................7
      (i)  Compliance Statements..................................7

SECTION 4. Payment of Expenses....................................7

SECTION 5. Conditions of Initial Purchaser's Obligations..........8
      (a)  Opinion of Counsel for Seller and Navistar
           Financial..............................................8
      (b)  Opinion of Counsel for Indenture Trustee and Owner
           Trustee................................................8
      (c)  Opinion of Counsel for Initial Purchaser...............8
      (d)  Officers' Certificate..................................8
      (e)  Procedures Letter......................................8
      (f)  Rating of Notes........................................9
      (g)  Additional Documents...................................9
      (h)  Termination of Agreement...............................9

SECTION 6. Subsequent Offers and Resales of the Notes.............9
      (a)  Offer and Sale Procedures..............................9
      (b)  Covenants of the Seller and Navistar Financial........10

SECTION 7. Indemnification.......................................10
      (a)  Indemnification of lnitial Purchasers.................10
      (b)  Indemnification of Seller and Navistar Financial,
           Directors and Officers................................11
      (c)  Actions against Parties; Notification.................12

SECTION 8. Contribution..........................................12

SECTION 9. Representations, Warranties and Agreements to
           Survive Delivery......................................13

SECTION 10. Termination of Agreement.............................14
       (a)  Termination; General.................................14
       (b)  Liabilities..........................................14

SECTION 11.  Notices.............................................14

SECTION 12.  No-Petition.........................................14

SECTION 13.  Parties.............................................14

SECTION 14.  Governing Law.......................................15

SECTION 15.  Effect of Headings..................................15

Schedule A -    Initial Purchasers

Exhibit A  -    Opinion of Kirkland & Ellis (in re enforceability
                and corporate matters)

Exhibit B  -    Opinion of Kirkland & Ellis (in re disclosure
                matters)

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                            $100,000,000
     Floating Rate Trade Receivables Backed Notes, Series 2000-1

                TRUCK ENGINE RECEIVABLES MASTER TRUST

                         PURCHASE AGREEMENT

                                    November 15, 2000

Banc One Capital Markets, Inc.
One First National Plaza
Chicago, Illinois 60670

Ladies and Gentlemen:

      Truck   Engine   Receivables   Financing   Co.,   a  Delaware
corporation (the "Seller"),  and Navistar Financial Corporation,  a
Delaware corporation ("Navistar  Financial"),  hereby confirm their
agreement  with  Banc One  Capital  Markets,  Inc.  (the  "Initial
Purchaser"),   with   respect  to  the   purchase  by  the  Initial
Purchaser of $100,000,000  aggregate  principal balance of Floating
Rate Trade  Receivables  Backed Notes,  Series 2000-1 (the "Notes")
of Truck Engine Receivables Master Trust (the "Trust").

      The Notes are to be issued  pursuant  to an  Indenture  to be
dated  as  of  November 21,   2000,  among  the  Seller,   Navistar
Financial,  as  Servicer  (the  "Servicer"),  and  The  Bank of New
York, as Indenture Trustee (the "Indenture  Trustee"),  and related
Series   2000-1   Supplement   to  the   Indenture   to  be   dated
November 21,  2000 (the "Supplement").  The Notes will be issued in
book-entry  form  in the  name  of Cede & Co.,  as  nominee  of The
Depository  Trust Company  ("DTC"),  pursuant to a letter agreement
to be dated as of the  Closing  Date (as  defined in Section  2(b))
(the "DTC  Agreement"),  among the Seller,  the  Indenture  Trustee
and DTC.

      The  Seller  and  Navistar  Financial   understand  that  the
Initial  Purchaser  proposes  to make an  offering  of the Notes on
the terms and in the  manner  set forth  herein  and agree that the
Initial  Purchaser may resell,  subject to the conditions set forth
herein,  all or a portion of the Notes to purchasers  ("Subsequent
Purchasers")  at any time  after  the date of this  Agreement.  The
Notes are to be offered  and sold to and by the  Initial  Purchaser
without  being  registered  under the  Securities  Act of 1933,  as
amended (the "1933 Act"),  in reliance upon  exemptions  therefrom.
Pursuant  to  the  terms  of  the  Notes  and  the   Indenture  and
Supplement  and subject to the conditions  therein,  investors that
acquire  Notes may only  resell or  otherwise  transfer  such Notes
(i) if  such  Notes are  hereafter  registered  under the 1933 Act,
(ii) outside  the United  States to  certain  persons  pursuant  to
Regulation  S of the  1933 Act  ("Regulation S"),  or  (iii) if  an
exemption  from the  registration  requirements  of the 1933 Act is
available  (including  the exemption  afforded by Rule 144A ("Rule
144A")  of the  rules and  regulations  promulgated  under the 1933
Act by the Securities and Exchange Commission (the "Commission").

      The  Seller  has  prepared  and   delivered  to  the  Initial
Purchaser an electronic copy of a preliminary  offering  memorandum
dated  November 2,  2000 (the  "Preliminary  Offering  Memorandum")
and  has  prepared  and  will  promptly   deliver  to  the  Initial
Purchaser an electronic copy of a final offering  memorandum  dated
as of the date hereof (the "Final Offering  Memorandum"),  each for
use by such Initial  Purchaser in connection with its  solicitation
of   purchases   of,  or  offering   of,  the  Notes.   "Offering
Memorandum"  means, with respect to any date or time referred to in
this Agreement,  the most recent offering  memorandum  (whether the
Preliminary  Offering Memorandum or the Final Offering  Memorandum,
or  any  amendment  or   supplement   to  either  such   document),
including exhibits thereto and any documents  incorporated  therein
by  reference,  which has been prepared and delivered by the Seller
to the Initial  Purchaser in connection  with its  solicitation  of
purchases  of, or offering  of, the Notes.  Capitalized  terms used
herein  that are not  otherwise  defined  shall  have the  meanings
ascribed thereto in the Offering Memorandum.

      SECTION (a)  Representations, Warranties and Agreements.

      (a)  Seller and Navistar  Financial.  The Seller and Navistar
Financial,  jointly  and  severally,  represent  and warrant to the
Initial  Purchaser  as of the  date  hereof  and as of the  Closing
Date  referred  to in  Section  2(b)  hereof,  and  agree  with the
Initial Purchaser, as follows:

           (a)  None  of the  Seller,  Navistar  Financial,  any of
      their   respective   affiliates   (other   than  the  Initial
      Purchaser),  as such term is defined in Rule 501(b) under the
      1933 Act  (each,  an  "Affiliate")  or any  person  acting on
      their behalf  (other than the Initial  Purchaser,  as to whom
      the Seller and Navistar  Financial  make no  representation),
      has,  directly  or  indirectly,  solicited  any offer to buy,
      sold or offered to sell or  otherwise  negotiated  in respect
      of,  or will  solicit  any  offer  to buy or offer to sell or
      otherwise  negotiate in respect of, any security  which is or
      would be  integrated  with the sale of the  Notes in a manner
      that would require the Notes to be registered  under the 1933
      Act.

           (b)  None  of  the  Seller,  Navistar  Financial  any of
      their  respective  Affiliates,  or any person acting on their
      behalf  (other  than the  Initial  Purchaser,  as to whom the
      Seller and Navistar  Financial  make no  representation)  has
      engaged or will engage,  in  connection  with the offering of
      the  Notes,  in any form of general  solicitation  or general
      advertising  within the meaning of Rule 502(c) under the 1933
      Act,  or has  engaged or will  engage in any  direct  selling
      efforts  (as  that  term is  defined  in  Regulation S)  with
      respect to the Notes, and the Seller and Navistar  Financial,
      any of their respective Affiliates,  and any person acting on
      their behalf  (other than the Initial  Purchaser,  as to whom
      the Seller and  Navistar  Financial  make no  representation)
      have  complied and will comply with the offering  restriction
      requirement of Regulation S.

           (c)  Subject  to  compliance  by the  Initial  Purchaser
      with the representations and warranties set forth in Section
      2 and the  procedures  set forth in  Section 6 hereof,  it is
      not  necessary  in  connection  with  the  offer,   sale  and
      delivery  of the Notes to the Initial  Purchaser  and to each
      Subsequent  Purchaser  in the  manner  contemplated  by  this
      Agreement  and the Offering  Memorandum to register the Notes
      under  the  1933  Act  or  to  qualify  the   Indenture   and
      Supplement  under the Trust Indenture Act of 1939, as amended
      (the "1939 Act").

           (d)  Since the respective dates as of which  information
      is  given  in the  Preliminary  Offering  Memorandum  and the
      Final  Offering  Memorandum,  (A) there  has been no material
      adverse  change or  development  which  would  reasonably  be
      expected  to  result  in a  material  adverse  change  in the
      condition,  financial or otherwise, of the Seller or Navistar
      Financial,  whether or not arising in the ordinary  course of
      business,  other  than as set  forth or  contemplated  in the
      Final   Offering   Memorandum  and  (B) there  have  been  no
      transactions   entered   into  by  the  Seller  or   Navistar
      Financial,  other  than  those  in  the  ordinary  course  of
      business,  that are material  with respect to the  condition,
      financial or otherwise,  of the Seller or Navistar Financial,
      other  than  as  set  forth  or  contemplated  in  the  Final
      Offering  Memorandum and other than the proposed  offering of
      $400 million of senior notes of Navistar Financial.

           (e)  Each of the Seller and Navistar  Financial has been
      duly formed and is validly  existing as a  corporation  under
      the laws of the State of Delaware  and all  filings  required
      at the date  hereof  under the laws of the State of  Delaware
      with respect to the due formation  and valid  existence of it
      as a  corporation  thereunder  have  been  made;  each of the
      Seller and Navistar  Financial  has all  requisite  power and
      authority  to own,  lease and operate its  properties  and to
      conduct its business as described in the Offering  Memorandum
      and to enter into and to perform  its  obligations;  and each
      of the Seller and  Navistar  Financial  is duly  qualified or
      registered as a foreign  corporation to transact business and
      is in  good  standing  in each  jurisdiction  in  which  such
      qualification or registration is required,  whether by reason
      of the  ownership  of property  or the  conduct of  business,
      except where the failure to so qualify  would not result in a
      material  adverse  change  in  its  condition,  financial  or
      otherwise.

           (f)  This Agreement has been duly  authorized,  executed
      and  delivered  by,  and  constitutes  a  valid  and  binding
      agreement  of, the Seller and Navistar  Financial,  except as
      the  enforceability  thereof  may be limited  by  bankruptcy,
      insolvency (including,  without limitation, all laws relating
      to  fraudulent  transfers),  moratorium,   reorganization  or
      other  similar  laws  affecting   enforcement  of  creditors'
      rights   generally  and  by  general   principles  of  equity
      (regardless of whether such  enforceability  is considered in
      a proceeding in equity or at law).

           (g)  As of the Closing Date, each  Transaction  Document
      to which it is a party  shall  have  been duly  executed  and
      delivered by the Seller and Navistar  Financial and, assuming
      the due authorization,  execution and delivery thereof by the
      other parties thereto,  shall constitute the legal, valid and
      binding  agreement  of the  Seller  and  Navistar  Financial,
      enforceable  in  accordance  with its  terms,  except  as the
      enforceability   thereof   may  be  limited  by   bankruptcy,
      insolvency (including,  without limitation, all laws relating
      to  fraudulent  transfers),  moratorium,   reorganization  or
      other  similar  laws  affecting   enforcement  of  creditors'
      rights   generally  and  by  general   principles  of  equity
      (regardless of whether such  enforceability  is considered in
      a proceeding in equity or at law).

           (h)  The Notes have been duly  authorized and, as of the
      Closing Date,  will have been duly executed by the Trust and,
      when  authenticated,  issued  and  delivered  in  the  manner
      provided for in the  Indenture and  Supplement  and delivered
      against  payment of the purchase  price  therefor as provided
      in this  Agreement,  will  constitute  the  legal,  valid and
      binding obligations of the Seller,  enforceable in accordance
      with their terms,  except as the  enforcement  thereof may be
      limited  by  bankruptcy,   insolvency   (including,   without
      limitation,  all  laws  relating  to  fraudulent  transfers),
      moratorium,  reorganization  or other similar laws  affecting
      enforcement  of  creditors'  rights  generally and by general
      principles of equity  (regardless of whether such enforcement
      is considered in a proceeding in equity or at law),  and will
      be in the form  contemplated by, and entitled to the benefits
      of, the Indenture and Supplement.

           (i)  Neither  the Seller nor  Navistar  Financial  is in
      violation  of  its  charter  or  bylaws,  in  default  in the
      performance   or  observance  of  any  material   obligation,
      agreement,  covenant or condition  contained in any contract,
      indenture,  mortgage,  loan agreement,  note,  lease or other
      instrument  to  which  it is a party  or by  which  it may be
      bound,  or to  which  any  of its  properties  or  assets  is
      subject  or  in  violation  of  any  law,   order,   rule  or
      regulation  applicable to it or any of its  properties of any
      court or of any federal or state  regulatory,  administrative
      agency   or   other   governmental   instrumentality   having
      jurisdiction  over  it or  any  of its  properties;  and  the
      execution,  delivery  and  performance  by each of the Seller
      and  Navistar  Financial of this  Agreement,  and each of the
      Transaction  Documents  to  which  it  is  a  party  and  the
      consummation  of the  transactions  contemplated  herein  and
      therein  and  in  the  Offering  Memorandum   (including  the
      issuance  and sale of the Notes  and the use of the  proceeds
      from  the  sale of the  Notes as  described  in the  Offering
      Memorandum   under  the  caption  "Use  of   Proceeds")   and
      compliance   by  it  with  its   obligations   hereunder  and
      thereunder  have  been  duly and  validly  authorized  by all
      necessary  corporate  action  and will not  conflict  with or
      constitute  a breach of, or default  under,  or result in the
      creation or imposition of any lien,  charge or encumbrance (a
      "Lien") upon any of its properties or assets  pursuant to any
      material  contract,  indenture,   mortgage,  loan  agreement,
      note,  lease or other instrument to which it is a party or by
      which it may be bound,  or to which any of its  properties or
      assets  is  subject,  nor  will  such  action  result  in any
      violation of the  provisions  of its charter or bylaws or any
      applicable law, order, rule,  regulation or administrative or
      court decree.

           (j)  There is no  action,  suit,  proceeding  or inquiry
      before  or by any  court  or  governmental  agency  or  body,
      domestic or foreign,  now  pending,  or, to the  knowledge of
      the  Seller or  Navistar  Financial,  threatened,  against or
      affecting  the  Seller  or  Navistar  Financial  which  might
      result  in  a  material  adverse  change  in  its  condition,
      financial   or   otherwise,   and  all   pending   legal   or
      governmental  proceedings  to  which  either  the  Seller  or
      Navistar  Financial  is a  party  or  of  which  any  of  its
      properties  or assets is the subject are,  considered  in the
      aggregate, not material.

           (k)  Subject  to  compliance  by the  Initial  Purchaser
      with the representations and warranties set forth in Section
      2(c) and the  procedures  set forth in  Section 6 hereof,  no
      filing with,  or  authorization,  approval or consent of, any
      court,  governmental  authority or agency or any other person
      is necessary in connection  with the execution,  delivery and
      performance  by the  Seller  or  Navistar  Financial  of this
      Agreement,   the  Notes  or  any  of  the  other  Transaction
      Documents  or  the  consummation  by it of  the  transactions
      contemplated  hereby or  thereby,  except for any  filings in
      accordance with applicable  state securities laws and such as
      will have been  obtained  and are in full force and effect as
      of the Closing Date.

           (l)  Each  of  the   Seller   and   Navistar   Financial
      possesses all material  certificates,  authorities,  licenses
      or  permits  issued  by the  appropriate  state,  federal  or
      foreign  regulatory  agencies or bodies as are  necessary  to
      conduct  the  business  now  operated  by it,  and it has not
      received   any  notice  of   proceedings   relating   to  the
      revocation   or   modification   of  any  such   certificate,
      authority,  license or permit  that,  individually  or in the
      aggregate, if the subject of an unfavorable decision,  ruling
      or finding,  would result in a material adverse change in its
      condition, financial or otherwise.

           (m)  On the  Closing  Date (after  giving  effect to all
      transactions  occurring  on  such  date),  the  Net  Invested
      Amount shall not exceed the Base Amount.

           (n)  No  event  has  occurred  and  is  continuing  that
      constitutes,  or with the  passage  of time or the  giving of
      notice or both would constitute,  an Early Amortization Event
      or a Servicing Default.

           (o)  Neither the Seller nor  Navistar  Financial is now,
      nor as a  result  of the  transactions  contemplated  by this
      Agreement will it become, an "investment  company," nor is it
      "controlled"  by an  "investment  company"  as such terms are
      defined in the Investment Company Act of 1940, as amended.

           (p)  As of the Closing  Date,  the  representations  and
      warranties  of each of the Seller and  Navistar  Financial in
      each Transaction  Document to which it is a party and in each
      officers'  certificate of the Seller and Navistar  Financial,
      delivered  as of the Closing  Date will be true and  correct,
      and the Initial  Purchaser  may rely on such  representations
      as if they were set forth herein in full.

      (b)  Initial  Purchaser.  The  Initial  Purchaser  represents
and  warrants to the Seller and  Navistar  Financial as of the date
hereof and as of the  Closing  Date  referred  to in  Section  2(b)
hereof,  and  agrees  with the Seller and  Navistar  Financial,  as
follows:

           (a)  The Initial  Purchaser  represents and warrants to,
      and  agrees  with  the  Seller,  that  it is  an  "accredited
      investor"  within the meaning of Rule  501(a)  under the 1933
      Act (an  "Accredited  Investor"),  with  such  knowledge  and
      experience   in  financial   and  business   matters  as  are
      necessary  in order to  evaluate  the  merits and risks of an
      investment in the Notes,  it is purchasing the Notes pursuant
      to a private  sale  exempt from  registration  under the 1933
      Act,  it has not  engaged  and will not engage in  connection
      with  the  offering  of the  Notes  in any  form  of  general
      solicitation  or general  advertising  within the  meaning of
      Rule 502(c) under the 1933 Act,  and it will  solicit  offers
      for the Notes,  and will offer,  sell or deliver the Notes as
      part of  their  initial  offering,  only in  accordance  with
      Section 6.

           (b)  With respect to any  information  not  contained in
      the Offering  Memorandum  and designated as  confidential  by
      the Seller and  Navistar  Financial,  the  Initial  Purchaser
      hereby agrees to cause any prospective  purchaser of Notes to
      execute that certain  Confidentiality  Letter  agreed upon by
      the  parties  hereto  prior  to  the  dissemination  of  such
      confidential information to such purchaser.

      SECTION (b)    Sale and  Delivery  to  Initial  Purchaser  --
Closing.

      (a)  Notes.   On  the  basis  of  the   representations   and
warranties   herein   contained   and  subject  to  the  terms  and
conditions  herein  set  forth,  the  Seller  agrees to sell to the
Initial  Purchaser  and the  Initial  Purchaser  agrees to purchase
from the  Seller  the  respective  principal  balance  of Notes set
forth  opposite  the name of such  Initial  Purchaser in Schedule A
hereto  at  a  purchase  price  equal  to  the  principal   balance
thereof.   As  compensation  to  the  Initial   Purchaser  for  its
commitment  and obligation  hereunder in respect of the Notes,  the
Seller will pay to the  Initial  Purchaser  on the Closing  Date an
amount  equal to 37.5  basis  points  multiplied  by the  aggregate
principal   balance  of  the  Notes   purchased   by  such  Initial
Purchaser hereunder (or $375,000).

      (b)  Payment.   Payment  of  the  purchase   price  for,  and
delivery  of the Notes  shall be made at the  office of  Kirkland &
Ellis,  Chicago,  Illinois,  or at such  other  place  as  shall be
agreed  upon by the  Initial  Purchaser  and the  Seller,  at 10:00
A.M.  (Chicago  time) on  November 21,  2000, or such other time on
the  same or  such  other  date  as  shall  be  agreed  upon by the
Initial  Purchaser  and the  Seller  (such time and date of payment
and delivery  being  herein  called the  "Closing  Date").  Payment
shall  be  made  to the  Seller  by wire  transfer  of  immediately
available  funds  to a  bank  account  designated  by  the  Seller,
against delivery to the Initial  Purchaser,  through the facilities
of DTC, of the Notes to be purchased by them.

      (c)  Denominations;   Registration.   The   Notes   shall  be
registered  in  the  name  of  Cede  &  Co.  pursuant  to  the  DTC
Agreement  and  shall  be made  available  for  examination  by the
Initial  Purchaser  in Chicago,  Illinois not later than 10:00 A.M.
(Chicago time) on the last business day prior to the Closing Date.

      SECTION (c)    Covenants   of   the   Seller   and   Navistar
Financial.   The  Seller  and  Navistar  Financial  each  severally
covenant and agree as follows:

      (a)  Offering    Memorandum.    The   Seller   and   Navistar
Financial,  as promptly as  possible,  will  furnish to the Initial
Purchaser  an  electronic  copy of the  Final  Offering  Memorandum
and,  with respect to any  documents  which were not or will not be
provided  electronically to the Initial  Purchaser,  at the expense
of the  Seller and  Navistar  Financial,  such  number of copies of
any  amendments  and  supplements  to the Offering  Memorandum  and
documents   incorporated  by  reference   therein  as  the  Initial
Purchaser may reasonably request.

      (b)  Notice and  Effect of  Material  Events.  The Seller and
Navistar  Financial will immediately  notify the Initial Purchaser,
and confirm  such notice in writing,  of (x) any filing made by the
Seller  or  Navistar  Financial  of  information  relating  to  the
offering  of the Notes with any  securities  exchange  or any other
regulatory  body in the  United  States or any other  jurisdiction,
and (y) prior to the  completion  of the  placement of the Notes by
the Initial  Purchaser  as  evidenced  by a notice in writing  from
the Initial  Purchaser to the Seller,  any  material  changes in or
affecting  the  Seller,  Navistar  Financial,   the  Trust  or  the
Receivables  that make any  statement  in the  Offering  Memorandum
false or  misleading  in any  material  respect  or which  requires
additions  to or changes  in the  Offering  Memorandum  in order to
make the statements therein not misleading.

      (c)  Amendment to Offering  Memorandum and  Supplements.  The
Seller and  Navistar  Financial  will advise the Initial  Purchaser
promptly  of  any  proposal  to  amend  or  supplement   the  Final
Offering   Memorandum   and  will  not  effect  such  amendment  or
supplement  without  the consent of the  Initial  Purchaser,  which
consent  will not  unreasonably  be  withheld.  Neither the consent
of the Initial Purchaser,  nor the Initial Purchaser's  delivery of
any such  amendment  or  supplement,  shall  constitute a waiver of
any of the conditions set forth in Section 5 hereof.

      (d)  Qualification  of Notes for Offer and Sale.  Each of the
Seller  and  Navistar  Financial  will  use its  best  efforts,  in
cooperation  with the Initial  Purchaser,  to take  actions  within
its  control to qualify the Notes for  offering  and sale under the
applicable  securities  laws of such  jurisdictions  as the Initial
Purchaser  may designate  and to maintain  such  qualifications  in
effect as long as  required  for the sale of the  Notes;  provided,
however,  that  the  Seller  shall  not be  obligated  to file  any
general  consent  to  service of process or to qualify as a foreign
corporation  or as a dealer in  securities in any  jurisdiction  in
which it is not so  qualified  or to subject  itself to taxation in
respect of doing  business in any  jurisdiction  in which it is not
otherwise so subject.

      (e)  Rating  of  Notes.  Each  of  the  Seller  and  Navistar
Financial  shall use its best  efforts  to take all  action  within
its control that is necessary to enable  Standard & Poor's  Ratings
Services,  a  division  of  McGraw  Hill,  Inc.  ("S&P").   Moody's
Investors  Service,  Inc.  ("Moody's")  and Fitch to provide  their
respective  credit ratings of the Notes and to the extent,  if any,
that any rating  provided with respect to the Notes is  conditional
upon  the  furnishing  of  documents  or the  taking  of any  other
actions  by the  Seller or  Navistar  Financial,  to  furnish  such
documents and take such actions as soon as is practicable.

      (f)  DTC.  Each of the Seller  and  Navistar  Financial  will
cooperate  with the Initial  Purchaser  and use its best efforts to
take  actions  within  its  control  to  permit  the  Notes  to  be
eligible for clearance  and  settlement  through the  facilities of
DTC and  through  the  Euroclear  System  and  Coldstream  Banking,
societe anonyme.

      (g)  Use of  Proceeds.  The  Seller  and  Navistar  Financial
will use the  proceeds  received by them from the sale of the Notes
in the manner  specified in the Offering  Memorandum  under "Use of
Proceeds."

      (h)  Information.  So long as any Notes are outstanding,  the
Seller  and  Navistar  Financial  agree to provide to any holder of
the Notes, or any prospective  purchaser thereof,  pursuant to Rule
144A,  such  information  as is  available  to it  and  as  may  be
required to render the Notes eligible for resale pursuant thereto.

      (i)  Compliance   Statements.   So  long  as  any  Notes  are
outstanding,  the  Seller  and  Navistar  Financial  will make good
faith  efforts to deliver or cause to be  delivered  to the Initial
Purchaser the annual  statements  as to  compliance  and the annual
statements  of a  firm  of  independent  public  accountants  as to
compliance.

      SECTION (d)    Payment  of  Expenses.  Each of the Seller and
Navistar  Financial  agree,  jointly  and  severally,  to  pay  all
expenses  incident  to the  performance  of its  obligations  under
this  Agreement,  including:  (a) the  preparation  and printing of
the Offering  Memorandum  (including  financial  statements and any
schedules  or exhibits  and any  document  incorporated  therein by
reference)  and of each  amendment or supplement  thereto,  (b) the
preparation,  printing  and  delivery to the Initial  Purchaser  of
this  Agreement,  the  Indenture  and  Supplement  and  such  other
documents  as may be  required  in  connection  with the  offering,
purchase,   sale,  issuance  or  delivery  of  the  Notes,  (c) the
preparation,  issuance  and  delivery  of the Notes to the  Initial
Purchaser,  including any charges of DTC in  connection  therewith,
(d) the  fees and  disbursements  of the counsel,  accountants  and
other  advisors  to the  Seller  and  Navistar  Financial,  (e) the
qualification  of the Notes  under  securities  laws in  accordance
with the provisions of Section 3(d) hereof,  including  filing fees
and  the  fees  and   disbursements  of  counsel  for  the  Initial
Purchaser  in  connection  therewith  and in  connection  with  the
preparation  of the Blue Sky  Survey  and any  supplement  thereto,
(f) the  fees and expenses of the Owner  Trustee and the  Indenture
Trustee,  including the fees and  disbursements  of counsel for the
Owner  Trustee and the  Indenture  Trustee in  connection  with the
Indenture,  the Supplement and the Notes;  and (g) any fees payable
in connection with the rating of the Notes.

      In  addition,   the  Seller  and  Navistar  Financial  agree,
jointly and  severally,  to pay all  out-of-pocket  expenses of the
Initial  Purchaser  incurred by the Initial Purchaser in connection
with the  transactions  contemplated by this Agreement,  including,
but not  limited to,  reasonable  legal fees and  expenses  and due
diligence travel and expenses.

      SECTION (e)    Conditions     of     Initial      Purchaser's
Obligations.  The  obligations of the Initial  Purchaser  hereunder
are subject to the accuracy of the  representations  and warranties
of  the  Seller  and  Navistar  Financial  contained  in  Section 1
hereof,  to the  performance  by the Seller and Navistar  Financial
of their  respective  covenants  and other  obligations  hereunder,
and to the following further conditions:

      (a)  Opinion  of   Counsel   Regarding   Enforceability   and
Corporate   Matters.   As  of  the   Closing   Date,   the  Initial
Purchaser,  Navistar  Financial  and the Seller shall have received
the  opinions,  dated as of the Closing  Date, of Kirkland & Ellis,
special counsel to the Seller,  Navistar  Financial and the Initial
Purchaser, to the effect set forth in Exhibit A hereto.

      (b)  Opinion  of  Counsel  for  Indenture  Trustee  and Owner
Trustee.  As of the  Closing  Date,  the  Initial  Purchaser  shall
have  received  the  opinions,  dated as of the  Closing  Date,  of
special  counsel to the Owner  Trustee and the  Indenture  Trustee,
in form and  substance  satisfactory  to  counsel  for the  Initial
Purchaser,  with  respect to such matters as counsel to the Initial
Purchaser may reasonably request.

      (c)  Opinion of Counsel Regarding  Disclosure  Matters. As of
the Closing Date,  the Initial  Purchaser,  Navistar  Financial and
the  Seller  shall  have  received  the  opinions,  dated as of the
Closing Date, of Kirkland & Ellis,  special  counsel to the Initial
Purchaser,  Navistar  Financial  and the  Seller to the  effect set
forth in Exhibit B hereto.

      (d)  Officers'  Certificate.  As of  the  Closing  Date,  the
Initial  Purchaser  shall have received  certificates,  dated as of
the Closing  Date,  of the  President,  any Vice  President  or the
Treasurer  or any  Assistant  Treasurer  of each of the  Seller and
Navistar  Financial,   in  which  such  officer  shall  state  that
(i) the  representations  and  warranties of the Seller or Navistar
Financial,  as the case  may be,  in this  Agreement  or any of the
Transaction  Documents  are  true  and  correct  on  and  as of the
Closing Date,  (ii) the Seller or Navistar  Financial,  as the case
may  be,  has  complied  with  all  agreements  and  satisfied  all
conditions  on its part to be performed  or satisfied  hereunder or
under the  Transaction  Documents on or prior to the Closing  Date,
and  (iii) subsequent  to the  date of this  Agreement,  there  has
been no material  adverse  change in the  condition,  financial  or
otherwise,  or  in  the  earnings,  business  affairs  or  business
prospects  of  International  Truck  and  Engine  Corporation,  the
Seller or  Navistar  Financial,  as the case may be,  except as set
forth in or contemplated by the Offering Memorandum.

      (e)  Procedures  Letter.  At the  time  of the  execution  of
this  Agreement,  the Initial  Purchaser shall have received from a
firm  of  independent,   nationally  recognized,  certified  public
accountants   acceptable   to  the   Initial   Purchaser  a  letter
("Procedures  Letter"),  in form and substance  satisfactory to the
Initial  Purchaser,  verifying  the accuracy of such  financial and
statistical data contained in the Preliminary  Offering  Memorandum
as the Initial Purchaser shall deem advisable.

      (f)  Rating  of  Notes.  As of the  Closing  Date,  the Notes
shall be rated in the "A"  category  or its  equivalent  by each of
S&P,  Moody's and Fitch.  The Seller  shall have  delivered  to the
Initial  Purchaser  a letter  dated as of the  Closing  Date,  from
each such rating  agency,  or other  evidence  satisfactory  to the
Initial Purchaser, confirming that the Notes have such ratings.

      (g)  Additional  Documents.  As of the Closing Date,  counsel
for the  Initial  Purchaser  shall  have been  furnished  with such
documents  and  opinions  as they may  reasonably  require  for the
purpose  of  enabling  them to pass upon the  issuance  and sale of
the  Notes as  herein  contemplated,  or in order to  evidence  the
accuracy  of any  of  the  representations  or  warranties,  or the
fulfillment of any of the  conditions,  herein  contained;  and all
proceedings  taken by the  Seller,  Navistar  Financial,  the Owner
Trustee or the Indenture  Trustee in  connection  with the issuance
and sale of the Notes as herein  contemplated  shall be  reasonably
satisfactory  in form and  substance to the Initial  Purchaser  and
counsel for the Initial Purchaser.

      (h)  Termination  of Agreement.  If any  condition  specified
in  this  Section  shall  not  have  been  fulfilled  when  and  as
required to be fulfilled,  this  Agreement may be terminated by the
Initial  Purchaser  by notice to the Seller at any time on or prior
to  the  Closing  Date,  and  such  termination  shall  be  without
liability  of any party to any other  party  except as  provided in
Section 4  and except  that  Sections  1, 7, 8 and 9 shall  survive
any such termination and remain in full force and effect.

      All opinions,  letters,  evidence and certificates  mentioned
above  or   elsewhere  in  this   Agreement   shall  be  deemed  in
compliance  with the  requirements  hereof only if they are in form
and substance  reasonably  satisfactory  to counsel for the Initial
Purchaser.

      SECTION (f)    Subsequent Offers and Resales of the Notes.

      (a)  Offer and Sale Procedures.  The Initial  Purchaser,  the
Seller  and  Navistar  Financial  hereby  establish  and  agree  to
observe the following  procedures in connection  with the offer and
sale of the Notes:

           (a)  Offers  and Sales only to  Qualified  Institutional
      Buyers.  Offers  and  sales of the Notes  shall  only be made
      (A) in the  case of  offers  inside  the  United  States,  to
      persons whom the offeror or seller reasonably  believes to be
      Qualified  Institutional  Buyers,  or, if any such  person is
      buying for one or more  institutional  accountants  for which
      such person is acting as fiduciary  or agent,  only when such
      person has  represented  to such  offeror or seller that such
      account is a Qualified  Institutional  Buyer,  to whom notice
      has been  given that such sale or  delivery  is being made in
      reliance on Rule 144A,  and (B) in the case of offers outside
      the  United  States,  to  persons  other  than  U.S.  persons
      ("foreign  purchasers,"  which term shall include  dealers or
      other  professional  fiduciaries  in the United States acting
      on  a  discretionary  basis  for  foreign  beneficial  owners
      (other than an estate or trust));  provided,  however, in the
      case of clause (B),  in  purchasing  such Notes such  persons
      are deemed to have  represented  and agreed as provided under
      the  caption   "Transfer   Restrictions"   in  the   Offering
      Memorandum.

           (b)  No General  Solicitation.  No general  solicitation
      or general  advertising  (within  the  meaning of Rule 502(c)
      under  the 1933  Act)  will be used in the  United  States in
      connection with the offering or sale of the Notes.

           (c)  Subsequent Purchaser  Notification.  In the case of
      offers  and sales  inside  the  United  States,  the  Initial
      Purchaser  will take  reasonable  steps to inform,  and cause
      each of its  Affiliates  doing  business in the United States
      to take reasonable steps to inform,  persons  acquiring Notes
      from the Initial Purchaser or Affiliate,  as the case may be,
      that the Notes  (A) have not been and will not be  registered
      under  the  1933  Act,  (B) are  being  sold to them  without
      registration  under the 1933 Act in  reliance on Rule 144A or
      in accordance with another exemption from registration  under
      the  1933  Act,  as the  case  may  be,  and  (C)  may not be
      offered,  sold  or  otherwise  transferred  except  (1)  to a
      person whom the seller  reasonably  believes is a  "qualified
      institutional  buyer" as defined in Rule 144A that  purchases
      for its own account or for the  account of another  qualified
      institutional  buyer to whom notice is given that the resale,
      pledge or  transfer  is being made in  reliance on Rule 144A,
      (2) in offshore  transactions  in accordance with Rule 903 or
      904 of  Regulation  S,  (3)  pursuant  to  another  exemption
      available  under  the  1933  Act or (4)  pursuant  to a valid
      registration statement.

           (d)  Restrictions    on    Transfer.     The    transfer
      restrictions  and  the  other  provisions  set  forth  in the
      Offering    Memorandum    under   the    heading    "Transfer
      Restrictions,"  including the legend required thereby,  shall
      apply to the  Notes  except  as  otherwise  agreed  among the
      Seller, Navistar Financial and the Initial Purchaser.

      (b)  Covenants  of the Seller and  Navistar  Financial.  Each
of the Seller and Navistar  Financial,  severally  and not jointly,
covenants with the Initial Purchaser as follows:

           (a)  Integration.   Each  of  the  Seller  and  Navistar
      Financial  agrees  that  it  will  not  and  will  cause  its
      Affiliates  not to solicit any offer to buy or make any offer
      or sale of, or otherwise  negotiate in respect of, securities
      of  any  class  if,   as  a  result   of  the   doctrine   of
      "integration"  referred  to in Rule 502  under  the 1933 Act,
      such offer or sale would  render  invalid (for the purpose of
      (A) the  sale  of the  Notes  by the  Seller  to the  Initial
      Purchaser,  (B) the  resale  of  the  Notes  by  the  Initial
      Purchaser to Subsequent  Purchasers or (C) the  resale of the
      Notes by such Subsequent  Purchasers to others) the exemption
      from the  registration  requirements of the 1933 Act provided
      by  Section  4(2)  thereof  or by  Rule  144A  thereunder  or
      otherwise.

           (b)  Rule  144A  Information.  Each  of the  Seller  and
      Navistar  Financial agrees that, in order to render the Notes
      eligible  for  resale  pursuant  to Rule 144A  under the 1933
      Act, while any of the Notes remain outstanding,  it will make
      available,   upon   request,   to  any  holder  of  Notes  or
      prospective  purchasers of Notes the information specified in
      Rule 144A(d)(4)  available to it (such  information is herein
      referred to as "Additional Information").

      SECTION (g)    Indemnification

      (a)  Indemnification  of  lnitial  Purchasers.  Each  of  the
Seller and Navistar  Financial  agrees,  jointly and severally,  to
indemnify  and  hold  harmless  the  Initial   Purchaser  and  each
person,  if any,  who  controls  the Initial  Purchaser  within the
meaning  of  Section  15 of the 1933 Act or  Section 20 of the 1934
Act as follows:

           (a)  against any and all loss, liability,  claim, damage
      and  expense  whatsoever,  as  incurred,  arising  out of any
      untrue  statement or alleged  untrue  statement of a material
      fact contained in any Preliminary  Offering Memorandum or the
      Final  Offering  Memorandum  (or any  amendment or supplement
      thereto),  or the omission or alleged omission therefrom of a
      material  fact  necessary  in order  to make  the  statements
      therein,  in the light of the circumstances  under which they
      were made, not misleading;

           (b)  against any and all loss, liability,  claim, damage
      and expense  whatsoever,  as  incurred,  to the extent of the
      aggregate  amount paid in  settlement of any  litigation,  or
      any  investigation or proceeding by any  governmental  agency
      or body, commenced or threatened,  or of any claim whatsoever
      based upon any such  untrue  statement  or  omission,  or any
      such alleged untrue statement or omission;  provided that any
      such  settlement is effected with the written  consent of the
      Seller and Navistar Financial;

           (c)  against   any  and  all  expense   whatsoever,   as
      incurred  (including the reasonable fees and disbursements of
      counsel   chosen  by  the  Initial   Purchaser),   reasonably
      incurred in  investigating,  preparing or  defending  against
      any  litigation,  or any  investigation  or proceeding by any
      governmental agency or body, commenced or threatened,  or any
      claim  whatsoever  based upon any such  untrue  statement  or
      omission  of the Seller or  Navistar  Financial,  or any such
      alleged  untrue  statement  or  omission  of  the  Seller  or
      Navistar  Financial,  to the extent that any such  expense is
      not paid under (i) or (ii) above;

provided,  however,  that (x) the indemnity  provided in (i), (ii),
and (iii)  shall not apply to any loss,  liability,  claim,  damage
or expense to the extent  arising  out of any untrue  statement  or
omission or alleged  untrue  statement or omission made in reliance
upon and in conformity  with written  information  furnished to the
Seller or Navistar  Financial  by the Initial  Purchaser  expressly
for use in the Offering  Memorandum (or any amendment  thereto) and
(y) the foregoing  indemnity  with respect to any untrue  statement
contained  in  or  any  omission  from  the  Preliminary   Offering
Memorandum   shall  not  inure  to  the   benefit  of  the  Initial
Purchaser (or any person  controlling such Initial  Purchaser) from
whom the person asserting any such loss,  liability,  claim, damage
or  expense  purchased  any of  the  Notes  that  are  the  subject
thereof if the  Seller or  Navistar  Financial  shall  sustain  the
burden  of  proving  that  (i) the  untrue  statement  or  omission
contained in the Preliminary  Offering  Memorandum was corrected in
the Final  Offering  Memorandum;  (ii) such  person was not sent or
given a copy of the Final Offering  Memorandum  which corrected the
untrue   statement   or   omission  at  or  prior  to  the  written
confirmation  of the sale of such Notes to such  person;  and (iii)
the Seller  satisfied  its  obligation  pursuant to Section 3(b) of
this  Agreement to provide to the Initial  Purchaser an  electronic
copy of the Final Offering  Memorandum  which  corrected the untrue
statement or omission.

      (b)  Indemnification   of  Seller  and  Navistar   Financial,
Directors and Officers.

           (a)  The  Initial  Purchaser  agrees  to  indemnify  and
      hold  harmless  the Seller and  Navistar  Financial  and each
      person,   if  any,   who  controls  the  Seller  or  Navistar
      Financial,  respectively, within the meaning of Section 15 of
      the 1933 Act or  Section 20 of the 1934 Act  against  any and
      all loss,  liability,  claim, damage and expense described in
      the indemnity  contained in  subsection  (a) of this Section,
      as incurred,  but only with respect to untrue  statements  or
      omissions,  or alleged untrue  statements or omissions,  made
      in  the  Offering   Memorandum   in  reliance   upon  and  in
      conformity with written  information  furnished to the Seller
      or Navistar Financial by the Initial Purchaser  expressly for
      use in the  Offering  Memorandum.  The  Seller  and  Navistar
      Financial  acknowledge  that the  statements set forth in the
      eighth  paragraph under the caption "Plan of Distribution" in
      the   Offering   Memorandum   constitute   the  only  written
      information  furnished to the Seller or Navistar Financial by
      the  Initial  Purchaser  expressly  for  use in the  Offering
      Memorandum.

           (b)  The  Initial  Purchaser  agrees  to  indemnify  and
      hold  harmless  the Seller and  Navistar  Financial  and each
      person,   if  any,   who  controls  the  Seller  or  Navistar
      Financial,  respectively, within the meaning of Section 15 of
      the 1933 Act or Section 20 of the 1934 Act,  against  any and
      all loss, liability,  claim, damage and expense, as incurred,
      arising from a breach of Section 1(b)(ii).

      (c)  Actions    against    Parties;    Notification.     Each
indemnified  party  shall give  notice as  promptly  as  reasonably
practicable  to each  indemnifying  party of any  action  commenced
against it in respect of which  indemnity may be sought  hereunder,
but  failure to so notify an  indemnifying  party shall not relieve
such  indemnifying  party  from  any  liability  hereunder  to  the
extent it is not  materially  prejudiced as a result thereof and in
any event  shall not  relieve  it from any  liability  which it may
have  otherwise  than on account of this  indemnity  agreement.  In
the case of parties  indemnified  pursuant  to Section  7(a) above,
counsel  to  the  indemnified  parties  shall  be  selected  by the
Initial   Purchaser  and,  in  the  case  of  parties   indemnified
pursuant  to  Section  7(b)  above,   counsel  to  the  indemnified
parties  shall be  selected by the Seller and  Navistar  Financial.
An  indemnifying  party may  participate  at its own expense in the
defense of any such  action;  provided,  however,  that  counsel to
the  indemnifying  party shall not (except  with the consent of the
indemnified  party) also be counsel to the  indemnified  party.  In
no event  shall the  indemnifying  parties  be liable  for fees and
expenses  of more  than  one  counsel  (in  addition  to any  local
counsel)  separate  from  their  own  counsel  for all  indemnified
parties in  connection  with any one action or separate but similar
or related  actions  in the same  jurisdiction  arising  out of the
same general  allegations or circumstances.  No indemnifying  party
shall,  without  the  prior  written  consent  of  the  indemnified
parties,  settle  or  compromise  or  consent  to the  entry of any
judgment with respect to any litigation,  or any  investigation  or
proceeding  by  any  governmental  agency  or  body,  commenced  or
threatened,   or  any  claim   whatsoever   in   respect  of  which
indemnification   or  contribution   could  be  sought  under  this
Section 7  or  Section 8  hereof  (whether  or not the  indemnified
parties  are actual or  potential  parties  thereto),  unless  such
settlement,  compromise  or consent (i)  includes an  unconditional
release of each  indemnified  party from all liability  arising out
of such  litigation,  investigation,  proceeding  or claim and (ii)
does not  include  a  statement  as to or an  admission  of  fault,
culpability   or  a  failure   to  act  by  or  on  behalf  of  any
indemnified party.

      SECTION (h)    Contribution.     If    the    indemnification
provided for in Section 7 hereof is for any reason  unavailable  to
or  insufficient  to hold harmless an indemnified  party in respect
of any losses,  liabilities,  claims,  damages or expenses referred
to therein,  then each  indemnifying  party shall contribute to the
aggregate amount of such losses,  liabilities,  claims, damages and
expenses  incurred by such indemnified  party, as incurred,  (i) in
such   proportion  as  is   appropriate  to  reflect  the  relative
benefits  received by the Seller and Navistar  Financial on the one
hand  and  the  Initial  Purchaser  on  the  other  hand  from  the
offering  of the Notes  pursuant to this  Agreement  or (ii) if the
allocation  provided by clause (i) is not  permitted by  applicable
law, in such  proportion as is  appropriate to reflect not only the
relative  benefits  referred  to in  clause  (i) above but also the
relative  fault of the Seller  and  Navistar  Financial  on the one
hand and of the Initial  Purchaser on the other hand in  connection
with the  statements  or omissions  which  resulted in such losses,
liabilities,  claims,  damages  or  expenses,  as well as any other
relevant equitable considerations.

      The  relative  benefits  received by the Seller and  Navistar
Financial  on the one hand and the Initial  Purchaser  on the other
hand in  connection  with the  offering  of the Notes  pursuant  to
this  Agreement  shall  be  deemed  to be in  the  same  respective
proportions  as the total net  proceeds  from the  offering  of the
Notes  pursuant  to  this  Agreement  (before  deducting  expenses)
received  by the Seller and the  discount  received  by the Initial
Purchaser,  bear to the  aggregate  initial  offering  price of the
Notes.

      The relative  fault of the Seller and  Navistar  Financial on
the one hand and the Initial  Purchaser  on the other hand shall be
determined by reference  to, among other  things,  whether any such
untrue or alleged  untrue  statement of a material fact or omission
or  alleged   omission  to  state  a  material   fact   relates  to
information  supplied by the Seller and Navistar Financial,  on the
one hand, or by the Initial  Purchaser,  on the other hand, and the
parties'  relative  intent,  knowledge,  access to information  and
opportunity to correct or prevent such statement or omission.

      Each  of the  Seller,  Navistar  Financial  and  the  Initial
Purchaser  agree  that  it  would  not be  just  and  equitable  if
contribution  pursuant  to this  Section 8 were  determined  by pro
rata  allocation  or by any other method of  allocation  which does
not  take  account  of the  equitable  considerations  referred  to
above in this Section 8.

      Notwithstanding   the  provisions  of  this  Section  8,  the
Initial  Purchaser  shall not be required to contribute  any amount
that in the  aggregate  exceeds  the total price at which the Notes
were  purchased  and resold by such  Initial  Purchaser  under this
Agreement,  less the  aggregate  amount of any  damages  which such
Initial  Purchaser has otherwise  been required to pay by reason of
such  untrue or alleged  untrue  statement  or  omission or alleged
omission or breach.

      No person guilty of fraudulent  misrepresentation (within the
meaning of  Section  11(f) of the 1933 Act)  shall be  entitled  to
contribution   from  any   person   who  was  not  guilty  of  such
fraudulent misrepresentation.

      For  purposes of this  Section 8, each  person,  if any,  who
controls  the  Initial  Purchaser  within the meaning of Section 15
of the 1933 Act or  Section  20 of the 1934 Act shall have the same
rights to contribution as the Initial  Purchaser,  and each person,
if any,  who  controls  either  the  Seller or  Navistar  Financial
within  the  meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act  shall  have the same  rights to  contribution  as the
Seller or Navistar Financial, as the case may be.

      SECTION (i)    Representations,  Warranties and Agreements to
Survive Delivery.  All  representations,  warranties and agreements
of  any  party   hereto   contained   in  this   Agreement   or  in
certificates  of  officers  of the  Seller and  Navistar  Financial
submitted  pursuant  hereto  shall  remain  operative  and in  full
force and effect,  regardless  of any  investigation  made by or on
behalf of the Initial  Purchaser or any controlling  person,  or by
or on  behalf  of the  Seller  and  Navistar  Financial,  and shall
survive delivery of the Notes to the Initial Purchaser.

      SECTION (j)    Termination of Agreement.

      (a)  Termination;   General.   The  Initial   Purchaser   may
terminate this Agreement,  by notice to the Seller,  at any time on
or prior to the  Closing  Date (i) if there  has  been,  since  the
time of execution of this Agreement or since the  respective  dates
as of which  information is given in the Offering  Memorandum,  any
material  adverse change in the condition,  financial or otherwise,
or in the earnings,  business affairs or business  prospects of the
Seller,  Navistar  Financial  or the  Trust  created  by the  Trust
Agreement  whether  or  not  arising  in  the  ordinary  course  of
business,  (ii)  if  there  has  occurred  any  downgrading  in the
rating of the securities of the Seller,  Navistar  Financial or the
Trust   by   any   "nationally    recognized   statistical   rating
organization"  (as  such  term  is  defined  for  purposes  of Rule
436(g)  under the 1933  Act) or any  public  announcement  that any
such  organization  has under  surveillance  or  review  any of the
securities  of the Seller,  Navistar  Financial or the Trust (other
than an  announcement  with  positive  implications  of a  possible
upgrading,  and no  implication  of a possible  downgrading of such
rating),  (iii) if there has occurred any material  adverse  change
in the  financial  markets in the  United  States or  financial  or
economic   conditions  in  the  United  States,   any  outbreak  of
hostilities or escalation  thereof or other calamity or crisis,  in
each case the  effect of which is such as to,  in the  judgment  of
the Initial  Purchaser,  materially impair the Initial  Purchaser's
ability to market the Notes or to  enforce  contracts  for the sale
of the Notes,  or (iv) if a banking  moratorium  has been  declared
by either Federal, New York or Illinois authorities.

      (b)  Liabilities.  If this  Agreement is terminated  pursuant
to this Section,  such  termination  shall be without  liability of
any  party to any  other  party  except as  provided  in  Section 4
hereof,  and  provided  further  that  Sections 1, 7, 8 and 9 shall
survive such termination and remain in full force and effect.

      SECTION (k)    Notices.     All     notices     and     other
communications  hereunder  shall be in writing  and shall be deemed
to have been duly given if mailed or  transmitted  by any  standard
form  of  telecommunication.   Notices  to  the  Initial  Purchaser
shall be directed to Banc One  Capital  Markets,  Inc. at One First
National Plaza, Chicago,  Illinois 60670,  attention of Christopher
J.  Gilker;  notices  to the  Seller  shall  be  directed  to Truck
Engine  Receivables  Financing  Co.,  2850 West Golf Road,  Rolling
Meadows,  Illinois  60008,  attention Vice President and Treasurer;
and  notices to  Navistar  Financial  shall be directed to Navistar
Financial  Corporation,  2850  West  Golf  Road,  Rolling  Meadows,
Illinois 60008, attention Vice President and Treasurer.

      SECTION (l)    No-Petition.   The  Initial  Purchaser  agrees
that  prior to a date  that is one year and one day  after the date
on which  all  amounts  owing  under  the  Notes  have been paid in
full,  it will not  commence,  or join with any other  creditor  of
the Seller in  commencing,  against  the  Seller,  any  bankruptcy,
insolvency,  arrangement,  reorganization,  receivership, relief or
similar   proceeding   under  any  bankruptcy  or  similar  law  or
assignment  for the  benefit  of  creditors  or any  marshaling  of
assets and liabilities.

      SECTION (m)    Parties.  This  Agreement  shall  inure to the
benefit of and be binding  upon the Initial  Purchaser,  the Seller
and Navistar  Financial and their  respective  successors.  Nothing
expressed or  mentioned  in this  agreement is intended or shall be
construed  to give any person,  other than the  Initial  Purchaser,
the Seller and Navistar  Financial and their respective  successors
and the  controlling  persons and officers and  directors  referred
to in Sections 7 and 8 and their  heirs and legal  representatives,
any legal or equitable  right,  remedy or claim under or in respect
of  this  Agreement  or  any  provision  herein   contained.   This
Agreement and all  conditions  and  provisions  hereof are intended
to  be  for  the  sole  and   exclusive   benefit  of  the  Initial
Purchaser,  the Seller and Navistar  Financial and their respective
successors,   and  said   controlling   persons  and  officers  and
directors  and their heirs and legal  representatives,  and for the
benefit  of no  other  person.  No  purchaser  of  Notes  from  the
Initial  Purchaser  shall be  deemed  to be a  successor  by reason
merely of such purchase.

      SECTION (n)    Governing Law. This  Agreement  shall governed
by and  construed  in  accordance  with  the  laws of the  State of
Illinois.

      SECTION (o)    Effect of  Headings.  The  Article and Section
headings herein are for  convenience  only and shall not affect the
construction hereof.

                      *     *     *     *     *

      If the foregoing is in accordance with your  understanding of
our  agreement,  please sign and return to the Seller a counterpart
hereof,  whereupon this  instrument,  along with all  counterparts,
will become a binding  agreement  between  the  Initial  Purchaser,
Navistar Financial, and the Seller in accordance with its terms.

                               Very truly yours,

                               TRUCK ENGINE  RECEIVABLES  FINANCING
CO.

                               By:
                                     Name:
                                     Its:

                               NAVISTAR FINANCIAL CORPORATION

                               By:
                                     Name:
                                     Its:

CONFIRMED AND ACCEPTED,
as of the date first above written:

BANC ONE CAPITAL MARKETS, INC.

By:             .....
      Name:     .....
      Its: Authorized Signatory

--------------------------------------------------------------------------------
                             SCHEDULE A

                         INITIAL PURCHASERS

         -----------------------------------------------------

               Name of Initial             Principal Balance
                  Purchaser                    of Notes
         -----------------------------------------------------

         Banc One Capital Markets, Inc.       $100,000,000
                                         -------------------

                                              $100,000,000
                                         ===================

--------------------------------------------------------------------------------
                              EXHIBIT A

                     OPINION OF KIRKLAND & ELLIS
             (Counsel for Seller and Navistar Financial)

--------------------------------------------------------------------------------
                              EXHIBIT B

                     OPINION OF KIRKLAND & ELLIS
                   (Counsel for Initial Purchaser)
```