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 July 31, 1998

                                       OR

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

                        For the transition period from to
                                   ----------
                         Commission File Number 1-4146-1
                                   ----------

                         NAVISTAR FINANCIAL CORPORATION
             (Exact name of Registrant as specified in its charter)

            Delaware                                   36-2472404
  (State or other jurisdiction of         (I.R.S. Employer Identification No.)
   incorporation or organization)

               2850 West Golf Road Rolling Meadows, Illinois 60008
               (Address of principal executive offices) (Zip Code)

         Registrant's telephone number including area code 847-734-4000

  Indicate  by check  mark  whether  the  registrant  (1) has filed all  reports
  required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
  1934 during the  preceding  12 months and (2) has been  subject to such filing
  requirements for the past 90 days. Yes X No

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

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

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

  As of August 31, 1998, the number of shares  outstanding  of the  registrant's
common stock was 1,600,000.

  THE  REGISTRANT  IS  A  WHOLLY-OWNED   SUBSIDIARY  OF  NAVISTAR  INTERNATIONAL
  TRANSPORTATION   CORP.   AND  MEETS  THE   CONDITIONS  SET  FORTH  IN  GENERAL
  INSTRUCTIONS  H(1)(a) AND (b) OF FORM 10-Q AND IS  THEREFORE  FILING THIS FORM
  WITH THE REDUCED DISCLOSURE FORMAT.


<PAGE>


                                                        
                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES


                                      INDEX



                                                                           Page

PART I.        FINANCIAL INFORMATION

  Item 1.  Financial Statements:

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

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

           Statements of Consolidated Cash Flow --
           Nine Months Ended July 31, 1998 and 1997.........................  4

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

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


PART II.   OTHER INFORMATION

  Item 6.  Exhibits and Reports on Form 8-K................................. 11

Signature      ............................................................. 11


<PAGE>


              
                         PART I - FINANCIAL INFORMATION


Item 1.   Financial Statements


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

<TABLE>
<CAPTION>
                                        Three Months Ended    Nine Months Ended
                                             July 31               July 31
                                         1998        1997      1998        1997
<S>                                    <C>          <C>       <C>        <C>
  Revenue
    Retail notes and lease financing...$ 40.0       $ 28.7    $ 99.8     $ 80.6
    Wholesale notes..................... 13.2          9.3      33.0       27.8
    Accounts............................  8.5          8.7      25.2       23.0
    Servicing fee income................  5.2          5.1      15.9       15.2
    Insurance premiums earned...........  8.5          8.4      24.4       24.9
    Marketable securities...............  3.9          2.3       7.7        6.4
           Total........................ 79.3         62.5     206.0      177.9


  Expense
    Cost of borrowing
        Interest........................ 23.2         16.7      59.2       48.2
        Other...........................  2.0          2.2       5.5        5.2
           Total........................ 25.2         18.9      64.7       53.4

    Credit, collection 
     and administrative.................  9.3          7.9      25.9       22.4
    Provision for (recovery of) losses
      on receivables.................... (2.6)         0.3      (1.4)       1.5
    Insurance claims and underwriting... 10.6          9.2      27.7       26.8
    Depreciation and other..............  7.9          4.2      21.0       14.7
           Total........................ 50.4         40.5     137.9      118.8


  Income Before Taxes on Income......... 28.9         22.0      68.1       59.1

  Taxes on Income....................... 11.2          8.6      26.3       23.0

  Net Income                             17.7         13.4      41.8       36.1

  Retained Earnings

      Beginning of period...............110.2        100.1     113.1      107.4

      Dividends paid.................... 15.0          5.0      42.0       35.0

      End of period....................$112.9       $108.5    $112.9     $108.5
</TABLE>



See Notes to Consolidated Financial Statements.


<PAGE>


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


<TABLE>
<CAPTION>

                                            July 31     October 31      July 31
                                             1998          1997          1997

                   ASSETS

<S>                                        <C>          <C>           <C>
Cash and Cash Equivalents................  $    4.9     $   10.7      $    8.9
Marketable Securities....................     110.0        114.2         115.6

Finance Receivables
    Retail notes and lease financing.....     624.6        706.5         453.3
    Wholesale notes......................      66.6         45.7         179.9
    Accounts.............................     316.5        471.0         336.8
                                            1,007.7      1,223.2         970.0
    Allowance for losses.................     (10.3)       (12.0)         (9.3)
        Finance Receivables, Net.........     997.4      1,211.2         960.7

Amounts Due from Sales of Receivables....     259.9        233.3         219.3
Equipment on Operating Leases, Net.......     213.4        124.1         116.0
Repossessions............................      16.3         13.0          24.5
Other Assets.............................      82.6        104.1          72.8
Total Assets.............................  $1,684.5     $1,810.6      $1,517.8


      LIABILITIES AND SHAREOWNER'S EQUITY


Short-Term Borrowings....................  $  148.8     $  141.0      $  112.3
Net Payable to Affiliates................     119.9        131.5         114.0
Other Liabilities........................      48.2         59.8          51.8
Senior and Subordinated Debt.............     972.7      1,082.7         844.6
Dealers' Reserves........................      24.0         22.2          22.5
Unpaid Insurance Claims
  and Unearned Premiums..................      84.7         85.6          89.5

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....................     112.9        113.1         108.5
    Unrealized gains on 
      marketable securities..............       2.3          3.7           3.6
           Total.........................     286.2        287.8         283.1
Total Liabilities
   and Shareowner's Equity...............  $1,684.5     $1,810.6      $1,517.8
</TABLE>



See Notes to Consolidated Financial Statements.



<PAGE>


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

<TABLE>
<CAPTION>

                                                            Nine Months Ended
                                                                July 31
                                                          1998            1997
<S>                                                     <C>            <C>
Cash Flow From Operations
   Net income  . . . . . . . . . . . . . . . . . . . . .$  41.8        $  36.1
   Adjustments to reconcile net income to cash
       provided from operations:
       Gains on sales of receivables  . . . . . . . . . . (15.3)         (13.4)
       Depreciation and amortization  . . . . . . . . . .  25.0           16.4
       Provision for (recovery of) losses on receivables.  (1.4)           1.5
       (Decrease)increase in net payable to affiliates. . (11.6)          89.5
       Other  . . . . . . . . . . . . . . . . . . . . . . (14.3)         (20.8)
           Total  . . . . . . . . . . . . . . . . . . . .  24.2          109.3

Cash Flow From Investing Activities
   Proceeds from sold retail notes  . . . . . . . . . . . 931.9          938.1
   Purchase of retail notes and lease receivables   . . .(918.7)        (677.3)
   Principal collections on retail notes and
     lease receivables  . . . . . . . . . . . . . . . . .  68.5           43.3
   Acquisitions under (over) cash collections of 
       wholesale notes and accounts receivable  . . . . . 118.7          (28.7)
   Purchase of marketable securities  . . . . . . . . . . (33.2)         (67.9)
   Proceeds from sales and maturities of 
       marketable securities  . . . . . . . . . . . . . .  37.8           86.0
   Purchase of equipment leased to others . . . . . . . .(124.9)         (50.2)
   Sale of equipment leased to others . . . . . . . . . .  13.3           20.9
           Total  . . . . . . . . . . . . . . . . . . . .  93.4          264.2

Cash Flow From Financing Activities
   Net increase in short-term borrowings  . . . . . . . .   7.8           12.9
   Net decrease in bank revolving credit facility usage . (48.0)        (334.0)
   Net decrease in asset-backed commercial
       paper facility usage . . . . . . . . . . . . . . . (97.1)        (173.0)
   Proceeds from long-term debt . . . . . . . . . . . . .  91.5          176.4
   Principal payments of long-term debt . . . . . . . . . (35.6)         (18.6)
   Dividends paid to Transportation . . . . . . . . . . . (42.0)         (35.0)
           Total  . . . . . . . . . . . . . . . . . . . .(123.4)        (371.3)

(Decrease) increase in Cash and Cash Equivalents  . . . .  (5.8)           2.2

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

Cash and Cash Equivalents at End of Period  . . . . . . $   4.9        $   8.9

Supplemental disclosure of cash flow information

   Interest paid  . . . . . . . . . . . . . . . . . . . $  65.5        $  49.5

   Income taxes paid  . . . . . . . . . . . . . . . . . $  25.9        $  22.1
</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 the Corporation.

     The  accompanying  unaudited  financial  statements  and   notes  have been
     prepared  in  accordance  with the  accounting  policies  set  forth in the
     Corporation's  1997  Annual  Report  on Form  10-K  and  should  be read in
     conjunction  with  the  Notes  to  the  Consolidated  Financial  Statements
     therein.

     In the opinion of management,  these  interim financial  statements reflect
     all  adjustments,  consisting of normal  recurring  accruals,  necessary to
     present fairly the results of operations, financial condition and cash flow
     for the interim  periods  presented.  Interim  results are not  necessarily
     indicative  of  results to be  expected  for the full  year.  Certain  1997
     amounts have been reclassified to conform with the presentation used in the
     1998 financial statements.


2.   Finance  receivable  balances  do  not  include  receivables  sold  by  the
     Corporation  to  public  and  private   investors  with  limited   recourse
     provisions. Outstanding sold receivable balances are as follows:
<TABLE>
<CAPTION>
                                       July 31       October 31      July 31
                                         1998           1997           1997
                                                    ($ Millions)
<S>                                    <C>            <C>            <C>
     Retail notes . . . . . . . . .    $1,670.7       $1,422.2       $1,634.6
     Wholesale notes  . . . . . . .       672.8          545.5          400.0
         Total  . . . . . . . . . .    $2,343.5       $1,967.7       $2,034.6
</TABLE>

     In  the first three  quarters of fiscal 1998,  in two separate  sales,  the
     Corporation sold a total of $1,001 million of retail notes, net of unearned
     finance income, through Navistar Financial Retail Receivables  Corporation,
     to two  individual  owner trusts which,  in turn,  sold notes to investors.
     Aggregate gains of $15.3 million were recognized on the sales. The proceeds
     of $959 million,  net of underwriting  fees and credit  enhancements,  were
     used by the Corporation for general working capital purposes.

     In July 1998, Navistar Financial  Securities  Corporation,  a  wholly owned
     subsidiary of the  Corporation,  issued a $200 million  tranche of investor
     certificates which matures in July 2008. The proceeds of $197 million,  net
     of underwriting fees and credit enhancements, were used for general working
     capital purposes.

<PAGE>






                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


     The allowance for losses on receivables is summarized as follows:

<TABLE>
<CAPTION>
                                        July 31       October 31     July 31
                                          1998           1997          1997
                                                     ($ Millions)
<S>                                        <C>           <C>           <C>
     Allowance pertaining to:
       Owned notes . . . . . . . . .       $10.3         $12.0         $ 9.3
       Sold notes  . . . . . . . . .        14.4          12.5          15.2
          Total  . . . . . . . . . .       $24.7         $24.5         $24.5
</TABLE>


3.   The Corporation has entered into $450 million of forward  treasury locks in
     anticipation  of a November  1998 sale of retail  receivables.  These hedge
     agreements  will be closed in conjunction  with the pricing of the sale and
     any resulting gain or loss will be included in the gain or loss on the sale
     of receivables recognized in November 1998.

4.   In June 1998, the Financial Accounting Standards Board issued Statement of
     Financial   Accounting   Standards  No. 133,  "Accounting  for  Derivative
     Instruments and Hedging Activities", to establish accounting and reporting
     standards for derivative instruments.  This statement requires recognition
     of all derivative instruments  in  the  statement of financial position as
     either assets or liabilities, measured at fair value, and is effective for
     fiscal years beginning after June 15,  1999.   This statement additionally
     requires changes in the fair value of  derivatives  to  be  recorded  each
     period in current  earnings  or  comprehensive  income  depending  on  the
     intended use of the  derivatives.   The Corporation is currently assessing
     the impact of this statement  on  its  results  of  operations,  financial
     condition and cash flows.

<PAGE>

                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

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


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


Financing Volume

In the first  nine  months  of fiscal  1998  industry  retail  sales for Class 5
through 8 trucks was  approximately  14% higher  than  1997.  The  Corporation's
retail  financing  acquisitions  during  the first nine  months of fiscal  1998,
including  retail notes and finance and operating  leases,  were $1,044 million,
44% higher than 1997.  The increase is primarily  the result of the strong truck
industry demand and an increase in the Corporation's finance market share of new
International  trucks  sold in the U.S.  from  13.3% in 1997 to 16.5% in  fiscal
1998. Serviced retail notes and lease financing balances were $2,514 million and
$2,208 million at July 31, 1998 and 1997, respectively.

In spite of the continued strong liquidity in the commercial  financing  market,
the  Corporation  provided 94% of the wholesale  financing of new trucks sold to
Transportation's  dealers  during the first nine months of fiscal 1998 and 1997.
Serviced  wholesale  note  balances  were $854  million at July 31,  1998, a 32%
increase compared to July 31, 1997 due to the strong industry demand.


Results of Operations

The  components of net income for the three and nine month periods ended July 31
are as follows:
<TABLE>
<CAPTION.

                                              Three Months       Nine Months
                                             Ended  July 31    Ended  July 31
                                             1998      1997     1998     1997
<S>                                         <C>       <C>      <C>      <C>
Income before income taxes:
  Finance operations. . . . . . . . . . .   $27.3     $20.5    $63.9    $54.9
  Insurance operations. . . . . . . . . .     1.6       1.5      4.2      4.2
     Income before taxes. . . . . . . . .    28.9      22.0     68.1     59.1
Taxes on income . . . . . . . . . . . . .    11.2       8.6     26.3     23.0
     Net income . . . . . . . . . . . . .   $17.7     $13.4    $41.8    $36.1
</TABLE>

1998 pretax income was $29 million for the third quarter and $68 million  fiscal
year to date, $7 million and $9 million  higher than the  respective  periods in
1997. The  improvements  were primarily a result of higher  wholesale  financing
balances in response to strong industry demand,  loss recoveries on retail notes
and higher gains on sales of  receivables  offset,  in part, by lower  financing
margins primarily due to the highly competitive commercial financing market.

<PAGE>





                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

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


Results of Operations (continued)

Finance Operations:

Retail note and lease revenue increased $19 million to $100 million in the first
nine months of 1998  compared to 1997.  The increase is primarily  the result of
higher average finance receivables due to an increase in Transportation's retail
sales and an increase in  operating  lease  balances due to a shift toward lease
financing.  Included in retail note and lease revenue is operating lease revenue
of $32  million and $21 million in 1998 and 1997,  respectively.  For  operating
leases,  the  Corporation  recognizes  the entire  lease  payment as revenue and
records depreciation expense on the assets under lease.

Wholesale note revenue was $33 million in the first nine months of 1998 compared
to $28 million in fiscal 1997 due  primarily  to the higher  level of  wholesale
financing activity.

Borrowing  costs  increased  $11  million to $65  million  during the first nine
months  of 1998  primarily  as a result  of higher  average  receivable  funding
requirements.  The  Corporation's  weighted  average  interest  rate on all debt
increased to 6.4% from 6.3% in the first nine months of 1997.

Credit,  collection and administrative  expenses increased to $26 million during
the first nine months of 1998 from $22 million in 1997. The increase in 1998 was
primarily due to employee related costs.

Provision  for losses on  receivables  was a net  recovery of $1 million for the
first nine  months of fiscal  1998,  a $3 million  improvement  compared to 1997
which is primarily due to loss recoveries related to one large obligor.

Depreciation  and other  expenses  during the first nine  months of 1998 was $21
million  compared to $15 million in the comparable  period of 1997. The increase
is primarily  the result of a larger  investment  in equipment  under  operating
leases.

Insurance Operations:

Harco National Insurance  Company's pretax income in the first three quarters of
fiscal 1998 was comparable to that of 1997.  Gains on sales of  investments  and
favorable  loss  experience  in the  liability  lines  were  offset  by a slight
decrease in earned premium revenue and increased operating expenses.

<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.  The Corporation
has traditionally  obtained the funds to provide  financing to  Transportation's
dealers and retail  customers from sales of receivables,  issuance of commercial
paper, short and long-term bank borrowings, medium and long-term debt issues and
equity  capital.  The  Corporation's  current  debt  ratings  have made sales of
finance  receivables the most economical  source of funding.  The  Corporation's
insurance  operation  generates its funds through internal operations and has no
external borrowings.

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

Operations  provided $24 million in cash in the first nine months of 1998 as net
income was  partially  offset by lower  accounts  payable and other  activities.
Investing activities provided $93 million in cash during this period as proceeds
from sold notes and cash  collections  exceeded the purchase of receivables  and
equipment leased to others. The Corporation used cash provided by operations and
investing activities to reduce outstanding debt balances and to pay dividends of
$42 million to Transportation.

Receivable sales were a significant  source of funding in 1998 and 1997. Through
the asset-backed public market, the Corporation has been able to fund fixed rate
retail note  receivables  at rates offered to companies  with  investment  grade
ratings.  During the first nine months of fiscal  1998 and 1997 the  Corporation
sold $1,001  million and $987 million,  respectively,  of retail notes,  through
Navistar  Financial Retail  Receivables  Corporation  ("NFRRC"),  a wholly-owned
subsidiary,  to owner trusts  which,  in turn,  sold notes and  certificates  to
investors.  The amount remaining under NFRRC's shelf registration as of July 31,
1998 was $472 million. On August 28, 1998, NFRRC filed a shelf registration with
the Securities and Exchange  Commission  (SEC)  providing for the issuance of an
additional  $2,500 million of  asset-backed  securities.  Upon acceptance of the
additional  shelf  registration  by the SEC,  NFRRC  will  have  $2,972  million
available for the issuance of asset-backed securities.

In  July  1998,  Navistar  Financial  Securities  Corporation,   a  wholly-owned
subsidiary  of the  Corporation,  issued  a $200  million  tranche  of  investor
certificates which matures in July 2008. At July 31, 1998, the Corporation has a
revolving  wholesale note trust that provides for the funding of $700 million of
wholesale notes. All eligible wholesale notes are sold to the trust.

At July 31,  1998,  available  funding  under the  amended and  restated  credit
facility and the  asset-backed  commercial  paper facility was $716 million,  of
which $149 million provided funding backup for the outstanding  short-term debt.
The remaining  $567  million,  when  combined  with  unrestricted  cash and cash
equivalents,  made $572 million  available to fund the general business purposes
of the Corporation.

<PAGE>


                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

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


Year 2000

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

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



New Accounting Standards

In June 1998, the Financial Accounting Standards  Board  issued  Statement  of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities",  to  establish accounting and reporting standards for
derivative instruments.  This statement requires recognition of all derivative
instruments  in the  statement  of  financial  position  as either  assets  or
liabilities, measured at  fair  value,  and  is  effective  for  fiscal  years
beginning after June 15,  1999.   This statement additionally requires changes
in  the  fair  value  of  derivatives  to  be  recorded each period in current
earnings or  comprehensive  income  depending  on  the  intended  use  of  the
derivatives.   The Corporation is  currently  assessing  the  impact  of  this
statement on its results of operations, financial condition and cash flows.


Business Outlook

Navistar  forecasts industry demand for fiscal 1998 for Class 5 through 8 trucks
to increase  approximately  12% over 1997  levels.  The  competitive  commercial
financing market will continue to put pressure on the  Corporation's  retail and
wholesale financing activity and margins.

Management  believes that collections on the outstanding  receivables  portfolio
plus cash available from the  Corporation's  various funding sources will permit
Navistar  Financial  to meet  the  financing  requirements  of  Transportation's
dealers and retail customers through 1998 and beyond.


<PAGE>




                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES


                           PART II - OTHER INFORMATION


Item 6.        Exhibits and Reports on Form 8-K

               No reports on Form 8-K were filed  during the nine  months  ended
               July 31, 1998.



                                    SIGNATURE


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



                                                 Navistar Financial Corporation
                                                 (Registrant)






Date September 11, 1998                       /s/P. E. Cochran
                                                 P. E. Cochran
                                                 Vice President and Controller
                                                (Principal Accounting Officer)