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**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, 2003

                                              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, 2003, the number of shares  outstanding of the  registrant's  common stock
  was 1,600,000.

  THE REGISTRANT IS A WHOLLY-OWNED  SUBSIDIARY OF INTERNATIONAL  TRUCK AND ENGINE CORPORATION
  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.

                             **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, 2003 and 2002................. 2

            Statements of Consolidated Financial Condition --
            July 31, 2003; October 31, 2002; and July 31, 2002........................ 3

            Statements of Consolidated Cash Flow --
            Nine Months Ended July 31, 2003 and 2002.................................. 4

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

   Item 2.  Management's Discussion and Analysis of Results
            of Operations and Financial Condition.....................................14

   Item 4.  Controls and Procedures...................................................19

**PART II.    OTHER INFORMATION

   Item 1.  Legal Proceedings.........................................................20

   Item 5.  Other Information.........................................................20

   Item 6.  Exhibits and Reports on Form 8-K..........................................20

Signature.............................................................................21

                            **Part I - Financial Information

Item 1. Financial Statements

                      Navistar Financial Corporation and Subsidiaries
---------------------------------------------------------------------------------------------
            Statements of Consolidated Income and Retained Earnings (Unaudited)
------------------------------------------------ ---------------------- ---------------------
                                                  Three Months Ended     Nine Months Ended
                                                   July       July        July       July
Millions of Dollars                                2003       2002        2003       2002**
------------------------------------------------ --------- ------------ ---------- ----------
Revenues
   Retail Notes and Finance Leases.  .  .  .        $12.5        $12.3      $34.9      $38.4
   Income Related to Sales of Finance
      Receivables.  .  .  .  .  .  .  .  .  .        28.2          3.1       63.6       36.6
   Operating Leases.  .  .  .  .  .  .  .  .         14.7         19.3       51.2       57.5
   Wholesale Notes.  .  .  .  .  .  .  .  .           8.6          7.5       23.5       20.6
   Accounts.  .  .  .  .  .  .  .  .  .  .  .         4.0          4.1       13.1       14.1
   Servicing Fees.  .  .  .  .  .  .  .  .  .         6.5          6.3       19.1       18.1
   Other Revenue.  .  .  .  .  .  .  .  .  .          1.2          2.2        4.4        7.2
                                                  --------- ------------ ---------- ---------
         Total.   .   .  .  .  .  .  .  .  .  .      75.7         54.8      209.8      192.5

Expenses
    Cost of Borrowing
           Interest Expense.  .  .  .  .  .          12.0         14.0       38.1       43.5
           Other.  .  .  .  .  .  .  .  .  .          2.3          2.1        6.2        6.0
    Credit, Collection and Administrative.  .        10.7         10.5       31.9       30.7
    Provision for Credit Losses.  .  .  .  .          4.0          5.1       11.9       15.6
   Depreciation on Operating Leases.  .  .  .        10.9         13.9       35.5       41.7
   Other Expense.  .  .  .  .  .  .  .  .  .          1.2          0.6        3.3        1.8
                                                 --------- ------------ ---------- ----------
         Total.   .   .  .  .  .  .  .  .  .  .      41.1         46.2      126.9      139.3

Income  Before  Taxes.   .  .  .  .  .  .  .  .      34.6          8.6       82.9       53.2
Income Tax Expense.  .  .  .  .  .  .  .  .          12.3          2.9       31.6       20.3
                                                 --------- ------------ ---------- ----------

Income  from  Continuing  Operations.   .  .  .      22.3          5.7       51.3       32.9

Gain on Disposal of Discontinued Operations,
     (net tax of $0.0, $0.0, $0.0 and $0.5) .           -            -          -        0.7
                                                 --------- ------------ ---------- ----------
           Net   Income.   .   .  .  .  .  .  .      22.3          5.7       51.3       33.6
Retained Earnings
     Beginning of Period.  .  .  .  .  .  .         216.1        191.3      197.1      163.4
     Dividends Paid.  .  .  .  .  .  .  .  .  .      (5.0)           -      (15.0)         -
                                                 --------- ------------ ---------- ----------
     End of Period.  .  .  .  .  .  .  .  .       $ 233.4       $197.0     $233.4   $  197.0
                                                 ========= ============ ========== ==========

                      See Notes to Consolidated Financial Statements.

               **Navistar Financial Corporation and Subsidiaries
------------------------------------------------------------------------------------
        Statements of Consolidated Financial Condition (Unaudited)
------------------------------------------------------------------------------------
                                                    July      October      July
Millions of Dollars                                 2003       2002        2002
------------------------------------------------ ----------- ---------- ------------
ASSETS
Cash and Cash Equivalents.  .  .  .  .  .  .           $5.2      $32.0        $57.4
Finance Receivables
   Finance Receivables Held for Sale.  .  .  .        533.6    1,006.7        702.3
   Other Finance Receivables.  .  .  .  .  .          242.5      294.3         96.2
   Allowance for Losses.  .  .  .  .  .  .  .         (15.1)     (16.0)       (13.6)
                                                 ----------- ---------- ------------
        Finance Receivables, net.  .  .  .  .         761.0    1,285.0        784.9

Amounts Due from Sales of Receivables.  .  .  .       456.7      357.7        488.9
Net Investment in Operating Leases.  .  .  .  .       192.5      248.2        263.6
Repossessions.   .   .   .  .  .  .  .  .  .  .        30.0       26.0         33.8
Restricted Marketable Securities.  .  .  .  .         430.1      104.6        255.0
Other Assets.  .  .  .  .  .  .  .  .  .  .  .         39.1       53.4         34.3
                                                 ----------- ---------- ------------
      Total Assets .  .  .  .  .  .  .  .  .      $ 1,914.6   $2,106.9    $ 1,917.9
                                                 =========== ========== ============

LIABILITIES AND SHAREOWNER'S EQUITY
Net Accounts Payable to Affiliates.  .  .  .  .      $ 26.2     $ 52.2       $ 51.3
Senior and Subordinated Debt.  .  .  .  .  .  .     1,348.5    1,562.5      1,376.7
Other  Liabilities.   .  .  .  .  .  .  .  .  .       138.5      127.4        124.4
                                                 ----------- ---------- ------------
       Total Liabilities.  .  .  .  .  .  .  .      1,513.2    1,742.1      1,552.4

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.  .  .  .  .  .  .  .  .  .         233.4      197.1        197.0
Accumulated Other Comprehensive Loss.  .  .  .         (3.0)      (3.3)        (2.5)
                                                 ----------- ---------- ------------
    Total Shareowner's Equity.  .  .  .  .  .         401.4      364.8        365.5
                                                 ----------- ---------- ------------
Total Liabilities and Shareowner's Equity.  .     $ 1,914.6  $ 2,106.9    $ 1,917.9
                                                 =========== ========== ============

                  See Notes to Consolidated Financial Statements.

                    **Navistar Financial Corporation and Subsidiaries
----------------------------------------------------------------------------------------------------
                  Statements of Consolidated Cash Flow (Unaudited)
----------------------------------------------------------------------------------------------------
                                                                             Nine Months Ended
                                                                              July      July
Millions of Dollars                                                           2003      2002

Cash Flow From Operations
    Net Income                                                            $   51.3   $  33.6
    Adjustments to reconcile net income to cash provided from operations:
        Gains on sales of receivables                                        (59.3)    (28.8)
        Depreciation, amortization and accretion                              43.8      47.2
        Provision for credit losses                                           11.9      15.6
        Net change in accounts payable to affiliates                         (26.0)     37.1
        Other                                                                 33.4      35.5
                                                                            -------   -------
             Total                                                            55.1     140.2

Cash Flow From Investing Activities
    Originations of finance receivables held for sale                       (764.6)   (712.5)
    Proceeds from sales of finance receivables held for sale               1,347.2     999.0
    Net change in restricted marketable securities                          (325.5)    (41.4)
    Collections of retail notes and finance lease receivables,
        net of change in unearned finance income                              36.9      50.8
    Repurchase of sold retail receivables                                   (163.5)   (165.0)
    Net change in wholesale notes and accounts receivables                    51.8     139.1
    Change in amounts due from sales of receivables                          (39.5)   (124.9)
    Purchase of equipment leased to others                                   (25.1)    (51.7)
    Sale of equipment leased to others                                        45.5      23.6
    Receipts from derivative contracts                                         3.1       2.3
    Payments on derivative contracts                                         (15.0)     (3.7)
    Proceeds from sale of discontinued operations                              -        63.3
                                                                            -------   -------
             Total                                                           151.3     178.9

Cash Flow From Financing Activities
    Net change in bank revolving credit facility usage                      (147.0)   (324.0)
    Proceeds from issuance of convertible debt                                 -       169.5
    Debt issuance costs on convertible debt                                    -        (6.2)
    Proceeds from long-term debt                                              28.4      70.4
    Principal payments on long-term debt                                     (99.6)   (193.7)
    Dividends paid to International                                          (15.0)      -
                                                                           --------  -------
             Total                                                          (233.2)   (284.0)

Change in Cash and Cash Equivalents                                          (26.8)     35.1
Cash and Cash Equivalents, Beginning of Period                                32.0      22.3
                                                                            -------   -------
Cash and Cash Equivalents, End of Period                                  $    5.2     $57.4

Supplementary disclosure of cash flow information:
    Interest paid                                                         $   37.3   $  46.3
    Income taxes paid, net of refunds                                     $    9.4   $  16.4

Noncash investing activities:
    Transfers to repossessions                                            $   72.7   $  72.3

                         See Notes to Consolidated Financial Statements.

                             **NAVISTAR FINANCIAL CORPORATION
                                       AND SUBSIDIARIES

                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                         (Unaudited)

1.      BASIS OF PRESENTATION

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

     The  accompanying  unaudited  financial  statements have been prepared in accordance with
     accounting  policies  described in the Corporation's  2002 Annual Report on Form 10-K and
     the accounting  policies adopted in the first,  second, and third quarters of fiscal year
     2003,  and should be read in conjunction  with the  disclosures  therein.  The accounting
     policy  adopted in the first  quarter of fiscal year 2003 was a result of the adoption of
     Statement of Position 01-6.

     In November  2002, the  Corporation  adopted  Statement of Position  01-6,  Accounting by
     Certain  Entities  that Lend to or  Finance  the  Activities  of  Others.  The  Statement
     requires  that  certain  finance   receivables  be  classified  as  held  for  sale.  The
     Corporation   classifies   certain  finance   receivables  as  held  for  sale.   Finance
     receivables  held for sale are carried at the lower of cost or estimated  market value in
     the aggregate.  Net unrealized  losses are  recognized  through a valuation  allowance by
     charges to income.

     In  November   2002,  the  Financial   Accounting   Standards   Board   ("FASB")   issued
     Interpretation  No. 45 ("FIN 45"),  Guarantor's  Accounting and  Disclosure  Requirements
     for  Guarantees,  Including  Indirect  Guarantees  of  Indebtedness  of  Others.  FIN  45
     requires  that  additional  disclosures  be made by a guarantor in its interim and annual
     financial  statements  about  its  obligations  under  certain  guarantees  that  it  has
     issued.  It also  requires a guarantor to  recognize,  at  inception  of a  guarantee,  a
     liability  for the fair value of the  obligation  undertaken  in issuing  the  guarantee.
     Provisions   related  to  recognizing  a  liability  at  inception  do  not  apply  to  a
     subsidiary's  guarantee  of debt owed to a third  party by either  its  parent or another
     subsidiary of that parent.  The initial  recognition  and  measurement  provisions of FIN
     45 are  applicable  on a  prospective  basis  to  guarantees  issued  or  modified  after
     December 31, 2002. The  disclosure  requirements  are effective for financial  statements
     of interim or annual periods ending after  December 15, 2002.  The  Corporation  provided
     disclosures about guarantees in Note 9.

     In January  2003,  the FASB issued  Interpretation  No. 46 ("FIN 46"),  Consolidation  of
     Variable  Interest  Entities.  FIN 46 addresses  consolidation  requirements  of variable
     interest  entities.   Transferors  to  qualifying  special  purpose  entities  ("QSPE's")
     subject  to the  reporting  requirements  of  FASB  Statement  No.  140,  Accounting  for
     Transfers and  Servicing of Financial  Assets and  Extinguishments  of  Liabilities,  are
     excluded  from  the  scope  of  this  interpretation.  The  Corporation  currently  sells
     receivables to entities meeting the requirements of QSPE's.

     In April 2003,  the FASB issued  Statement  of  Financial  Accounting  Standards  No. 149
     (`SFAS  149"),   Amendment  of  Statement  133  on  Derivative  Instruments  and  Hedging
     Activities.  This Statement amends and clarifies  financial  accounting and reporting for
     derivative  instruments,  including  certain  derivative  instruments  embedded  in other
     contracts.  SFAS 149 is effective for contracts  entered into or modified  after June 30,
     2003,  and for  hedging  relationships  designated  after  June  30,  2003.  Prior to the
     issuance  of SFAS  149,  the  Corporation  reported  net cash  received  from and paid on
     derivatives  contracts  in "other"  under  adjustments  to  reconcile  net income to cash
     provided from  operations.  Currently,  the  Corporation  reports cash received  from, or
     paid on,  derivative  contracts  consistently  with the underlying assets under investing
     activities on its Statements of  Consolidated  Cash Flow.  There is no material effect on
     the financial statement as a result of this adoption.

     In  the  opinion  of  management,   these  interim  financial   statements   reflect  all
     adjustments,  consisting  of normal  recurring  items,  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
     any other  interim  period or for the full  year.  Certain  amounts  in the prior  period
     financial   statements   have  been   reclassified   to  conform  with   current   period
     presentations.

**2.   DISCONTINUED OPERATIONS**

     On November 30, 2001,  the  Corporation  completed  the sale of all of the stock of Harco
     National  Insurance  Company  ("Harco"),  a  wholly-owned  insurance  subsidiary,  to IAT
     Reinsurance  Syndicate  Ltd.,  a Bermuda  reinsurance  company.  Cash  proceeds  of $63.3
     million were received.  The Harco  insurance  segment was accounted for as a discontinued
     operation,  and accordingly,  amounts in the consolidated  financial statements and notes
     thereto, for all periods affected,  have been restated to reflect discontinued operations
     accounting.

**3.   COMPREHENSIVE INCOME**

     The Corporation's total comprehensive income was as follows:

                                                        Three Months            Nine Months
                                                       Ended July 31          Ended July 31
     Millions of Dollars                               2003         2002       2003         2002
     Net income. . . . . . . . . . . . . . . . .    $  22.3        $  5.7     $   51.3     $  33.6
     Change in net unrealized gain on derivative . . .  0.2           -            0.3         0.6
         Total comprehensive income . . . . . . . . $  22.5        $  5.7     $   51.6     $  34.2

**4.   FINANCE RECEIVABLES**

     Finance receivables are summarized as follows:

                                                         July 31,   October 31,    July 31,
     Millions of Dollars                                   2003        2002          2002
     Retail notes, net of unearned income              $    410.5    $   827.1   $    519.9
     Finance leases, net of unearned income                 123.1        179.6        182.4
     Wholesale notes                                         34.3         37.8         17.8
     Accounts:
         Retail                                             140.1        181.1          7.3
         Wholesale                                           68.1         75.4         71.1
             Total accounts                                 208.2        256.5         78.4

                 Total finance receivables                  776.1      1,301.0        798.5
                 Less: Allowance for losses                  15.1         16.0         13.6

                 Total finance receivables, net        $    761.0    $ 1,285.0   $    784.9

     Finance  receivables  held for sale consisted of $533.6 million,  $1,006.7  million,  and
     $702.3 million in retail notes and finance  leases,  net of unearned  income,  as of July
     31, 2003, October 31, 2002, and July 31, 2002, respectively.

**5.   ALLOWANCE FOR LOSSES**

     The allowance for losses is summarized as follows for the fiscal period ended:

                                                         July 31,   October 31,    July 31,
     Millions of Dollars                                   2003        2002          2002
     Allowance for losses, beginning of period          $    16.0     $   13.3    $    13.3
     Provision for credit losses                             11.9         20.5         15.6
     Net losses charged to allowance                         (5.0)        (5.3)        (3.4)
     Transfers to finance receivables sold                   (7.8)       (12.5)       (11.9)

         Allowance for losses, end of period            $    15.1     $   16.0    $    13.6

     The average  outstanding balance of impaired finance receivables was not material for the
     nine  months  ended  July  31,  2003 and 2002 or for the year  ended  October  31,  2002.
     Interest income that would have been recognized on impaired  finance  receivables  during
     the nine months  ended July 31, 2003 and 2002 or for the year ended  October 31, 2002 was
     not material.

     Balances  with payments  past due over 90 days on owned  finance  receivables,  including
     held for sale, totaled $3.6 million as of July 31, 2003.

**6.   SENIOR AND SUBORDINATED DEBT**

     Senior and subordinated debt outstanding is summarized as follows:

                                                         July 31,   October 31,    July 31,
     Millions of Dollars                                   2003        2002          2002
     Bank revolving credit facility, at variable rates,
         due December 2005                               $  435.0    $   582.0   $    368.0

     Revolving retail warehouse facility, at variable
         rates, due October 2005                            500.0        500.0        500.0

     Borrowings secured by operating leases, 3.71%
         to 6.65%, due serially through December 2010       236.6        307.8        337.3

     Convertible debt, 4.75%, due April 2009                176.9        172.7        171.4

             Total senior and subordinated debt          $1,348.5    $ 1,562.5   $  1,376.7

     As of July 31, 2003,  October 31, 2002, and July 31, 2002 the  Corporation had unaccreted
     discount of $43.1 million, $47.3 million, and $48.6 million respectively,  related to the
     convertible debt.

**7.   DERIVATIVE FINANCIAL INSTRUMENTS**

     The Corporation  uses derivative  financial  instruments as part of its overall  interest
     rate risk management  strategy as further  described under Footnote 13 of the 2002 Annual
     Report on Form 10-K.

     The  Corporation  manages its exposure to  fluctuations in interest rates by limiting the
     amount of fixed rate assets  funded with  variable  rate debt.  This is  accomplished  by
     selling  fixed  rate  receivables  on a fixed  rate  basis  and by  utilizing  derivative
     financial  instruments.  These  derivative  financial  instruments  may  include  forward
     contracts,  interest  rate  swaps,  and  interest  rate  caps.  The  fair  value of these
     instruments  is estimated  based on quoted market prices and is subject to market risk as
     the instruments may become less valuable due to changes in market  conditions or interest
     rates.  The Corporation  manages  exposure to  counterparty  credit risk by entering into
     derivative financial  instruments with major financial  institutions that can be expected
     to fully perform under the terms of such  agreements.  The  Corporation  does not require
     collateral or other  security to support  derivative  financial  instruments  with credit
     risk.  The  Corporation's  counterparty  credit  exposure is limited to the positive fair
     value of  contracts  at the  reporting  date.  As of July  31,  2003,  the  Corporation's
     derivative  financial  instruments  had a negative  net fair value.  Notional  amounts of
     derivative financial instruments do not represent exposure to credit loss.

     As of  July  31,  2003,  the  notional  amounts  and  fair  values  of the  Corporation's
     derivative financial instruments are summarized as follows:

     Inception        Maturity           Instrument                Notional       Fair Value
                                                                     (Millions of Dollars)
     October 2000     November 2012       Interest rate cap        $ 500.0       $     (3.8)
                      November 2012       Interest rate cap          500.0              3.8
     December 2000    January 2004        Interest rate swap*          5.2             (0.1)
     July 2001        April 2006          Interest rate swap          29.5             (1.6)
     November 2001    June 2004           Interest rate swap*        100.8             (0.9)
                      July 2006           Interest rate swap*        114.3              1.1
     November 2002    March 2007          Interest rate swap*          -                  -
     February 2003    July 2005           Forward starting swap*     300.0             (0.7)
     April 2003       July 2005           Forward starting swap*     100.0             (0.2)

        * Accounted for as non-hedging instruments.

     The fair values of all  derivatives  are recorded in Other  Liabilities on the Statements
     of Consolidated Financial Condition.

     In November  2002,  the  Corporation  entered  into an interest  rate swap  agreement  in
     connection  with a sale of retail  notes and lease  receivables.  The purpose of the swap
     was to convert the  floating  rate  portion of the  asset-backed  securities  issued into
     fixed rate  interest  to match the  interest  basis of the  receivables  pool sold to the
     owner trust, and to protect the Corporation  from interest rate volatility.  The notional
     amount of this swap is calculated as the difference  between the actual pool balances and
     the projected  pool  balances.  As of July 31, 2003,  the notional  amount was zero.  The
     outcome of the swap  results in the  Corporation  paying a fixed rate of  interest on the
     projected  balance of the pool. To the extent that actual pool  balances  differ from the
     projected  balances,  the  Corporation  has  retained  interest  rate  exposure  on  this
     difference.  This transaction is accounted for as non-hedging derivative instrument.

**8.   SALES OF RECEIVABLES**

     The Corporation  securitizes and sells  receivables  through  Navistar  Financial  Retail
     Receivables  Corporation,   Navistar  Financial  Securities  Corporation,   Truck  Retail
     Accounts  Corporation and Truck Engine  Receivables  Financing  Corporation,  all special
     purpose,   wholly-owned   subsidiaries  ("SPC's")  of  the  Corporation.   The  sales  of
     receivables  in  each  securitization   constitute  sales  under  accounting   principles
     generally  accepted  in the  United  States of  America,  with the  result  that the sold
     receivables  are  removed  from  the  Corporation's  balance  sheet  and  the  investor's
     interests in the related trust or conduit are not reflected as liabilities.

     The SPC's have limited recourse on the sold  receivables.  The SPC's assets are available
     to satisfy the creditors'  claims prior to such assets  becoming  available for the SPC's
     own uses or to the  Corporation or affiliated  companies.  The terms of receivable  sales
     generally  require  the  Corporation  to  provide  credit  enhancements  in the  form  of
     overcollateralizations  and/or cash  reserves  with the trusts and  conduits.  The use of
     such cash reserves by the  Corporation is restricted  under the terms of the  securitized
     sales agreements.  The maximum exposure under all receivable sale recourse  provisions as
     of July  31,  2003 was  $456.7  million.  The  allowance  for  losses  allocated  to sold
     receivables  totaled $14.9 million,  $14.0  million,  and $16.4 million at July 31, 2003,
     October 31, 2002, and July 31, 2002, respectively.

     The SPC's  retained  interests  in the  related  trusts or assets  held by the trusts are
     reflected on the Corporation's  Statement of Consolidated  Financial Condition in Amounts
     Due From Sales of  Receivables.  The  following is a summary of Amounts Due from Sales of
     Receivables:

                                                         July 31,   October 31,    July 31,
     Millions of Dollars                                   2003        2002          2002
     Cash held and invested by trusts                  $    123.0    $   105.6   $    180.4
     Subordinated retained interests in wholesale notes     198.1        138.9        143.3
     Subordinated retained interests in retail notes and
         finance leases                                      86.4         96.4        143.0
     Interest-only receivables                               49.2         16.8         22.2

         Total amounts due from sales of receivables   $    456.7    $   357.7   $    488.9

     Subordinated  retained  interests in wholesale  notes  consist  principally  of wholesale
     notes or  marketable  securities.  Subordinated  retained  interests  in retail notes and
     finance  leases  consist   principally  of  collections   held  as  cash  and  marketable
     securities.  Due to the short-term nature of these assets,  their fair value approximates
     carrying value.

     Management  estimates the prepayment speed for the receivables sold and the discount rate
     used to present  value the  interest-only  receivables  in order to calculate the gain or
     loss.  Estimates  of  prepayment  speeds  and  discount  rates  are  based on  historical
     experience  and  other  factors  and  are  made   separately   for  each   securitization
     transaction.  In addition,  the Corporation estimates the fair value of the interest-only
     receivables on a quarterly basis.

     Key economic  assumptions used in measuring the interest-only  receivables at the date of
     the sale for sales of retail notes and finance leases  completed during the quarter ended
     July 31 were:

                                                                   2003          2002
     Prepayment speed (annual rate)                                 1.4           1.4
     Weighted average life                                       41 months     40 months
     Interest-only receivable discount rate                        4.93%         6.93%

     The impact of hypothetical 10% and 20% adverse changes in these  assumptions  would have no
     material  effect on the fair value of the  interest-only  receivables  as of July 31, 2003.
     These  sensitivities  are  hypothetical  and should be used with  caution.  The effect of a
     variation of a particular  assumption  on the fair value of the  interest-only  receivables
     is calculated  without  changing any other  assumption;  in reality,  changes in one factor
     may result in changes in another.

     Sold receivables balances are summarized below.

                                                         July 31,   October 31,    July 31,
     Millions of Dollars                                   2003        2002          2002
     Retail notes, net of unearned income              $  1,873.8    $ 1,521.8   $   1,805.2
     Finance leases, net of unearned income                  38.4          -               -
     Wholesale notes                                        872.7        801.4         696.8
     Retail accounts                                         94.6        126.9         163.8

             Total sold finance receivables, net       $  2,879.5    $ 2,450.1   $   2,665.8

     Serviced portfolio balances are summarized below.

                                                         July 31,   October 31,    July 31,
     Millions of Dollars                                   2003        2002          2002
     Gross serviced receivables
         Retail notes                                  $  2,517.4    $ 2,529.1   $  2,573.5
         Finance leases                                     178.3        205.7        209.8
         Wholesale notes                                    907.0        839.2        714.6
         Accounts                                           302.8        383.4        242.2
             Total gross serviced receivables             3,905.5      3,957.4      3,740.1
     Net investment in operating leases                     192.5        248.2        263.6

             Total serviced portfolio                  $  4,098.0    $ 4,205.6   $  4,003.7

     Additional  financial data for gross  serviced  portfolio as of July 31, 2003 and for the
     nine months then ended is summarized below.

                                        Retail      Finance and     Wholesale
     Millions of Dollars                 Notes   Operating Leases     Notes      Accounts

     Balances with payments
         past due over 60 days (1)      $  10.5       $   2.1        $  3.7        $   2.5
     Credit losses (net of recoveries)     11.0           0.8           0.1             -

     (1) Includes rent past due over 60 days for Operating Leases

     Certain cash flows received from (paid to) securitization trusts/conduits were as follows:

                                                                 Nine Months
                                                                 Ended July 31
     Millions of Dollars                                          2003    2002
     Proceeds from sales of finance receivables
         held for sale                                      $ 1,347.2     $  999.0
     Proceeds from sales of finance receivables into
         revolving facilities                                 3,748.9      3,385.3
     Servicing fees received                                     19.6         18.1
     Repurchase of receivables in breach of terms (1)           (24.0)      (120.4)
     Cash used in exercise of purchase option                  (139.5)       (44.6)
     All other cash received from trusts                        127.4        179.3

     (1) The  Corporation,  as  servicer,  covenants  that  it  will  not amend the terms of the
     receivables.  A breach  of  this  covenant  requires  the  Corporation  to  repurchase  the
     receivables from the trust/conduit.

     The following table summarizes income related to sales of finance receivables:

                                                    Three Months            Nine Months
                                                    Ended July 31          Ended July 31
     Millions of Dollars                           2003         2002       2003        2002
     Gains on sales of receivables               $  26.1    $   1.9     $   59.3   $   28.8
     Excess spread                                   2.6        2.9         10.8       12.2
     Derivative gains (losses)                      (1.0)      (2.4)        (7.8)      (5.7)
     Interest income from retained securities
         and other                                   0.5        0.7          1.3        1.3
     Total income related to
         sales of finance receivables            $  28.2    $   3.1     $   63.6   $   36.6

**9.   COMMITMENTS AND CONTINGENCIES**

     Leases

     The  Corporation is obligated  under  non-cancelable  operating  leases for the majority of
     its office  facilities.  These leases are  generally  renewable  and provide that  property
     taxes and  maintenance  costs are to be paid by the  lessee.  As of July 31,  2003,  future
     minimum lease  commitments  under  non-cancelable  operating leases with remaining terms in
     excess of one year are as follows:

               Twelve month period ended July 31,               (Millions of Dollars)
               2004                                                  $     1.8
               2005                                                        1.6
               2006                                                        1.5

                      Total                                          $     4.9

     The total  operating  lease  expense for the nine month period ended July 31, 2003 and 2002
     was $1.8 million and $1.6 million, respectively.

     Guarantees of Debt

     The  Corporation   periodically   guarantees  the  outstanding  debt  of  affiliates.   The
     guarantees  allow for  diversification  of funding sources for the  affiliates.  As of July
     31, 2003, the Corporation has four guarantees  related to Navistar's  three Mexican finance
     subsidiaries,   Servicios  Financieros  Navistar,  S.A.  de  C.V.  ("SOFOL"),   Arrendadora
     Financiera  Navistar,  S.A. de C.V.  ("Arrendadora")  and Navistar  Comercial  S.A. de C.V.
     The Corporation has no recourse as guarantor in case of default.

     The following table summarizes the borrowings as of July 31, 2003:

     Type of Funding            Maturity           Amount of Guaranty   Outstanding Balance
                                                               (Millions of Dollars)
     Revolving credit facility   December 2005          $  100.0                $  32.0
     Medium term note*           November 2004              47.5                   47.5
     Revolving credit facility*  March 2006                 10.6                   10.6
     Revolving credit facility*  July 2006                  19.0                   19.0

     * Peso-denominated

     Guarantees of Derivatives

     As of July 31, 2003,  the  Corporation  had  guaranteed  derivative  contracts for interest
     rate swaps and cross currency swaps  related to SOFOL and  Arrendadora.  The Corporation is
     liable  up  to the fair market value of these derivative contracts only in cases of default
     by SOFOL and Arrendadora.

     The following table summarizes the guaranteed derivative contracts as of July 31, 2003:

                                                   Guaranteed     Outstanding      Fair
     Instrument                 Maturity             Notional       Balance        Value
                                                              (Millions of Dollars)
     Interest rate swaps and
         cross currency swaps*   April 2004           $ 50.4       $  44.8     $   0.4

     * Peso-denominated

     Other

     The Corporation  has entered into an agreement for the repurchase of equipment.  Under this
     agreement,  which  matures in August  2004,  the  Corporation  would be  required to make a
     maximum  potential  future  payment  of  $11.9  million.   Under  the  provisions  of  this
     agreement,  the  Corporation  can  liquidate  the  repurchased  assets to recover  all or a
     portion of the payment.  The  Corporation  has potential  exposure to the extent that there
     is a  difference  between  the  fair  value of the  repurchased  asset  and the  guaranteed
     repurchase  amount.  The  Corporation's  current exposure under this agreement is estimated
     to be immaterial.

     As  part  of  its  sales  agreement  with  IAT  Reinsurance  Syndicate  Ltd.  ("IAT"),  the
     Corporation  has agreed to guarantee  the adequacy of Harco's loss  reserves as of November
     30, 2001, the close date of the sale.  There is no limit to the potential  amount of future
     payments  required  under this  agreement,  which is scheduled to expire  November 2008. As
     security for its  obligation  under this  agreement,  the  Corporation  has  escrowed  $5.0
     million,  which is included in Other  Assets in the  Consolidated  Statements  of Financial
     Condition.  The  escrowed  funds  will  become  available  for use in  February  2004.  The
     carrying  amount of the  Corporation's  liability under this guarantee is estimated at $0.6
     million  as of July 31,  2003 and is  included  in Other  Liabilities  in the  Consolidated
     Statements of Financial  Condition.  Management  believes this reserve is adequate to cover
     any future potential payments to IAT.

                             **NAVISTAR FINANCIAL CORPORATION
                                       AND SUBSIDIARIES

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

Certain  statements under this caption purely  constitute  "forward-looking  statements" under
the Securities Reform Act. Navistar  Financial  Corporation's  ("Corporation")  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."

Overview

Navistar  Financial  Corporation,  was  incorporated in Delaware in 1949 and is a wholly-owned
subsidiary  of  International  Truck  and  Engine  Corporation  ("International"),  which is a
wholly-owned subsidiary of Navistar International  Corporation  ("Navistar").  As used herein,
the "Corporation" refers to Navistar Financial  Corporation and its wholly-owned  subsidiaries
unless the context otherwise requires.

The Corporation is a commercial  financing  organization that provides  wholesale,  retail and
lease  financing in the United  States for sales of new and used trucks sold by  International
and  International's  dealers.  The Corporation also finances  wholesale accounts and selected
retail accounts  receivable of International.  Sales of new products  (including  trailers) of
other  manufacturers are also financed  regardless of whether they are designed or customarily
sold for use with International's truck products.

Critical Accounting Policies

The consolidated  financial  statements are prepared in conformity with accounting  principles
generally  accepted  in the United  States of  America.  The  preparation  of these  financial
statements  requires  the  use of  estimates,  judgments,  and  assumptions  that  affect  the
reported  amounts of assets and  liabilities  at the date of the financial  statements and the
reported  amounts of revenues and expenses  during the periods  presented.  In preparing these
financial  statements,  management  has made its  best  estimates  and  judgments  of  certain
amounts included in the financial  statements,  giving due  consideration to materiality.  The
significant  accounting  principles which management believes are the most important to aid in
fully understanding the Corporation's financial results are:

X    Sales of Receivables
X    Allowance for Losses

Details  regarding  the  Corporation's  use of these  policies and the related  estimates  are
described in the Corporation's 2002 Annual Report on Form 10-K.

Results of Continuing Operations

Third Quarter 2003 Compared with Third Quarter 2002

Net income  was $22.3  million  for the third  quarter of 2003.  Net  income  increased  $16.6
million  compared  with net  income  of $5.7  million  for the  third  quarter  of  2002.  The
increase in earnings was  primarily  due to higher gains on sales of  receivables.  During the
third quarter of fiscal 2003, the  Corporation  sold $500.0 million of retail notes and leases
for a  pre-tax  gain  of  $26.1  million.  During  the  third  quarter  of  fiscal  2002,  the
Corporation sold $112.0 million of retail notes for a pre-tax gain of $1.9 million.

Fiscal Nine Months Period 2003 Compared with 2002

Net income was $51.3  million for the first nine months of fiscal  2003,  an increase of $17.7
million  compared  with net income of $33.6  million for the first nine months of fiscal 2002.
The increase in earnings was  primarily due to greater  gains on sales of  receivables  during
the first nine months of fiscal 2003,  compared  with the same period of fiscal  2002.  In the
first  nine  months  of  fiscal  2003,  the  Corporation   sold  $1,350.0  million  of  retail
receivables  for a pre-tax gain of $59.3  million.  During the same period of fiscal 2002, the
Corporation  sold  $1,000.0  million  of  retail  receivables  for a  pre-tax  gain  of  $28.8
million.  These gains were slightly  offset by a pre-tax loss on  derivatives  of $7.8 million
and $5.7 million during the first nine months of fiscal 2003 and 2002, respectively.

Financial Condition

Finance Volume and Finance Market Share

During the first nine months of fiscal  2003,  the  Corporation's  net retail notes and leases
originations  were $789.7  million,  compared  with $764.2  million  during the same period of
fiscal  2002.  Net  serviced  retail  notes and leases  balances  were  $2,638.3  million  and
$2,776.1  million  as of July 31,  2003 and  2002,  respectively.  The  Corporation's  finance
market  share of new  International  trucks  sold in the U.S.  decreased  to 15.1% at July 31,
2003  compared to 20.2% at July 31, 2002,  primarily  due to the  financing of a purchase by a
large truck customer in fiscal 2002, which was not present in fiscal 2003.

The   Corporation   provided  96.0%  of  the  wholesale   financing  of  new  trucks  sold  to
International's  dealers during the first nine months of fiscal 2003 and 2002.  Wholesale note
originations  were  $2,239.2  million for the first nine months of fiscal 2003,  compared with
$1,976.1  million for the same period of fiscal 2002.  Serviced  wholesale notes balances were
$907.0  million and $714.6  million as of July 31, 2003 and 2002, respectively.  The increases
in wholesale notes balances and  originations are a result of dealers'  anticipated  sales due
to an increase in industry orders.

Allowance for Losses

The allowance is maintained at an amount management  considers  appropriate in relation to the
outstanding  portfolio  based on  factors  such as  overall  portfolio  credit  risk  quality,
historical  loss  experience,  and  current  economic  conditions.   Finance  receivables  and
investments  in operating  leases are charged off to the allowance for losses when amounts due
from the customers are determined to be uncollectible.

Allowance for losses,  including the portion  allocated to sold notes,  as a percentage of net
serviced  finance  receivables  and  investments in operating  leases was 0.78% as of July 31,
2003, compared with 0.80% as of July 31, 2002.

Funds Management

The Corporation has traditionally  obtained the funds to provide financing to  International's
dealers and retail customers from sales of finance  receivables,  commercial paper,  short and
long-term  bank  borrowings,  and medium and long-term  debt. The  Corporation's  current debt
ratings have made sales of finance receivables the most economical source of funding.

Credit Ratings

The Corporation's current debt ratings are as follows:
                                                                                 Standard
                                                Fitch          Moody's          and Poor's

Senior unsecured debt                            BB             Ba3                BB-
Subordinated debt                                B+             B2                  B
Outlook                                       Negative        Stable              Stable

In December  2002,  Fitch IBCA,  Standard and Poor's,  and Moody's  lowered the  Corporation's
senior unsecured and subordinated debt ratings.  Fitch IBCA lowered the  Corporation's  senior
unsecured debt to BB from BB+ and the  subordinated  debt rating to B+ from BB-.  Standard and
Poor's  lowered  the  Corporation's  senior  unsecured  debt  rating  to BB-  from  BB and the
subordinated  debt rating to B from B+. Moody's  lowered the  Corporation's  senior  unsecured
debt rating to Ba3 from Ba1 and the subordinated debt rating to B2 from Ba2.

Funding Facilities

Receivable  sales are a  significant  source  of  funding.  Through  the  asset-backed  public
market and private  placement  sales,  the Corporation has been able to fund fixed rate retail
notes and  finance  leases at rates  which are more  economical  than those  available  to the
Corporation  in the public  unsecured  bond  market.  The  Corporation  sells retail notes and
finance  leases  through  Navistar  Financial  Retail  Receivables  Corporation  ("NFRRC"),  a
special  purpose,  wholly-owned  subsidiary of the  Corporation.  During the first nine months
of  fiscal  2003 and 2002,  the  Corporation  sold  $1,350.0  million  and  $1,000.0  million,
respectively,  of retail  notes and finance  leases to an owner trust which,  in turn,  issued
asset-backed  securities  that were sold to  investors.  As of July 31,  2003,  the  remaining
shelf registration  available to NFRRC for the public issuance of asset-backed  securities was
$1,150.0 million.

Truck Engine Receivables Financing  Corporation,  a special purpose,  wholly-owned  subsidiary
of the  Corporation,  has in place a trust that provides for the funding of $100.0  million of
unsecured trade  receivables  generated by the sale of diesel engines and engine service parts
from  International  to Ford Motor  Company.  The  facility  matures  in 2006.  As of July 31,
2003, the Corporation had utilized $94.6 million of this facility.

Truck  Retail  Accounts  Corporation,  a  special  purpose,  wholly-owned  subsidiary  of  the
Corporation,  has in place a revolving  retail  account  conduit that provides for the funding
of $100.0 million of eligible  retail  accounts.  As of July 31, 2003, the Corporation was not
utilizing any of this facility.  The facility  expired in August 2003.  The  Corporation is in
the process of obtaining refinancing for the retail accounts.

Navistar Financial Securities Corporation,  a special purpose,  wholly-owned subsidiary of the
Corporation,  has in place a revolving  wholesale  note trust that provides for the funding of
$1,224.0  million of eligible  wholesale  notes. As of July 31, 2003, it is comprised of three
$200.0 million tranches of investor  certificates  maturing in 2003, 2004 and 2008, two $212.0
million  tranches of investor  certificates  maturing in 2005 and 2006,  and variable  funding
certificates  with a maximum capacity of $200.0 million  maturing in January 2004.  During the
third  quarter, a  $212.0  million tranche  was  issued  in  anticipation  of the maturity, on
August 25, 2003, of a $200.0 million  tranche of investor  certificates.  As of July 31, 2003,
the Corporation had utilized $872.7 million of the revolving wholesale note trust.

As of July 31, 2003, cash  available  to  fund  finance  receivables  under the bank revolving
credit facilities, the revolving retail warehouse facility  and  the revolving  wholesale note
trust was $886.8 million.  When  combined  with unrestricted cash and cash equivalents, $892.0
million was available to fund the general  business  purposes of the Corporation.

The  weighted  average  borrowing  rate on all debt  outstanding  for the first nine months of
fiscal 2003  decreased  to 3.67% from 4.05% for the same period in 2002.  The  decrease in the
Corporation's weighted average borrowing rate is primarily a result of lower LIBOR rates.

Liquidity and Cash Flow

During  the first  nine  months of fiscal  2003,  cash and cash  equivalents  decreased  $26.8
million  to  $5.2  million.  For the  first  nine  months  of  fiscal  2003,  the  Corporation
generated  $55.1  million  and  $151.3  million  from  operating  and  investing   activities,
respectively.  The  Corporation  also utilized $233.2 million in financing  activities  during
this period.  See also the Statements of Consolidated Cash Flow on page 4.

Total  cash  generated  from  investing  activities  was  $151.3  million.  The  Corporation's
primary  source of cash during the first nine months of fiscal  2003 was  proceeds  from sales
of finance  receivables  held for sale. The aggregate  source of cash flow related to the sale
of finance  receivables  held for sale was $93.6  million.  This  includes  cash  proceeds  of
$1,347.2  million,  offset by cash  utilization  from a net  change in  restricted  marketable
securities of $325.5 million,  repurchase of sold retail  receivables of $163.5  million,  and
originations of finance  receivables  held for sale of $764.6  million.  See Footnote 1 of the
2002  Annual  Report on Form 10-K for further  descriptions  of the  Corporation's  Restricted
Marketable Securities.

Total  cash used in  financing  activities  during the first  nine  months of fiscal  2003 was
$233.2  million.  During the first nine months of fiscal  2003,  the  Corporation  reduced its
utilization  of the bank  revolving  credit  facility by $147.0  million and made  payments on
long-term debt of $99.6 million.

New Accounting Pronouncements

In November 2002, the Financial  Accounting  Standards  Board ("FASB")  issued  Interpretation
No.  45 ("FIN  45"),  Guarantor's  Accounting  and  Disclosure  Requirements  for  Guarantees,
Including  Indirect  Guarantees of  Indebtedness  of Others.  FIN 45 requires that  additional
disclosures be made by a guarantor in its interim and annual  financial  statements  about its
obligations  under  certain  guarantees  that it has issued.  It also  requires a guarantor to
recognize,  at  inception  of a guarantee,  a liability  for the fair value of the  obligation
undertaken  in issuing  the  guarantee.  Provisions  related to  recognizing  a  liability  at
inception  do not apply to a  subsidiary's  guarantee  of debt owed to a third party by either
its parent or another  subsidiary  of that parent.  The initial  recognition  and  measurement
provisions of FIN 45 are  applicable on a prospective  basis to guarantees  issued or modified
after December 31, 2002. The disclosure  requirements  are effective for financial  statements
of interim or annual  periods  ending  after  December  15,  2002.  The  Corporation  provided
disclosures about guarantees in Note 9.

In January 2003, the FASB issued  Interpretation No. 46 ("FIN 46"),  Consolidation of Variable
Interest  Entities.  FIN  46  addresses   consolidation   requirements  of  variable  interest
entities.  Transferors  to  qualifying  special  purpose  entities  ("QSPE's")  subject to the
reporting  requirements  of FASB Statement No. 140,  Accounting for Transfers and Servicing of
Financial  Assets and  Extinguishments  of  Liabilities,  are excluded  from the scope of this
interpretation.   The  Corporation   currently  sells  receivables  to  entities  meeting  the
requirements of QSPE's.

In April 2003,  the FASB issued  Statement of Financial  Accounting  Standards  No. 149 (`SFAS
149"),  Amendment of Statement  133 on Derivative  Instruments  and Hedging  Activities.  This
Statement   amends  and  clarifies   financial   accounting   and  reporting  for   derivative
instruments,  including certain derivative  instruments embedded in other contracts.  SFAS 149
is  effective  for  contracts  entered into or modified  after June 30, 2003,  and for hedging
relationships  designated  after  June  30,  2003.  Prior to the  issuance  of SFAS  149,  the
Corporation  reported  net cash  received  from and paid on  derivatives  contracts in "other"
under  adjustments to reconcile net income to cash provided from  operations.  Currently,  the
Corporation  reports cash received from, or paid on,  derivative  contracts  consistently with
the  underlying  assets under  investing  activities on its  Statements of  Consolidated  Cash
Flow.  There is no material effect on the financial statement as a result of this adoption.

Business Outlook

Certain  statements,  which  involve  risks  and  uncertainties,  constitute  "forward-looking
statements"  under the  Securities  Reform Act. The  Corporation's  actual  results may differ
significantly from the results discussed in such forward-looking statements.

The company  currently  projects  2003 U.S.  and  Canadian  Class 8 heavy  truck  demand to be
156,000  units,  down 4% from  2002.  Class 6 and 7  medium  truck  demand,  excluding  school
buses, is forecast at 72,700 units,  approximately  the same as 2002.  Demand for school buses
is expected to be 27,500 units,  consistent with 2002.  Mid-range  diesel engine  shipments by
the company to OEMs in 2003 are expected to be 335,000 units, 6% higher than 2002.

Management  believes that collections on the outstanding  finance  receivables  portfolio plus
cash available from the  Corporation's  various funding sources will permit the Corporation to
meet the financing  requirements of International's  dealers and retail customers through 2003
and beyond.

                               **NAVISTAR FINANCIAL CORPORATION
                                       AND SUBSIDIARIES

ITEM 4.   CONTROLS AND PROCEDURES**

Evaluation of Disclosure Controls and Procedures

The Corporation's  principal  executive  officer and principal  financial  officer,  along with
other  management of the  Corporation,  evaluated  the  Corporation's  disclosure  controls and
procedures  (as defined in rule 13a-15(e) and 15d-15(e)  under the  Securities  Exchange Act of
1934,  as amended) as of July 31,  2003.  Based on that  evaluation,  the  principal  executive
officer and  principal  financial  officer of the  Corporation  concluded  that, as of July 31,
2003, the disclosure  controls and procedures in place at the Corporation  were (1) designed to
ensure that material  information  relating to the  Corporation  is made known to them to allow
timely  decisions  regarding  required  disclosure and (2) effective,  in that such  disclosure
controls  and  procedures  provide  reasonable   assurance  that  information  required  to  be
disclosed  by the  Corporation  in reports  that the  Corporation  files or  submits  under the
Exchange Act, is recorded,  processed,  summarized and reported on a timely basis in accordance
with  applicable  rules  and  regulations.   Although  the  Corporation's  principal  executive
officer  and  principal  financial  officer  believe  the  Corporation's   existing  disclosure
controls and  procedures  are adequate to enable the  Corporation to comply with its disclosure
obligations,  the  Corporation is in the process of formalizing  and documenting the procedures
already in place.

Changes in Internal Controls

The Corporation  has  not made any change to its  internal control over financial reporting (as
defined in rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended
July 31, 2003 that have materially affected, or are reasonably likely to materially affect, the
Corporation's internal control over financial reporting.

                              **NAVISTAR FINANCIAL CORPORATION
                                       AND SUBSIDIARIES

PART II - OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS**

There were no material  pending legal  proceedings  other than  ordinary,  routine  litigation
incidental to the business of the Corporation.

**ITEM 5.   OTHER INFORMATION**

Effective  March 1, 2003,  Phyllis E.  Cochran  became  Chief  Executive  Officer  and General
Manager of the  Corporation  upon the  retirement  of John J.  Bongiorno,  President and Chief
Executive Officer.

Effective  August 1,  2003,  Paul  Martin  replaced  Ronald D.  Markle as Vice  President  and
Controller.

**ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits:**

            3     Articles of Incorporation and By-Laws.........................E-1

            4     Instruments Defining Rights of Security Holders,
                  including Indentures..........................................E-2

            10    Material Contracts............................................E-3

            31.1  CEO Certification Pursuant to
                  Section 302 of the Sarbanes-Oxley Act of 2002.................E-4

            31.2  CFO Certification Pursuant to
                  Section 302 of the Sarbanes-Oxley Act of 2002.................E-6

            32.1  CEO Certification Pursuant to
                  Section 906 of the Sarbanes-Oxley Act of 2002.................E-8

            32.2  CFO Certification Pursuant to
                  Section 906 of the Sarbanes-Oxley Act of 2002.................E-9

(b) No reports on Form 8-K were filed during the quarter ended July 31, 2003.

                             **NAVISTAR FINANCIAL CORPORATION
                                       AND SUBSIDIARIES

                                          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 12, 2003                          /s/ Paul Martin
                                                     Paul Martin
                                                      Vice President and Controller
                                                     (Principal Accounting Officer)**********
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