CarMax Auto Owner Trust 2023-1 Files 10-K, Confirms Compliance

TL;DR

**CarMax Auto Owner Trust 2023-1's 10-K is a routine compliance check, signaling stability for ABS investors but offering no new operational insights for CarMax itself.**

AI Summary

CarMax Auto Owner Trust 2023-1, an asset-backed securities issuer, filed its 10-K for the fiscal year ended February 28, 2025. As a statutory trust, its primary function is to hold and manage a pool of auto loan receivables originated by CarMax Business Services, LLC, and distribute payments to investors. The filing indicates compliance with all Section 13 or 15(d) reporting requirements of the Securities Exchange Act of 1934 during the preceding 12 months. The trust is not a well-known seasoned issuer and is not required to submit Interactive Data Files. The report confirms the trust's operational status and adherence to regulatory obligations, with no significant changes in its business model or financial performance metrics typically reported by operating companies, as its financial activities are limited to the securitization of auto loans.

Why It Matters

This 10-K filing for CarMax Auto Owner Trust 2023-1 is crucial for investors holding its asset-backed securities, as it confirms the trust's ongoing regulatory compliance and operational stability. For CarMax Business Services, LLC, the sponsor, it demonstrates continued access to the securitization market, a vital funding mechanism for its auto loan portfolio. This transparency helps maintain investor confidence in the structured finance market for auto loans, providing competitive context against other auto lenders and securitization issuers. Employees of CarMax are indirectly impacted by the health of its funding channels, which support the broader auto sales business.

Risk Assessment

Risk Level: low — The risk level is low because CarMax Auto Owner Trust 2023-1 is a statutory trust focused solely on securitizing auto loans, not an operating company with revenue or net income fluctuations. The filing confirms it has met all Section 13 or 15(d) reporting requirements for the fiscal year ended February 28, 2025, indicating strong regulatory adherence and operational stability for its specific function.

Analyst Insight

Investors in CarMax Auto Owner Trust 2023-1's asset-backed securities should view this filing as a confirmation of routine compliance and operational stability. No immediate action is required based on this administrative filing, but investors should continue to monitor servicer performance and underlying collateral metrics in future reports.

Key Numbers

• 10-K — Form Type (Annual report filed pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934)
• February 28, 2025 — Fiscal Year End (The period covered by this annual report)
• 0001959426-25-000027 — Accession Number (Unique identifier for this SEC filing)
• 333-260819-05 — Commission File Number (SEC registration number for CarMax Auto Owner Trust 2023-1)
• 0001959426 — Central Index Key (CIK) (Unique identifier for CarMax Auto Owner Trust 2023-1)

Key Players & Entities

• CarMax Auto Owner Trust 2023-1 (company) — Issuing Entity
• CarMax Auto Funding LLC (company) — Depositor
• CarMax Business Services, LLC (company) — Sponsor
• SEC (regulator) — Securities and Exchange Commission
• February 28, 2025 (date) — Fiscal year end
• 333-260819-05 (regulator) — Commission File Number of issuing entity
• 0001959426 (company) — Central Index Key Number of issuing entity
• Delaware (company) — State of incorporation for Issuing Entity and Depositor
• 88-6784392 (company) — I.R.S. Employer Identification No. for the Issuing Entity
• 12800 Tuckahoe Creek Parkway, Suite 400, Richmond, VA 23238 (company) — Address of principal executive offices

FAQ

Risk Factors

• Reliance on CarMax Business Services, LLC [high — operational]: The trust's operations are entirely dependent on CarMax Business Services, LLC (the Sponsor) for the origination, servicing, and administration of the auto loan receivables. Any disruption in the Sponsor's business, including its ability to originate loans or manage its servicing operations, could materially impact the trust's ability to generate cash flows and meet its obligations.
• Performance of Underlying Auto Loans [high — market]: The value and performance of the asset-backed securities are directly tied to the credit quality and repayment performance of the pool of auto loan receivables. Economic downturns, rising unemployment, or increased interest rates could lead to higher delinquency and default rates on these loans, negatively affecting the cash flows available for distribution to investors.
• Changes in Consumer Protection Laws [medium — regulatory]: The auto loan industry is subject to various federal and state consumer protection laws. Changes in these regulations, or new interpretations, could increase compliance costs, restrict lending practices, or lead to litigation, all of which could adversely affect the performance of the receivables and the trust's operations.
• Interest Rate Risk [medium — financial]: The trust's securities may be subject to interest rate risk. Fluctuations in prevailing interest rates could affect the market value of the outstanding securities. Additionally, if the interest rates on the underlying auto loans are fixed, and market rates rise significantly, the yield on the securities may become less attractive.
• Potential for Litigation [low — legal]: As with any financial instrument, there is a risk of litigation related to the securitization process, the underlying assets, or the servicing of the loans. Such litigation could result in significant legal costs and potential liabilities for the trust or related parties.

Industry Context

The auto finance industry is characterized by intense competition among lenders, including captive finance companies, banks, and independent finance companies. Key trends include the increasing use of technology for loan origination and servicing, evolving consumer preferences for vehicle purchasing (e.g., online sales), and a dynamic regulatory environment focused on consumer protection. The performance of auto loan receivables is closely tied to macroeconomic factors such as interest rates, unemployment, and used car values.

Regulatory Implications

CarMax Auto Owner Trust 2023-1, as an issuer of asset-backed securities backed by auto loans, is subject to regulations governing financial markets and consumer credit. Compliance with consumer protection laws, such as the Truth in Lending Act and Fair Credit Reporting Act, is critical. Changes in these regulations or increased scrutiny from regulatory bodies could impact the origination and servicing of loans, potentially affecting the trust's cash flows and the value of its securities.

What Investors Should Do

1. Review the Servicer's Report (if available in subsequent filings or related documents) for detailed performance metrics of the auto loan pool.
2. Monitor the financial health and operational stability of CarMax Business Services, LLC (the Sponsor).
3. Assess the impact of prevailing interest rates and economic conditions on the auto loan market and the trust's collateral.

Key Dates

• 2025-02-28: Fiscal Year End — Marks the end of the reporting period for the 10-K filing, providing the latest financial and operational data.
• 2025-05-23: 10-K Filing Date — The date the annual report was officially submitted to the SEC, making the information publicly available to investors.

Glossary

Asset-Backed Securities (ABS)

Securities that are backed by a pool of assets such as auto loans, credit card receivables, or mortgages. Payments on the securities are derived from the cash flows of the underlying assets. (CarMax Auto Owner Trust 2023-1 is an issuer of ABS, specifically backed by auto loan receivables.)

Securities Exchange Act of 1934

A U.S. federal law that governs the secondary trading of securities, including requirements for periodic reporting by public companies and issuers. (The trust is required to file its annual report (10-K) under this act.)

Depositor

An entity that transfers assets to a trust in exchange for beneficial interests in the trust, which are then typically sold to investors. In this case, CarMax Auto Funding LLC. (The depositor plays a crucial role in the securitization process by transferring the auto loans to the trust.)

Sponsor

The entity that originates the assets being securitized and often plays a role in the structuring and servicing of the securitization. Here, CarMax Business Services, LLC. (The sponsor's performance and business practices directly impact the quality and performance of the underlying auto loans.)

Fiscal Year End

The last day of a company's or trust's accounting period. For CarMax Auto Owner Trust 2023-1, it is February 28. (Defines the period covered by the financial statements and disclosures in the 10-K.)

Accession Number

A unique identifier assigned by the SEC to each filing submitted electronically. (Used to locate and retrieve specific filings from the SEC's EDGAR database.)

Year-Over-Year Comparison

As this is the first 10-K filing for CarMax Auto Owner Trust 2023-1 (indicated by the context of it being a new trust filing), a direct comparison of key metrics to a previous year's filing is not possible. Future filings will provide year-over-year comparisons for metrics such as loan performance, delinquency rates, and any changes in the trust's structure or the underlying collateral pool.

Filing Details

This Form 10-K (Form 10-K) was filed with the SEC on May 23, 2025 regarding CarMax Auto Owner Trust 2023-1.

View full filing on EDGAR

View Full Filing

View this 10-K filing on SEC EDGAR