Bridgecrest Lending Auto Securitization Trust 2023-1 Annual Report

I’m here to help you understand the annual report for the Bridgecrest Lending Auto Securitization Trust 2023-1. Think of this as a plain-English guide to your investment.

1. What does this trust do?

This isn't a typical company like Apple or Amazon. It is a financial vehicle that holds a pool of subprime and non-prime auto loans from Bridgecrest Credit Company. When borrowers pay their car loans, the trust passes those payments to you.

For the year ending December 31, 2025, the trust operated as planned. The initial $600 million pool is shrinking as loans are paid off. Bridgecrest and the trustee, Wilmington Trust, passed all required compliance audits with no issues.

2. Financial performance

The trust’s performance depends entirely on the quality of the car loans. No single borrower makes up more than 0.05% of the pool. This wide spread protects you if one person stops paying. The loans carry interest rates between 18% and 22%, which provides enough cash to pay the interest owed to you.

3. Wins and challenges

• Wins: The trust is running smoothly. Auditors confirmed that Bridgecrest is collecting and processing payments exactly as the rules require.
• Challenges: The trustee, Wilmington Trust, faces class-action lawsuits regarding other, unrelated deals. These legal issues are separate from your investment and do not affect your ownership of the loans or your cash flow.

4. Financial health

The trust is self-contained. It uses "credit enhancement"—a safety net—to protect investors. This includes a Reserve Account funded at 1% of the initial pool balance. This cash buffer covers any missed payments. All classes of notes (A, B, C, and D) continue to receive payments on time.

5. Key risks

• Loan Defaults: These are subprime loans, so some defaults are expected. If losses exceed the projected 15%–20%, the safety net could shrink, potentially putting your principal at risk.
• Legal Risks: While the lawsuits against the trustee are currently separate, they could cause administrative distractions or lead to transition costs if the trustee needs to be replaced.

6. Strategy and operations

There are no changes to the strategy. The plan remains simple: collect loan payments and distribute them to investors. Bridgecrest remains the servicer, and the 2.50% annual fee is unchanged.

7. Future outlook

The trust is in "run-off" mode. It will continue to collect payments until the loans are gone. As the pool ages, the speed at which borrowers pay off their loans early will determine how long the trust lasts. Expect your total investment balance to decline steadily as the trust pays down the principal.

8. Market trends

The trust remains subject to oversight from the Consumer Financial Protection Bureau. Any new rules on how lenders collect payments or repossess vehicles could indirectly affect your returns.

Investor Takeaway: This investment is designed to provide steady cash flow from a shrinking pool of auto loans. Because it is in "run-off" mode, your primary focus should be monitoring the default rates of the underlying loans to ensure the 15%–20% loss projection remains accurate. As long as the loans continue to perform within these expectations, the trust is structured to pay out your principal and interest as scheduled.